State Council, 3rd Chamber
Case No.: 2017/2173
Decision No.: 2021/1449
“Text of the Judgment”
TR
STATE COUNCIL
THIRD CHAMBER
Case No.: 2017/2173
Decision No.: 2021/1449
APPELLANT (DEFENDANT): … Tax Office/…
ATTORNEY: Attorney …
OPPOSING PARTY (PLAINTIFF): …
ATTORNEY: Attorney …
SUBJECT OF THE APPEAL: It is requested that the decision issued by the … … Regional Administrative Court’s … Tax Litigation Chamber, dated E:…, K:…, be reviewed and overturned on appeal regarding the objection filed against the Tax Court’s decision dated E:…, K:….
JURISDICTION PROCESS:
Subject of the claim: According to the tax analysis report prepared on behalf of the plaintiff, who is an attorney, a portion of the income derived from the cases he handled within the scope of his freelance professional activities, taking into account the data obtained from the tax technical report, resulted in a tax exemption and a criminal income tax for the year 2010, the double tax loss penalty and special procedural penalty imposed pursuant to Article 353(1) of the Tax Procedure Law No. 213, and the request to revoke the tax exemption.
Summary of the First Instance Court’s decision: Based on information obtained from UYAP data, the plaintiff’s tax base was determined by considering all files opened or recorded as closed in 2010, all files containing power of attorney that were completed within the same year, and all funds deposited into bank accounts as attorney’s fees.
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If it is determined that the case has been concluded, the extent to which the information and documents submitted to the file upon request regarding the cases the plaintiff handled are related to the attorney’s fees in those cases, the actual period in which the cases ended, and whether the attorney’s fees were collected or not are determined, along with the interim decision issued by the courts. While such a determination must be based on concrete data, the failure to make such a determination means that all funds entering the bank accounts of a person engaged in legal practice must be deemed paid as legal fees, unless proven otherwise.
Since a preliminary review of the bank account is not possible, funds may be transferred to the bank account for any type of business or transaction, and the contrary must be established by referring to the statements of the parties involved in the attorney-client relationship. Due to the lack of proper investigation and research, the assessment and the penalty for procedural irregularities were found to be inconsistent with the law, and the special deductions applied as a result led to the cancellation of the taxes and penalties in question.
Summary of the Regional Administrative Court’s decision: The appeal was dismissed pursuant to Article 3 of the Administrative Procedure Law No. 45.
THE APPELLANT’S CLAIMS:
It is claimed that since the tax technical report prepared regarding the plaintiff concretely established that certain income was not recorded or declared, there is no legal violation in the assessment or the special penalty for procedural irregularities imposed, and the annulment of the decision is requested.
DEFENDANT’S DEFENSE: No defense was filed.
OPINION OF THE ADVISORY BOARD’S REVIEW JUDGE: We are of the opinion that the appeal should be dismissed and the decision, which is in accordance with procedure and law, should be upheld.
IN THE NAME OF THE TURKISH NATION
After hearing the statements of the Investigating Judge and reviewing the documents in the file, the Third Chamber of the Council of State has rendered the following decision:
LEGAL ASSESSMENT:
Final decisions of regional administrative courts may be overturned on appeal if any of the grounds specified in Article 49 of the Administrative Procedure Code No. 2577 are present.
The decision under review is in accordance with procedure and law, and the grounds for appeal raised in the petition do not warrant the decision’s reversal.
DECISION:
For the reasons stated above;
The appeal is dismissed,
…The decision of the Regional Administrative Court is AFFIRMED… as per the decision dated … and numbered E:…, K:… issued by the Tax Litigation Office,
Pursuant to Article 50 of the Administrative Procedure Code No. 3.2577, it was decided by unanimous vote on March 22, 2021, to return the file to the court of first instance for the purpose of serving this decision on the parties and sending a copy to the Tax Litigation Office.