1 Civil Appeal 734/89, Missim (1992), Vol. 6, (Part 6), p. E-77; (1992) 46(v) P.D. 309.

2 The term “best judgment” assessment is commonly used by tax systems which are based on British law. Other systems use terms such as “discretionary assessments” (e.g., Sweden); “official assessments” or “assessments ex officio” (e.g., Brazil); “unilateral determination of taxpayer's income” — taxation d'office (e.g., France); “assessment by estimate”, (e.g., the Swiss Veranlagung nach Ermessen or Schätzung). The “best judgment” assessment should be distinguished from “estimated income” which is not estimation of the real income but an alternative method of assessing income. See Lapidoth, A., The Use of Estimation for the Assessment of Taxable Business Income, in Selected Monographs on Taxation, Harvard Law School of International Tax Program and International Bureau of Fiscal Documentation, Vol. 4 (1977) 14et seq.Google Scholar

3 1 L.S.I. [N.V.] 145.

4 The main purposes of the amendments were to introduce “self assessment” and to limit the period of time during which the Revenue may audit the return.

5 Certain tax laws do. For example, article 25 of the Argentine Fiscal Law (Law 11683) provides that “the determination (ex officio) of taxable income by the administration will be founded on known facts and circumstances that will indicate in each particular case the existence and measure of same. The following will serve particularly as indices of taxable income: invested capital, patrimonial fluctuations, volume of transactions and profits in other fiscal periods, amount of sales or purchases, merchandise in stock, yield of business, general expenditures, salaries, rent (both office rent and house rent), standard of living of taxpayer, or any other element in the possession of the administration or furnished by banks, chambers of commerce, unions, public or private entities or furnished by a third party, etc.”

6 (1937) 5 Income Tax Reports 170, 180.

7 Published in Fellman, A., The Israel Income Tax Law and Practice 1952-53 (December, 2nd ed., 1952), 309Google Scholar.

8 For more details on these techniques, see A. Lapidoth, The Use of Estimation for the Assessment of Taxable Business Income, supra n. 2, at 109 et seq., 124 et seq.

9 Civil Appeal 66, 68/65, Feiner (1965) 19(ii) P.D. 631. See also Further Hearing 14/65, (1966) 20(i) P.D. 533.

10 For more details of the tachshiv see Lapidoth, A., “The Israeli Experience of Using the Tachshiv for Estimating the Taxable Income”, Bulletin for International Fiscal Documentation, 1977, Vol. 96, pp. 99–106Google Scholar.

11 Further Hearing 14/65, (1966) 20(i) P.D. 533.

12 (1937) 5 Income Tax Reports 170, 180.

13 Supra n. 1.

14 P.G. (Extraordinary), No. 1126, Supplement 1, of 22nd August, 1941, p. 51.

15 P.G. (Extraordinary), No. 1101, of 26th May, 1941, p. 497.

16 Report of the Interdepartmental Committee on Income Tax in the Colonies not Possessing Responsible Government, 1922, Cmd. 1788.

17 The Statute Laws of Cyprus, No. 6 of 1941.

18 Rules of Court (Income Tax Appeals), 1941.

19 Income Tax (Amendment) Ordinance No. 12 of 1944, P.G., No. 1324 — Supplement No. 1, of 16th March, 1944, p. 34.

20 As of 1949 an appeal against the decision of the Assessing Officer lies to the District Court, whose decision is subject to an appeal, as of right, to the Supreme Court sitting as a Court of Appeal. The new procedure replaces the procedure of “case stated”. For more details see Lapidoth, A., Evasion and Avoidance of Income Tax, (Museum of Taxes, State Revenue Administration, Jerusalem, 1966) 97Google Scholaret seq.

21 Civil Appeal 19/44 (Trachtengott v. Assessing Officer), Palestine Income Tax Cases, 1945, p. 134.

22 Ibid., at 135.

23 Civil Appeal 2/81, (1984) 38(ii) P.D. 414.

24 Income Tax Ordinance (Amendment) Law, 5721-1961, 15 L.S.I. 28.

25 Income Tax Ordinance (Amendment No. 22), Law, 5735-1975, 29 L.S.I. 215.

26 Civil Judgment Vol. A, p. 171, followed in Civil Appeal 2/81, supra n. 23, cited with approval in the Picquantie case.

27 For a detailed discussion of the onus of proof in tax appeals by the Supreme Court see also Petition for leave to lodge Civil Appeal 1435/90, Giora Arad Ltd. v. Director of Value Added Tax, (1992) 46(v) P.D. 101. That decision, as well as Civil Appeal 2/81 (see n. 23 supra) are referred to in Assessing Officer v. Gahl, (1993) 47(i) P.D. 564 at 568. The decision in Giora Arad Ltd. was criticised by Bein, D., “The Burdens of Proof and Adducing Evidence in the Law of Taxation”, (1995) 3 Mishpat Umimshal (Law and Government in Israel) 277Google Scholar.

28 The Israel tax administration seldom made use of sec. 33. Furthermore, the interpretation which was given to sec. 33 by the Israel courts greatly mitigated its harshness.

29 C.A. 52/59, Yadid v. Assessing Officer, (1960) 14 P.D. 1353; C.A. 546/59, Bashara v. Assessing Officer, (1960) 14 P.D. 1089.

30 C.A. 300/54, Blumental v. Assessing Officer, (1955) 9 P.D. 1929.

31 The Commissioner of Income Tax has indeed made use of the power vested in him under sec. 130. Since 1953 “Directions for Keeping Account Books” have been issued for growing categories of taxpayers. Today practically all self-employed taxpayers are legally obliged to keep account books.

32 Per Justice Witkon in the Feiner decision, supra n. 9, at 634.

33 For further details on the 1975 reform regarding account books, see A. Lapidoth, The Use of Estimation for the Assessment of Taxable Business Income, supra n. 2, at 83 et seq.

34 Civil Appeal 3576/92, Director of Value Added Tax v. Mifgash Ha-On, Missim (1996), Vol. 10 (Part I), p. E-12. The majority decision was criticized by G. Amir, “On the Nature of the “Immaterial Defect”, (Some Thoughts Following the Decision of the Supreme Court in Civil Appeal 3576/92)”, Missim (1996), Vol. 10 (Part I), p. A-12 (in Hebrew).

35 See the chapter on the Onus of Proof and the Keeping of Account Books, supra.

36 Supra n. 9, at 631. Further Hearing 14/65, supra n. 9, at 533.

37 Civil Appeal 724/89, “Yeda Lemeida”, A Magazine for Taxation, Law and Economics, (1994) No. 210, p. 177Google Scholar.

38 See n. 9, supra.

39 See, e.g., Wolf, Lord, “Tax and Judicial Review” [1993] B.T.R. 219Google Scholar; Lapidoth, A, “Taxation of “Notional Income” Derived from “Preferred Loans” — Some Reflections on the Mintz and Silverstein Case and its Predecessor the Rimon Case,” (1994) 28 Is. L.R. 154, at 163Google Scholar.