Comparative Study of Tax Return and Confession with Scrutiny in the Decision of the General Board of the Court of Administrative Justice

Introduction
A tax return is essentially a form whose template is prepared by the Tax Affairs Organization, and taxpayers enter items related to taxable sources therein. The fundamental question that arises is whether a taxpayer, after submitting their return to the tax unit, has the right to amend it. This question assumes significance because the note to Article (226) of the Tax Law stipulates: "Taxpayers are permitted, should a calculation error have occurred in their submitted tax return, balance sheet, or profit and loss account, to remedy the error by submitting the necessary documentation within one month from the expiration of the deadline for submission, and to submit a corrected return, balance sheet, or profit and loss account as appropriate..." Accordingly, the practice of the Tax Affairs Organization had been that taxpayers were allowed only one month after the expiration of the return submission deadline to correct calculation errors. In other words, the taxpayer's opportunity to correct errors was first limited to one month from the expiration of the submission deadline, and second, restricted solely to calculation errors.
The Public Relations Office of the Tax Affairs Organization, in a notice dated 20/2/1402 (May 10, 2023), stated that "claims of error or mistake in completing and submitting the tax return form will not be heard in tax litigation authorities." An individual challenged this notice, and ultimately, the General Board of the Court of Administrative Justice, in its decision numbered 140231390003001412, annulled the aforementioned notice and held that the taxpayer's claim in this regard is admissible before the Tax Dispute Resolution Board. However, the content of the decision remains ambiguous. The ambiguity concerns whether the Court's ruling means that the Tax Dispute Resolution Board may examine various aspects of the case and if the issue concerns a claim of error or mistake, it will not be heard, or whether the Board may directly examine such a claim. The apparent interpretation of the Court's decision, which is now followed by most members of the dispute resolution boards, is that the claim of error or mistake in the return itself is also admissible and may be examined by the Tax Dispute Resolution Board. The purpose of this study is to elucidate the legal foundations of this decision and to analyze the position of the tax return within Iran's legal system through a comparative approach to the institution of confession in private law.
 
Methods
This research has been conducted using a descriptive-analytical method. Data and materials were collected through library-based research, involving the examination of written sources, including the Direct Taxes Law, the decisions of the General Board of the Court of Administrative Justice, circulars and notices of the Tax Affairs Organization, as well as private law texts relevant to the institution of confession. In the first stage, the concept, nature, and function of the tax return in Iran's legal system were elucidated. Subsequently, the institution of confession in Iranian civil law was examined based on the provisions of the Civil Code and the opinions of legal scholars, in order to clarify the possibility or impossibility of comparing these two institutions. The decision of the General Board of the Court of Administrative Justice (No. 140231390003001412) and the contested notice of the Tax Affairs Organization were then critically analyzed using qualitative content analysis, focusing on their legal foundations and underlying reasoning. Finally, through logical reasoning and conceptual analysis, the jurisprudential and legal principles governing the tax return and confession—particularly with emphasis on the opposite meaning, the concept of priority, and explanatory clauses—were critically evaluated, and the effectiveness of the Court's decision in promoting tax transparency and justice was assessed.

Results and Discussion
The findings of this research indicate that the contents of the tax return, after the expiry of the one-month period provided for in the note to Article (226) of the Tax Law, are deemed a legal presumption and are therefore unalterable. Several reasons support this conclusion: First, from the opposite meaning of the note to Article (226), it is inferred that outside the one-month deadline from the expiration of the return submission date, the taxpayer cannot correct a calculation error, and from the concept of priority, it can be understood that other errors cannot be corrected either. Second, the phrase "taxpayers are permitted" in the aforementioned note implies a general prohibition, meaning that amending the return is impermissible except in the case of explicit legislative authorization. Third, the tax return is comparable in several respects to the institution of confession in private law. In confession, the principle is that denial is not accepted unless the law has provided an exception. Article (1277) of the Civil Code has limitedly allowed such an exception in private law, but in tax law—which is a branch of public law—the legislator has adopted a different approach, and from the opposite meaning of the note to Article (226), it is inferred that permission to correct a tax return error is extremely limited and subject to specific conditions. Fourth, Article (97) of the Direct Taxes Law permits the Tax Affairs Organization to accept received returns without examination, which implies the finality of such returns as against the taxpayer. Fifth, Article (156) of the Tax Law explicitly affirms the finality of the tax stated in the return as against the taxpayer, stipulating that in cases where the taxpayer's return is deemed final due to lack of examination, the Tax Affairs Department is obliged to forward a copy of the assessment sheet to the Tax Enforcement Prosecutor's Office. This provision further indicates that the taxpayer cannot amend the return after the expiry of the one-month period. Sixth, Note (2) of Article (210) provides that "that part of the tax accepted by the taxpayer as stated in the submitted return or balance sheet shall be deemed final tax and may be collected through enforcement proceedings." The phrase "that part of the tax accepted by the taxpayer" functions as an explanatory and non-restrictive clause, which does not limit the conceptual scope but rather expresses an inherent characteristic. Seventh, given the exceptional importance attached by the legislator to the tax return, it appears that the taxpayer cannot raise a claim of error in the return even before the Tax Dispute Resolution Board. Eighth, the contents of the tax return carry significant legal consequences. Beyond overstatement of return items, understatement also has repercussions for the taxpayer. If a taxpayer understates their income, they become subject to the concealment penalty. If the taxpayer can explain an error regarding overstatement of income and tax before the Tax Dispute Resolution Board, they should equally be able to make such a claim in relation to understatement. Indeed, the number of such individuals may exceed those seeking to reduce their income, and this approach risks rendering the tax return ineffective.
 
Conclusion
The findings of this research indicate that the decision of the General Board of the Court of Administrative Justice regarding the admissibility of claims of error or mistake in completing the tax return before the Tax Dispute Resolution Board is not entirely consistent with the principles and foundations of Iran's tax law. The existing provisions, including Articles (97), (156), and Note (2) of Article (210) of the Direct Taxes Law, all point to the finality of the contents of the tax return after the expiry of the prescribed period. Furthermore, the comparison between the tax return and the institution of confession in private law demonstrates that, owing to the substantive differences between these two institutions and the legislator's distinctive approach in public law, the rules governing confession cannot be fully extended to the tax return. Accordingly, it is recommended that the practical practice of the Tax Dispute Resolution Boards be regulated in a manner consistent with a narrow interpretation of the Court's decision, and that legislative reform be placed on the agenda to resolve the existing ambiguities concerning the amendment of the tax return and the admissibility of claims of error, thereby preventing the filing of multiple and inconsequential claims before tax authorities. Ultimately, a revision of tax regulations aimed at establishing a balance between taxpayers' rights and the public interest may contribute to greater transparency, justice, and efficiency in Iran's tax system.