Published on 14 November 2022

FIRST SECTION

Application no. 57718/15 FIN FER SPA against Italy lodged on 9 November 2015 communicated on 25 October 2022

SUBJECT MATTER OF THE CASE

The applicant is a company which, on 13 January 2011, was notified by the Tax Authority of Avellino ( Agenzia delle Entrate ) of a tax assessment notice ( avviso di accertamento del tributo ). It was found liable to pay taxes for the revenues it had not declared to the Authority. In addition, tax surcharges and tax fines as prescribed by the relevant tax laws have been imposed on it.

The assessment undertaken by the Tax Authority was based, inter alia , on the following elements: the legal presumption according to which movements and transactions in the bank accounts of shareholders and administrators of small companies are presumed to be non-declared revenues of the company; and on the oral statements issued by the administrators of two companies that had had commercial relationships with the applicant. They declared to the Tax Authority that they had made payment for activities attributable to the applicant company directly to its administrator. Therefore, in the Tax Authority’s view, the statements confirmed the presumption cited above.

The applicant challenged the tax assessment notice before the Provincial Tax Commission of Avellino. The Commission observed that the applicants had failed to reverse the presumption which, by contrast, was confirmed by the statements of the applicant company’s clients. Therefore, it upheld the tax assessment. The applicant lodged an appeal with the Regional Tax Commission of Naples, Section of Salerno, arguing, inter alia , that there were no factual elements confirming the presumption, and that the statements of the witnesses, issued outside the pending judicial proceedings and not at the presence of the applicant’s lawyer, had been misinterpreted by the Tax Authority. The applicant also argued that the Tax Authority had selected part of the statements and omitted those parts that were in the applicant’s favour. The Regional Tax Commission partially granted, on different grounds than the complaints raised before the Court in the instant application, the applicant’s appeal, thereby reducing the final amount to be paid by the applicant. Eventually the Court of Cassation upheld the appeal decision on 15 May 2015.

The applicant complains of the alleged violation of Article 6 §§ 1 and 3 (d) of the Convention. It argues that the proceedings against it were unfair, as the tax assessment was largely based on the oral statements of witnesses, issued outside the judicial proceedings but positively assessed by the judicial authorities. However, pursuant to Article 7 § 4 of Decree no. 546 of 1992, which establishes a legal prohibition of witness evidence in judicial proceedings before tax courts, the applicant could not counter-examine before the competent courts the witnesses that had made statements against it. Therefore, in the applicant’s view, it was precluded from assessing the credibility and reliability of the witnesses and to ask them to clarify the statements issued to the Tax Authority and recorded by the latter.

QUESTION TO THE PARTIES

1. Was the applicant company’s representative prevented from requesting to cross-examine the witnesses who had made statements against it, because of the provision enshrined in Article 7 § 4 of Decree no. 542 of 1992?

If so, does such situation amount to a violation of Article 6 § 1 in conjunction with Article 6 § 3 (d) of the Convention (see Chap Ltd v. Armenia , no. 15485/09, §§ 41-53, 4 May 2017, and, a contrario , Jussila v. Finland [GC], no. 73053/01, § 46, ECHR 2006 ‑ XIV)?

2. The Government are requested to provide the Court with the records of the statements issued by the relevant witnesses to the Tax Authority during the tax assessment proceedings.