The s 222AOJ(2) defence to director penalty liability under Division 9 of the Income Tax Assessment Act 1936 (Cth) requires a director to establish a good reason for non-participation in company management for the entirety of the period during which the s 222AOB(1) obligation exists, including any period of continuation under s 222AOB(3). A director who has a good reason for part of the period but not all of it cannot rely on the defence. The Commissioner should exercise Division 9 powers expeditiously to avoid escalation of penalties.
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