Page 581 - Juta's Indirect Tax

IN 15 (4) TAX ADMINISTRATION ACT: INTERPRETATION NOTES IN 15 (4)
4.3 Limitation on the extension of time to lodge an objection
Section 104(5) places a limitation on the extension of time that a senior SARS of cial may grant for the lodging of an objection. It applies with effect from the commencement of the TA Act on 1 October 2012. The extension of the period for lodging an objection is prohibited –
• for a period exceeding 21 business days (calculated from the end of the 30-day period referred to in 4.1, in other words
the period for lodging an objection may not exceed 51 business days after the date of assessment or decision, the delivery of a notice under rule 6(4) or the delivery of the notice providing the reasons for the assessment under rule 6), unless a senior SARS of cial is satis ed that exceptional circumstances exist which gave rise to the delay;
• if more than three years have lapsed from the date of the assessment or the decision; or
• if the grounds for the objection are based wholly or mainly on a change in a practice generally prevailing which applied
on the date of the assessment or decision.
The term ‘exceptional circumstances’ is not de ned for the purposes of section 104. Consideration must therefore be given to its ordinary grammatical meaning, taking into account The online Oxford Dictionary* de nes ‘exceptional’ as follows:
‘Unusual; not typical.’
The circumstances referred to must thus be of such a nature that they would be considered as being something out of the ordinary and of an unusual nature. In a criminal bail case the Constitutional Court was required to consider what constituted exceptional circumstances and stated the following:†
‘In this regard I am not persuaded that there is any ...validity in the complaint raised ... that the term ‘exceptional circumstances’ is so vague that an applicant ... does not know what it is that has to be established. ... In any event, one can hardly expect the lawgiver to circumscribe that which is inherently incapable of delineation. If something can be imagined and outlined in advance, it is probably because it is not exceptional.’
Each case must be considered according to its own merits in order to determine whether the reason for requesting an extension of more than 21 business days is exceptional and therefore justi es the requested extension.
Section 218 lists what comprises exceptional circumstances in the context of the remission of penalties. Although not directly relevant to section 104(5), it nevertheless provides an indication of the type of things which, taking into account the particular facts and circumstances, may constitute exceptional circumstances for purposes of section 104(5). For example, exceptional circumstances may include –
• a natural or human-made disaster;
• a civil disturbance or disruption in services; • a serious illness or accident; and
• serious emotional or mental distress.
The mere existence of one of these factors is not suf cient. The taxpayer would need to demonstrate that the factor was the reason for the delay.
The term ‘practice generally prevailing’ as used in section 104(5)(c) is de ned in section 1 and has the meaning assigned in section 5. Section 5(1) provides that a practice generally prevailing is a practice set out in an of cial publication regarding the application or interpretation of a tax Act. An ‘of cial publication’ is de ned in section 1 as a binding general ruling, interpretation note, practice note or public notice issued by a senior SARS of cial or the Commissioner. It does not include a guide or brochure. The objection process and timeframes are illustrated in Annexure A.
4.4 Format of an application for an extension of time
The obligation to provide facts and arguments supported by documentation and evidence when submitting an application for an extension of the period in which to lodge an objection lies with the taxpayer. SARS bears no responsibility, but reserves the right, to make further enquiries.
In ITC 1795‡ the taxpayer failed to provide proof of the expenses claimed and the Commissioner accordingly denied the objection. The taxpayer then lodged a late appeal and failed to provide valid reasons for the delay in noting the appeal. The court held that based on the facts and circumstances of the case the Commissioner was correct in not entertaining the late lodgement.
The importance of a taxpayer submitting a proper detailed application for an extension of time in which to lodge an objection or appeal cannot therefore be overemphasised.
4.5 Refusal to grant an extension
In the event that a senior SARS of cial, having considered the reasons furnished for not lodging the objection within the prescribed time, decides not to grant an extension of the period in which to submit an objection or lodge an appeal, a taxpayer may object and appeal against such a decision.§
Under section 104(5) (see 4.3) a senior SARS of cial may not grant an extension of the period to lodge an objection if more than three years have elapsed from the date of the assessment or the decision. In these circumstances the senior SARS of cial does not make a decision; the request for condonation or an extension is simply denied by operation of
* www.oxforddictionaries.com/definition/english/exceptional. [Accessed 4 November 2014].
† S v Dlamini; S v Dladla & others; S v Joubert; S v Schietekat 1999 (7) BCLR 771 (CC), 1999 (4) SA 623 (CC) at 669.
‡ (2005) 67 SATC 297 (G).
§ Section 104(2)(a) and (b).
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