Tax court condones late filing of appeal due to faulty internet connection
22 November 2017
by Esther van Schalkwyk, Tax Consulting Manager, BDO Cape Town
SARS recently published 11 decisions on its website that were delivered by the Tax Court between January and August 2017. Among these were case number 0018/2016 delivered by the Gauteng Tax Court on 27 January 2017 regarding a taxpayer’s request for condonation of the late filing of an appeal.
The taxpayer’s tax practitioner apparently experienced problems with the ADSL line in his neighbourhood in December 2013. During that time the tax practitioner ploaded the taxpayer’s Notice of Appeal (NOA) on eFiling against a partial disallowance of an objection. On enquiry on the progress six months later, it transpired that SARS had no record of the appeal. Two days after becoming aware of this he successfully filed a new NOA on eFiling with a request for condonation citing the faulty ADSL line as the reason for being late. SARS refused condonation of the late appeal, stating that it had no discretion to extend the time period for lodging an appeal by more than 45 business days.
A senior SARS official may extend the 30 business days within which an appeal must be lodged by 21 business days (if reasonable grounds exist for the delay) or by up to 45 business days (if exceptional circumstances justify an extension beyond 21 business days). The legislation does not specify from which date the 30 business days should be calculated.
The court ruled that the extension should be calculated “from the date of the request” (as opposed to the date of the disallowance of the objection as was argued by SARS). In arriving at this decision the court reasoned that there may be cases where the taxpayer is either unware of the disallowance of an objection or that its NOA was not filed in the prescribed manner (as was the case before the court). The court stated that it would not make sense to expect a party who is unaware of its failure or that an administrative action has been taken against it to invoke its internal remedies to resolve a dispute with an organ of state. The court condoned the late filing of the appeal, considering that:
- The delay was caused by a defective ADSL line which was not the taxpayer’s fault;
- The taxpayer submitted a new NOA and condonation application a mere two days after becoming aware of the situation;
- There appeared to be good prospects of success on appeal as SARS failed to indicate why the two lever arch files of supporting documents that the taxpayer submitted with the objection were not considered; and
- There would be no prejudice to SARS if condonation was granted whereas the taxpayer would suffer prejudice if condonation was refused.
Taxpayers who wish to dispute any decision by SARS should be mindful of the relevant time periods.
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