My client would like to apply for an extension based on mitigating circumstances due to family health issues (spouse diagnosed with cancer)?
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
We accept that the issue here is that the client requires condonation of the late filing of an objection. If the relevant objection wasn’t delivered within the relevant period, the taxpayer may thereafter only submit a new and valid objection together with an application to SARS for an extension of the period for objection under section 104(4).
The current practice generally prevailing is that a senior SARS official may extend the date for lodging an appeal by –
• 21 business days, if satisfied that reasonable grounds exist for the delay; or
• up to 45 business days, if exceptional circumstances exist that justify an extension beyond 21 business days.
It appears that the objection was made after the 30 plus 21 days. According to that practice “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 justifies the requested extension.”
SARS believes that, “although not directly relevant to section 104(5), section 218 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 sufficient. The taxpayer would need to demonstrate that the factor was the reason for the delay.”
The problem faced by the taxpayer is that the tax court recently agreed with SARS’s approach. The following is an extract from Judge Satchwell’s decision:
“The lapse of time from mid December 2014 to June 2015 is not satisfactorily explained – let alone sufficiently to discharge the onus of proving ‘exceptional circumstances’.”