Tax Court Judgments
25 March 2023
Tax Administration Act, 2011, and Employment Tax Incentive Act, 2013.
1. IT45935
Regarding the Procedure – determining good cause in the interest of justice and whether good cause was established not to grant the appellant the default judgment it sought.
Procedure: Interlocutory application – whether statement delivered by the respondent (“SARS”) in terms of tax court rule 31 may be set aside as an irregular step – proper interpretation of specific rules/sub-rules, in particular the interplay between rules 4, 52(1), 52(6) and 56.
In this legal case, the court had to interpret the rules relating to extending prescribed periods for objections and appeals against assessments or decisions under Chapter 9 of the Tax Administration Act (TAA). The taxpayer argued that Rule 56(1)(a) of the TAA allowed it to apply for condonation of its late delivery of a statement of grounds of appeal, even though it had already received a notice under Rule 52(6) to remedy its default. The court rejected this argument, finding that Rule 52(6) applied where a party was in default and wished to proceed, while Rule 56(1)(a) came into play where the innocent party wanted to do something about the default. The court held that SARS had complied with Rule 56(1)(a) and that its statement was properly before the court, but the 45-day period for the taxpayer to deliver its statement of grounds of appeal would only commence upon formal notification by the registrar of the tax court in accordance with Section 131 of the TAA. Accordingly, the court dismissed the taxpayer’s application and ordered that costs follow the appeal’s result.
You can read the judgment delivered here.
2. 2022/37
Procedure: Determining good cause in the interest of justice – whether good cause was established not to grant the appellant the default judgment it sought.
You can read the judgment delivered here.
Income tax: Set-off of assessed losses – whether the taxpayer may, in terms of section 20(1) of the Income Tax Act, set off (deduct) the balance of the foreign assessed loss from an aircraft partnership trade, as carried forward to the 2018 tax period, against the income received by or accrued to her in the form of recoupments arising from the deemed disposal, under section 9H of the Act, of partnership assets used in the conduct of foreign trade.
You can read the judgment delivered here.
