Silver Mines Limited and Innovation Australia (Taxation)

This matter concerned an appeal by Silver Mines Limited (the Applicant) against decisions by Innovation Australia (the Respondent) to refuse late lodgement of applications for research and development tax concessions for the 2010/2011 and 2011/2012 income years. The Tribunal was required to determine whether exceptional circumstances existed that would justify the late lodgement of these applications.

The central legal issue was whether the Applicant's failure to lodge its applications within the prescribed timeframes constituted exceptional circumstances, as contemplated by the relevant provisions of the *Industry Research and Development Act 1986*. Specifically, the Tribunal considered whether the death of a director or the inadequate advice provided by the Applicant's tax agent amounted to such circumstances.

The Tribunal reasoned that the death of a director was not, in itself, an exceptional circumstance. However, it was prepared to accept, for the sake of argument, that the Applicant not being formally advised of its ability to lodge out-of-time applications until March 2014 constituted an exceptional circumstance. Despite this concession, the Tribunal found that the subsequent delay in lodging the applications was due to the Applicant's own fault. The Applicant had knowledge of the possibility of making an R&D claim well before July 2013 but took no steps to investigate or seek further advice until November 2013. Furthermore, the Applicant then delayed engaging a tax agent for several months due to concerns about fees, and ultimately lodged the applications in June 2014, some seven months after purportedly becoming aware of the possibility of an out-of-time claim. The Tribunal concluded that a prudent person would have acted with greater speed to mitigate further delays.

The decisions under review were affirmed.