1. Was the second submitted by way of a request for correction? – Yes, a request for correction for submitted however the correction was not to amend the medical deduction section, there was an error on the IRP5 which had been corrected. 2. All of that ma
Important:
This answer is based on tax law for the year ending 28 February 2012.
Answer:
The principle we referred to, which is found in section 99(1)(a) of the Tax Administration Act, is that SARS may not make an assessment “three years after the date of assessment of an original assessment by SARS”. This prescription does not apply when any of the circumstances mentioned in section 99(2)(d) applies. It was our view that either section 99(2)(d) or 99(2)(e) are the only ones that may be relevant.
We are not sure if the taxpayer would be able to prove that “the fact that the full amount of tax chargeable was not assessed, was due to … non-disclosure of material facts” in this case.
SARS can then only respond to a request referred to in section 93(1)(d) if SARS became aware of the error referred to in that subsection before expiry of the period for the assessment under section 99(1).
Section 99(2)(e) doesn’t contain a similar time limit, but requires that SARS receives a request for a reduced assessment under section 93(1)(e). under section 93(1)(e) SARS may make a reduced assessment if a senior SARS official is satisfied that an assessment was based on—
(i) the failure to submit a return or submission of an incorrect return by a third party under section 26 or by an employer under a tax Act;
(ii) a processing error by SARS; or
(iii) a return fraudulently submitted by a person not authorised by the taxpayer.
You will notice that this subsection doesn’t refer to an error by the taxpayer. It is section 93(1)(d) that does and if made after three years after assessment, is nit available.