The Supreme Court of Appeal (SCA) has ruled that Airports Company South Africa (ACSA) is not entitled to amend an objection against an additional assessment of its 2011 tax year by the SA Revenue Service (SARS).
ACSA wanted to make the amendments after the expiry of the period prescribed by law within which they could do so.
SARS turned to the SCA after the Tax Court in Johannesburg held that ACSA is permitted to amend its objection against the additional assessment of the 2011 tax year made by SARS in March 2016.
The SCA ruled last week that, in terms of the Tax Administration Act (TAA), read in conjunction with the tax court rules, a taxpayer is not entitled to amend an objection against an additional assessment after the expiry of the periods prescribed.
Therefore, the SCA upheld the appeal by SARS against the tax court ruling, set aside the tax court judgment, and dismissed ACSA’s application to amend its original objection to the additional SARS assessment for the 2011 tax year.
The matter relates to an income tax audit SARS conducted from December 2015 to February 2016. In the additional assessment, among other things, SARS disallowed certain deductions ACSA claimed in respect of corporate social investment (CSI) expenditure, and certain allowances claimed in terms of commercial buildings. SARS also imposed understatement penalties (USPs) and interest in terms of the TAA.
The SCA judgment states that the effect of the amendment sought by ACSA will be to extend the period for the filing of an objection – or the filing of new grounds of objection – long after the peremptory periods prescribed in the TAA and court rules had expired.
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“The prescribed time periods provided for in the TAA, read with [the court rules], taken together with the ability of a taxpayer to secure an extension of time within the permitted parameters, achieves a fair balance between SARS and the taxpayer,” states the SCA judgment.
“To permit amendments to an objection would unjustifiably undermine the principles of certainty and finality which underpin a revenue authority’s duty to collect taxes. It would also permit the taxpayer to impermissibly introduce new grounds of objection to the additional assessment.”
Source: News 24
