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SARS filing a revised assessment without taxpayer’s knowledge

Wednesday, 15 October 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I have a complaint regarding SARS’s conduct, and before I take the matter further, I would appreciate it if you could advise whether I have any grounds.


I have a client who was retrenched by his employer during the 2013 tax year.  However, he still finalised some projects for them, for which he was paid a professional fee.  He declared this income as "local business, trade and professional income” in his 2013 ITR12.

During the 2014 tax year, my client was employed for only one month, i.e. March 2013.  He received income as an independent contractor, which was declared on an IRP5 certificate.  He earned no other income during the 2014 tax year, so I did not declare any other income.

2014 Tax return 

SARS asked for copies of my client’s supporting documents, which I sent to them.  But it seems they were not happy with the fact that he declared no local business income, therefore SARS issued an additional assessment to him, in which they included professional income of Rx.  

In terms of section 42(6) of the Tax Administration Act, SARS had to send grounds for the additional assessment to the taxpayer within 21 working days, which they did not do.  So I called SARS today to make sure that no reasons were posted.  The SARS official confirmed that no correspondence with the grounds was issued.  She also said that SARS’s records show that they wanted to include business income for 2014, because the taxpayer earned professional income in 2013.

What I am upset about, is that the SARS official told me that SARS submitted a revised ITR12 on behalf of my client on the date of the additional assessment, in which SARS declared the Rx as local business income.  Is SARS allowed to do this?  How can they submit a tax return on behalf of a taxpayer, without the taxpayer’s knowledge, when a taxpayer must actually sign a tax return to confirm that the information declared is true and correct?

A: We agree with you that SARS is not allowed to submit "a revised ITR12 on behalf of my client”.  The Tax Administration Act (in section 95) provides that:

(1) SARS may make an original, additional, reduced or jeopardy assessment based in whole or in part on an estimate if the taxpayer—

(a) fails to submit a return as required; or

(b) submits a return or information that is incorrect or inadequate.

(2) SARS must make the estimate based on information readily available to it.  

We assume that SARS considered that subsection 1(b) applies in this instance.  It is agreed that SARS didn’t act in an administratively fair manner in this case.  Judge Ponnan (in the Pretoria East motors case) explained it as follows:

"The raising of an additional assessment must be based on proper grounds for believing that, in the case of … income tax it must be based on proper grounds for believing that there is undeclared income or a claim for a deduction or allowance that is unjustified. It is only in this way that SARS can engage the taxpayer in an administratively fair manner, as it is obliged to do.”  

We also agree that SARS had to provide grounds for the assessment – refer to section 96(2).  The problem now is that the additional assessment was already issued and it one can’t argue that the assessment is invalid due to the fact that no grounds for the assessment were given.  

The correct procedure to follow is to, in the first instance, request suspension of the payment of the amount due – refer to section 164.  The next step would be to request reasons for the assessment – rule 6 of the Rules for dispute resolution and then to make objection against the assessment.  


Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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