An individual taxpayer recently realised that he should have been assessed to a refund in respect of his 2017 year of assessment. This is associated with the so-called “183/60 day exemption”. Instead of a refund, SARS assessed the taxpayer to a liability. The trouble was that the assessment against which an objection lied was more than two years old (but not more than three years old).
On the facts of the case there appeared to be no exceptional circumstances that could justify the delay in submitting the objection. Therefore an objection would almost certainly be rejected.
After closer scrutiny of the assessments and returns, it came to light that the exemption claim was simply disallowed in the original assessment. This was despite it being correctly claimed on the return. It was also clear that there was no audit or verification conducted. Clearly then, the original assessment raised by SARS was not fully based on a return/information submitted by the taxpayer. As such, SARS was obliged, in terms of section 96, to include the grounds for the assessment in the original assessment. SARS failed to do so. Had SARS complied with their obligations under the TAA, the taxpayer (being a layperson) would have been aware of the disallowance of the exemption claim. He would have been in a position to lodge an objection on time.
In this case, it was successfully argued that SARS’ non-compliance with the provisions of the relevant legislation constituted exceptional circumstances. The late objection was condoned by SARS.