DS v Commissioner For SARS (13238 & 13164/2008) [2014] ZATC 5; 77 SATC 175 (8 December 2014)

DS v Commissioner For SARS (13238 & 13164/2008) [2014] ZATC 5; 77 SATC 175 (8 December 2014)

The court held that the Commissioner’s satisfaction, as expressed in the assessment letter of 30 November 2010 and the subsequent disallowance letter, was based solely on the first change in shareholding (March 2003) and not on the second change (November 2003). The Commissioner cannot amend his grounds of assessment to rely on matters on which he was not satisfied at the time of issuing the assessment. The jurisdictional fact for the exercise of the Commissioner’s power under s 103(2) is his satisfaction at the time of assessment, and he must stand or fall by those reasons. The application to amend was refused and the taxpayer’s counter-application to strike out references to the second...

Citation
[2014] ZATC 5
Parties
Appellant: DS; Respondent: Commissioner For SARS
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
8 December 2014
Case Number
13238 & 13164/2008
Procedural Posture
Civil Application / Interlocutory Application and Counter Application Regarding Amendment and Striking Out in Tax Appeal
Outcome
The Commissioner’s application to amend his grounds of assessment is dismissed with costs. The taxpayer’s counter-application to strike out is granted, with costs awarded against the Commissioner.
Judges
Rogers
Legal Topics
Income Tax Act, Assessed Loss Set Off, Anti Avoidance, Amendment of Pleadings, Jurisdictional Facts
Tax Law Civil Procedure Income Tax Act Assessed Loss Set Off Anti Avoidance Amendment of Pleadings Jurisdictional Facts

Case Brief

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Parties

DS

Appellant

Commissioner For SARS

Respondent

Procedural Posture

Civil Application / Interlocutory Application and Counter Application Regarding Amendment and Striking Out in Tax Appeal

Legal Issues

  1. 1 Whether the Commissioner for SARS may amend his grounds of assessment to rely on a second change in shareholding under s 103(2) of the Income Tax Act.
  2. 2 Whether the Commissioner is limited to the matters on which he was satisfied when issuing the original assessment.
  3. 3 Whether the taxpayer is entitled to strike out references to the second change in shareholding from the Commissioner’s grounds of assessment.

Ratio Decidendi

The court held that the Commissioner’s satisfaction, as expressed in the assessment letter of 30 November 2010 and the subsequent disallowance letter, was based solely on the first change in shareholding (March 2003) and not on the second change (November 2003). The Commissioner cannot amend his grounds of assessment to rely on matters on which he was not satisfied at the time of issuing the assessment. The jurisdictional fact for the exercise of the Commissioner’s power under s 103(2) is his satisfaction at the time of assessment, and he must stand or fall by those reasons. The application to amend was refused and the taxpayer’s counter-application to strike out references to the second...

Court Disposition

The Commissioner’s application to amend his grounds of assessment is dismissed with costs. The taxpayer’s counter-application to strike out is granted, with costs awarded against the Commissioner.

Orders

  • The Commissioner’s application to amend dated 7 August 2014 is dismissed with costs.
  • An order is granted in accordance with prayer one of the notice of counter-application dated 9 September 2014.