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Income Tax Act, 1962 (Act No. 58 of 1962)

Department of Finance

Practice Note No. 20

Transactions, Operations or Schemes for Purposes of Avoiding or Postponing Liability for or Reducing Amounts of Taxes on Income: Section 103 of the Income Tax Act, 1962 (the Act)


Date: 25 June 1993


1) Concern has been expressed that the opening words of subsections 103(1), 103(2) and the wording of subsection 103(5)(a) of the Act gives the Commissioner the right and in fact impose an obligation on him to invoke those provisions in relevant circumstances and to re-open any assessment irrespective of the period that has expired since the date of the assessment.


2) The view of Inland Revenue is that the raising of 1 additional assessments in terms of these subsections is subject to the restrictions imposed by the first proviso to section 79 of the Act. Additional assessments may therefore not be raised after the expiry of three years from the date of the assessment unless the Commissioner is satisfied that the amount which should have been assessed to tax was not so assessed or the fact that the full amount of tax chargeable was not assessed, was due to fraud, misrepresentation or non-disclosure of material facts.