The prescription period for a revised assessment is either three years for taxes assessed by SARS or five years for taxes self-assessed by a taxpayer.
Before the advent of s 98 of the Tax Administration Act a taxpayer could not request a reopening of an erroneous assessment discovered after the expiry of the prescription period.
A recent case, Medox Limited v CSARS (20059−2014)  ZASCA 74 (27 May 2015), decided before the inception of the Tax Administration Act, under s 81 of the Income Tax Act, as it pertained to the 1997 year of assessment), held that assessments after the prescription period could not be reopened in order to include and carry forward an inadvertently omitted assessed loss.
The insertion of s 98(1)(d) of the Tax Administration Act was meant to address problems with erroneous assessments, which are often discovered only after all prescription periods and remedies have expired, on the basis that it would be inequitable to recover the tax due under such assessments.
The idea, seemingly, was to allow for the withdrawal of assessments after the prescription period, in narrow circumstances, which included an undisputed factual error perpetrated by the taxpayer in a return. According to SARS, however, the true intention was to address only adverse assessments resulting from factors beyond the taxpayer’s control.
Amendment to TAA
Accordingly, owing to a lack of clarity of interpretation of s 98(1)(d), it has been deleted by the Tax Administration Laws Amendment Act 23 of 2015 (promulgated on 8 January 2016) and its content moved to s 93(1)(d) and (e), although in an amended form.
The wording of s 93(1)(d) now provides that SARS must be satisfied that there is a ‘readily apparent undisputed’ error in order for post-prescription relief to be justified.
To my mind, the application of this new expression, ‘readily apparent undisputed error’, in a decision whether the exception to the prescription period should be allowed is moot.