Penalties: Onus of proof rests with SARS

WHEN IMPOSING UNDERSTATEMENT PENALTIES, SARS BEARS THE BURDEN OF PROVING THE UNDERLYING FACTS.

The recent case of Lance Dickson Construction CC v Commissioner for the South African Revenue Service (A211/ 2021) [2023] ZAWCHC 12 serves as a reminder of the onus placed upon SARS to prove the facts on which it has based the imposition of an understatement penalty (USP) in respect of a taxpayer.

It also highlights the fact that when SARS exercises the powers conferred upon it, it must do so cautiously and sensibly.