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Can the Issuance of a Protective Assessment Extend the Six-Year Time Limit for a Section 70A Claim?

Under section 70A of the Inland Revenue Ordinance (“IRO”), a taxpayer can apply to correct an assessment within 6 years after the end of the year of assessment concerned or 6 months after a relative notice of assessment is served, whichever is the later, if they can prove that the tax charged for that year of assessment is excessive by reason of an error or omission. A recent judicial review case handed down by the Court of First Instance in Good Mark Industrial Limited v. Commissioner of Inland Revenue [HCAL 88/2012] concerns how the time limit for a section 70A application should be interpreted. The issue involved a protective assessment served close to the expiration of the normal six-year time limit for raising an additional assessment for a year and whether the serving of the same enabled the time limit for a section 70A application to correct an earlier assessment for the same year to be extended by up to 6 months from the date when the protective assessment was served.