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Citation: 2005TCC182
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Date: 20050314
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Docket: 2004-4202(IT)APP
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BETWEEN:
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CLERMONT CARRIER,
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Applicant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Tardif J.
[1] This is an application for an
order extending the time in which the applicant may serve a
notice of objection to assessments dated
January 26, 2004, in respect of the 1999 and 2000
taxation years.
[2] The request for an extension was
prepared and submitted by Michel Robitaille, the
applicant's accountant. The request was worded as
follows:
[TRANSLATION]
August 2, 2004
Assistant Director, Appeals
Canada Customs and Revenue Agency
165, rue de la Pointe-aux-Lièvres Sud
Québec, QC G1K 7L3
Re: Notice of Assessment
for the years 1999 and 2000
Mr.
Clermont Carrier
SIN xxx xxx xxx
Dear Sir,
On behalf of Mr. Carrier, I hereby request an extension of the
time in which to object to the assessments for the years 1999 and
2000. The assessments result from an audit by your
representative Chantal Fortier. No detailed accounting was
done before the assessments were made. The assessments are
somewhat arbitrary.
Mr. Carrier is a new client for me, and I have been unable to
devote much time to his matter, mostly because it is annual
tax-filing time.
Attached please find a statement of income for 1999, based on
the detailed accounting for Makisoft. The statement is not final
because the adjustments have not been entered, but it can be seen
that the net income is somewhat different from the amount
assessed. All of this is related to the way in which the account
statements of Small Fry Snack Food Inc. are interpreted.
Do not hesitate to contact me for additional information.
I trust that we will be able to obtain an extension.
Sincerely,
Michel Robitaille, CA
encl.
C.c.: Clermont Carrier
[3] The respondent strenuously opposed
the request for an extension. The applicant, represented by
his accountant Michel Robitaille, did not attend. After being
sworn in, Mr. Robitaille acknowledged and admitted that he
did not prepare the notices of objection within the prescribed
time limits.
[4] Mr. Robitaille argued that
the period in which the assessment was made was a very busy one
for him professionally, owing to the large number of annual tax
filings. He candidly admitted that he failed to prepare the
notices of objection.
[5] According to his testimony,
Mr. Robitaille determined, after thoroughly examining the
applicant Clermont Carrier's file, that there was a
significant difference between the amount assessed and the amount
that should have been assessed. In his view, this explained why
the taxpayer was determined to do whatever was necessary to
ensure that the arbitrary assessment would be revised.
[6] The respondent argued vigorously
that the applicant's file evinced carelessness and negligence
as to the time limits for filing his annual income tax returns as
required, and responding to the notices of reassessment.
[7] The accountant said that he did
not see fit to ask the applicant to attend. Consequently, the
Court was unable to obtain the applicant's position on the
respondent's numerous complaints of negligence in connection
with various late-filed returns over the years.
[8] Are such complaints admissible and
relevant to the merits of the application for an extension? I do
not believe so. However, while the explanations aimed at
justifying the applicant's absence are understandable, they
cannot, considering the grounds of the application, be accepted,
especially since the application pertains solely to the applicant
and does not concern his representative in any way.
[9] Subsection 165(1) of the Income
Tax Act (the "Act") reads as follows:
Objections to assessment
165. (1) A taxpayer who objects to an assessment under
this Part may serve on the Minister a notice of objection, in
writing, setting out the reasons for the objection and all
relevant facts:
(a) where the assessment is in respect of the taxpayer
for a taxation year and the taxpayer is an individual (other than
a trust) or a testamentary trust, on or before the later
of
(i) the day that is one year after the taxpayer's
filing-due date for the year, and
(ii) the day that is 90 days after the day of mailing of the
notice of assessment; and
(b) in any other case, on or before the day that
is 90 days after the day of mailing of the notice of
assessment.
[10] Why was the
notice of objection not timely served? Although the applicant
seems to have played no role in this delay ― his
representative admitted responsibility for the failure to produce
the notice within the prescribed time limits ―
the Court must dispose of the application based on the evidence
submitted.
[11] First of all, the respondent states as
follows in her written opposition:
[TRANSLATION]
. . .
2. The
applicant did not serve his objection to the January 26, 2004,
assessments within the time limit prescribed by
subsection 165(1) of the Income Tax Act (the Act),
which elapsed on April 26, 2004.
3. On
August 2, 2004, the applicant sent the Minister a request to
extend the time for serving an objection to the January 26,
2004, assessments, and attached his objection to that
request.
4. By letter
dated August 27, 2004, the Minister notified the
applicant, in accordance with subsection 166.1(7) of the
Act, that he was refusing to grant him an extension of the time
for serving an objection to the assessments.
5. On October
20, 2004, the applicant filed an application in the
Tax Court of Canada for an extension of the time for serving
an objection to the January 26, 2004, assessments.
6. The
respondent submits that the application should be dismissed for
the following reasons:
(a) the applicant did not file an application extension
[sic] of the time for filing a notice of objection to the
assessments within the time allotted in paragraph
166.1(7)(a) of the Act;
[12] The first argument, to the effect that
the application was filed too late, cannot succeed because a
plain reading of the written objection clearly and unequivocally
shows that the applicant did file his application in time,
thereby complying, in fact, with
paragraph 166.1(7)(a) of the Act, which reads as
follows:
When order to be made
(7) No application shall be
granted under this section unless
(a)
the application is made within one year after the expiration
of the time otherwise limited by this Act for serving a notice of
objection or making a request, as the case may be;
(Emphasis added.)
[13] The notices of reassessment are dated
January 26, 2004. Thus, the first 90-day period
ended on April 26, 2004. After that date, the applicant
had one year after the expiration of the 90-day period to
apply for permission to produce his notice. This means that
he had until April 25, 2005.
[14] However, even the respondent is
alleging that the application was filed on
October 20, 2004, which is well within the
one-year limit. In order for the respondent's argument
under paragraph 166.1(7)(a) to succeed, the
application would have had to be filed after
April 26, 2005.
[15] Still, the appellant's application
cannot be granted solely because it meets this first requirement,
since Parliament has provided that such applications must meet
other conditions as well. Those conditions are set out in
paragraph 166.2(5)(b).
[16] In fact, the respondent's case
against the merits of the application is also based on the
conditions set out in subparagraphs 166.2(5)(b)(i), (ii)
and (iii), which provide as follows:
When application to be granted
(5) No application shall be granted under this section
unless:
(a) . . .
(b) the taxpayer demonstrates that
(i) within the time otherwise limited by this Act for
serving such a notice or making such a request, as the case may
be, the taxpayer
(A) was unable to act or to instruct another to act in his
name, or
(B) had a bona fide intention to object to the assessment or
make the request,
(ii) given the reasons set out in the application and the
circumstances of the case, it would be just and equitable to
grant the application, and
(iii) the application was made under subsection 166.1(1) as
soon as circumstances permitted.
[17] Is the applicant responsible for his
representative's omission? The representative argued
that the delay in producing the notice of objection stemmed
essentially from an oversight on his part, which was caused by an
excess workload attributable to the exceptionally high volume
during the annual tax-filing period.
[18] In keeping with the contents of his
originating document, the applicant essentially repeated the
grounds of his request. On August 2, 2004, the
applicant's representative wrote as follows in support of the
request for an extension:
[TRANSLATION]
Mr. Carrier is a new client for me, and I have been unable to
devote much time to his matter, mostly because it is annual
tax-filing time.
[19] No new facts emerged from the hearing.
The only evidence adduced was an elaboration on the ground set
out in the request and reproduced above. Even if the
appellant's representative admits that the oversight was his,
the applicant must bear responsibility for his agent's
oversight because it was his duty to ensure that the agent would
be able to act within the prescribed time limits.
[20] If this application were to succeed,
the true time limit for filing a notice of appeal would not be 90
days, but rather, one year and 90 days.
[21] Subparagraphs 166.2(5)(b)(i),
(ii) and (iii) were enacted for a reason and serve a useful
purpose, which is to provide affected persons with more time to
register their objection if they satisfy certain specific
conditions, and not if they have failed to act within the time
limit because of oversights, carelessness or a lack of
discipline.
[22] It is certainly not acceptable to claim
entitlement to an extension on the basis that the applicant was a
new client and that the agent, an accountant in this instance,
was unable to devote much time to the matter because it was tax
time.
[23] I do not see how being a new client can
or should create more rights. In addition, the excess
workload was predictable. There can be circumstances in which
professionals have no free time because of a work overload. Under
such circumstances, it would have been more prudent, and
certainly more appropriate, to decline carriage of the
matter.
[24] I therefore find that the applicant has
not fulfilled the conditions set out in subparagraphs
166.2(5)(b)(i) and (iii) of the Act, in that he did not
demonstrate, on a balance of probabilities, that within the time
otherwise limited by the Act for serving the notices of
objection, he was unable to instruct another to act in his name,
and that the application was made as soon as the circumstances
permitted.
Signed at Ottawa, Canada, this 14th day of March 2005.
Tardif J.
Translation certified true
on this 30th day of March 2005
Jacques Deschênes, Translator
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