Sobier,
T.CJ.:—This
appeal
was
heard
at
Toronto
on
August
28,
1990.
At
the
outset,
counsel
for
the
appellant
and
the
respondent
agreed
that
the
facts
in
this
appeal
are
not
in
dispute.
Briefly
stated
from
the
notice
of
appeal,
on
February
29,
1984,
the
appellant
purchased
for
$694,000
a
note
issued
by
Concord
Scientific
Corporation
("Concord")
in
the
principal
amount
of
$388,640.
As
a
result
of
such
purchase,
Mr.
Taylor
became
entitled
to
a
scientific
research
tax
credit
which
reduced
the
cost
of
the
note
to
him
to
$347,000.
The
note
was
repaid
by
Concord
on
February
29,
1984
for
$388,640.
The
gain
of
$41,640
was
included
by
the
appellant
in
his
income
for
tax
purposes
for
1984
as
a
capital
gain.
At
the
time
of
filing
the
original
return
of
income
for
1984,
the
appellant
did
not
file
an
election
pursuant
to
subsection
39(4)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
On
February
2,
1988,
the
appellant
filed
an
amended
tax
return
for
1984
which
included
an
election
pursuant
to
subsection
39(4)
of
the
Act.
The
notification
of
confirmation
sent
to
the
appellant
was
based
on
the
reason
that
"an
election
was
not
filed
in
a
prescribed
form
in
accordance
with
subsection
39(4)
of
the
Act".
Issue
The
issue
in
this
appeal
is
whether
the
appellant
complied
with
the
provisions
of
subsection
39(4)
of
the
Act.
It
is
the
appellant's
submission
that
filing
the
election
with
an
amended
tax
return
for
the
1984
taxation
year
complied
with
the
requirements
of
subsection
39(4)
of
the
Act
in
that
the
election
was
filed
“in
his
return
of
income
.
.
.
for
that
year".
The
appellant
submitted
that
there
is
no
provision
in
the
Act
or
rule
of
law
which
precludes
a
taxpayer
from
filing
an
amended
return
of
income
for
a
year.
The
appellant
referred
to
subsections
152(6)
and
49(4)
of
the
Act
as
authority
for
this
proposition.
Counsel
for
the
respondent
argued
that
these
provisions
are
different
in
that
they
permit
the
filing
of
an
amended
return
in
cases
where
the
taxpayer
is
entitled
to
elect
treatment
of
his
income
on
a
retroactive
basis
because
it
is
the
happening
of
events
which
have
occurred
after
the
filing
of
the
original
return
that
permits
him
to
file
an
amended
return.
While
any
taxpayer
may
file
an
amended
return,
is
the
Minister
required
to
deal
with
that
return
by
way
of
reassessment?
Reference
was
made
by
counsel
for
the
appellant
to
Canada
v.
Miller,
J.,
[1990]
2
C.T.C.
4;
90
D.T.C.
6355
(F.C.T.D.).
This
case
deals
with
forward
averaging
in
the
manner
I
referred
to
above.
In
Miller,
the
Court
found
that
"common
sense
dictates
that
when
the
amounts
appearing
in
the
taxpayer's
income
tax
return
are
changed
by
Revenue
Canada
because
of
an
assessment,
the
corresponding
amounts
on
the
forward
averaging
election
form
must
also
be
changed."
[Emphasis
added.]
Therefore,
there
must
be
a
reassessment
by
the
Minister.
Here
nothing
was
done
by
Revenue
Canada
which
affected
the
taxpayer's
return
or
how
the
taxes
were
to
be
calculated.
In
the
decision
of
Taylor,
T.C.J.,
in
the
original
instance
of
Miller,
J.
v.
M.N.R.,
[1985]
1
C.T.C.
2390;
85
D.T.C.
318
at
2391
(D.T.C.
319),
His
Honour
stated:
"I
am
not
aware
of
jurisprudence
which
would
mandate
the
acceptance
of
any
such
amended
return
by
the
Minister—no
matter
what
may
be
general
practice”.
The
Federal
Court-Trial
Division
took
no
exception
to
this
statement
and
I
accept
it.
Counsel
for
the
respondent
referred
to
Hadler
Turkey
Farms
Inc.
v.
The
Queen,
[1986]
1
C.T.C.
81;
86
D.T.C.
6013.
This
was
an
appeal
heard
by
the
Associate
Chief
Justice
of
the
Federal
Court-Trial
Division
from
the
judgment
of
the
Tax
Review
Board.
His
Lordship
dealt
with
the
effect
of
reassessment.
At
pages
81-82
(D.T.C.
6014),
His
Lordship
states:
The
first
question
to
be
dealt
with
is
whether
the
reassessment
by
the
Minister
creates
an
on-going
process
and
thereby
keeps
the
matter
open
in
such
a
way
as
to
give
the
taxpayer
all
options
that
were
available
at
the
time
of
filing
the
initial
returns.
Not
surprisingly,
this
point
has
been
dealt
with
before
and
I
consider
myself
bound
by
the
unequivocal
language
of
the
Supreme
Court
of
Canada
in
Montreal
Trust
Co.
(Lodestar
Drilling
Co.
Ltd.)
v.
M.N.R.,
[1962]
C.T.C.
418;
62
D.T.C.
1242.
In
that
portion
of
his
dissenting
reasons
concurred
in
by
the
majority
of
the
Court,
Judson
J.
states:
When
the
Minister
re-assessed
in
April
1955,
he
had
before
him
only
the
original
return
and
the
first
amended
return.
He
was
under
no
compulsion
to
act
on
the
second
amended
return
filed
after
the
notice
of
re-assessment.
Both
the
Income
Tax
Appeal
Board
and
the
Exchequer
Court
have
so
held.
The
mere
fact
that
a
re-assessment
in
1955
does
not
open
the
matter
of
taxability
at
large
and
compel
the
Minister
to
re-assess
in
accordance
with
an
amended
return
made
out
of
time
.
.
.
Under
this
legislation,
if
the
taxpayer
wishes
to
carry
back
business
losses,
he
must
file
his
amended
return
within
the
statutory
time
limit.
Otherwise
the
Minister
cannot
be
compelled
to
accept
the
amended
return.
[Emphasis
added.]
Accordingly,
I
must
conclude
that
the
reassessments
by
the
Minister
in
1977
do
not
open
the
entire
question
of
taxability
for
the
plaintiff's
1973,
1974
and
1975
taxation
years.
It
is,
therefore,
not
open
to
the
plaintiff
to
file
new
or
amended
returns
on
the
basis
of
the
reassessments.
There
may
be
a
distinction
here
between
Lodestar
and
this
appeal
since
the
filing
of
the
amended
return
in
Lodestar
was
stated
to
be
made
"out
of
time".
However
in
Hadler
Turkey
Farms,
the
amended
return
was
not
filed
"out
of
time”.
The
appellant's
position
is
that
the
filing
of
the
amended
return
by
the
appellant
was
not
made
out
of
time
since
there
is
no
time
limit.
I
consider
this
irrelevant.
Continuing
with
the
reasons
for
judgment
in
Hadler
Turkey
Farms
dealing
with
the
time
in
which
an
election
may
be
made,
at
page
83
(D.T.C.
6015),
His
Lordship
states:
150.
(1)
A
return
of
the
income
for
each
taxation
year
in
the
case
of
a
corporation
and
for
each
taxation
year
for
which
a
tax
is
payable
in
the
case
of
an
individual
shall,
without
notice
or
demand
therefor,
be
filed
with
the
Minister
in
prescribed
form
and
containing
prescribed
information.
Once
a
return
is
filed,
it
is
the
Minister’s
responsibility
to
examine
it,
and
to
assess
the
tax
for
the
year,
any
interest
or
penalties
that
may
be
payable
and
any
refund
to
which
the
taxpayer
is
entitled
(section
152).
Here,
the
plaintiff
filed
returns
for
the
1973,
1974
and
1975
taxation
years
in
which
it
calculated
income
and
taxable
income
using
the
accrual
method
of
accounting.
In
my
view,
it
is
consistent
with
the
specific
language
of
section
28
and
with
the
general
scheme
of
the
Act
to
interpret
section
28
as
giving
to
this
taxpayer
the
open-ended
option
to
switch
from
the
accrual
method
to
the
cash
method.
The
timing
of
the
exercise
of
the
option
remains
in
the
hands
of
the
taxpayer
without
the
necessity
of
the
Minister's
approval.
I
would
however
consider
it
redundant
were
the
section
to
specify
a
particular
time
at
which
the
election
can
be
made
since,
obviously,
it
can
only
be
made
with
the
filing
of
the
return.
It
also
seems
to
me
to
be
entirely
consistent
with
the
intent
of
the
section
and
the
intent
of
the
Act
that
once
a
taxpayer
files
his
return
on
the
accrual
basis,
the
cash
option
no
longer
exists
for
that
taxation
year.
[Emphasis
added.]
Once
the
taxpayer
has
filed
his
return,
it
is
his
return
for
the
year.
In
answer
to
the
argument
that
the
taxpayer
may
file
an
amended
return
at
any
time,
the
Minister
argued
that
there
is
nothing
in
subsection
39(4)
which
requires
the
Minister
to
accept
and
deal
with
such
an
amended
return.
I
agree
with
this
proposition.
In
dealing
further
with
the
question
of
the
proper
time
for
filing
the
election
under
subsection
39(4),
I
refer
to
Financial
Collection
Agencies
(Quebec)
Ltd.
v.
M.N.R.,
[1990]
1
C.T.C.
2178;
90
D.T.C.
1040
a
decision
of
Rip,
T.C.J.
The
present
appeal
is
similar
in
some
respects
to
Financial
Collection
Agencies
but
in
the
latter
case,
the
taxpayer
attempted
to
file
an
election
under
subsection
39(4)
unaccompanied
by
an
amended
tax
return
whereas
in
the
present
case
the
appellant
has
chosen
to
file
an
amended
tax
return
and
the
election
together.
I
cannot
concur
with
the
argument
of
the
appellant
that
the
mere
filing
of
an
amended
tax
return
with
the
election
distinguishes
the
Financial
Collection
Agencies
decision
from
the
case
at
hand.
In
both
cases
the
election
was
not
filed
with
the
original
return.
I
now
refer
to
the
decision
of
Rip,
T.C.J.
at
page
2187
(D.T.C.
1047):
The
appellant's
position
is
that
it
filed
a
valid
election,
notwithstanding
that
it
did
not
elect
in
prescribed
form
in
its
return
of
income
and
that
the
election
in
prescribed
form
was
filed
some
17
months
after
the
return
of
income
for
1985
was
filed.
Appellant's
counsel
submitted
that
"a
taxpayer
can
file
a
return
of
income
at
any
time
he
desires
notwithstanding
section
150
and
any
election
required
to
be
included
in
the
return
of
income
can
similarly
be
filed
at
such
late
date
and
would
be
a
valid
election”.
At
pages
2189-90
(D.T.C.
1049),
Judge
Rip
stated
as
follows:
Counsel
also
argued
that
an
election
is
additional
information
to
be
added
to
a
tax
return
and
by
filing
the
election
late
the
appellant
was
simply
amending
its
return.
Thus
the
election
ought
to
be
accepted
by
the
respondent
as
a
valid
election.
There
is,
as
far
as
I
am
aware,
only
one
provision
in
the
Act
which
permits
a
taxpayer
to
amend
an
income
tax
return
for
the
year
which
has
been
filed.
Subsection
152(6)
sets
out
the
circumstances
when
returns
may
be
amended.
The
addition
of
a
form
of
election
is
not
one
of
these
circumstances.
The
appellant,
a
corporation,
was
required
to
file
its
1985
tax
return
within
six
months
from
the
end
of
its
fiscal
year
(paragraph
150(1)(a)).
The
appellant
filed
its
return
for
1985
on
time.
The
appellant's
income
tax
return
for
1985
contained
all
the
information
which
the
appellant
intended
to
provide
to
the
respondent
when
the
return
was
filed.
The
return,
when
filed,
contained
all
the
information
required
by
the
respondent
in
order
to
assess.
The
form
of
election
pursuant
to
subsection
39(4)
came
sometime
later,
after
the
appellant
had
been
assessed
in
a
manner
not
to
its
liking.
Without
ruling
whether
a
subsection
39(4)
form
of
election
may
be
validly
filed
in
a
corporate
taxpayer's
return
of
income
for
a
year
when
the
return
is
filed
late,
I
find
that
on
the
facts
the
appellant
did
not
file
a
form
of
election
on
time
since
the
form
of
election
was
not
“in”
the
return.
In
this
case,
the
appellant,
an
individual,
was
required
to
file
his
1984
tax
return
by
April
30,
1985
which
he
did.
This
was
the
time
for
filing
the
election.
I
concur
with
the
reasons
of
Rip,
T.C.J.
as
stated
in
the
last
sentence
above.
Further
on
page
2190
(D.T.C.
1049),
Judge
Rip
states:
The
appellant’s
submissions
ignore
what
is
stated
in
subsection
39(4).
Subsection
39(4)
is
clear
and
unambiguous
in
both
of
our
official
languages:
the
election
is
to
be
made
in
prescribed
form
in
the
return
of
income.
The
provision
is
explicit
and
certain.
While
the
manner
of
electing
under
subsection
26(7)
of
the
Act
and
section
4700
of
the
Regulations
to
the
Act
may
be
directory
rather
than
mandatory,
the
requirement
in
subsection
39(4)
is
mandatory.
When
Parliament
writes
a
law,
the
law
must
have
meaning.
It
is
the
function
of
a
Canadian
court
to
interpret
the
law
and
give
the
words
to
be
interpreted
in
the
law
their
normal,
accepted,
every
day
meaning.
A
court
should
not
look
for
ambiguity
in
a
statute
where
none
exists.
Similarly,
it
is
not
the
function
of
a
court
to
add
words
to
statutes
nor
is
it
its
function
to
alter
the
intent
of
Parliament.
I
concur
with
these
reasons
and
also
find
that
there
is
no
ambiguity
in
the
statute
and
accordingly
there
is
no
ambiguity
to
resolve
in
favour
of
the
taxpayer.
For
the
above
reasons
the
appeal
is
dismissed.
Appeal
dismissed.