Citation: 2011 TCC 189
Date: 20110325
Docket: 2010-810(IT)APP
BETWEEN:
ANGELINA SCHOENNE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Little J.
A. FACTS
[1]
The Minister of
National Revenue (the “Minister”) reassessed the Applicant for the 2005 and
2006 taxation years by Notices of Reassessment dated and mailed to the
Applicant on January 9, 2007 and November 26, 2007, respectively.
[2]
On December 7, 2009,
the Applicant served upon the Minister an application to extend the time within
which the Applicant may file a Notice of Objection with respect to the 2005,
2006 and 2007 taxation years.
[3]
By letter dated December
18, 2009, the Minister notified the Applicant that:
a)
the Minister had
granted the Applicant a time extension for the 2007 taxation year; and
b)
the Minister could not
grant the application to extend the time within which to file a Notice of Objection
for the 2005 and 2006 taxation years since the application was not made
within one year after the expiration of the time frame otherwise permitted for
filing a Notice of Objection pursuant to paragraph 166.1(7)(a) of the Income
Tax Act (the “Act”).
[4]
The application to
extend the time was received by the Court on March 17, 2010.
B. ISSUE
[5]
Should the Applicant be
allowed to file Notices of Objection for the 2005 and 2006 taxation years.
C. ANALYSIS AND DECISION
[6]
The deadline for filing
the Notice of Objection for the 2005 taxation year was 90 days from January 9,
2007, i.e., on or before April 5, 2007.
[7]
If the Applicant had
filed an application to extend the time for filing a Notice of Objection
for the 2005 taxation year, the Applicant should have filed an application to
extend the time within one year of April 5, 2007, i.e., on or before April 5,
2008.
[8]
The deadline for filing
the Notice of Objection for the 2006 taxation year was 90 days from November
26, 2007, i.e., on or before February 22, 2008.
[9]
If the Applicant had
filed an application to extend the time for filing a Notice of Objection
for the 2006 taxation year, the Applicant should have filed an application to
extend the time within one year of February 25, 2008, i.e., on or before
February 22, 2009.
[10]
As noted above, the
application for an extension of time to file a Notice of Objection for the
2005 and 2006 taxation years was not filed by the Applicant until
March 17, 2010.
D. CONCLUSION
[11]
In this situation, the
application to extend the time within which to file the Notice of Objection, that
was filed by the Applicant for the 2005 and 2006 taxation years, should be
dismissed because:
a)
the application was not
made under subsection 166.1(1) of the Act within one year after
the expiration of the time otherwise limited by the Act for serving a
Notice of Objection or making a request, as required by paragraph 166.2(5)(a)
of the Act; and
b)
the Applicant has not
demonstrated that within the time otherwise limited by the Act for
serving such a notice or making a request, that she was unable to act or
instruct another to act in the Applicant’s name, as required by clause
166.2(5)(b)(i)(A) of the Act.
[12]
The Income Tax Act
is very specific on when an application to extend the time to file a Notice of
Objection should be filed, i.e., within one year after the time
limitation established to file the Notice of Objection. In this situation, the
Applicant failed to meet the one year plus 90 day deadline for the 2005 and
2006 taxation years. I do not have the power or authority to extend the one
year plus 90 day deadline. I must therefore dismiss the Application that
was filed for the 2005 and 2006 taxation years. As I have noted above, the
Minister has granted the Applicant’s request to extend the time to file a Notice
of Objection for the 2007 taxation year.
[13]
Before concluding my
Reasons, I must comment on this situation.
[14]
The Applicant stated
that she had received T-4 slips issued by Labatts Brewery (“Labatts) for
the 2005 and 2006 taxation years, but she maintained that she had never
received any money from Labatts. The Applicant said that she understood that
the amounts shown on the T-4 slips were as follows (approximate):
a)
2005 - $5,000;
b)
2006 - $5,000.
[15]
The Applicant had
earlier testified that her former husband was employed at the Yellowknife
Curling Club, in Yellowknife, Northwest Territories and the Liquor
Board of the Northwest
Territories told him that he
could not be the representative for Labatts because of a conflict between his
employment contract and the fact that Labatts was a large Canadian Brewery.
(Transcript, page 6)
[16]
The Applicant also
testified that her former husband had signed contracts with Labatts naming the
Applicant as the representative of Labatts. The Applicant stated that she
advised her former husband that she would not agree to represent Labatts and
she denies that she was ever the representative of Labatts. (Transcript, page 12)
[17]
The Applicant also said
that she has encountered serious financial problems, including the financial
problem concerning the payments made by Labatts to her former husband but taxed
in her hands.
[18]
The Applicant also
stated that in addition to paying tax on the Labatts’ payment, she lost her
gift shop and she lost her interest in the commercial building where the gift
shop was located.
[19]
As noted above, the
Canada Revenue Agency (the “CRA”) has accepted the Notice of Objection filed by
the Applicant for the 2007 taxation year. It is not clear in the evidence that
was filed but it is possible that some portion of the payments made by Labatts
related to the 2007 taxation year. I suggest that officials of the CRA should
review the records of Labatts to determine if any portion of the payment made
by Labatts in 2007 was related to the Applicant.
[20]
During the hearing, the
Applicant said regarding the 2007 taxation year:
… I felt that
there may be an accumulation of problem that might have gone into 2007, so I
wanted them to look at the whole picture up to where I was speaking with
Mr. Foisy.
(Transcript, page 36)
[21]
During the hearing, I
asked Counsel for the Respondent the following question:
JUSTICE LITTLE: …
Has the department looked into that in terms of talking to Labatt's or trying
to accept it or did they just sort of go on the T‑4 slip and not worry
about it?
MS. TEELING: I
believe on this file they went with the T‑4 end.
JUSTICE LITTLE: Nothing
else?
MS. TEELING: Nothing
further.
(Transcript,
pages 29 and 30)
[22]
Before concluding my comments,
I believe that this may be a situation where the Minister should seek a remission
of debt under section 23 of the Financial Administration Act, RSC
1985, c F-11, (the “FAA”). Parliament has enacted legislation that
permits, at the discretion of the Governor-in-Council, there to be granted a
remission of taxes, penalties or other debts owed to the Crown. Section 23 of
the FAA reads as follows:
Definitions
23. (1)
In this section,
“other debt”
“other debt”
means any amount owing to Her Majesty, other than a tax or penalty or an
amount in respect of which subsection 24.1(2) applies;
“penalty”
“penalty”
includes any forfeiture or pecuniary penalty imposed or authorized to be
imposed by any Act of Parliament for any contravention of the laws relating to
the collection of the revenue, or to the management of any public work producing
tolls or revenue, notwithstanding that part of such forfeiture or penalty is
payable to the informer or prosecutor, or to any other person;
“tax”
“tax” includes
any tax, impost, duty or toll payable to Her Majesty, imposed or authorized to
be imposed by any Act of Parliament.
Remission of taxes and penalties
(2) The
Governor in Council may, on the recommendation of the appropriate Minister,
remit any tax or penalty, including any interest paid or payable thereon, where
the Governor in Council considers that the collection of the tax or the
enforcement of the penalty is unreasonable or unjust or that it is otherwise in
the public interest to remit the tax or penalty.
Remission
of other debts
(2.1) The
Governor in Council may, on the recommendation of the Treasury Board, remit
any other debt, including any interest paid or payable thereon, where the
Governor in Council considers that the collection of the other debt is
unreasonable or unjust or that it is otherwise in the public interest to remit
the other debt.
…
(Emphasis added)
[23]
Thus, the Treasury Board may
recommend to the Governor-in-Council that the Applicant’s tax debt be remitted.
If the Governor-in-Council considers that the collection of the tax debt is
unreasonable or unjust or that it is in the public interest to remit the tax
debt, it may so order.
[24]
In this case, a strong argument
can be made that the collection of the Applicant’s tax debt is indeed
unreasonable and unjust.
[25]
The request to extend the time
within which the Applicant may file Notices of Objection for the 2005 and 2006
taxation years is dismissed, without costs.
Signed at Vancouver, British Columbia, this 25th day of March 2011.
“L.M. Little”
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