Docket: 2008-1302(IT)I
BETWEEN:
PATRICK GROULX,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Before: The Honourable
Justice Valerie Miller
Appearances:
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For the Appellant:
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The
Appellant himself
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Counsel for the Respondent:
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Amit Ummat
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____________________________________________________________________
ORDER
Upon
Motion by the Respondent for an Order of this Court quashing the Appellant’s
purported appeal from the assessment made under the Income Tax Act for
the 1997, 1998, 2000, 2001, 2003 and 2004 taxation years;
The motion is
allowed, without costs, and the purported appeals are quashed.
Signed at Halifax, Nova Scotia, this 15th day of August 2008.
“V.A. Miller”
Citation:2008TCC445
Date: 20080815
Docket: 2008-1302(IT)I
BETWEEN:
PATRICK GROULX,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
V. A. Miller, J.
[1]
The Respondent has
brought a motion for an Order to quash the Appellant’s appeals for the 1997,
1998, 2000, 2001, 2003 and 2004 taxation years. The grounds for the
Respondent’s motion are as follows:
a)
The appeals for the
2000, 2001, 2003 and 2004 taxation years concern assessments for nil federal
tax, related interest and penalties;
b)
The appeals for the
1997 and 1998 taxation years concern reassessments that were issued with the
taxpayer’s consent, pursuant to subsection 152(4.2) of the Income Tax Act
(the “Act”) and pursuant to subsections 165(1.2) and 169(1) of the Act the
Appellant may not object or appeal those reassessments.
[2]
The Respondent has
asked, in the alternative, for an Order pursuant to subsection 18.16(1) of the Tax
Court of Canada Act granting her leave to file a Reply to the Notice of
Appeal. She has asked for 60 days from the date of the Order to file the Reply.
[3]
Subsection 18.16(1) of
the Act reads:
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18.16 (1) The Minister of National
Revenue shall file a reply to a notice of appeal within sixty days after the
day on which the Registry of the Court transmits to that Minister the notice
of appeal unless the appellant consents, before or after the expiration of
the sixty day period, to the filing of that reply after the sixty day period
or the Court allows the Minister, on application made before or after the
expiration of the sixty day period, to file the reply after that period.
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18.16 (1) Le ministre du Revenu national
dispose de soixante jours suivant la transmission de l'avis d'appel par le
greffe de la Cour pour y répondre; il peut, toutefois, répondre après ce
délai avec le consentement de l'appelant ou la permission de la Cour; le
consentement et la permission peuvent être demandés soit avant, soit après
l'expiration du délai.
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[4]
The Appellant has also
brought a motion asking this Court to hear the issue under appeal on the date
assigned to the Respondent’s motion. The grounds for the Appellant’s motion
are:
a)
All methods of
discussion has failed to provide results consistent in accordance with the Tax
Law of Canada and related Interpretation Bulletins, resulting in a request to
this Honourable Court to decide the result on this date set.
b)
The matter is simply
the correct calculation of
i)
non-capital loss carry
forward/back and
ii)
interest on the
resultant refund- most of it already agreed.
[5]
If I dismiss the
Respondent’s motion, then I intend to grant her 60 days to file the Reply to
Notice of Appeal. As a result, I dismissed the Appellant’s motion as I would
not hear the issue in appeal.
[6]
The Respondent has
relied on the affidavit evidence of Carlene Josephs. In her affidavit, Ms.
Josephs stated that the Appellant’s 1997 and 1998 taxations had been reassessed
pursuant to subsection 152(4.2) of the Act on January 31, 2007 and September 4,
2007 respectively.
[7]
Subsection 152(4.2)
reads as follows:
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Reassessment with taxpayer’s consent
(4.2) Notwithstanding subsections
(4), (4.1) and (5), for the purpose of determining, at any time after the end
of the normal reassessment period of a taxpayer who is an individual (other
than a trust) or a testamentary trust in respect of a taxation year, the
amount of any refund to which the taxpayer is entitled at that time for the
year, or a reduction of an amount payable under this Part by the taxpayer for
the year, the Minister may, if the taxpayer makes an application for that
determination on or before the day that is ten calendar years after the end
of that taxation year,
(a) reassess tax, interest or penalties
payable under this Part by the taxpayer in respect of that year; and
(b) redetermine the amount, if any, deemed
by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3),
127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the
taxpayer’s tax payable under this Part for the year or deemed by subsection
122.61(1) to be an overpayment on account of the taxpayer’s liability under
this Part for the year.
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Nouvelle cotisation et nouvelle détermination
(4.2) Malgré les
paragraphes (4), (4.1) et (5), pour déterminer, à un moment donné après la
fin de la période normale de nouvelle cotisation applicable à un contribuable
— particulier, autre qu’une fiducie, ou fiducie testamentaire — pour une
année d’imposition le remboursement auquel le contribuable a droit à ce
moment pour l’année ou la réduction d’un montant payable par le contribuable
pour l’année en vertu de la présente partie, le ministre peut, si le
contribuable demande pareille détermination au plus tard le jour qui suit de
dix années civiles la fin de cette année d’imposition, à la fois :
a) établir de nouvelles cotisations concernant
l’impôt, les intérêts ou les pénalités payables par le contribuable pour
l’année en vertu de la présente partie;
b) déterminer de nouveau l’impôt qui est réputé,
par les paragraphes 120(2) ou (2.2), 122.5(3), 122.51(2), 122.7(2) ou (3),
127.1(1), 127.41(3) ou 210.2(3) ou (4), avoir été payé au titre de l’impôt
payable par le contribuable en vertu de la présente partie pour l’année ou
qui est réputé, par le paragraphe 122.61(1), être un paiement en trop au
titre des sommes dont le contribuable est redevable en vertu de la présente
partie pour l’année.
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[8]
In essence, subsection
152(4.2) allows a taxpayer to apply to the Minister of National Revenue to have
a return reconsidered and reassessed beyond the normal reassessment period if
that reassessment would result in a refund or a reduction of tax, penalties or
interest for that year. See Mellish v. R., 2007TCC228.
[9]
Once the Minister
issues the reassessment under subsection 152(4.2), a taxpayer may not object to
that reassessment. Subsection 165(1.2) reads:
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Limitation on objections
(1.2) Notwithstanding
subsections 165(1) and 165(1.1), no objection may be made by a taxpayer to an
assessment made under subsection 118.1(11), 152(4.2), 169(3) or 220(3.1) nor,
for greater certainty, in respect of an issue for which the right of
objection has been waived in writing by the taxpayer.
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Restriction
(1.2) Malgré les
paragraphes (1) et (1.1), aucune opposition ne peut être faite par un
contribuable à une cotisation établie en application des paragraphes
118.1(11), 152(4.2), 169(3) ou 220(3.1). Il est entendu que cette
interdiction vaut pour les oppositions relatives à une question pour laquelle
le contribuable a renoncé par écrit à son droit d’opposition.
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[10]
As a taxpayer cannot
object to a reassessment that has been made in accordance with subsection
152(4.2), it follows that the taxpayer cannot appeal that reassessment. Any
appeal to the Tax Court of Canada must be made in accordance with section 169
which reads:
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Appeal
169. (1) Where a taxpayer has served notice of
objection to an assessment under section 165, the taxpayer may appeal to the
Tax Court of Canada to have the assessment vacated or varied after either
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Appel
169. (1) Lorsqu’un contribuable a signifié un avis d’opposition à une
cotisation, prévu à l’article 165, il peut interjeter appel auprès de la Cour
canadienne de l’impôt pour faire annuler ou modifier la cotisation
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[11]
The taxpayer is precluded from
appealing his 1997 and 1998 taxation years to the Tax Court as he cannot object
to the reassessments for those years as they have been made in accordance with
subsection 152(4.2). Justice O’Connor had this to say in his decision in Mellish:
[10] The Court has
previously considered the interplay between these three subsections and has
consistently concluded that there is no right of appeal to the Tax Court of
Canada for a reassessment issued under subsection 152(4.2)
·
Yaremy[1] - Once satisfied that the reassessment
was issued under subsection 152(4.2), the Court concluded, at paragraph 10,
"that subsection 165(1.2) applies and no valid objection could be made by
the Appellant. If no valid objection can be made, then no valid appeal can be
commenced under subsection 169(1)."
·
Haggart[2] - The Court concluded, at paragraph 37,
"that it is not possible to file a valid Notice of Objection nor a Notice
of Appeal to a Reassessment that was issued under subsection 152(4.2) of the
Act."
·
Chou[3] - The Court concluded, at paragraph 15,
that "as the appellant could not validly file a notice of objection to
the...reassessment issued pursuant to subsection 152(4.2) of the Act,
she was consequently barred under subsections 165(1.2) and 169(1) of the Act
from instituting an appeal from that reassessment before this Court."
[12]
In her affidavit, Ms.
Josephs also stated that the records of the CRA disclosed that the Appellant’s
2000, 2001 and 2004 taxation years were reassessed on September 4, 2007, May
18, 2006 and May 23, 2006 respectively. The Appellant was assessed for his 2003
taxation year on August 26, 2004. For each of these years the reassessment or
assessment resulted in nil federal taxes payable.
[13]
There is no appeal from
a nil assessment. See Her Majesty the Queen v. Bowater Mersey Paper
Company Limited, 1987 CarswellNat 453, [1987] 2 C.T.C. 159, 78 N.R. 233, 87
D.T.C. 5382(FCA).
[14]
As a result of the
above, the Respondent’s motion to quash is granted. The appeal for the 1997,
1998, 2000, 2001, 2003 and 2004 taxation years are quashed.
Signed at Halifax, Nova Scotia, this 15th day of August 2008.
“V.A. Miller”
CITATION: 2008TCC445
COURT FILE NO.: 2008-1302(IT)I
STYLE OF CAUSE: PATRICK GROULX AND THE QUEEN
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: July 21, 2008
REASONS FOR ORDER
BY: The Honourable Justice Valerie Miller
DATE OF ORDER: August 15, 2008
APPEARANCES:
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For the
Appellant:
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The Appellant himself
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Counsel for the
Respondent:
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Amit Ummat
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COUNSEL OF RECORD:
For the Appellant:
Name: Patrick Groulx, on his own behalf
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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