Citation: 2005TCC199
Date: 20050412
Docket: 2004-4658(IT)APP
BETWEEN:
DIXON
MACFARLANE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Angers, J.
[1] This is an application dated November 24, 2004, for an
Order extending the time within which the applicant may serve a Notice of
Objection regarding his 1999, 2000 and 2001 taxation years. A similar request
dated August 26, 2004, was made to the Minister of National Revenue (the “Minister”) and was
refused in October 2004.
[2] The applicant was notified by Notices of Assessment
dated May 23, 2000, May 10, 2001, and May 16, 2002, respectively that his 1999,
2000 and 2001 tax returns had been assessed by the Minister. On September 10,
2002, by Notices of Reassessments, the Minister informed the applicant that a
reassessment for the same three taxation years had been made.
[3] Upon receiving the last Notice of Reassessment, the
applicant met with his accountant and provided him with various documents. On
November 2, 2002, the applicant’s accountant forwarded these documents to the
auditor involved in the case and was informed by the auditor that he would review
the documents and get back to him. Not having heard from the auditor, the
accountant contacted him in mid-February 2003. The auditor reiterated that he
would examine the documents. Three days later, the accountant was informed that
no changes would be made. The documents were returned to the accountant later
in that month. The accountant admitted that he was aware of the 90-day period
but did not serve on the Minister a Notice of Objection within that time.
[4] The accountant testified that on March 12, 2003, he had prepared
Notices of Objection for each taxation year in issue, signed by him and the
applicant, together with a letter dated March 15, 2003, requesting an extension
of time to file the Notices of Objection. Both the letter and the notices were
sent by regular mail around that date to the Appeals Section of the Canada
Customs and Revenue Agency (“CCRA”) in Saint John, New Brunswick. March 15, 2003, was a Saturday and the accountant
explained that it was common for him to sign letters on a Saturday during
income tax time.
[5] The accountant further testified that from his
experience, it takes between six to ten months before an appeals officer makes
contact to start the process. Therefore, this period of silence did not
surprise him. In June 2003, he was informed by the applicant’s wife that she
had not heard anything from the CCRA. He assumed all was well and that he would
eventually hear from them.
[6] On August 26, 2004, the accountant was informed that the
Notices of Objection that he had mailed in March 2003 were never received by the
CCRA. Upon learning that fact, the accountant sent the Minister another
application, on behalf of the applicant, for an extension of time. It is that last
application that was refused in October 2004. The applicant now seeks relief
from our Court under section 166.2 of the Income Tax Act (the “Act”).
[7] The Respondent filed the affidavit of Karen Sceviour, a
litigation officer in a designated appeals office at the CCRA to support their
opposition to the application. The affidavit confirmed the date of the Notices
of Reassessments referred to above and further stated that a careful
examination and search of the records showed that the applicant had not served
the Minister with a Notice of Objection within the time allowed by subsection
165(1) nor with an application to extend the time for serving the said Notice
within the time allowed by paragraph 166.1(7)(a) of the Income Tax Act.
[8] The relevant sections, subsections and paragraphs of the
Act are 165(1), 165(2), 166.1(1), 166.1(3), 166.1(7), 166.2(1) and 166.2(5)
which read 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.
165(2) Service. A notice of objection under this section shall be served by being
addressed to the Chief of Appeals in a District Office or a Taxation Centre of
the Canada Customs and Revenue Agency and delivered or mailed to that Office or
Centre.
Extension of time by Minister.
166.1 (1)
Where no notice of objection to an assessment has been served under section
165, nor any request under subsection 245(6) made, within the time limited by
those provisions for doing so, the taxpayer may apply to the Minister to extend
the time for serving the notice of objection or making the request.
How application made.
166.1(3) An application under subsection (1) shall be made by being addressed to
the Chief of Appeals in a District Office or a Taxation Centre of the Canada
Customs and Revenue Agency and delivered or mailed to that Office or Centre,
accompanied by a copy of the notice of objection or a copy of the request, as
the case may be.
When order to be made.
166.1(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;
and
(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 the taxpayer's 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 as soon as circumstances permitted.
Extension of time by Tax Court.
166.2(1) A taxpayer who has made an application under subsection 166.1 may apply to
the Tax Court of Canada to have the application granted after either
(a) the Minister has refused the
application, or
(b) 90 days have elapsed
after service of the application under subsection 166.1(1) and the Minister has
not notified the taxpayer of the Minister's decision,
but no application under this section may be made
after the expiration of 90 days after the day on which notification of the
decision was mailed to the taxpayer.
When application to be granted.
166.2(5) No application shall be granted under this section unless
(a) the application was
made under subsection 166.1(1) 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; and
(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 the taxpayer's 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.
[9] There is no dispute in this application that the Notices
of Reassessment dated September 10, 2002, were received by the applicant and
that no Notices of Objection were served within the 90 days after the date of
mailing. The applicant therefore had to apply to the Minister to extend the
time for serving the Notices of objection (s. 166.1). He did so on March
15, 2003, but did not follow up on his application. The applicant could have
followed up on that application by making a further application to this court
to have it granted on the basis that the Minister had not notified him of his
decision after 90 days had elapsed. He, instead, made another application
on August 26, 2004, and was notified in October 2004 that his second application
had been refused by the Minister. It is that refusal that the Applicant now
seeks an extension of time.
[10] The application for an extension of time made to the
Minister on August 26, 2004, is clearly beyond the time provided for in
paragraph 166.1(7)(a) and subsection 166.2(5)(a) of the Act. In
such a case, neither the Minister nor this Court is able to grant such an
application. (See Carlson v. Canada, [2002] F.C.J. No. 573 (F.C.A.)).
[11] The application is therefore dismissed.
Signed
at Ottawa, Canada, this 12th day of April 2005.
“François
Angers”
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