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Citation: 2004TCC486
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Date: July 2, 2004
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Docket: 2003-2905(IT)APP
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BETWEEN:
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BERYL RAMDEEN,
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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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____________________________________________________________________
REASONS FOR ORDER
Bell, J.
[1] This
is an application for an order extending the time within which an appeal may be
instituted in respect of each of the Applicant's 1998, 1999 and 2000 taxation
years.
[2] The
pertinent dates in respect of each of those taxation years are set out as
follows:
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1998
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Original
Assessment
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June 17, 1999
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Reassessment
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May 28, 2002
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Notice of
Objection
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dated July 3,
2002 and received by Revenue on July 9, 2002
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Notification of
Confirmation
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April 24, 2003
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E-mail request
by applicant to reassess
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September 29,
2003
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Reassessment
under section 152(4.2) of the Income Tax Act
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October 14, 2003
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Expiry of
"normal reassessment period"
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June 18, 2002
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1999
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Original
Assessment
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April 26, 2000
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Reassessment
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May 28, 2002
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Notice of
Objection
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dated June 3,
2002 and received by Revenue on July 9, 2002
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Notification of
Confirmation
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April 24, 2003
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E-mail request
by applicant to reassess
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September 29,
2003
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Reassessment
Under Section 152(4.2) of the Income Tax Act
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October 14, 2003
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Expiry of
"normal reassessment period"
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April 27, 2003
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2000
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Original
Assessment
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June 11, 2001
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Reassessment
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May 28, 2002
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Notice of
Objection
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dated July 3,
2002 and received by Revenue July 9, 2002
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Notification of
Confirmation
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April 24, 2003
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E-mail Request
by Applicant to reassess
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September 29,
2003
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Reassessment
Under Section 152(4) of the Income Tax Act
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October 14, 2003
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Expiry of
"normal reassessment period"
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June 12, 2004
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ANALYSIS AND CONCLUSION
[3] The pertinent part of the term "normal reassessment period" is
defined in subsection 152(3.1) of the Income Tax Act ("Act")
as follows:
(3.1) Definition of
"normal reassessment period" - For the purposes of subsections (4),
(4.01), (4.2), (4.3), (5) and (9), the normal reassessment period for a
taxpayer in respect of a taxation year is
…
(b) in any other case, the
period that ends 3 years after the earlier of the day of mailing of a notice of
an original assessment under this Part in respect of the taxpayer for the year
and the day of mailing of an original notification that no tax is payable by
the taxpayer for the year.
The above chart
sets out in both the 1998 and 1999 taxation years that the "normal
reassessment period" had expired before the e-mail request for an
additional reassessment. Accordingly, the second reassessment was properly made
pursuant to subsection 152(4.2). That subsection reads as follows:
(4.2) [Reassessment
with taxpayer's consent] - Notwithstanding subsections 152(4), 152(4.1) and 152(5), for the
purpose of determining, at any time after the expiration of the normal
reassessment period for a taxpayer who is an individual (other than a
trust) or a testamentary trust in respect of a taxation year,
(a) the amount of any refund
to which the taxpayer is entitled at that time for that year, or
(b) a reduction of an amount
payable under this Part by the taxpayer for that year,
the Minister may, if application
therefor has been made by the taxpayer,
(c) reassess tax, interest or
penalties payable under this Part by the taxpayer in respect of that year, and
(d) redetermine the amount,
if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 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.
(emphasis added)
As set out above,
the second reassessment was made pursuant to subsection 152(4.2) because the
Applicant requested a reassessment after the "normal reassessment
period". No Notice of Objection may be filed in respect of a reassessment
made under subsection 152(4.2), subsection 165(1.2) of the Act reading
as follows:
(1.2) Determination of
fair market value [Limitation on objections] - 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.
Accordingly, the
Applicant is unable to object to the reassessment issued on October 14, 2003
with respect to the 1998 and 1999 taxation years.
[4] The
situation with respect to the 2000 taxation year is different because the
reassessment was made pursuant to subsection 152 (4.2) but was made pursuant to
subsection 152(4), the pertinent portions of which read as follows:
(4) Assessment and
reassessment [limitation period] - The Minister may at any time make an assessment, reassessment or
additional assessment of tax for a taxation year, interest or penalties, if
any, payable under this Part by a taxpayer or notify in writing any person by
whom a return of income for a taxation year has been filed that no tax is
payable for the year, except that an assessment, reassessment or additional
assessment may be made after the taxpayer's normal reassessment period in
respect of the year only if
…
(b) the assessment,
reassessment or additional assessment is made before the day that is 3 years
after the end of the normal reassessment period for the taxpayer in respect of
the year and …
[5] Because the Applicant was
reassessed for the 1998 and 1999 years on October 14, 2003 the previous Notices
of Reassessment were nullified and cannot form the basis of an appeal. In Abrahams
v. The Minister of National Revenue,66 DTC 5451 at page 5452, Mr.
Justice Jackett of the Exchequer Court said:
Assuming that the second re-assessment is valid,
it follows, in my view, that the first re-assessment is displaced and becomes a
nullity. The taxpayer cannot be liable on a original assessment as well as on a
re-assessment. It would be different if one assessment for a year were followed
by an "additional" assessment for that year. Where, however, the
"re-assessment" purports to fix the taxpayer's total tax for the
year, and not merely an amount of tax in addition to that which has already
been assessed, the previous assessment must automatically become null.
The learned Justice concludes
that due to the existence of a valid second reassessment the Court could not
grant relief to the Appellant seeking to appeal a previous assessment.
I am, therefore, of the opinion that, since the
second reassessment was made, there is no relief that the Court could grant on
the appeal from the first re-assessment because the assessment appealed from
had ceased to exist. There is no assessment, therefore, that the Court could
vacate, vary or refer back to the Minister. When the second re-assessment was
made, this appeal should have been discontinued or an application should have
been made to have it quashed.
This
view was adopted by the Federal Court of Appeal in TransCanada Pipelines
Ltd. v. The Queen, where the Court decided that the issuance of notices of
reassessment for the taxation years in question displaced earlier Notices of
Reassessment. The Court noted that earlier reassessments:
…ceased to exist when the November 8,
1999 reassessments were issued and there was nothing that the Tax Court could
vary or refer back to the Minister with respect to them.
[9] For
the 2000 taxation year the application with respect to the May 28, 2002 Notice
of Reassessment cannot be granted for the reasons stated above, namely that
such reassessment has been nullified by the October 14, 2003 Notice of
Reassessment. The Applicant has not served a Notice of Objection to that
reassessment as required by section 159 of the Act. The Applicant could,
of course, have filed a Notice of Objection within 90 days after the day of
mailing of that Notice of Reassesment. The time for so doing would have expired
(and did expire) on January 12, 2004.
[10] The
application for an order extending the time for appealing from the May 28,
2002 reassessment was made on August 8, 2003. This was before the second
reassessment of the 2000 taxation year which was made on October 14, 2003. The
application was not heard before October 14, 2003 and accordingly, as above
stated, the May 28, 2002 reassessment to which the Applicant thought to object,
was a nullity.
[11] No
Notice of Objection was filed for the 2000 taxation year within 90 days after
October 14, 2003. That 90 days expired on January 12, 2004.
[12] The
application was heard on November 24, 2003 at which time the Court ordered
written submissions by the Respondent on or before December 10, 2003 and by the
Applicant on or before December 31, 2003. In fact, the Respondent's written
submissions were filed with the Court on December 10, 2003 and the Applicant's
written submissions were filed with the Court on December 24, 2003.
[13] As
indicated above, had the Applicant received this order before January 12, 2004
she could have filed a Notice of Objection in respect of the October 14, 2003
reassessment. Unfortunately, with the intervention of the Christmas season and
the subsequent inadvertent misplacement of the Judges’ file this matter was not
promptly dealt with by the Court. It is, of course, open for the Applicant to
make an application to the Minister of National Revenue for an order extending
the time in which to file a Notice of Objection to the October 14, 2003
reassessment. That application can be made pursuant to section 166.1 of the Act.
It must be made within one year after the expiration of the time for serving a
Notice of Objection. That year expires on January 12, 2005. Such application is
made to the Minister of National Revenue who may grant or refuse same. If it is
refused by the Minister the Applicant may apply to this Court to have the
application granted under section 166.2 of the Act. Such application
must be made before the expiration of 90 days after the date of mailing to the
taxpayer of the notification of the Minister's decision. Because of the
circumstances described above it is highly recommended that the Minister grant
such application, if made. Obviously, the Applicant had a bona fide
intention to object to ministerial action. In the event that the Minister does
not grant the application, the Applicant, under section 166.2 of the Act
may apply to this Court to have such application granted.
Signed at Ottawa, Canada on this 2nd day of
July, 2004.
Bell,
J.
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