Nach v. The Queen, docket 98-124-IT-I (Informal Procedure)

Date: 20000828

Docket: 98-124-IT-I

BETWEEN:

MICHAEL NACH,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Hamlyn, J.T.C.C.

[1] This is a purported appeal with respect to the 1995 and 1996 taxation years.

[2] In computing income for the 1995 and 1996 taxation years, the Appellant deducted the amounts of $16,247.00 and $12,609.00 respectively, as farming losses.

[3] As a preliminary objection in relation to the Appellant's purported appeal for the 1995 and 1996 taxation years the Minister of National Revenue ("the Minister") submits that the Appellant's appeal for the 1995 and 1996 taxation years ought to be dismissed as the Appellant did not serve on the Minister Notices of Objection to the assessments for the said taxation years as required by section 169 of the Income Tax Act ("the Act").

[4] The Minister assessed the Appellant for the 1995 and 1996 taxation years by Notices of Assessment mailed on May 30, 1996 and May 27, 1997 respectively. The Notices of Reassessment are dated October 27, 1997.

[5] The Appellant's evidence was that on January 26, 1998 he filed a Notice of Appeal with the Tax Court of Canada and thereafter on that same date served a Notice of Objection and a copy of the Notice of Appeal to the Minister.

[6] The Minister, on February 16, 1998, wrote to the Appellant and stated "We have received your objection. As soon as we complete our initial review, we will contact you or your authorized representative."

[7] The Appellant on this point heard nothing further from the Minister save that in the Reply to Notice of Appeal (April 1, 1998) the Minister pleaded the preliminary objection that the Appellant did not serve on the Minister Notices of Objection to the assessments for the 1995 and 1996 taxation years.

[8] Section 165 of the Act provides the requirements for objections to assessments. A Notice of Objection is the first step in the appeal procedure set out in the Act. It is only by serving a Notice of Objection within the proper time limit that a taxpayer may ultimately launch an appeal which may be heard by the Tax Court of Canada. The taxpayer has the benefit of 90 days after the day of mailing of the Notice of Assessment to serve a written Notice of Objection containing the reasons for objection and all relevant facts. In the present appeal, the facts clearly show that the Notices of Reassessment are dated October 27, 1997 while the Appellant's Notice of Objection was served on January 26, 1998. According to the calendar, the Appellant's 90th day would have been January 25, 1998. However, January 25, 1998 was a Sunday.

[9] According to section 26 of the Interpretation Act, R.S.C. 1985, c. I-21, the Appellant has the benefit of an extra day:

26. Where the time limited for the doing of a thing expires or falls on a holiday, the thing may be done on the day next following that is not a holiday.

[10] Subsection 35(1) of the Interpretation Act defines a "holiday" as including Sunday, which is the situation in the present appeal. The Appellant's Notice of Objection was validly served within the prescribed period.

[11] The next matter to be dealt with is the validity of the Appellant's Notice of Appeal, which was filed on the same day as the Notice of Objection was served. Subsection 169(1) of the Act provides that a taxpayer may only appeal to the Tax Court of Canada after either (a) the Minister has confirmed the assessment or reassessed, or (b) after 90 days have elapsed after service of the Notice of Objection.

[12] The effect of this section in relation to the purported Notice of Appeal that was filed is that the Notice of Appeal was filed prematurely. As a consequence there is no valid Notice of Appeal before this Court.

[13] Procedurally the Court cannot dispose of an appeal until there is a valid appeal filed in accordance with the Act. Therefore the Court cannot proceed further in this matter until there has been compliance with subsection 169(1) of the Act.

[14] The appeal is therefore quashed.

Signed at Ottawa, Canada, this 28th day of August 2000.

"D. Hamlyn"

J.T.C.C.