Citation: 2014 TCC 27
Date: 20140124
Docket: 2013-3389(IT)APP
BETWEEN:
SHANE YARMOLOY,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Rip C.J.
[1]
Shane Yarmoloy has
applied for an extension of time within which to file a Notice of Appeal for
his 2007 taxation year: section 167 of the Income Tax Act ("Act").
[2]
Mr. Steven Richmond,
Mr. Yarmoloy's accountant, testified in support of the application.
Mr. Richmond stated that the reassessment for 2007, notice of which is
dated September 23, 2010, was objected to by notice dated January 5,
2011 and confirmed by notice dated February 7, 2012. The notice of
confirmation was purportedly delivered by Canada Post on February 16,
2012. Mr. Richmond declared he never received the notice of confirmation
and that the scanned signature on a copy of a Canada Post document sent to
Mr. Yarmaloy by the Canada Revenue Agency ("CRA") on or about
June 29, 2012 confirming delivery by registered mail is unrecognisable.
Mr. Yarmoloy, who also said he did not receive the notice of confirmation,
also could not recognize the scanned signature on the Canada Post document. The
delivery date of the notice of confirmation on the Canada Post document is
February 9, 2012. The scanned signature on the Canada Post document does
not appear to be similar to Mr. Yarmoloy's signature on a copy of a form
entitled "Election on Disposition of Property by a Taxpayer to a Taxable
Canadian Corporation" (Form T2057). A copy of a second document from
Canada Post with a different scanned signature was sent by the CRA to either
Mr. Richmond or Mr. Yarmoloy. They denied recognition of this
signature as well. This second document indicated delivery of a registered
letter on February 16, 2012.
[3]
Mr. Richmond
stated that the practice is that mail addressed to Mr. Yarmoloy from the
CRA is sent to the latter's office and that CRA mail is "opened
immediately". Mr. Richmond is present at the office six days a week
and "scans CRA mail immediately".
[4]
Mr. Yarmoloy
carries on business as a developer and also earns rental income. He carries his
business from the address in Canmore Alberta to which the CRA sends him his
general mail. The civic address in Canmore is shared by several tenants,
although Mr. Yarmoloy's office is in a fixed unit. He stated that his ordinary
practice is to sign for any registered mail and then give the mail to the Chief
Financial Officer, Mr. Richmond.
[5]
Mr. Yarmoloy resides in Sicamous, British Columbia but he usually
is present in Sicamous the last part of a month.
[6]
Mr. Yarmoloy
testified that he has been in an automobile accident and received a brain
injury and has memory difficulty. In an affidavit of Daljeet Dev, an
Appeals Officer in the Appeals Division of the Calgary office of the CRA, filed
on behalf of the respondent, Mr. Dev stated that:
(e) The Applicant filed a T1 Adjustment Request for the 2007
taxation year on March 1, 2012 requesting his allowable charitable
donations be increased from $500 to $100,500. …
(f) The Minister reassessed the Applicant's 2007 taxation
year by way of a Notice of Reassessment dated July 3, 2012 to increase the
Applicant's allowable charitable donations from $500 to $100,500. …
[7]
On a question put to
him by respondent's counsel, Mr. Yarmoloy could not recall receiving a
notice of reassessment for 2007 dated July 3, 2012; Mr. Richmond also
had no knowledge of the reassessment.
[8]
Mr. Dev states in
his affidavit that he has charge of appropriate records and has knowledge of
CRA's practices, that he has undertaken a careful examination and search of
CRA's records relating to Mr. Yarmoloy's application for an extension of
time to appeal his income tax assessment for 2007. He says, amongst, other
things:
(a) The Minister reassessed the Applicant for the 2007
taxation year by way of a Notice of Reassessment (the "Reassessment")
dated October 7, 2010 to, among other things; assess late filing penalties
and arrears interest on unremitted tax instalment payments. …
(b) The Applicant filed a Notice of Objection to the
Reassessment on January 5, 2011. …
(c) The Minister confirmed the Reassessment on the
Applicant's 2007 taxation year by Notice of Confirmation (the
"Confirmation") dated and mailed to the Applicant on February 7,
2012 by registered mail. …
(d) Canada Post records show that the Confirmation was
successfully delivered and signed for by the Applicant on February 16,
2012. …
4. On September 11, 2013 the Applicant filed an
application for an extension of time to file a Notice of Appeal for the 2007
taxation year in this Court pursuant to section 167 of the Income Tax
Act.
[9]
Attached to
Mr. Yarmaloy's application for extension of time to file a Notice of
Appeal for 2007, is a Notice of Appeal from an assessment dated
"03/07/2012". There is no evidence that a notice of objection to the
July 3, 2012 assessment was filed with the CRA by Mr. Yarmaloy.
Indeed, as mentioned earlier, neither he nor Mr. Richmond recall receiving
the notice of assessment. Their evidence as to the Canada Post documents
attesting to delivery dates of a notice of confirmation relate to an assessment
dated September 23, 2010.
[10]
In Abrahams v.
The Queen, Jackett P., as he then was,
explained:
Assuming that the
second reassessment is valid, it follows, in my view, that the first
reassessment is displaced and becomes a nullity. The taxpayer cannot be liable on
an 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.
I am therefore, of
opinion that, since the second reassessment was made, there is no relief that
the Court could grant on the appeal from the first reassessment 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 reassessment was made, this appeal should have been
discontinued2 or an application should have been made to have it
quashed3.
2 The
appellant could have asked the respondent to agree to pay his costs as a
condition to his discontinuing. If the respondent had refused, he could have
applied for leave to discontinue on terms that the respondent be ordered to pay
his costs of the appeal that had been made abortive by the second reassessment.
3 An
alternative view is that the appeal should be allowed and the assessment
appealed from declared null. I am of the view that the correct view of the
statute is that there is no basis for an appeal from an assessment that has
become null by virtue of a reassessment. Certainly such an appeal is
unnecessary and it would be an unnecessary expense and expenditure of time and
energy if the practice of taking such appeals developed.
[11]
The assessment for 2007
issued on July 3, 2012 therefore nullified the earlier assessment of
September 23, 2010. The September 23, 2010 assessment no longer
existed. Only the reassessment of July 3, 2012 was before me. The bulk of
the evidence I heard from Mr. Yarmoloy and Mr. Richmond concerned facts
relating to the non receipt of the notice of confirmation of the
September 23, 2010 assessment.
[12]
At the end of the
hearing of this application I informed the parties that Mr. Yarmaloy would
have until January 15, 2014 to provide me with any case law to support
their position. I did receive copies of three reported cases, none of which I
find to be on point.
Mr. Richmond notified me in the covering letter dated January 14,
2014 that "Mr. Yarmoloy has never consented in any way of the
original appeal being disposed of, in fact was in discussions about the appeal
after the second reassessment was done …" Neither Mr. Richmond
nor Mr. Yarmoloy provided information as to when Mr. Yarmoloy was
aware of the second reassessment; as a matter of fact he denied knowledge at
the hearing of the second assessment.
[13]
I have heard no
evidence why it was not possible to file a notice of objection to the
assessment for 2007, notice of which is dated July 3, 2012.
[14]
The application is dismissed.
Signed at Ottawa, Canada, this 24th day of January 2014.
"Gerald J. Rip"
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