Date: 20121203
Docket: A-475-11
Citation: 2012
FCA 317
CORAM: NADON J.A.
SHARLOW J.A.
DAWSON J.A.
BETWEEN:
TOASTMASTER
INC.
Appellant
and
THE MINISTER OF
NATIONAL REVENUE AS REPRESENTED BY THE ATTORNEY GENERAL OF CANADA
Respondent
Heard at Toronto, Ontario, on December 3, 2012.
Judgment delivered
from the Bench at Toronto, Ontario, on December 3, 2012.
REASONS FOR JUDGMENT OF THE COURT BY:
DAWSON J.A.
Date: 20121203
Docket: A-475-11
Citation: 2012 FCA 317
CORAM: NADON
J.A.
SHARLOW
J.A.
DAWSON J.A.
BETWEEN:
TOASTMASTER INC.
Appellant
and
THE MINISTER OF NATIONAL REVENUE
AS REPRESENTED BY THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
OF THE COURT
(Delivered from the Bench at Toronto, Ontario, on December 3, 2012)
DAWSON J.A.
[1]
This
is an appeal of a decision of the Federal Court. For reasons cited as 2011 FC
1309, 400 F.T.R. 39, the Federal Court dismissed an application for judicial
review of a decision of a delegate of the Minister of National Revenue. The
delegate declined to exercise her discretion to cancel interest under the
taxpayer relief provision contained in subsection 220(3.1) of the Income Tax
Act R.S.C., 1985, c.1 (5th Supp.).
[2]
On
this appeal, the appellant taxpayer argues that the Federal Court Judge erred
by concluding that the delegate's decision was reasonable.
[3]
In
our view, the appellant has failed to establish that the Judge erred in his application
of the reasonableness standard.
[4]
We
see no error in his conclusion that the delegate did not fetter her discretion
or in his conclusion that the decision was within the range of possible,
acceptable outcomes defensible on the facts and the law.
[5]
The
essence of the appellant's position is that the interest charge of over
$600,000 on an ultimate tax balance of approximately $42,000 is absurd.
However, this result reflects the fact that large losses sustained in the 2003
and 2004 taxation years were carried back to the 2001 and 2002 taxation years,
and losses in the 2006 and 2007 years were applied to the 2005 taxation year.
Had the appellant filed its tax returns when required in 2001, 2002, and 2005
it would have had taxable income in those years and been required to pay tax
thereon. Only in subsequent years when a loss was incurred could a request for
a loss carry back be made, which would result in a reassessment for the earlier
years. The result of the late filing therefore benefited the appellant in that
it was able to claim the loss carry back in the late filed 2001, 2002 and 2005
tax returns.
[6]
The
appellant also argues that it should not have had to pay interest because it
relied on professional tax advice to the effect that it had no permanent establishment
in Canada. It did not file tax returns. However, as counsel for the appellant
conceded in oral argument, there is no evidence that the appellant was told
that it need not file tax returns.
[7]
On
these facts it was open to the delegate to conclude that the appellant failed
to show that it exercised a reasonable amount of care with respect to its
affairs.
[8]
For
these reasons, the appeal will be dismissed with costs.
"Eleanor
R. Dawson"
FEDERAL COURT OF
APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-475-11
(APPEAL
FROM A JUDGMENT OF THE HONOURABLE MR. JUSTICE O’REILLY, DATED NOVEMBER 15, 2011
IN DOCKET NO. T-1251-10)
STYLE OF CAUSE: TOASTMASTER INC v THE
MINISTER OF NATIONAL REVENUE AS REPRESENTED BY THE ATTORNEY GENERAL OF CANADA
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: December 3, 2012
REASONS FOR JUDGMENT
OF THE COURT BY: (NADON, SHARLOW & DAWSON JJ.A.)
DELIVERED FROM THE
BENCH BY: DAWSON J.A.
APPEARANCES:
|
David W. Chodikoff
Tarsem
Basraon
|
FOR
THE APPELLANT
|
|
John Grant
|
FOR
THE RESPONDENT
|
SOLICITORS
OF RECORD:
|
Miller Thomson LLP
Toronto, Ontario
|
FOR THE APPELLANT
|
|
William F. Pentney
Deputy
Attorney General of Canada
|
FOR THE RESPONDENT
|
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