Date: 20100217
Docket: A-280-09
Citation: 2010 FCA 50
CORAM: SEXTON
J.A.
EVANS
J.A.
SHARLOW
J.A.
BETWEEN:
ROBERT
KUBBERNUS
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered from the Bench at Toronto, Ontario, on February 17,
2010)
SHARLOW_J.A.
[1]
This
is an appeal from a judgment of Justice Angers of the Tax Court of Canada (2009
TCC 311) granting the Crown’s motion to quash an appeal commenced by the
appellant to challenge a reassessment made under the Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp.) on October 16, 2006 in relation to the
2000 taxation year.
[2]
The
only issue in this appeal is whether the 2006 reassessment was made under
subsection 152(4.2) of the Income Tax Act as contended by the Crown, or
subparagraph 152(4)(b)(i) as contended by the appellant. It is common
ground that if the Crown is correct on this point, this appeal cannot succeed
because the right to object is barred by subsection 165 (1.2), and therefore no
appeal to the Tax Court of Canada is possible.
[3]
It
is undisputed that the 2006 reassessment granted a request by the appellant.
However, the record does not disclose whether the request was made orally or in
writing, or the statutory provision upon which the appellant relied to persuade
the Minister that he had the authority to reassess after the normal
reassessment period.
[4]
The
only documentary evidence about the request itself is found in a document
attached to the affidavit of Agnes Predota sworn March 5, 2009, submitted by
the appellant (Appeal Book, page 195). The document appears to be a paper copy
of a computer record that the appellant obtained from the Canada Revenue Agency
pursuant to a formal request for access to information. The document refers to
a request received on June 29, 2006 from the appellant apparently seeking a
correction to a “capital loss”, which request was approved on September 11,
2006.
[5]
The
only statutory provisions referred to in the note are subsections 152(4.2) and
164(1.5). Subsection 152(4.2) gives the Minister the discretion to reassess
outside the normal reassessment period at the taxpayer’s request. It reads in
relevant part as follows:
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152. (4.2)
Notwithstanding subsections (4), (4.1) and (5), for the purpose of
determining, at any time after the end of the normal reassessment period of a
taxpayer who is an individual […] the amount of any refund to which the
taxpayer is entitled at that time for the year, or a reduction of an amount
payable under this Part by the taxpayer for the year, the Minister may, if
the taxpayer makes an application for that determination on or before the day
that is ten calendar years after the end of that taxation year,
(a)
reassess tax, interest or penalties payable under this Part by the taxpayer
in respect of that year […].
|
152. (4.2)
Malgré les paragraphes (4), (4.1) et (5), pour déterminer, à un moment donné
après la fin de la période normale de nouvelle cotisation applicable à un
contribuable […] pour une année d’imposition
le remboursement auquel le contribuable a droit à ce moment pour l’année ou
la réduction d’un montant payable par le contribuable pour l’année en vertu
de la présente partie, le ministre peut, si le contribuable demande pareille
détermination au plus tard le jour qui suit de dix années civiles la fin de
cette année d’imposition, à la fois :
a)
établir de nouvelles cotisations concernant l’impôt, les intérêts ou les
pénalités payables par le contribuable pour l’année en vertu de la présente
partie […].
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Subsection 164(1.5) authorizes the Minister
to refund tax where a reassessment is made under subsection 152(4.2).
[6]
The
notice of reassessment indicates that the reassessment allowed a capital loss
carry forward of $545. There is no reference in the notice of reassessment to
any other capital loss or any loss carry back, or any other adjustment to
income or taxable income. The notice of reassessment contains the following
passage:
|
As you requested, we
have adjusted your return. In the past, you had to make such a request within
three years of the date we mailed you the “Notice of Assessment” for that
return. However, the fairness provisions of the “Income Tax Act” allow us to
make adjustments beyond the usual three year period. Since we allowed you an
adjustment under these provisions, you cannot file a “Notice of Objection”
regarding this reassessment.
We have allowed a
carryforward of $545 of your capital loss.
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[7]
The
fairness provisions referred to in this note are a group of provisions in the Income
Tax Act that give the Minister the discretion to provide certain forms of
tax relief. The Crown argues that the particular fairness provision applicable
in this case is subsection 152(4.2), referred to above. That is the only
fairness provision that can possibly apply.
[8]
The
appellant argues
that the 2006 reassessment was not made under subsection 152(4.2) of the Income
Tax Act, but rather was made under subparagraph 152(4)(b)(i). The
combined effect of that provision and subsection 152(6) is to extend the
permitted reassessment period from three to six years where a reassessment is
required to give effect to a request for a loss carry back. Thus, the position
of the appellant is based on the premise that the 2006 reassessment was a
response to his request for a reassessment that would apply to 2000 a loss
carried back from a subsequent year. Subparagraph 152(4)(b)(i) and
subsection 152(6) read in relevant part as follows:
|
152. (4) 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
[…]
|
152. (4) Le ministre peut établir une
cotisation, une nouvelle cotisation ou une cotisation supplémentaire
concernant l’impôt pour une année d’imposition, ainsi que les intérêts ou les
pénalités, qui sont payables par un contribuable en vertu de la présente
partie ou donner avis par écrit qu’aucun impôt n’est payable pour l’année à
toute personne qui a produit une déclaration de revenu pour une année
d’imposition. Pareille cotisation ne peut être établie après l’expiration de
la période normale de nouvelle cotisation applicable au contribuable pour
l’année que dans les cas suivants :
[…]
|
|
(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
(i) is required pursuant to subsection 152(6)
or would be so required if the taxpayer had claimed an amount by filing the
prescribed form referred to in that subsection on or before the day referred
to therein […].
|
b)
la cotisation est établie avant le jour qui suit de trois ans la fin de la
période normale de nouvelle cotisation applicable au contribuable pour
l’année et, selon le cas :
(i) est à établir en
conformité au paragraphe (6) ou le serait si le contribuable avait déduit un
montant en présentant le formulaire prescrit visé à ce paragraphe au plus
tard le jour qui y est mentionné […].
|
|
[…]
|
[…]
|
|
152. (6) Where a taxpayer has filed for a
particular taxation year the return of income required by section 150 and an
amount is subsequently claimed by the taxpayer or on the taxpayer’s behalf
for the year as
[…]
(c) a deduction […] under
section 111 in respect of a loss for a subsequent taxation year,
[…]
by filing with the Minister, on or before the
day on or before which the taxpayer is, or would be if a tax under this Part
were payable by the taxpayer for that subsequent taxation year, required by
section 150 to file a return of income for that subsequent taxation year, a
prescribed form amending the return, the Minister shall reassess the
taxpayer’s tax for any relevant taxation year (other than a taxation year
preceding the particular taxation year) in order to take into account the
deduction claimed.
|
152. (6) Lorsqu’un contribuable a produit
la déclaration de revenu exigée par l’article 150 pour une année d’imposition
et que, par la suite, une somme est demandée pour l’année par lui ou pour son
compte à titre de :
[…]
c)
déduction, […] en application de l’article 111, relativement
à une perte subie pour une année d’imposition ultérieure;
[…]
en présentant au ministre, au plus
tard le jour où le contribuable est tenu, ou le serait s’il était tenu de
payer de l’impôt en vertu de la présente partie pour cette année d’imposition
ultérieure, de produire en vertu de l’article 150 une déclaration de revenu
pour cette année d’imposition ultérieure, un formulaire prescrit modifiant la
déclaration, le ministre doit fixer de nouveau l’impôt du contribuable pour
toute année d’imposition pertinente (autre qu’une année d’imposition
antérieure à l’année donnée) afin de tenir compte de la déduction demandée.
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[9]
Justice Angers concluded
that the 2006 reassessment was made under subsection 152(4.2). That conclusion
was reasonably open to him on the record. Indeed, it was the only
conclusion that was reasonably open to him on the record. There are documents
from which it might reasonably be inferred that the reassessment was made under
subsection 152(4.2), namely the notice of reassessment and the computer record
described above. However, there is no evidence that the 2006 reassessment was
made to give effect to any request relating to a loss carry back pursuant to
subsection 152(6). It follows that there is no evidence to support the
contention of the appellant that the 2006 reassessment was made under
subparagraph 152(4)(b)(i).
[10]
Even
if the reassessment had been made under subparagraph 152(4)(b)(i) as
contended by the appellant, we agree with the conclusion of Justice Angers that
the issues raised in the proposed appeal are not reasonably related to the
adjustment made in the 2006 reassessment, i.e., the deduction of the $545
capital loss carry forward. The issues the appellant raises in his appeal
cannot be entertained because of the limitation in subsection 169(2) of the Income
Tax Act.
[11]
For
these reasons, the appeal will be dismissed with costs.
“K. Sharlow”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-280-09
(APPEAL FROM A JUDGMENT OF THE
HONOURABLE FRANÇOIS ANGERS OF THE TAX COURT OF CANADA DATED JUNE 29, 2009, DOCKET NO. 2008-3239
(IT) G)
STYLE OF CAUSE: ROBERT KUBBERNUS v. HER MAJESTY THE QUEEN
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: FEBRUARY 17, 2010
REASONS FOR JUDGMENT OF THE COURT BY: (SEXTON, EVANS & SHARLOW JJ.A.)
DELIVERED FROM THE BENCH BY: SHARLOW J.A.
APPEARANCES:
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A. Christina Tari
|
FOR THE APPELLANT
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Marie
Thérèse-Boris
Justin Kutyan
|
FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Richler and Tari, Tax
Lawyers
Toronto, Ontario
|
FOR THE
APPELLANT
|
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John H. Sims,
Q.C.
Deputy Attorney General of Canada
Toronto, Ontario
|
FOR THE RESPONDENT
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