In 2015, Bonnybrook, a private corporation, disclosed unreported income under the voluntary disclosure program by filing income tax returns for its 2003 and subsequent taxation years. In assessing these returns, the Minister denied its claim for dividend refunds for the 2003 to 2011 taxation years on the basis that Bonnybrook had not filed those returns within three years as required by s. 129(1). Bonnybrook then applied for relief under s. 220(2.1) (for a waiver of the s. 129(1) requirement to file a corporate return within three years), under s. 220(3) (for an extension of this three-year deadline) and under s. 220(3.1) (for relief from penalties and interest). The Minister’s response ignored the s. 220(2.1) request and denied the s. 220(3) request for conclusory reasons (it was the Minister’s position that s. 220(3) was not available for refund applications).
In finding (at para 19) that, contrary to the finding below, that the Federal Court had jurisdiction to review these decisions, Woods JA stated:
The Tax Court’s jurisdiction … is generally limited to hearing appeals concerning the correctness of assessments. Its jurisdiction does not extend to judicial review of decisions of the Minister under discretionary relief provisions of the Act … .
After determining to remit the s. 220(2.1) matter back to the minster for consideration, Woods JA then turned to the s. 220(3) decision and, after noting the position in 2013-0499421I7, stated (at paras. 40, 42, 45):
The CRA’s view … is that the taxpayer relief provisions cannot affect a filing requirement which restricts the issuance of a dividend refund. The problem with this reasoning is that this is exactly what the taxpayer relief provisions are intended to do — enable the Minister to provide relief from strict filing requirements.
Subsection 220(3) of the Act provides the Minister with a broad discretion to extend the time to file a “return”. …
It is also useful to note that the CRA has authorized waivers that are conditions to obtaining a benefit.
Woods JA concluded (at para 65), with Near JA concurring:
I would allow the appeal, set aside the judgment of the Federal Court, allow the application for judicial review, and set aside the Minister’s decision. I would refer the matter back to the Minister to consider Bonnybrook’s application for relief under subsections 220(2.1) and 220(3)… .
In his dissenting reasons, Stratas JA stated (at paras 72, 74, 93 and 95):
The Minister has asserted a position concerning subsection 220(3) but … has not offered meaningful or coherent reasons in support of that position….
My colleague’s response to this is to interpret subsection 220(3) herself in the course of conducting reasonableness review, in effect doing the job of statutory interpretation and reasons-writing that the Minister should have done. On this … I decline to join her.
[F]aced with a silence whose meaning cannot be understood through legitimate interpretation, who am I to grab the Minister’s pen and “supplement” her reasons?…
…I would remit [the s. 220(3) matter] to the Minister for full consideration and decision. …