Wayne Thody v. Minister of National Revenue, [1983] CTC 2741, 83 DTC 641

Taylor, TCJ:—This application for an extension of time within which to file notices of objection against income tax assessments for the years 1978, 1979 and 1980 was heard in London, Ontario, on August 29, 1983. The application reads:

The Notices of Re-assessment provided no details of the amounts being reassessed. The taxpayer requested these details, but these were not forwarded by Appeals until November 5, 1982 (copy attached). The taxpayer was supplied with details and copies of the working papers at the time of the audit. The audit was done in conjunction with the review of Delmont Investment Group Incorporated. Subsequent to the audit, the Toronto Dominion Bank called in the corporation’s bank loan and the business ceased operations and the records of the company including the details of the income tax audit were no longer available to Mr Wayne Thody. Accordingly, further details of the audit were requested from Mrs Wiseman in Appeals in your London office.

The taxpayer was not in a position to file Notices of Objection within the time frame allowed since he did not receive details of the amounts being assessed until this time frame had expired.

For the Minister, it was asserted:

1. Concurrent Notices of Assessment for the 1978, 1979 and 1980 taxation years of the Applicant were dated June 18, 1982.

2. The ninetieth day following June 18, 1982, was Thursday, September 16, 1982.

3. Purported Notices of Objection for the 1978, 1979 and 1980 taxation years dated November 25, 1982, and bearing the signature of the Applicant, were received by the Respondent on November 29, 1982, in an envelope registered November 25, 1982.

4. By letter dated January 26, 1983, the Respondent advised the Applicant that these Notices of Objection were not submitted within the prescribed ninety days.

5. This application was perfected on March 4, 1983, as indicated by the Registrar’s stamp on the letter dated February 25, 1983, from the Applicant’s agent, David E Neil.

6. March 4, 1983, was 169 days following the time limited by section 165 of the Income Tax Act, RSC 1952, Chapter 148 as amended and 36 days following the Respondent’s letter of January 26, 1983.

7. The Respondent puts the Applicant to the strict proof that he has complied with the requirements of subparagraph 167(5)(c)(i) of the Income Tax Act.

8. The Respondent respectfully submits that this application was not brought as soon as circumstances permitted and therefore This Honourable Board is without jurisdiction to grant the order requested by virtue of subparagraph 167(5)(c)(ii) of the Income Tax Act.

9. The Respondent further submits that this application does not disclose any reasonable grounds for objecting to or appealing from the assessments, within the meaning of subparagraph 167(5)(c)(iii) of the Income Tax Act.

In this matter, the Minister has specifically relied on each of the three subparagraphs (i), (ii) and (iii) of paragraph 167(5)(c) of the Act. The only physical evidence available to the Court was the relevant assessment notices. While it can hardly be said that the applicant was very aggressive in demanding and obtaining the allegedly missing information within the 90- day period, neither can it be said that he did have all the information from Revenue Canada that would have assisted him in filing the notices of objection. His application cannot be denied based upon a lack of fulfilling subparagraph 167(5)(c)(i).

With regard to subparagraph 167(5)(c)(iii), in my view the combination of the assessments and the involvement of the company Delmont Investment Group Incorporated would indicate that there may have been “companypersonal” items in the assessments to which he could legitimately object. To some degree, these are noted in the filed notices of objection, and do deal with the company. That position cannot be sustained by the respondent.

Dealing with subparagraph 167(5)(c)(ii), we come to another matter. Reference is made to the recent cases of Milan Hrovat et al v MNR, [1983] CTC 2662; 83 DTC 590. The question then becomes one of determining if there was an undue delay during the period subsequent to the original 90 days. The only information available to the Court on this point is that the applicant’s accountant, Mr Neil, who represented him at the hearing stated that he did not obtain the required information until November 5, 1982. No explanation or information was presented which would account for the fact that the application at issue is dated February 25, 1983, and was apparently received by Revenue Canada on March 4, 1983. While that is a period of some additional four months, it cannot be said that the delay was the result of “culpable negligence” on the part of the applicant himself (see Cite de Pont Viau v Gauthier Mfg Ltd, [1978] 2 SCR 516; Murray Bowen v City of Montreal, [1979] 1 SCR 511) and it was not argued by the respondent that the above two Supreme Court cases should only apply and extend to taxpayers’ representatives who are members of the legal profession.

The application is allowed.

Application allowed.