The
Chairman:—D
Papalia
Drywall
Construction
Ltd
is
applying
under
subsection
167(1)
of
the
Income
Tax
Act
for
an
extension
of
time
in
which
to
file
Notices
of
Objection
with
respect
to
the
1974,
1975,
1976,
1977
and
1978
taxation
years.
Findings
of
Fact
The
Minister’s
reassessments
were
based
on
the
applicant’s
Books
and
Records
which
had
been
the
subject
of
a
search
and
seizure
procedure
carried
out
by
the
Special
Investigation
Branch
of
the
Department
of
National
Revenue.
The
applicant
had
properly
filed
Notices
of
Objection
to
a
first
reassessment
on
February
23,
1979
(Exhibit
A-1);
second
Notices
of
Objection
were
also
properly
filed
with
respect
to
the
Minister’s
second
Notice
of
Reassessment
on
October
2,
1979.
The
firm
of
G
H
Ward
&
Partners,
chartered
accountants,
which
had
previously
acted
as
auditors
for
the
applicant
until
1971,
was
again
retained
in
March
1980
as
income
tax
and
financial
consultants
to
the
applicant
(Exhibit
R-1).
Mr
Brian
Mulvihill,
a
partner
of
G
H
Ward
&
Partners
and
the
applicant’s
witness,
had
in
1980
and
early
1981
arranged
meetings
with
Mr
McClean
of
the
Special
Investigation
Branch
to
clarify
the
applicant’s
accounting
records
and
to
make
necessary
adjustments
to
the
applicant’s
income
for
the
years
in
question.
The
Notice
of
Reassessment
pertinent
to
this
application
was
dated
April
29,
1981
and
forwarded
to
the
applicant
company’s
address
and
to
the
address
of
three
executive
officers
of
the
applicant.
No
meetings
between
Mr
Mulvihill
and
Mr
McClean
were
held
subsequent
to
April
29,
1981.
Mr
Mulvihill,
on
September
25,
1981,
wrote
to
the
Director
of
Taxation:
September
25,
1981.
Mr
R
Dore
Director
of
Taxation
REVENUE
CANADA
TAXATION
Ottawa
District
Office
360
Lisgar
Street
Ottawa,
Ontario
K1A
0L9
Dear
Sir:
Re:
D
PAPALIA
DRYWALL
CONSTRUCTION
LIMITED
In
January
of
1981
an
agreement
was
reached
between
your
assessors,
Messrs
R
S
McClean
and
J
Lafontaine,
and
our
client
referred
to
above
on
final
adjustments
to
your
department’s
reassessment
covering
the
years
1975
to
1978
inclusive.
The
adjustments
agreed
to
had
the
effect
of
substantially
reducing
the
corporation’s
taxable
income
and
therefore
its
income
tax.
We
are
advised
by
your
collection
section
that
these
revisions
have
not
been
processed
as
yet
and
the
company
account
has
been
in
error
status
on
your
books
since
April
13,
1981.
Surely
this
matter
can
be
corrected.
As
you
are
aware,
the
province
of
Ontario
acts
in
concert
with
your
department
and
therefore
they
are
also
requesting
payment
on
a
balance
of
income
tax
which
is
not
properly
owing.
The
purpose
of
this
letter
is
to
ask
for
your
personal
intervention
in
order
to
speed
up
the
processing
of
these
adjustments
and
thereby
reduce
the
collection
action
which
is
presently
being
exerted
on
our
client.
As
soon
as
these
adjustments
are
processed
our
client
proposes
to
pay
the
balance
of
tax
owing
in
full.
We
look
forward
to
receiving
your
early
reply.
Yours
very
truly,
(Signed)
WARD
MALLETTE
Brian
M
Mulvihill
Partner
BMM/km
cc
Mr
D
Papalia
The
Notices
of
Reassessment
were
not
received
nor
were
they
seen
by
Mr
Mulvihill
until
October
1981
at
which
time
copies
of
Notice
of
Objection
for
each
of
the
years
1974,
1975,
1976,
1977
and
1978
were
incorrectly
forwarded
to
the
Minister
of
National
Revenue
(Exhibit
A-4).
The
Application
for
Extension
of
Time
under
section
167
of
the
Act,
addressed
to
the
Tax
Review
Board,
is
dated
December
8,
1981
and
reads
as
follows:
D
PAPALIA
DRYWALL
CONSTRUCTION
LTD
Drywall,
Joints,
and
Insulation
|
Contractor
|
|
|
122
Ridgefield
Crescent
OTTAWA,
ONTARIO
|
828-3013
|
|
December
8,
1981.
|
|
|
Registrar
of
the
Tax
Review
Board,
|
|
|
Kent
Professional
Building,
|
|
|
381
Kent
St,
|
|
|
Ottawa,
Ontario.
|
|
|
K1A
0M1
|
|
|
Dear
Sir:
|
|
We
wish
to
apply
for
an
extension
under
Section
167
of
the
Income
Tax
Act
to
the
appeal
period
for
filing
a
notice
of
objection
to
the
income
tax
re-assessments
dated
April
29,
1981,
relating
to
the
years
1974,
1975,
1976,
1977
and
1978.
The
reasons
that
we
are
requesting
an
extension
are
as
follows:
A)
Our
accountant,
who
had
prepared
these
financial
statements
and
income
tax
returns
left
us
and
we
were
unable
to
appreciate
the
need
to
respond
within
the
90
day
time
limit.
B)
My
father
who
was
involved
in
a
major
car
accident
was
involved
in
an
insurance
court
case
which
required
a
great
deal
of
our
time
and
thought.
C)
My
father,
my
brother
and
myself
are
the
main
shareholders
and
participants
in
the
company
and
because
of
the
previous
two
points
we
were
unaware
of
the
significance
of
the
90
day
time
limit.
We
trust
you
will
look
favourably
on
this
request
and
wait
to
hear
from
you.
Yours
very
truly,
D
Papalia
Drywall
Const
Ltd,
(Signed)
Serafina
Bueti
Secretary
Treasurer
Submissions
Counsel
for
the
applicant
contends
that,
owing
to
the
numerous
Notices
of
Reassessment
received
by
the
applicant,
the
request
for
tax
payment
by
the
Province
of
Ontario,
the
car
accident,
the
insurance
court
case
involving
one
of
the
applicant’s
shareholders
and
the
amount
of
tax
involved
are
circumstances
which
contributed
in
making
it
impossible
for
the
applicant
to
file
the
Notices
of
Objection
within
the
prescribed
time.
Counsel
suggests
that,
not
having
personally
received
the
Notices
of
Reassessment
as
the
applicant’s
legal
adviser
and
the
chartered
accountant
not
having
been
made
aware
of
the
April
29,
1981
Notices
of
Reassessment
until
October
1981,
the
Notices
of
Objection
just
happened
to
fall
“between
two
chairs”.
He
concludes
that
the
reasons
advanced
by
the
Minister
of
National
Revenue
in
opposing
the
application
are
not
well
founded
and
that
the
Board
would
be
justified
in
granting
the
application
in
the
circumstances.
Counsel
for
the
Minister
opposed
the
application
on
the
following
grounds:
(a)
the
circumstances
of
the
case
are
not
such
that
it
would
be
just
and
equitable
to
make
an
order
extending
the
time;
(b)
there
are
no
valid
reasons
given
to
justify
why
it
was
not
possible
to
serve
the
notice
of
objection
within
the
time
otherwise
limited
by
the
Act;
(c)
the
application
was
not
brought
as
soon
as
circumstances
permitted
it
to
be
brought;
(d)
there
are
no
reasonable
grounds
for
objecting
to
the
assessment.
Counsel
for
the
Minister
suggested
that
the
application
signed
by
the
applicant’s
Secretary
Treasurer
contains
serious
inconsistencies.
Indeed
the
applicant
had
properly
filed
Notices
of
Objection
to
reassessment
on
two
previous
occasions:
February
23,
1979
and
October
2,
1979
and
it
is
most
unlikely
—
particularly
since
Mr
Mulvihill
had
been
retained
by
the
applicant
in
March
1980
and
had
at
the
time
the
benefit
of
legal
counsel
—
that
the
applicant
was
unable
to
appreciate
the
significance
of
the
90-day
time
limit
in
which
to
file
its
Notices
of
Objection.
Counsel
also
pointed
out
that
the
car
accident
and
the
insurance
court
case
referred
to
in
the
application
took
place
in
a
time
frame
other
than
the
one
under
consideration.
Conclusion
The
Minister’s
Notices
of
Reassessment
were
completed
and
properly
served
in
addressing
them
to
the
applicant’s
corporate
address
and
to
each
of
the
applicant’s
officers.
In
reviewing
the
evidence,
it
is
reasonable
to
assume
that
reasonable
grounds
for
objecting
to
the
assessments
may
well
have
existed.
Mr
Mulvihill,
notwithstanding
the
error
in
addressing
the
application
to
the
Minister
of
National
Revenue,
did
make
an
attempt
to
file
the
application
as
soon
as
circumstances
permitted
him
to
do
so.
I
cannot
see,
on
the
basis
of
the
evidence,
how
Mr
Mulvihill
or
indeed
the
applicant’s
legal
counsel
can
be
considered
directly
or
indirectly
responsible
for
the
applicant’s
failure
to
file
his
Notices
on
time
in
the
circumstances.
The
conditions
set
out
in
subsections
167(2)
and
(5)
of
the
Act
are
applicable
to
and
must
ultimately
be
met
by
the
applicant
if
its
application
is
to
succeed.
The
first
requirement
is
the
existence
of
valid
reasons
why
it
was
not
possible
for
the
applicant
to
file
its
Notices
of
Objection
in
the
delay
prescribed
by
subsection
165(1).
In
my
opinion,
the
applicant
failed
to
meet
that
basic
condition.
It
would
have
been
a
simple
matter
and
indeed
a
normal
procedure
for
the
applicant
(or
either
one
of
its
officers)
to
file
the
Notices
of
Objection
or
alternatively
to
inform
the
accountant
and
the
legal
advisor
—
who
had
been
retained
to
assist
the
applicant
with
its
tax
problems
—
as
soon
as
the
Notices
of
Assessment
had
been
received.
This
the
applicant
failed
to
do
and
Mr
Mulvihill
became
aware
of
the
Notices
of
Reassessment
in
October
1981
—
some
five
and
a
half
months
after
that,
on
December
8,
1981.
In
applying
subsection
167(2)
of
the
Act,
I
do
not
accept
as
a
valid
reason
the
applicant’s
contention
that
it
was
unable
to
appreciate
and
was
unaware
of
the
importance
of
filing
the
Notices
of
Objection
within
a
90-day
time
limit.
Ruling
out
ignorance
of
the
law
as
an
acceptable
reason
for
not
complying
with
the
Act,
the
only
other
reason
the
Notices
of
objection
were
not
filed
within
90
days
of
the
date
of
the
reassessments
is
the
applicant’s
negligence
and,
in
my
opinion,
is
not
one
of
the
reasons
which
can
be
accepted
as
rendering
impossible
the
servicing
of
Notices
of
Objection
within
the
time
limit
prescribed
by
the
Act.
The
applicant
does
not
meet
the
basic
requirement
of
subsection
167(2)
of
the
Act
and
the
circumstances
of
the
case
are
not
such
that
it
would
be
just
and
equitable
for
the
Board
to
grant
the
extension.
The
application
is
refused.
Application
dismissed.
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