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This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.
Principal Issues: In the particular situation, where the day of mailing of a notice of an original assessment was May 3, 2003, when does the normal reassessment period end?
Position: May 3, 2006.
Reasons: The Interpretation Act and the decision in Brunette et al. v. The Queen, 2000 DTC 1783 (T.C.C.).
May 4, 2006
Ms. Ghyslaine Larouche Income Tax Rulings Directorate
Client Services T1, 541 2-1
Jonquière Tax Centre M. Bisson
2251 René-Lévesque Blvd. (613) 957-2099
Jonquière QC G7S 5J1
2006-018380
Limitation period
This is in response to your email of April 27, 2006, on the above subject. In particular, you wish to know, in the particular situation described below, when the latest reassessment could be issued.
Unless otherwise indicated, any reference in this document to a section of the Act or any of its components is a reference to a section of the Income Tax Act (the "Act")
Particular Situation
An individual's return for the 2002 taxation year was reviewed by the Canada Revenue Agency (CRA) and a notice of assessment dated May 3, 2003, was sent to the individual pursuant to subsection 152(2).
Question
You asked us what is the latest date within the normal reassessment period under subsection 152(3.1) that a reassessment could be issued by the CRA under subsection 152(4). Is it May 2 or 3, 2006?
It is our view that the reassessment for the 2002 taxation year of the individual in the particular situation must be issued by May 3, 2006, for the following reasons.
Subsection 152(3.1) provides, inter alia, that the reassessment period for an individual for a taxation year is the period that ends three years after the day of mailing of a notice of an original assessment in respect of the taxpayer for the year.
Subsection 152(4) provides, inter alia, that, unless an exception applies, a reassessment may not be made after the expiry of the taxpayer's normal reassessment period for the year.
With respect to the calculation of time limits in Canadian statutes and regulations, subsection 27(4) of the Interpretation Act provides as follows:
After specified day
(4) Where a time is expressed to begin after or to be from a specified day, the time does not include that day.
Consequently, in the particular situation, since the day of mailing of the notice of original assessment is May 3, 2003, the three-year reassessment period begins on May 4, 2003 and necessarily ends on May 3, 2006. In general, no reassessment could be issued from May 4, 2006, i.e. after the expiry of the individual's normal reassessment period.
In that regard, we refer you to Brunette et al. v. The Queen, 2000 DTC 1783 (TCC), which deals with a similar situation. In that case, notices of initial assessment dated March 16, 1995, were issued in respect of the appellants' individual income tax returns for the 1994 taxation year. The only issue was whether the reassessments issued by the Minister on March 16, 1998, were timely. The court was of the opinion that the time limit for calculating the reassessment period should be calculated from the day following the notice of first assessment (which was March 16, 1995), i.e., March 17, 1995, and that this time limit should expire at midnight on March 16, 1998, since the last day of the time limit should count. Thus, the assessments made on March 16, 1998 were valid since they were made within the reassessment period provided for in subsection 152(3.1).
We hope that our comments are of assistance.
Maurice Bisson, CGA
for the Director
Corporate Reorganizations and Resource Industries Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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