Bakorp - Tax Court finds that a "180 degree turn" in the relief requested by a large corporation at the appeal stage was not "a mere change in quantum"

The taxpayer's Notice of Objection indicated that the Minister had erred in reducing the amount of a deemed dividend from $53 million to $28 million for its 1995 taxation year, but its Notice of Appeal stated that the deemed dividend for 1995 should have been nil instead (so that such amount instead should have been included in a prior year's return).

The taxpayer, as a large corporation, was subject to the requirement in s. 169(2.1) that it could only appeal on an issue raised in its Notice of Objection.  It argued that, at both the Notice of Objection and Appeal stages, it was raising the same issue, namely, the quantum of the deemed dividend for that year.  After stating that "there may be situations where change in quantum may not involve Large Corporation Rules," C Miller J stated that "I cannot imagine a fuller reconstruction than making a 180 degree turn in what is to be included in income."  The taxpayer's appeal for 1995 was invalidated.

Scott Armstrong.  Summary of Bakorp Management Ltd. v. The Queen, 2013 TCC 94 under s. 169(2.1).