Kokanee Placer – Tax Court of Canada indicates that a due diligence defence can be raised to a penalty under s. 162(7) for failure to file electronically

A corporation which had marginally more revenue than the $1 million threshold triggering an electronic return-filing requirement was liable for a s. 162(7) penalty for instead filing in paper form even though it had no taxes payable. A mistake as to the electronic filing requirement was a mistake of law and not a defence to the penalty. Paris J also found that although due diligence defences may be raised to s. 162(7) penalties, no such defence was established here.

Neal Armstrong. Summary of Kokanee Placer Ltd. v. The Queen, 2016 TCC 63 under s. 162(7.2).