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Citation: 2005TCC325
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Date: 20050506
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Docket: 2004-3595(IT)I
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BETWEEN:
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BERNARD JOHNSTON,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Beaubier, J.
[1] This motion by the Respondent to
dismiss the appeal was heard at Saskatoon, Saskatchewan on
January 11, 2005. Respondent's counsel filed the affidavit of
David Young and the Appellant testified.
[2] The truth of Mr. Young's affidavit
is not contested. It establishes:
1. On August 12, 2002 the
reassessment in question was mailed to the Appellant.
2. On January 30, 2004the
Appellant served a Notice of Objection on the Respondent.
3. On May 31, 2004 the
Respondent issued a Notice of Confirmation in this matter.
4. No Notice of Objection
or application for extension of time was received by the Minister
within the times set forth in the Income Tax Act (the
"Act").
[3] The Appellant testified that he
couriered a Notice of Objection to the reassessment, executed on
January 30, 2004 and filed February 15, 2004, (Exhibit R-3).
[4] In response, the Appellant
received Exhibit A-1 dated May 31, 2004, which reads, in
full:
Bernard Johnston
3549 W. Lawrence Lane
Phoenix, AZ 85051
USA
Our reference
GL 0405 6103 0393
Nigel Touhey
Tel.: (613) 598-2314
Fax: (613) 991-3903
May 31, 2004
Dear Mr. Johnston:
Re: Notice of
objection for the 1998 taxation year.
We have completed our review of your objection for the
above-mentioned taxation year.
As a result of our review, we have confirmed the assessment.
We have explained the Minister's decision in the attached
Notice of Confirmation.
If you disagree with the decision, you can file an appeal with
the Tax Court of Canada. We have attached information on how to
proceed with an appeal.
Yours sincerely,
"Tim Matte"
Tim Matte
Team Leader
Appeals Division
Enclosures
[5] On this basis the Appellant filed
this Notice of Appeal with the Tax Court of Canada on August 27,
2004.
[6] Therefore, Appellant's counsel
argues; there is an offer dated May 31, 2004 which the
Appellant accepted by filing the Notice of Appeal on August 27,
2004. The Appellant's counsel argued that as a statutory court,
the Tax Court of Canada can accept jurisdiction which is
conferred on it by the contract of the parties.
[7] Because this argument took
Respondent's counsel by surprise, this matter was adjourned to
enable her to file a written argument, which she did. Appellant's
counsel did not file any further argument.
[8] The first question is whether, in
these circumstances, the Minister of National Revenue has the
power under the Act to even make such an offer. Sections
165, 166.1 and 169 of the Act read as follows:
165. (1) A taxpayer who objects to an assessment under
this Part may serve on the Minister a notice of objection, in
writing, setting out the reasons for the objection and all
relevant facts,
(a) where the assessment is in respect of the taxpayer
for a taxation year and the taxpayer is an individual (other than
a trust) or a testamentary trust, on or before the later of
(i) the day that is one year after the taxpayer's
filing-due date for the year, and
(ii) the day that is 90 days after the day of mailing of the
notice of assessment; and
(b) in any other case, on or before the day that is 90
days after the day of mailing of the notice of assessment.
(1.1) Notwithstanding subsection 165(1), where at any time the
Minister assesses tax, interest, penalties or other amounts
payable under this Part by, or makes a determination in respect
of, a taxpayer
(a) under subsection 67.5(2) or 152(1.8), subparagraph
152(4)(b)(i) or subsection 152(4.3) or (6), 161.1(7), 164(4.1),
220(3.4) or 245(8) or in accordance with an order of a court
vacating, varying or restoring an assessment or referring the
assessment back to the Minister for reconsideration and
reassessment,
(b) under subsection 165(3) where the underlying
objection relates to an assessment or a determination made under
any of the provisions or circumstances referred to in paragraph
165(1.1)(a), or
(c) under a provision of an Act of Parliament requiring
an assessment to be made that, but for that provision, would not
be made because of subsections 152(4) to 152(5),
the taxpayer may object to the assessment or determination
within 90 days after the day of mailing of the notice of
assessment or determination, but only to the extent that the
reasons for the objection can reasonably be regarded
(d) where the assessment or determination was made
under subsection 152(1.8), as relating to any matter or
conclusion specified in paragraph 152(1.8)(a), 152(1.8)(b) or
152(1.8)(c), and
(e) in any other case, as relating to any matter that
gave rise to the assessment or determination
and that was not conclusively determined by the court, and
this subsection shall not be read or construed as limiting the
right of the taxpayer to object to an assessment or a
determination issued or made before that time.
(1.11) Where a corporation that was a large corporation in a
taxation year (within the meaning assigned by subsection
225.1(8)) objects to an assessment under this Part for the year,
the notice of objection shall
(a) reasonably describe each issue to be decided;
(b) specify in respect of each issue, the relief
sought, expressed as the amount of a change in a balance (within
the meaning assigned by subsection 152(4.4)) or a balance of
undeducted outlays, expenses or other amounts of the corporation;
and
(c) provide facts and reasons relied on by the
corporation in respect of each issue.
(1.12) Notwithstanding subsection 165(1.11), where a notice of
objection served by a corporation to which that subsection
applies does not include the information required by paragraph
165(1.11)(b) or 165(1.11)(c) in respect of an issue to be decided
that is described in the notice, the Minister may in writing
request the corporation to provide the information, and those
paragraphs shall be deemed to be complied with in respect of the
issue if, within 60 days after the request is made, the
corporation submits the information in writing to a Chief of
Appeals referred to in subsection 165(2).
(1.13) Notwithstanding subsections 165(1) and 165(1.1), where
under subsection 165(3) a particular assessment was made for a
taxation year pursuant to a notice of objection served by a
corporation that was a large corporation in the year (within the
meaning assigned by subsection 225.1(8)), except where the
objection was made to an earlier assessment made under any of the
provisions or circumstances referred to in paragraph 165(1.1)(a),
the corporation may object to the particular assessment in
respect of an issue
(a) only if the corporation complied with subsection
165(1.11) in the notice with respect to that issue; and
(b) only with respect to the relief sought in respect
of that issue as specified by the corporation in the notice.
(1.14) Where a particular assessment is made under subsection
165(3) pursuant to an objection made by a taxpayer to an earlier
assessment, subsection 165(1.13) does not limit the right of the
taxpayer to object to the particular assessment in respect of an
issue that was part of the particular assessment and not part of
the earlier assessment.
(1.15) Notwithstanding subsection 165(1), where the Minister
makes a determination under subsection 152(1.4) in respect of a
fiscal period of a partnership, an objection in respect of the
determination may be made only by one member of the partnership,
and that member must be either
(a) designated for that purpose in the information
return made under section 229 of the Income Tax Regulations for
the fiscal period; or
(b) otherwise expressly authorized by the partnership
to so act.
(1.2) Notwithstanding subsections 165(1) and 165(1.1), no
objection may be made by a taxpayer to an assessment made under
subsection 118.1(11), 152(4.2), 169(3) or 220(3.1) nor, for
greater certainty, in respect of an issue for which the right of
objection has been waived in writing by the taxpayer.
(2) A notice of objection under this section shall be served
by being addressed to the Chief of Appeals in a District Office
or a Taxation Centre of the Canada Customs and Revenue Agency and
delivered or mailed to that Office or Centre.
(2.1) Notwithstanding any other provision of this Act,
paragraph (1)(a) shall apply only in respect of assessments,
determinations and redeterminations under this Part and Part
I.2.
(3) On receipt of a notice of objection under this section,
the Minister shall, with all due dispatch, reconsider the
assessment and vacate, confirm or vary the assessment or
reassess, and shall thereupon notify the taxpayer in writing of
the Minister's action.
(3.1) (Repealed by S.C. 1998, c. 19, s. 192(4).)
(3.2) (Repealed by S.C. 1998, c. 19, s. 192(4).)
(4) (Repealed by S.C. 1994, c. 7, Sch. VIII, s. 98(3).)
(5) The limitations imposed under subsections 152(4) and
152(4.01) do not apply to a reassessment made under subsection
165(3).
(6) The Minister may accept a notice of objection served under
this section that was not served in the manner required by
subsection 165(2).
(7) Where a taxpayer has served in accordance with this
section a notice of objection to an assessment and thereafter the
Minister reassesses the tax, interest, penalties or other amount
in respect of which the notice of objection was served or makes
an additional assessment in respect thereof and sends to the
taxpayer a notice of the reassessment or of the additional
assessment, as the case may be, the taxpayer may, without serving
a notice of objection to the reassessment or additional
assessment,
(a) appeal therefrom to the Tax Court of Canada in
accordance with section 169; or
(b) amend any appeal to the Tax Court of Canada that
has been instituted with respect to the assessment by joining
thereto an appeal in respect of the reassessment or the
additional assessment in such manner and on such terms, if any,
as the Tax Court of Canada directs.
166.1. (1) Where no notice of objection to an
assessment has been served under section 165, nor any request
under subsection 245(6) made, within the time limited by those
provisions for doing so, the taxpayer may apply to the Minister
to extend the time for serving the notice of objection or making
the request.
(2) An application made under subsection 166.1(1) shall set
out the reasons why the notice of objection or the request was
not served or made, as the case may be, within the time otherwise
limited by this Act for doing so.
(3) An application under subsection 166.1(1) shall be made by
being addressed to the Chief of Appeals in a District Office or a
Taxation Centre of the Canada Customs and Revenue Agency and
delivered or mailed to that Office or Centre, accompanied by a
copy of the notice of objection or a copy of the request, as the
case may be.
(4) The Minister may accept an application under this section
that was not made in the manner required by subsection
166.1(3).
(5) On receipt of an application made under subsection
166.1(1), the Minister shall, with all due dispatch, consider the
application and grant or refuse it, and shall thereupon notify
the taxpayer in writing of the Minister's decision.
(6) Where an application made under subsection 166.1(1) is
granted, the notice of objection or the request, as the case may
be, shall be deemed to have been served or made on the day the
decision of the Minister is mailed to the taxpayer.
(7) No application shall be granted under this section
unless
(a) the application is made within one year after the
expiration of the time otherwise limited by this Act for serving
a notice of objection or making a request, as the case may be;
and
(b) the taxpayer demonstrates that
(i) within the time otherwise limited by this Act for serving
such a notice or making such a request, as the case may be, the
taxpayer
(A) was unable to act or to instruct another to act in the
taxpayer's name, or
(B) had a bona fide intention to object to the assessment or
make the request,
(ii) given the reasons set out in the application and the
circumstances of the case, it would be just and equitable to
grant the application, and
(iii) the application was made as soon as circumstances
permitted.
169. (1) Where a taxpayer has served notice of
objection to an assessment under section 165, the taxpayer may
appeal to the Tax Court of Canada to have the assessment vacated
or varied after either
(a) the Minister has confirmed the assessment or
reassessed, or
(b) 90 days have elapsed after service of the notice of
objection and the Minister has not notified the taxpayer that the
Minister has vacated or confirmed the assessment or
reassessed,
but no appeal under this section may be instituted after the
expiration of 90 days from the day notice has been mailed to the
taxpayer under section 165 that the Minister has confirmed the
assessment or reassessed.
(1.1) Where at any particular time a taxpayer has disposed of
a property, the fair market value of which has been confirmed or
redetermined by the Minister of the Environment under subsection
118.1(10.4), the taxpayer may, within 90 days after the day on
which that Minister has issued a certificate under subsection
118.1(10.5), appeal the confirmation or redetermination to the
Tax Court of Canada.
(2) Notwithstanding subsection 169(1), where at any time the
Minister assesses tax, interest, penalties or other amounts
payable under this Part by, or makes a determination in respect
of, a taxpayer
(a) under subsection 67.5(2) or 152(1.8), subparagraph
152(4)(b)(i) or subsection 152(4.3) or 152(6), 164(4.1), 220(3.4)
or 245(8) or in accordance with an order of a court vacating,
varying or restoring the assessment or referring the assessment
back to the Minister for reconsideration and reassessment,
(b) under subsection 165(3) where the underlying
objection relates to an assessment or a determination made under
any of the provisions or circumstances referred to in paragraph
169(2)(a), or
(c) under a provision of an Act of Parliament requiring
an assessment to be made that, but for that provision, would not
be made because of subsections 152(4) to 152(5),
the taxpayer may appeal to the Tax Court of Canada within the
time limit specified in subsection 169(1), but only to the extent
that the reasons for the appeal can reasonably be regarded
(d) where the assessment or determination was made
under subsection 152(1.8), as relating to any matter specified in
paragraph 152(1.8)(a), 152(1.8)(b) or 152(1.8)(c), and
(e) in any other case, as relating to any matter that
gave rise to the assessment or determination
and that was not conclusively determined by the Court, and
this subsection shall not be read or construed as limiting the
right of the taxpayer to appeal from an assessment or a
determination issued or made before that time.
(2.1) Notwithstanding subsections 169(1) and 169(2), where a
corporation that was a large corporation in a taxation year
(within the meaning assigned by subsection 225.1(8)) served a
notice of objection to an assessment under this Part for the
year, the corporation may appeal to the Tax Court of Canada to
have the assessment vacated or varied only with respect to
(a) an issue in respect of which the corporation has
complied with subsection 165(1.11) in the notice, or
(b) an issue described in subsection 165(1.14) where
the corporation did not, because of subsection 165(7), serve a
notice of objection to the assessment that gave rise to the
issue
and, in the case of an issue described in paragraph
169(2.1)(a), the corporation may so appeal only with respect to
the relief sought in respect of the issue as specified by the
corporation in the notice.
(2.2) Notwithstanding subsections 169(1) and 169(2), for
greater certainty a taxpayer may not appeal to the Tax Court of
Canada to have an assessment under this Part vacated or varied in
respect of an issue for which the right of objection or appeal
has been waived in writing by the taxpayer.
(3) Notwithstanding section 152, for the purpose of disposing
of an appeal made under a provision of this Act, the Minister may
at any time, with the consent in writing of the taxpayer,
reassess tax, interest, penalties or other amounts payable under
this Act by the taxpayer.
(4) Division I applies, with such modifications as the
circumstances require, in respect of a reassessment made under
subsection 169(3) as though it had been made under section
152.
[9] None of these sections give the
Minister the power to do anything beyond that set out
therein.
[10] Thus, by statute, the Minster has no
power to make an offer or a contract as alleged by the
Appellant.
[11] Similarly, the Tax Court of Canada has
no power to accept or deal with a Notice of Appeal which is not
within the statutory preconditions set out in the Act.
[12] For the foregoing reasons, this
purported Notice of Appeal is quashed.
Signed at Saskatoon, Saskatchewan, this 6th day of
May 2005.
Beaubier, J.
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