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Citation:2003TCC910
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Date:20031205
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Docket: 2003-2062(IT)I
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BETWEEN:
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SHAWN L. IVENS,
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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 ORDER
GARON, C.J.
[1] This
is a motion made by the Respondent for an Order quashing the appeal from the
income tax reassessment for the 1998 taxation year.
[2] The
ground for the motion, as stated in the Notice of Motion dated September 19,
2003, is that a condition precedent to instituting a valid appeal has not been
met because:
1. The Appellant did not serve a Notice of Objection to the 1998
notice of reassessment dated June 1, 2001, within the time allowed by
subsection 165(1) of the Income Tax Act; and
2. The Appellant did not appeal directly to the Tax Court of Canada
regarding the reassessment issued on June 1, 2001, pursuant to subsection
165(7) of the Income Tax Act, within the time allowed by subsection
169(1) of the Income Tax Act.
[3] The
salient facts concerning this motion, which are set out in the Affidavit of Mr.
A.K.W. Chan, attached to the Notice of Motion dated September 19, 2003, could
be summarized as follows:
1. On March 8, 2001, the Minister of National Revenue initially
assessed the Appellant to include in the Appellant's income employment income
of $17,875.00 and social assistance payments in the amount of $621.00.
2. By a letter dated April 5, 2001, the Appellant objected to the
above assessment.
3. On June
1, 2001, the Minister of National Revenue reassessed the Appellant for the 1998
taxation year to allow interest paid in the amount of $150.00 on his student
loans and provincial sales tax credit in the amount of $50.00.
4. By a
letter dated July 31, 2001, the Minister of National Revenue advised the
Appellant that if he disagreed with the reassessment dated June 1, 2001, he
must either
a) file
an objection, or
b) appeal directly to the Tax Court of Canada
within 90 days of the mailing of the latest reassessment.
5. On
September 3, 2002, the Appellant objected to the reassessment dated
June 1, 2001 for the 1998 taxation year.
6. On March
24, 2003, the Appellant filed a Notice of Appeal where reference is made to the
1998 and 1999 taxation years.
Analysis
[4] I
shall now consider the application to the facts of this case of the provisions
of the Income Tax Act regarding the time frame within which a Notice of
Objection must be served on the Minister of National Revenue and a Notice of
Appeal must be filed with the Tax Court of Canada.
Notice of Objection
[5] Subsection
165(1) of the Income Tax Act provides that in the case of an individual
the Notice of Objection must be served on the Minister "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."
[6] The
phrase "filing-due date", which is defined in subsection 248(1) of
the Income Tax Act, generally refers in the case of an individual
to a period ending on April 30th of the year immediately following the year for
which the return of income is to be filed. I am referring below to the period
for serving a Notice of Objection as the normal period.
[7] Therefore,
in the present case, the Appellant's filing-due date for the return for the
1998 return of income was April 30, 1999. Accordingly, one year after the
taxpayer's filing-due date was April 30, 2000. The other date referred to in
subsection 165(1) of the Income Tax Act is 90 days after the mailing of
the Notice of Assessment, which in this case is dated June 1, 2001, was August
30, 2001.
[8] From
the above, it follows that the Notice of Objection, which was served on
September 3, 2002, was served more than a year after the later of the two days
mentioned in subsection 165(1) of the Act, the later of the two days
being August 30, 2001.
[9] However,
section 166.1 of the Income Tax Act provides that if a Notice of
Objection had not been filed within the required time, an application may be
made to the Minister of National Revenue for an extension of time and the
Minister of National Revenue could extend the time if conditions specified in
subsection 166.1(7) of the Income Tax Act are met. One of the conditions
is that the application must be made within one year after the expiration of
the normal period for filing a Notice of Objection, that means within one year
after August 30, 2001, which is no later than August 30, 2002. Here, the
Appellant served his Notice of Objection on September 3, 2002, that is, more
than a year after the expiration of the normal period for serving a Notice of
Objection. Therefore, no extension of time could be granted by the Minister of
National Revenue.
[10] An extension of time could also be granted by the Tax Court of Canada.
However, the application is also to be made within one year after the
expiration of the normal period for serving a Notice of Objection as set out in
subsection 166.2(5) of the Income Tax Act.
[11] Therefore, no extension of time for serving a Notice of Objection
could be granted in the present case by the Court or by the Minister of National
Revenue in respect of the 1998 taxation year, because the application for
extension of time was made too late, that is, more than a year after the
expiration of the normal period for serving a Notice of Objection on the
Minister of National Revenue.
Notice of Appeal
[12] Following the receipt of the Notice of Reassessment dated June 1,
2001, the Appellant also had the option of appealing directly to the Tax Court
of Canada from the reassessment in question, without serving a second Notice of
Objection in respect of the 1998 taxation year. This is authorized by
subsection 165(7) of the Income Tax Act.
[13] Subsection 169(1) of the Income Tax Act, provides that
no appeal may be instituted after the expiration of 90 days from the day the
Notice of Reassessment has been mailed to the taxpayer. Section 167 of the Income
Tax Act, provides that if an appeal has not been
instituted by the taxpayer within the required time, which I describe as the
"normal time" for appealing, the taxpayer may make an application to
this Court for an extension of time, as provided by subsection 167(1) of the Income
Tax Act.
[14] The application for an extension of time for appealing an assessment
could be granted by the Court, if certain requirements are met. One of the
requirements is that the application must be made within one year after the
expiration of the normal time.
[15] In this case, the reassessment was issued on June 1, 2001 and the
appeal was instituted on March 24, 2003.
[16] The normal time for appealing would have been 90 days after the
reassessment of June 1, 2001. This means that the appeal had to be filed before
August 31, 2001 and the application for extension of time could not be made
after August 30, 2002. That means the appeal was instituted more than seven
months after the utmost limit within which an extension of time for appealing
could be made.
[17] From the above, it follows that the Appellant was out of time in
serving a Notice of Objection to the reassessment issued on June 1, 2001 in
respect of the 1998 taxation year and in instituting his appeal from the same
reassessment. He was also out of time for making an application for extension
of time for serving a Notice of Objection or appealing to this Court in respect
of the reassessment of June 1, 2001.
[18] Therefore, the motion is granted and the purported appeal from the
income tax reassessment for the 1998 taxation year is quashed.
Signed at Ottawa, Canada, this 5th day of
December 2003.
Garon,
C.J.
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