Rice v. The Queen, docket 98-404-IT-APP

Date: 19990810

Docket: 98-404-IT-APP

BETWEEN:

DANIEL RICE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for decision

RIP, J.T.C.C.

[1] Daniel Rice has made an application for an extension of time to file a notice of objection to his income tax assessment for 1995.

[2] The notice of reassessment for 1995 was dated and mailed to Mr. Rice on March 25, 1996. The Minister of National Revenue ("Minister") subsequently reassessed Mr. Rice's 1995 taxation year and a notice of reassessment was dated and mailed to Mr. Rice on June 23, 1997.

[3] On April 16, 1998, Mr. Rice served a notice of objection and an application for an extension of time to file an objection to the reassessment.

[4] By letter dated May 6, 1998, Revenue Canada advised Mr. Rice that the Minister cannot grant his application since he did not demonstrate that the application for the extension was made as soon as circumstances permitted and that he did not demonstrate that within the period allowed for serving an objection he was unable to act or instruct another to act on his behalf, or that he had a bona fide intention to object to the reassessment.

[5] Mr. Rice was advised by the writer of the letter that if he disagrees with Revenue Canada's decision he may make a further application to this Court provided that the application be made within 90 days of the mailing of the letter, that is 90 days from May 6, 1998.

[6] The facts surrounding Mr. Rice's application for extension of time to file a notice of objection are sad. Mr. Rice became ill on May 5, 1998 and was subsequently diagnosed with a brain tumour. On May 27, 1998 underwent brain surgery. He developed an infection and he has been in and out of the hospital on several occasions since. According to his spouse, Eunice McDonald, who acted as his agent and who testified together with Mr. Rice, Mr. Rice had evidence of a tumour for at least three years prior to becoming ill and he had difficulties that "we did not know about". Ms. McDonald described her husband as being erratic and very difficult to deal with before he actually became ill.

[7] Mr. Rice filed his 1995 tax return on the basis that his wife had no income for income tax purposes. Mr. Rice's spouse testified that she is an Indian who is exempt from tax under the Indian Act. Mr. Rice was reassessed on the basis that the income his spouse earned in 1995 was subject to income tax and therefore he was denied claims for, amongst other things, marital exemption. Counsel for the Minister informed me that according to the material in Mr. Rice's file, Ms. McDonald did not file any notice of objection to her 1995 assessment in which the Minister included the disputed income in her income. There is no evidence whether or not Ms. McDonald reported that income or the Minister added it to her declared income. Ms. McDonald stated that she could not say whether or not she objected to her assessment for 1995.

[8] Mr. Rice also testified. He has difficulty with his speech but was able to make himself understood. I have no doubt that both Mr. Rice and Ms. McDonald testified truthfully.

[9] Ms. McDonald stated that when the notice of reassessment was received by her husband, he was of the view that since the increase in his assessment was due to his wife's income she, not he, should object. He was not being reasonable, she said.

[10] As I stated earlier the facts are sad, if not tragic. The problem before me is that I am faced with the provisions of subsection 166.2(1) of the Income Tax Act ("Act") which provides that where a taxpayer has made an application for an extension of time to file a notice of objection after being refused by the Minister, the taxpayer may apply to the Tax Court of Canada to have the application granted but no application may be made after the expiration of 90 days after the day on which the Minister's decision rejecting the original application was made.

[11] The Minister notified Mr. Rice on May 6, 1998 that his application for extension of time was rejected. Mr. Rice had 90 days from May 6th, that is, until August 4, 1998, to apply to the Court to have the application granted. Unfortunately, Mr. Rice did not file the application until October 29, 1998. There is no provision in the Act to permit me at this time to extend the time to file a notice of objection on the basis that Mr. Rice was ill in 1998 and was unable to attend to his affairs.

[12] With regret, I must dismiss the application of Mr. Rice. However, this may be a matter which, if Mr. Rice's spouse is truly exempted from tax under the provisions of the Indian Act, the Minister and the Treasury Board may wish to consider favourably a remission of tax to Mr. Rice under the provisions of the Financial Administration Act.

Signed at Ottawa, Canada, this 10th day of August 1999.

"Gerald J. Rip"

J.T.C.C.