Paul S Bhatti v. Minister of National Revenue, [1981] CTC 2555, 81 DTC 506

The Assistant Chairman:—On or about April 25, 1980, the above-named applicant filed an application pursuant to section 167 of the Income Tax Act SC 1970-71-72, c. 63 as amended, to have the Tax Review Board, pursuant to that section, issue an Order extending the time within which he could file a notice of objection to a reassessment of income tax for each of the 1973 and 1974 taxation years. By notice of motion dated October 23, 1980, with accompanying affidavit, the solicitor for the Minister of National Revenue made a motion to dismiss the application as the application was not made within the time limit prescribed in paragraph 167(5)(a) of the said Act. At the hearing of the motion the applicant acted for himself.

Asusming the facts in the affidavit are correct, prima facie the application was filed beyond the period prescribed in the said section, so that this Board has no jurisdiction to grant the extension. However, in the course of eliciting information concerning the said reassessments and the reason why the taxpayer had not objected to them or taken steps to make an application to extend the time within which he could object to them, the applicant advised that he had never received the reassessments. Hereinafter when an address is used for the applicant, reference will only be made to the town or city involved as nothing turns on the street address. In 1973 and 1974 the applicant resided in the Town of Grand Forks, BC. In 1976 he moved to Delta, BC, where he resided until June 1977, when he moved to Trail, BC. He stated that the name and social insurance number used when he filed his 1977 income tax return were the same as that shown on his 1973 and 1974 income tax returns, and also that the 1977 income tax return was filed with the Minister of National Revenue on or about April 30, 1978, showing his address as Trail. He continued that he was assessed shortly after that date showing that address.

The reassessments on account of which the applicant made the Application were dated (according to the exhibits to the Affidavit filed with the Motion) October 20, 1978, which was about six months after the applicant had informed the Minister (via his 1977 income tax return) that his address was Trail, BC. It would appear that since no reassessment for each of the years 1973 and 1974 was sent to the applicant, based on the case of Lawrence B Scott v MNR, [1960] CTC 402; 60 DTC 1273, the applicant was never reassessed for those years by the purported reassessments of October 20, 1978. Such being the case, the purported reassessments of October 20, 1978, are not assessments, therefore there need be no objection to them. If there need be no objection, there need not be any Application to extend the time to object and consequently an Application cannot be late and so the motion to quash is dismissed. The purported Application is quashed as there were no reassessments to which he could either object or apply for an extension of time to object. If the purported reassessments of October 209, 1978, were the only purported reassessments of the 1973 and 1974 income tax returns following the original assessments, then it could be a reassessment for each year could only be made if subsection 152(4) of the said Act were satisfied.

In the Scott case (supra) at 411 [1277], Thurlow, J (as he then was) stated:

. . . The appellant’s income tax return for the year 1952 was filed . . . gave as his address 100 Colony Road, RR 2, York Mills .. .

and he gave his company’s address. A letter relating to a potential reassessment for that year was sent to the appellant at an address referred to in his 1955 income tax return (an address which was also mentioned in evidence by a witness in that case) and was returned. The Department of National Revenue sent the reassessment to a lawyer who had acted for the appellant several years before. It was immediately returned to the Department of National Revenue and by the time it was received by the Department of National Revenue, the time limit (for reassessment) had expired.

The question in that case was whether or not the reassessment was statute-barred. There was no suggestion of fraud or misrepresentation. At 416 [1280], Thurlow, J stated:

I am accordingly of the opinion that the giving of notice of assessment is part of the fixation operation referred to as an assessment in the statute and that an assessment is not made until the Minister has completed his statutory duties as an assessor by giving the prescribed notice.

He also stated at 417 [1281]:

In the present case, the notice of re-assessment which was put in the mail on May 28, 1957, while directed to the appellant, was not directed to his actual address nor was it directed to either of the addresses stated in his 1952 income tax return. Had it been so directed — despite the fact that the appellant no longer lived at the residential address or carried on business at the business address — and even despite the fact that the assessor was aware of these facts — it might well be that in the absence of any act on the part of the appellant to notify the Minister of a change of address, he would be bound by the sending of a notice to either of the addresses so given. That, however, was not done and it is accordingly unnecessary to decide what the effect would have been if it had been done. Nor was the notice sent to the address given by the appellant in his 1955 income tax return and for the same reason it is unnecessary to decide what might have been the effect if the notice had been directed to that address. These, however, were the only addresses which the appellant had indicated to the Department and it is not shown that Mr. Wolfe Goodman or any other person was in fact authorized to receive notices on his behalf. In this situation, while it was open to the appellant to adopt and ratify and thus give effect to the sending of notice to that address as a valid notice to him, he was under no obligation to adopt or ratify it and on the evidence I do not think he ever did so. Nor does it appear that the notice so sent in fact reached him as a result of the mailing of it on May 28, 1957, either in the ordinary course of post, or later. In my opinion, such a mailing or sending was not a valid mailing or sending of the notice within the meaning of s. 46(2) of the Act, and it follows that the re-assessment was not made within the four year period limited by s. 46(4). Nor, in my opinion, can the requirement of s. 46(2), that a notice of assessment be sent to the taxpayer, be regarded as a directory provision of the Act.

Vide Nicholls v Cumming (1877), 1 SCR 395.

The result is, the motion is dismissed as there was no need for the application to extend the time to object as there was no assessment or reassessment to which objection could be taken.

Motion dismissed.