Robert Bruzzese v. Minister of National Revenue, [1980] CTC 2098

Delmer E Taylor [TRANSLATION]:—This decision is being rendered following an application to the Tax Review Board for an extension of the time for appealing a tax assessment. The taxpayer is a chartered accountant and his ‘‘application for an extension of time’’ dated July 18, 1979 contains the reasons why he is applying to the Board. His application reads as follows:

(TRANSLATION)

I am applying humbly to you for an order for an extension of time from the Tax Review Board for appealing the notice from the Minister dated August 25, 1978 concerning the 1973 and 1974 assessments.

I was suffering from severe mental exhaustion at the time and could not look after my affairs adequately. I am barely beginning to resume my full activities.

The 1973 and 1974 assessments were made arbitrarily—I am convinced that if you give me an opportunity to defend myself I will be able to prove my allegations to the Review Board’s satisfaction with supporting documents.

At the hearing the taxpayer did not add anything to his application and did not submit any supporting documents such as a medical certificate to establish that he was ill or the duration of his illness.

Mr N Naggiar of the Department of National Revenue submitted to the Board the correspondence concerning the problems the Minister had encountered in trying to assess the taxpayer. This correspondence is reproduced in full.

Subject: Your 1972, 1973 and 1974 tax returns

We are in the process of reviewing your returns for the above-mentioned years and require further information in order to make a more detailed audit.

Would you therefore please send to this office your records and any other documents you have to support your claims. A list of receipts or paid invoices must be prepared for each of the expense items appearing in the returns and the totals reconciled with the amounts claimed as expenses.

These documents must reach us within fifteen (15) days or an arbitrary assessment will be made.

Yours truly,

(Signed) Jean-Paul Dufour

for the chief of Audit

JPD/lh

Lachapelle, Bruzzésé & Cie

PIERRE LACHAPELLE	ROBERT BRUZZESE, BCOM, CA
Registered Public Accoutant	Chartered Accountant
2103 Jean Talon St East
Montreal
tel: 721-9771
	March 10, 1977
Revenue Canada, Taxation
National Revenue Building
305 Dorchester Boulevard West
5th floor, section 51(4)
Montreal, Quebec
H2Z 1A6
Attn: Mr Jean-Pau I Dufour
SUBJECT: ROBERT BRUZZESE
Tax returns
1972-1973-1974
Dear Sir:

I acknowledge receipt of your letter of February 24, 1977.

In view of the time of year for an accountant, I would ask to be given until May 15, 1977.

Thanking you in advance for your co-operation, I remain,

	Yours truly,
RB/dge	(signed) Robert Bruzzésé, CA
March 24, 1977
Mr Robert Bruzzese	Jean-Paul Dufour
2103 Jean Talon St East	Section 51-4
Montreal, Que	5th floor
H2E 1V4	Tel: 283-5326
Dear Sir:
Subject: Request for additional time

\Ne acknowledge receipt of your letter of March 10, 1977 in which you asked us for additional time in which to submit your supporting documents for the 1972, 1973 and 1974 taxation years.

We are granting you the time requested, that is, until May 15, 1977, and would like to advise you that if the documents in question have not been submitted by May 15, 1977 at the latest, no communication will be made and we shall go ahead with the assessment since we are of the view that the time allowed is more than reasonable.

Yours truly,

(Signed) Jean-Paul Dufour

for the Chief of Audit

JPD/lh

REGISTERED

May 19, 1977
Mr Robert Bruzzese	Jean-Paul Dufour
9029 Boisonnault	Section 51-4
St-Léonard, Que	5th floor
H1P 2X3	Tel: 283-5326
Dear Sir:

Subject: Your tax returns for 1972, 1973 and 1974

Further to our letter of February 24, 1977, you have not sent us your supporting documents as requested and we have consequently verified your tax returns for the above-mentioned years, to which we intend to make the following changes:

(A) Income from self-employment

1972 1973 1973 1974 1974

Expenses claimed $8,893.33 $10,080.75 $36,671.94

Less:

Automobile expenses (1) 549.92 1,756.18 2,747.51 Rental expenses (2) —

1,105.00 —

Stationery and printing (3) 210.31 644.34 964.25 Advertising and promotion (4) 71.21 199.87 388.32 Office maintenance and repairs (5) — — 573.10 CCA on furniture and equipment (6) — 878.88 1,024.30

Expenses disallowed $ 831.44 $ 4,584.27 $ 5,697.48

Expenses allowed $8,061.89 $ 5,496.48 $30,974.46

(1) 1973 and 1974 capital expenses disallowed. Personal use 50%
(2) 12 months’ rent in residence allowed. Outside rent disallowed
(3) (4) 50% disallowed
(5) 12 months x $25 allowed.
(6) 1973 and 1974 capital expenses disallowed.
(B) 1974 rental income
Property located at 9023 to 9029A Boissonnault, St-Léonard, Que
Mortgage—2nd—interest disallowed	$700
(C) 1974 capital gain

A taxable capital gain of $1,687.50 was calculated on the disposition of the property located at 5387 Amos, Montreal North, Que, on January 31, 1974. (See schedule 1 attached).

(D) Depreciation schedules

We have prepared new depreciation schedules (schedules 2 and 3 attached) for your properties as a result of the disposition of a property in class 3 in 1974.

We would ask you to use these schedules as a basis for depreciation expenses in your future tax returns.

We are allowing you five days in which to submit your comments on this proposal, failing which we shall go ahead with an assessment based on it at the end of this period.

Yours truly,

for the chief of Audit

JPD/cp

Encl

REGISTERED

May 3, 1978
Mr Robert Bruzzese	Mrs A Savaria
185, rue Les Erables	Appeals Division
Laval-sur-le-Lac, Qué	Room 736
	Tel: 283-5531
Dear Sir:

Subject: Notices of objection for 1973 and 1974

With regard to the above-mentioned notices of objection, please submit to this office documents to support the expenses you are claiming against your income; a list of receipts or paid invoices must be prepared for each of the expense items appearing in the returns and the totals reconciled with the amounts claimed.

These documents must be submitted to us within the next ten (10) days.

Yours truly,

(Signed) M MS

for the Chief of Appeals

AS/cv

May 25, 1978
Mr Robert Bruzzese	Mrs A Savaria
185, rue Les Erables	Appeals Division
Laval-sur-le-Lac, Qué	Room 736
	Tel: 283-5531
Dear Sir:

Subject: Notices of objection for 1973 and 1974

We wrote to you regarding the above-mentioned notices of objection on May 3, 1978 (copy attached), but have still not received a reply to our letter.

Unless we receive a reply within 5 days following the date of this letter, we shall have no other alternative but to recommend that the assessments be confirmed.

Yours truly,

(Signed) M MS

for the chief of Appeals

AS/cv

REGISTERED

August 14, 1978

Mr Robert Bruzzésé, CA

185 Les Erables

Laval sur le Lac, Que	G Naggiar
Dear Sir:

Subject: Your notices of objection for 1973 and 1974

We have not yet received your documents to support your expenses for the years in question.

Unless we receive a reply within five (5) days following the date of this letter, we shall have no other alternative but to confirm the assessments in question by a notice from the Minister.

Yours truly,

Regional Director of Appeals—Montreal

GN/aa

The Board notes the fact that there is no reference to any illness of any kind in the only letter from Mr Bruzzésé, dated May 10, 1977.

Subsection 167(5) of the Income Tax Act reads in part as follows:

The order shall be made . . .

(c) unless the Board . .. is satisfied that,

(i) but for the circumstances mentioned ... an objection or appeal would have been made or taken within the time otherwise limited by this Act for so doing,

(ii) the application was brought as soon as circumstances premitted it to be brought, and

(iii) there are reasonable grounds for objecting to or appealing from the assessment.

It is obvious that the taxpayer has not satisfied all the conditions mentioned above, and it is possible that he has not satisfied any of them.

The application is dismissed.

Application dismissed.