Vaillancourt v. R., [1999] 2 CTC 2656, 99 DTC 6

Lamarre Proulx T . C.J.:

This is an application under section 166.2 of the Income Tax Act (“the Act’) to extend the time for serving a notice of objection on the Minister of National Revenue (“the Minister”).

The taxation years involved are 1993, 1994 and 1995. The time limit for serving a notice of objection for 1993 was April 30, 1997. For the other two years, it was March 10, 1997.

The appellant explained that he did not feel well psychologically in 1996. He filed a letter from his attending psychologist as Exhibit A-1.

Robert Julien, the appellant’s accountant and his agent at the hearing of this application, explained in his testimony that he began looking after the appellant’s tax affairs in early January 1997. He began negotiating with Revenue Canada and Revenu Québec and said that he was surprised when the applicantAs accounts were seized. That was when he applied to the Minister for an extension of time under subsection 166.1(1) of the Act. The application, dated July 9, 1997, was filed as Exhibit I-1. It states only the following: [TRANSLATION] “Application to extend the time for appealing in respect of the 1993, 1994 and 1995 taxation years because new facts have been obtained”. The application was refused by the Minister in a letter dated October 17, 1997.

When the accountant was asked by the Court what meetings or telephone conversations he had had with Revenue Canada concerning the application for an extension, he replied that there had been none and that he had simply received Revenue Canada’s response dated October 17, 1997, refusing the application.

However, this was contradicted by the testimony of Claude Soulard, the Minister’s officer in this case. He referred to several telephone calls asking Mr. Julien why he was applying to the Minister for an extension of time. Mr. Soulard said that he never received an answer and finally decided against the application.

Mr. Julien’s answer to that was that he had trouble remembering the telephone calls and that, while he was not denying them, he wondered why the Minister’s appeals officer did not send him a letter instead.

A letter makes it easier to prove the date and content of communications, and it may be thought that the various exchanges with Mr. Julien should have included one. However, the appeals officer cannot be criticized for contacting the appellant’s agent by telephone, since points that are unclear in a taxpayer’s case and cannot all be covered by a form letter can be explained in a telephone conversation.

Analysis and conclusion

Mr. Julien began looking after the applicant’s file in 1997 and admitted that he was aware of the time limits for serving the notices of objection. It is therefore difficult to understand why he did not serve the notices at the proper time. Moreover, in seeking an extension of time, he did not say in his written application why he was asking for an extension and did not even respond to the many requests by the MinisterÀs officer for that information. The intention under the Act is that an application to extend the time for serving an objection be discussed initially at the ministerial level.

Subsection 166.2(5) of the Act reads as follows:

When application to be granted — No application shall be granted under this section unless

(a) the application was made under subsection 166.1(1) 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,

(11) 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 under subsection 166.1(1) as soon as circumstances permitted.

It is my opinion that due diligence in the exercise of the applicant’s rights has not been shown in this case. The application is accordingly dismissed.

Application dismissed.