Section 166.2

Subsection 166.2(1) - Extension of time by Tax Court


McGowan v. The Queen, 95 D.T.C 5337 (FCA)

The Tax Court judge did not err in quashing an application for extension of time to file a Notice of Objection. The taxpayer had not applied to the Tax Court for an extension of time within the required 90-day period.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 244 - Subsection 244(15) 20

Bordieri v. The Queen, 95 DTC 5243 (FCA)

The taxpayer's accountant gave an application under s. 166.2(1) to Purolator Courier Service within the 90-day period referred to in s. 166.2(1). Purolator misplaced the package and did not deliver it to the Tax Court.

Because there is no provision for the Court to extend the 90-day limitation period, the application of the taxpayer was dismissed.

See Also

Brando v. The Queen, 2013 DTC 975, 2013 TCC 223

address change

In rejecting the taxpayer's position that she had not received a notice of reassessment, V.A. Miller stated (at para. 11):

CRA cannot change a taxpyer's address because her spouse has changed his addresss. It was the Appellant's responsibility to keep the CRA informed of her mailing address: Denetson v R [1998] FCJ 1450 (FCA).

Haight v. The Queen, 2000 DTC 2571 (TCC)

In finding that the word "shall" in s. 166.1(2) was directory rather than mandatory (so that a letter to the Tax Services Office that did not specify reasons for the failure to file a notice of objection within the 90-day period was treated as an application for an extension), Bell T.C.J. stated (at p. 2576):

Section 166.1 obviously is designed to afford relief to a taxpayer who disagrees with an assessment. Although it sets out specific requirements it should not, in these circumstances, be interpreted to foreclose the possibility of an earnest taxpayer, unsophisticated in tax matters, being able to proceed with an appeal. That is simply unjust.

Carlson v. The Queen, 2000 DTC 2556 (TCC)

The taxpayer, who was poorly educated, received a transfer of registered title (but not beneficial ownership) of property from an individual with an unpaid income tax liability. He received an assessment under s. 160 with no accompanying letter of explanation, spoke to a Revenue Canada official who told him that he would look into the matter and then did not hear anything more on the matter for five years.

Before going on to apply the discoverability rule that had been developed by the Supreme Court of Canada to find that a notice of objection that the taxpayer filed within 90 days of the time over five years later when Revenue Canada finally made a demand, was a valid notice of objection, Porter D.J. stated (at p. 2562):

The Supreme Court appreciated and dealt with the need to bring some finality to legal situations. Nonetheless, where there was legitimate reason for the non-appreciation of their rights to institute some legal action, the Court clearly provided that time should only start running under limitation periods in the statutes in question (albeit statutes of limitation) once the incapacity to appreciate the situation had reasonably come to an end.

Subsection 166.2(5) - When application to be granted

See Also

Air Canada v. ARQ, 2016 QCCA 710

failure to establish due diligence

The lawyer acting for Air Canada in a tax dispute with ARQ was copied on a letter to Air Canada indicating that ARQ would be reassessing in a smaller amount than the original reassessment under dispute. This occurred several weeks later, but without the lawyer being copied. The Montreal head office of Air Canada forwarded the reassessment to its Winnipeg office (which dealt with tax matters), where something went awry, so that no action was taken. The lawyer did not find out about this until the 90-day objection period had expired.

The Court found that, in light of considerations of procedural fairness, the Quebec equivalent of ITA s. 165(3) should be read as if it contained the additional bolded words noted below (para. 17):

[T]he Minister shall … reconsider the assessment and … make a reassessment, and send the Minister's decision to the person by mail and to its designated representative, if any.

Notwithstanding that ARQ thus had made a procedural error, the Court nonetheless declined to grant an extension of the 90-day appeal period under s. 93.1.13 of the Tax Administration Act (Quebec), which provided that “the application shall be granted if the person demonstrates that it was impossible in fact for that person to act and that the application was filed as soon as circumstances permitted.” The Court stated (at para. 22):

[T]here is no impossibility of acting if it is lacking in diligence or it could remedy the effect of such a lack (of its lawyer, for example), but it chose or neglected to do so. One can thus state that diligence is a condition sine qua non for there to be impossibility to act.

The Court made extensive findings that such diligence was not established, including responding to a submission (at para. 32) that “having conferred a mandate on a lawyer to represent it attested sufficiently to its diligence,” by stating (at para. 33):

[T]his does not relieve its obligation to forward the documents received by it relating to the mandate of representation which it conferred on him or, at least, to diligently alert him when it received such documents.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 165 - Subsection 165(3) ARQ obligated to copy a lawyer, who was its contact on a tax dispute, with its further reassessment 466

Hanson v. The Queen, 2014 DTC 1003 [at 2515], 2013 TCC 341

no extension on sympathetic grounds

Woods J found that the taxpayer's family circumstances were not enough to grant an extension to file a notice of objection relating to the denial of charitable credits. The statutory deadline cannot bend on sympathetic grounds.

DouangChanh v. The Queen, 2013 DTC 243 [at 1335], 2013 TCC 320

no discretion to extend deadline

While the taxpayer's file for 2007 was on hold, pending the determination of a question in common with other taxpayers, the taxpayer submitted a T1 Adjustment Request to allow carrying charges. The Minister allowed the Request and issued a further reassessment. The taxpayer neglected to file a new notice of objection, and he took more than a year and 90 days to file his application to extend the time to file a notice of objection.

Woods J dismissed the taxpayer's application to allow the extension application. There is no basis on which to extend the s. 166.2(5)(a) deadline (para. 18).

(The decision ultimately favoured the taxpayer, as Woods J also found that the latest reassessment was barred - see summary under s. 152(4.2).)

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2) T1 Adjustment Request presumed not to be s. 152(4.2) application if such application would needlessly extinguish right to appeal 287

Palubjak v. The Queen, 2013 DTC 1232 [at 1272], 2013 TCC 285

no fairness relief

Woods J confirmed that the taxpayer's failure to apply in time for an extension to file a Notice of Objection meant that her appeal must fail. The taxpayer's explanations about the complexity of her tax affairs were ultimately irrelevant, as s. 166.2(5)(a) does not allow relief on the basis of fairness alone (para. 9).

Morris v. The Queen, 97 DTC 1394 (TCC)

The taxpayer, who did not have any intention to object to his reassessment until, following the expiration of the 90-day period, he learned of the decision of the Federal Court of Appeal in the Tonn case, did not satisfy the requirement of s. 166.2(5)(b)(i).

D'Arcy v. The Queen, [1995] 2 CTC 2027 (TCC)

Shortly after the expiry of the deadline for objecting to a reassessment that included alimony in her income, the taxpayer learned of the decision of the Federal Court of Appeal in the Thibaudeau case, and made an application for an extension under s. 166.2. In denying the application, Christie TCJ. noted that prior to that decision, there would have been no desire on her part to serve the notice described in s. 166.2(5)(b). Respecting clause (A):

"The existence of inability to act or to instruct another to act with reference to serving a notice of objection presupposes the presence, prior to the time limit imposed by the Act, of a desire on the part of a taxpayer to effect such service."

Paragraph 166.2(5)(a)

See Also

Ihama-Anthony v. The Queen, 2018 TCC 262

taxpayer’s pre-reassessment fax to CRA could have qualified as an objection with words of objection and proper addressee, but he was now too late

Sommerfeldt J found that a fax sent by the taxpayer to CRA could have qualified as notices of objection even though it may have been sent before the issuance of the notices of reassessment in question, stating:

Like Justice Woods in Persaud, I am of the view that a notice of objection prepared in response to a proposal letter, which informs a taxpayer that a reassessment is about to be issued, may, if validly served on a Chief of Appeals, constitute a valid notice of objection in respect of the reassessment when it is subsequently issued.

However, the fax in question did not so qualify because it was not addressed to the Chief of Appeals, and did not provide “at least some indication that the particular taxpayer is objecting to an assessment” (para. 17), and instead only provided missing documents.

As no application to late-file a notice of objection had been made within the period of one year plus 90 days referenced in s. 166.2(5)(a), this late application was dismissed.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 165 - Subsection 165(1) objection can be made after the proposal letter and before the notice of reassessment – but must state “I object” 327