Section 204.3

The taxpayer (Chiang) overcontributed to his RRSP (thereby incurring Part X.1 tax) because he “genuinely and reasonably believed” that he had deducted his contributions for two years in his returns for those years (but, in fact, did not enter the amounts in the deduction line) and that for a third year he had unused RRSP deduction room (which he did not). In finding that Chiang was not subject to penalties under s. 162(1) for not filing Part X.1 tax returns, Sommerfeldt J found that because

Mr. Chiang reasonably believed in, and was operating under, a mistaken set of facts that, if true, would have resulted in there not having been a cumulative excess amount…his failure to file tax returns (Form T1-OVP) for 2004 to 2013 resulted from a reasonable error of fact, so as to be excused by the due diligence defence.

D’Auray J confirmed that as a T1-OVP form was a return made under a separate part of the Act (Part X.1), the assessment of timely filings of regular Part I returns of the taxpayer did not commence the running of the normal reassessment period respecting his required reporting of excess-RRSP contribution tax. Accordingly, the Minister was entitled to assess the tax in 2015 going back to the 2008 year.