Subsection 289.1(1)
Cases
Canada (National Revenue) v. 2276230 Ontario Inc., 2021 FC 242
CRA requested that the three Respondents provide certain business information (characterized by the Minister as information that should have been kept in ordinary business records that were required to be kept) pursuant to s. 288(1), and when many of the requests were either not answered at all or only partially by the last of the extended deadlines, the Minister initiated a summary application pursuant to s. 289.1, seeking an order for the missing information. At the time of this application, the Respondents had objected to assessments of prior taxation years.
Before granting the compliance order, Pentney J stated (at paras 18, 19, 29):
… I reject the Respondents’ argument that section 289.1 can only be invoked where a taxpayer has “refused” to provide the requested information… . [T]he provision states that a compliance order may be granted if the Court “is satisfied that (a) the person was required under section 288 or 289 to provide the… information or document and did not do so…” (emphasis added). …
… As noted in ... Cameco ... prior cooperation in an audit is not itself a valid defence to a compliance order (para 39), nor is ongoing litigation relating to other matters (para 41). In addition, the fact that the requests may involve substantial documentation which the taxpayer may view as not proportional to the matter is not a relevant consideration (para 42) …
In this case, there is no evidence to suggest that the CRA audit has been launched for any purpose other than to ensure compliance with the ETA, or that the request for information was so wide, extraordinary, or unusual as to give rise to questions about its legitimacy in the context of the audit (assuming that such a claim could be brought, in the face of the wide authority granted to the Minister to set the timing, scope, and nature of the audit … .
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) | Cameco principles applied in granting compliance order | 194 |
See Also
Canada (National Revenue) v. Dominelli, 2022 FC 187
Before judgment had been rendered in an application by the Minister for a s. 231.7 compliance order regarding failure of Mr. Dominelli (who had claimed $139 million in deductions from two leveraged insurance annuity arrangements) to provide related documents, Dominelli and the Minister made a written agreement that Dominelli would provide an affidavit with appended documents that was to certify with particulars that he and his advisors had canvassed their records for the requested documents – and that if the Minster was not satisfied with the affidavit, she would ask that judgment be delivered on the compliance application (until then, held in abeyance).
The Minister indicated dissatisfaction with the affidavit, whereupon Dominelli brought this motion before Pentney J to enforce the settlement agreement.
Pentney J stated (at para. 59) that he agreed “with Dominelli that the scope of the Minister’s discretion to determine that she is not satisfied that he has discharged his obligations under the agreement must be limited by the terms of their agreement … .” However, he went on to find that Dominelli’s affidavit did not demonstrate that he had met his obligations under the agreement, stating (at para. 79):
[T]he gap between what Dominelli promised to do and what his affidavit states is striking. … [H]is evidence does not establish that he has met the specific and detailed terms of the agreement and the Undertaking that he negotiated, and thus his motion cannot succeed.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) | taxpayer’s affidavit did not contain the agreed particulars for complying with document-provision agreement in lieu of s. 231.7 judgment | 426 |
Subsection 289.1(3)
Cases
Canada (National Revenue) v. Edward Enterprise International Group Inc., 2020 FC 1044
The Minister sought a compliance order under s. 289.1(1) to compel the respondent (“EEIGI”) to provide certain access, assistance, information and documentation sought by the Minister in connection with an audit (the “Required Information”). EEIGI took the position that the requested compliance order should include a condition that EEIGI be given notice before any of the Required Information was shared outside the CRA. It expressed a concern that “circumstances may arise in the future in which it may wish to assert arguments, based on statutory interpretation or Charter rights, to oppose sharing of the Required Information by CRA with other entities including other foreign entities“ (para. 29), and noted that it was involved in foreign legal proceedings.
In rejecting the addition of this condition, Southcott J stated (at paras. 34, 37):
… EEIGI is seeking this relief without having articulated with any precision a basis in either fact or law for its concern that it may in the future face dissemination of the Required Information in a manner that offends the Charter.
… [R]equiring CRA to disclose, in the course of an investigation, the fact that the investigation is taking place could compromise the investigation. EEIGI has identified no precedent or statutory authority for the imposition of such a requirement, other than the general discretion that s 289.1(3) of the ETA affords to the Court to impose, in an order issued under s 289.1(1), any conditions that the Court considers appropriate.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(3) | no basis established for adding notice requirement to compliance order | 186 |