Words and Phrases - "assessment"
Iris Technologies Inc. v. Canada, 2024 SCC 24
Before confirming that the taxpayer’s Federal Court motion for judicial review had represented an impermissible collateral attack on assessments made under ETA s. 296, Kasirer J stated (at para. 49):
Okalta Oils — like other cases that rely on a like definition of “assessment” — stands for the proposition that a tax assessment is a non-discretionary determination of the Minister as to “the actual sum in tax which the taxpayer is liable to pay” … . When assessing tax due under the ETA, the Minister is not exercising a discretionary power than can be abused. Assessing tax is, for the Minister, not a discretionary decision but a mandatory duty imposed by statute, specifically by ss. 275 and 296 of the ETA. … Rennie J.A. rightly said, at para. 17 of his reasons, that the “fulfillment of [a non-discretionary] statutory responsibility cannot be an improper motive for the Minister to issue an assessment”.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Act - Section 18.5 | Federal Court has jurisdiction over matters of reprehensible CRA conduct (none was alleged here) | 278 |
Dow Chemical Canada ULC v. Canada, 2024 SCC 23
In rejecting the taxpayer’s position that the Minister’s decision under s. 247(10) is part of an assessment, Karirer J indicated that this position was “inconsistent with the understanding of a tax assessment as a ‘product’ and not a ‘process’” (para. 6).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(10) | the Tax Court lacks jurisdiction to review CRA decisions regarding s. 247(10) downward adjustments | 697 |
| Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) - Paragraph 171(1)(b) - Subparagraph 171(1)(b)(iii) | Tax Court lacks jurisdiction to vary or quash an s. 247(10) opinion of the Minister | 128 |
Pure Spring Co. Ltd. v. MNR, 2 DTC 844 (Ex. Ct.)
In the course of finding that the exercise by the Minister of his discretion to disallow an expense was an assessment that could be appealed as such, Thorson P. stated (at p. 857):
The assessment is different from the notice of assessment; the one is an operation, the other a piece of paper. The nature of the assessment operation was clearly stated ... in Federal Commissioner of Taxation v. Clarke ((1927) 40 C.L.R. 246 at 277):
An assessment is only the ascertainment and fixation of liability. …
The purpose of providing an appeal from the assessment is to ensure to the taxpayer that it shall be correct in fact and in law. …
[C]ertainly it should not be assumed, without most explicit terms, that Parliament intended that the administration and definition of a policy, which it had left to the discretion of a Minister responsible to it, should be left to the discretion of the Court, which is in no way responsible to it.
Canada v. 984274 Alberta Inc., 2020 FCA 125
The taxpayer (“984”) reported a capital gain on its 2003 sale of land on the basis that it had acquired it from its parent (Henro) on a rollover basis. In 2010, the Minister assessed Henro (to include an income account gain) and 984 (to reverse the previously reported capital gain and refund the capital gains tax plus interest, totalling $1.7M) on the basis that the 2003 drop-down had occurred on a non-rollover basis. On March 23, 2015, the Minister implemented a settlement agreement (effectively agreeing with 984’s and Henro’s initial filing position) by inter alia assessing 984 to claim back the 2010 payment, including the refund interest, plus arrears interest since 2010, in what Noël CJ found (contrary to the Tax Court below) to be in proper reliance on ss. 160.1(1), 160.1(3) and 164(3.1).
Noël CJ noted (at para. 68) that, although the 2010 assessment of 984 was a nil assessment:
Aside from the fundamental distinction drawn … in Okalta, an assessment that levies tax and a nil assessment have the same legal effect i.e. both start the limitation period when issued as the original notice, both replace a prior assessment or reassessment when issued as the last notice, and both fix the tax payable for the year.
Given that the 2010 nil assessment was an “assessment” including for the purposes of s. 164(1)(a)(iii), it followed “that the 2010 payment was a refund authorized to be made pursuant to subparagraph 164(1)(a)(iii)” (para. 73), from which it further followed “that the refund interest paid by the Minister to the respondent in 2010 can be recovered pursuant to subsection 164(3.1)” (para. 74).
Furthermore, it did not matter that the 2010 assessment was issued more than three years after the previous 2003 (re)assessment of 984, given that (para. 58):
A notification that no tax is payable may be issued at any time, because the three-year limit subsequently provided for under [s. 152(4)] does not apply to a notice that no tax is payable.
Finally, it also did not matter that no reassessment had been issued to bring the 2003 tax payable back from zero, as per the 2010 nil assessment, to the amount initially assessed, given that inter alia “Markevich makes it clear that an excessive refund can be assessed even if the power to issue a reassessment for the year pursuant to subsection 152(4) has expired” (para. 77).
Accordingly, the 2015 assessment for an overpayment and interest was valid.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 160.1 - Subsection 160.1(1) | ss. 160.1(1) and (3)’s application not subject to the issuance of a prior time-constrained reassessment | 489 |
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) | nil assessment not subject to 3-year limitation in s. 152(4) | 190 |
| Tax Topics - General Concepts - Stare Decisis | prior decision of the FCA that “manifestly overlooked [the] established line of cases” was not to be followed | 76 |
Beggs v. The Queen, 2016 TCC 11 (Informal Procedure)
CRA determined to not grant a waiver of withholding under Reg. 105 from fees to be paid to the appellants in connection with a proposed performance in Canada. The appellants filed Notice of Objection and filed appeals in the Tax Court on the basis that they thereby had been assessed.
After stating (at para. 22) that “if a withholding of tax is not an assessment, a waiver authorizing a Canadian taxpayer to not withhold the 15% on the fees payable to a non-resident is also not an assessment,” Favreau J stated (at paras. 26-7):
The Appellants submitted that CRA made a determination that they were liable to pay tax in Canada and that, this determination was equivalent to an assessment. I do not agree… .[A] waiver is not a determination of the tax liability of a non-resident but it is a decision with regards to giving permission to a Canadian taxpayer or a non-resident payor to not withhold taxes on amounts payable to a non-resident. The tax liability of the non-resident can only be determined by an assessment after a review of his or her tax return.
…[T]he Appellants will always have the opportunity to turn themselves to the Federal Court of Canada in order to force the Minister to change its decision as stated by Justice Bowie in Kravetsky.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 105 - Subsection 105(1) | refusal to grant Reg. 105 waiver not an assessment/remedy in FC | 84 |
Okalta Oils Ltd. v. Minister of National Revenue, 55 DTC 1176, [1955] CTC 271, [1955] S.C.R. 824
The taxpayer was not able to appeal a "nil" reassessment to the Tax Appeal Board. The word "assessment" referred to the actual sum in tax which the taxpayer is liable to pay and there, accordingly, was no assessment to appeal.
The Queen v. Consumers' Gas Co. Ltd., 87 DTC 5008, [1987] 1 CTC 79 (FCA)
It was indicated, obiter, that the Minister was not precluded from taking a position before the Trial Division that was inconsistent with the basis of his reassessment. Hugessen, J. stated: "While the word 'assessment' can bear two constructions, as being either the process by which tax is assessed or the product of that assessment, it seems to me clear, from a reading of sections 152 to 177 of the Income Tax Act, that the word is there employed in the second sense only."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Accounting Principles | 35 | |
| Tax Topics - Income Tax Act - Section 181 - Subsection 181(3) | 78 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | payments made in the same manner as by private businesses were not “government assistance” | 125 |
Civil Service Co-Operative Credit Society Ltd. v. The Queen, 2001 DTC 790 (TCC)
The taxpayer, along with other credit unions, was required to deposit with the Ontario Share and Deposit Insurance Corporation ("OSDIC") amounts equal to 1% of its capital.
A refund to it of these amounts was included in its income under s. 137.1(10) notwithstanding that the amounts deposited had not become OSDIC's property. Lamarre T.C.J. found (at p. 802) that the deposited sums qualified as an "assessment", i.e., "a sum specifically levied ... by a mutual company ... to pay losses or losses and administrative expenses incurred". Furthermore, the word "allocation" did not imply that OSDIC was required to own the amounts deposited, but instead merely denoted the possibility that a member institution might not be repaid the entire amount initially paid.
Canada v. Anchor Pointe Energy Ltd., 2007 DTC 5379, 2007 FCA 188
The Minister initially reassessed the taxpayer on the assumption that it had purchased seismic data for more than its fair market value, so that a portion of the expenditure did not qualify for deduction as CEE, and confirmed this reassessment on the assumption that the expenditure had not been made for a qualifying purpose so that it did not qualify as CEE.
In finding that the taxpayer had the onus of demolishing the different assumption (added to the Minister's pleadings by amendment) made by the Minister at the confirmation stage, Létourneau J.A. noted that the taxpayer's position (that this onus only applied to assumptions made prior to the filing by the taxpayer of its notice of objection) ignored the likely meaning of "assessment" in the relevant jurisprudence as the product of the process of assessment, reassessment and confirmation.
However, several of the Minister's assumptions contained mixed statements of fact and law, and the trial judge was correct to strike these paragraphs. Létourneau J.A. stated (at para. 26):
The Minister may assume the factual components of a conclusion of mixed fact and law. However, if he wishes to do so, he should extricate the factual components that are being assumed so that the taxpayer is told exactly what factual assumptions it must demolish in order to succeed. It is unsatisfactory that the assumed facts be buried in the conclusion of mixed fact and law.