Category Archives: 167

Extension of Time to Appeal to Tax Court

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Extension of Time to Appeal to Tax Court 

Roopchand v The Queen, 2016 TCC 279

The taxpayers were reassessed to deny their claim for the principal residence exemption.

At issue was whether the TCC should grant an extension of time to file a notice of appeal pursuant to S 167 of the Income Tax Act, and whether two of them should be granted an extension of time to file a Notice of Objection with the Minister pursuant to subsection 166.1(1).

ANALYSIS
Extension of time to file Notice of Appeal

Subsection 169(1) of the Income Tax Act permits a taxpayer who has filed a Notice of Objection to appeal to the Tax Court of Canada by filing a Notice of Appeal within 90 days of either the Minister sending the notice of confirmation to the taxpayer or after the Notice of Objection has been served on the Minister.

Where a taxpayer misses this deadline, an application for extension of time may be brought pursuant to ITA s 167 and the court may grant an order extending the time:

  • the application to extend time is brought within one year after the expiry of the original time period;
  • the taxpayer demonstrates that the taxpayer, during the regular time period, EITHER was unable to act or instruct another to act OR had a bona fide intention to appeal;
  • It would be just and equitable to grant the application in light of the circumstances;
  • The application was made as soon as circumstances permitted, and
  • There are reasonable grounds for the appeal.

However, an unsupported allegation that the taxpayer did not receive the notice of confirmation is insufficient where the address the notice was mailed to was that of the taxpayer’s principal residence, the taxpayer’s accountant was copied on the letter and took action consistent with being aware of the confirmation.

Extension of time to file Notice of Objection

Subsection 165(1) provides a taxpayer the right to file a Notice of Objection, meeting certain criteria, within certain time periods:

  • For Individuals other than trusts or graduated estate trusts, within the latter of EITHER one year after the taxpayer’s filing due-date for the year OR 90 days after the day the Notice of Assessment is sent; or
  • For all other taxpayers, 90 days after the day the Notice of Assessment is sent.

Where a taxpayer misses the applicable deadline, an application can be made to the:

  • Minister for an extension of time (s 166.1(1)) within one year after the expiry of the original period; and
  • TCC for an order to extend the time, after an application is made under s 166.1, within 90 days after the latter of either the minister refusing the application or 90 days after the service of the application on the Minister.

However, uncorroborated claims that a taxpayer’s representative informed the taxpayer that Notice of Objection had been filed, or where there was no evidence that the taxpayer filed an application on the Minister to extend the time under 166.1, will not result in the Court granting the application.

Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

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Neglect or Carelessness by Representative no Reason to Extend Time – Sas Ansari

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Neglect or Carelessness by Representative no Reason to Extend Time

Sapi v The Queen, 2016 TCC 239

This was an application to extend the time within which a Notice of Appeal may be filed with the TCC by persons who took part in a donation tax scheme by .

FACTS

The parties all forwarded CRA correspondence to PAC who then took no action.  The Applicants argued for an extension of time on the basis that their agent believed that the Agent’s legal representative had filed an appeal, but this was not correct (para 5).

The parties agreed that the application was made within the one year period and that there are reasonable grounds for the underlying appeal of the donation agreement.

ANALYSIS

The TCC is guided by section 167 of the Income Tax Act when an applicant requests an extension of the time to file a Notice of Appeal.

The Court referred to the decision in Mehta v. R., 2011 TCC 38, where Justice Miller granted an application of the basis of the harm of disallowing the application being greater to the applicant than the respondent. However, this Court considered that balance to be a relevant but not a determinative factor as the balance almost always favours the applicant (para 23).

The Court also referred to Gorenko v. R., 2002 D.T.C. 2025, where two lawyers failed to file a NOA due to a miscommunication and remedied the problem within 2 days of discovering it.  The Court held that in Gorenko both lawyers testified and were found to have acted with a reasonable degree of diligence, while no such evidence existed in this case (para 25).  The Court drew an adverse inference from the APplicant’s failure to call or subpoena the lawyer involved.

The Court agreed that the applications should be dismissed because:

  • The Applicant bears the onus of establishing each criterion in section 167;
  • Failure to meet any one of the conditions is fatal to the application – Dewey v. Canada, 2004 FCA 82Kolmar v. R., 2003 TCC 829
  • A bona fide intention to appeal within 90 days is not satisfied where the taxpayer merely forward correspondence to an agent without following up or taking steps to ensure an appeal was filed – Sampson v. R., 2012 TCC 156
  • The failure of an Applicant to appear and testify as their inability to act or instruct another to act is fatal to an application (para 23) – Hamilton v. R., 2013 TCC 192

The Court held that in this case, the failure of the agent or lawyer to file a NOA is not a just and equitable reason to grant the extension of time.  There was insufficient evidence to establish that the agent or lawyer acted with reasonable diligence (para 37).  Ther was also no evidence of the Applicants actively monitoring the status of their case, or that there was evidence of an insufficient number of counsel in their jurisdiction to take on the matter (para 37).

The failure of an agent to file a NOA is not in itself sufficient to grant an extension of time – Carrier v. Canada, 2005 TCC 182. The Court concluded at para 44:

[44]        Overall, it is my view that each of the Applicants provided their respective Notice of Confirmation to PAC on a timely basis, and then simply trusted PAC to attend to their appeals without adequately following up with PAC to ensure their appeal was so filed. Unfortunately, their trust in PAC was misplaced, as PAC did not ensure their appeals were filed on a timely basis or take adequate steps in doing so. While PAC has attempted to deflect blame to Mr. De Bartolo, who did not testify, it is my view that any neglect or carelessness by either PAC or any counsel it engaged to file the appeals in question is not a just and equitable reason to grant these four Applications.

Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

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