Federal Appeal


Tax

Income tax

Administration and enforcement

Question was whether application for extension of time brought as soon as circumstances permitted

In 2010, taxpayer sold condominium property that he had acquired three years previously. He declared gain from sale in 2010 income tax return as capital gain. In 2014, Minister reassessed taxpayer’s return, treated gain from sale of condominium property as income and assessed penalty. Taxpayer filed notice of objection. On January 12, 2016, Minister confirmed reassessment and sent notice of confirmation to taxpayer. Bookkeeper who had been assisting taxpayer referred taxpayer to chartered accountant who communicated with Canada Revenue Agency to persuade them that confirmation of reassessment was error. Within short time, CRA advised that file had been closed and that taxpayer would have to file notice of appeal to Tax Court of Canada (TCC). Accountant asked taxpayer to obtain relevant documentation for appeal, which took taxpayer beyond 90 day limitation period for filing notice of appeal. TCC dismissed taxpayer’s application for extension of time for appeal. Taxpayer appealed. Appeal allowed. Relevant issue was taxpayer’s use of time between expiry of 90 day appeal period and filing date of application for extension of time. TCC did not direct its mind to appropriate period when it considered whether taxpayer’s appeal had been brought as soon as circumstances permitted. TCC asked whether circumstances permitted taxpayer to file notice of appeal during 90 day period rather than asking whether, once period expired, he brought application for extension of time as soon as circumstances permitted. Case was one in which Federal Court of Appeal should render decision which TCC ought to have given. Having incurred expense of hearing in TCC and appeal, taxpayer ought to be spared necessity of further hearing on question. Evidence was that taxpayer spent period between expiry of 90 day period and filing of his application for extension of time gathering documentary evidence. Evidence suggested that application for extension of time was brought as soon as necessary documents were in hand and application for extension of time were made as soon as circumstances permitted. It was just and equitable to grant application..

Bygrave v. Canada (2017), 2017 CarswellNat 2687, 2017 FCA 124, J.D. Denis Pelletier J.A., Wyman W. Webb J.A., and D.G. Near J.A. (F.C.A.).

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