Federal Appeal


Taxation

INCOME TAX
Revocation of registration would cause irreparable harm to school

Applicant was registered charity. Applicant operated school. CRA determined applicant failed to comply with requirements incumbent on registered charity. Minister proposed to revoke registration of applicant as charity. Applicant sought order prohibiting Minister from giving effect to proposal by publishing copy of notice in Canada Gazette. Applicant argued that without orderly liquidation of assets and ability to collect tuition fees and to issue donation receipts for religious instruction component of curriculum, school might be left without sufficient funds to operate resulting in closure or in serious disruption of activities affecting students and staff of school. Applicant was allowed. Period during which Minister was precluded from publishing copy of notice was extended on one-time basis to specified date. Order allowed applicant to pursue operations of school without major disruptions for fall semester. During period applicant was expected to proceed with orderly liquidation of large part of assets in kind and was expected to develop alternative plan to continue operations of school after specified date without status of registered charity. Applicant was to notify parents forthwith. Minister accepted there was serious issue to be determined resulting from applicant’s notice of objection. Applicant showed that revocation of registration would cause irreparable harm. Balance of convenience required that orderly solution be crafted that took into account both interests of students and general public interest in integrity of charitable sector.

Chabad v. Minister of National Revenue (Aug. 23, 2013, F.C.A., Robert M. Mainville J.A., File No. A-276-13) 231 A.C.W.S. (3d) 1110.

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