Tax Court of Canada


Big step to treat request for change in filing position as notice of objection

Application by taxpayers for order extending time for service of notices of objection to assessment for 2007 taxation year. Assessments were based on applicants’ filings for 2007 taxation year, but applicants did not include deductions in respect of tax shelter investment because they were warned not to by CRA. Applicants later sent T1 requests for adjustment and Minister denied their requests. Applicants then sent notices of objection, which were found to be out of time. Applicants argued their requests for adjustment ought to have been treated as notices of objection or applications for extension of time to file notices of objection, or determination of requests ought to have restarted limitation period. Application dismissed. No provision in Income Tax Act (Can.), required Minister to do what applicants asked, though CRA had tremendous discretion and could have done so. It was not unusual for CRA to treat late filed notices of objection as requests to extend time; however, it would be pretty big step to treat request for change in filing position as notice of objection. Regardless of what Minister could have done, court was bound to accept authority in Armstrong v. Canada (2006), 147 A.C.W.S. (3d) 327 (F.C.A.), as relied on by respondent, which held amended return did not impose any obligation to assess as it was merely a request. Applicants could have filed notices of objection in conjunction with requests and were even warned that responses to their requests might be delayed and they must apply for extension of time to preserve rights, yet failed to do so. Denial of requests were not assessments as there was no tax assessed, and treating these responses as assessments would result in administrative nightmare. Latest assessment date was March 26, 2009, from which applicants had one year, 90 days to application for extension of time. Even accepting applicants’ claim they mailed notices of objection on September 7, 2010, deadline had expired. Requests could not be treated as loss determinations under s. 152(1.1) given applicants were unable to change returns without permission from Minister, for which they had to file timely objection and did not do so.

Petratos v. R. (Jul. 26, 2013, T.C.C., J.E. Hershfield J., File No. 2011-206(IT)APP, 2011-202(IT)APP, 2011-209(IT)APP) 231 A.C.W.S. (3d) 830.

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