Reassessments were valid and binding until set aside by Tax Court of Canada

Tax – Income tax – Administration and enforcement

When taxpayer was advised by CRA of intention to reassess him for 2005 to 2014 taxation years, he filed application under voluntary disclosure process (VDP) that was dismissed as not being voluntary. Taxpayer requested second-level VDP review before being advised of CRA’s intention to commence second audit for 2007-2016 . CRA sent taxpayer proposal letter, setting forth proposed reassessments arising from audit that included penalties and interest charges. Taxpayer applied for judicial review to quash proposal letter and motion for injunction to prevent issuance of proposed reassessments. While application was outstanding, Minister reassessed taxpayer under Income Tax Act and his second-level VDP application was dismissed, leading taxpayer to file Notices of Objection to reassessments and apply for judicial review of VDP decision. Taxpayer’s application for judicial review of proposal letter and motion for injunctive relief were dismissed. Taxpayer appealed. Appeal dismissed. Question of whether injunction could have issued restraining issuance of Notices of Reassessment pending determination of second-level VDP request was now moot. As matter of law, reassessments were valid and binding until set aside by Tax Court of Canada. Taxpayer’s argument that reassessments must be stayed or enjoined until he exhausted recourse mechanisms contemplated by VDP could not succeed as it would effectively nullify power granted to Minister under s. 152(4) of Act to reassess “at any time”. There could be no legitimate expectation that reassessment process would be suspended pending final consideration of VDP application. Contrary to taxpayer’s claim of possible harm, s. 225.1(1) of Act precluded enforcement action since he had filed notice of objection. Proposal letter was not reviewable decision or order as, while it might foreshadow Minister’s intention to reassess, it did not determine any of taxpayer’s rights.

Prince v. Canada (National Revenue) (2020), 2020 CarswellNat 201, 2020 FCA 32, Johanne Gauthier J.A., Donald J. Rennie J.A., and George R. Locke J.A. (F.C.A.); affirmed (2019), 2019 CarswellNat 2084, 2019 CarswellNat 801, 2019 FC 348, 2019 CF 348, Peter Annis J. (F.C.).

Case Law is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts. These cases may be found online in WestlawNext Canada. To subscribe, please visit store.thomsonreuters.ca

Free newsletter

Our newsletter is FREE and keeps you up to date on all the developments in the Ontario legal community. Please enter your email address below to subscribe.

Recent articles & video

Gowling's Mark Giavedoni on the housing shortage and logistics sector 'boom in real estate'

Ont. Superior Court orders tenant to vacate housing despite ongoing human rights tribunal dispute

Ontario Court of Appeal rules tenant responsible for snow removal in slip and fall case

Imran Kamal told his story about addiction, hoping to encourage the legal profession to be more open

Ontario Court of Justice welcomes four new justices: Frank, Hanna, Harris, Marcon

Ont. Superior Court denies disability benefits due to lack of a causal link to 40-year-old accident

Most Read Articles

Imran Kamal told his story about addiction, hoping to encourage the legal profession to be more open

Ontario Court of Justice welcomes four new justices: Frank, Hanna, Harris, Marcon

Ont. Superior Court denies disability benefits due to lack of a causal link to 40-year-old accident

Gowling's Mark Giavedoni on the housing shortage and logistics sector 'boom in real estate'