The taxpayer was a Canadian-controlled private corporation that was found by MacPhee J to have filed its SR&ED claim for its taxation year ending on June 30, 2018 on a timely basis on December 20, 2019. However, CRA lost this filing, and the taxpayer’s accountants learned that CRA could not locate this filing approximately one year after the initial nil notice of assessment was issued for the 2018 taxation year in December 2019. On January 21, 2021, the taxpayer’s accountants wrote to the CRA SR&ED division, explained that no response had been received to the December 2019 SR&ED claim filing and provided a duplicate copy of the 2018 return along with the SR&ED claim. On March 8, 2021, CRA informed the taxpayer that the SR&ED expenditures claim was denied as it had been filed more than 12 months after the 2018 return was due.
MacPhee J rejected the taxpayer’s claim that the SR&ED claim made on December 20, 2019 could be treated as a notice of objection.
The taxpayer also submitted that the letter dated January 21, 2021 should be regarded as both an application for an extension of time with the Minister (as the 90-day period to file a notice of objection had elapsed) and a Notice of Objection. In rejecting this submission, MacPhee J stated (at paras. 36, 38):
[A]n application to extend time has to be sent to the Chief of Appeals, who is in the Appeals Division. The January 21 letter was sent to the Scientific Research and Experimental Development Division, which is a different division of the Canada Revenue Agency. Further, the January 21 letter does not clearly indicate that it is intended as an application to extend time, or even as a notice of objection. In such circumstances, the January letter cannot reasonably be interpreted as complying with s.166.1 of the Act. …
The Applicant never sent a Notice of Objection for the 2018 taxation year in a timely fashion.