Delmer E Taylor:—This is the decision on a hearing at which James W Elliott made application to the Tax Review Board under subsection 167(1) of the Income Tax Act, SC 1970-71-72, c 63, as amended, for an order extending the time within which a notice of objection to income tax assessments for the years 1975 and 1976 could be served on the Minister of National Revenue. Section 165 of the Income Tax Act provides a taxpayer with a period of 90 days from the date of mailing of the notice of assessment in which to serve on the Minister a notice of objection in the prescribed form.
The taxpayer gave evidence on his own behalf and was represented by Mr P Smith of the law firm Payne, Smith, Smith, Campbell & Gazzola of Guelph, Ontario. Mr Smith also provided the Board with some particulars on the reasons for the delay. The notice of objection which the Minister was not prepared to accept without an order from the Board was dated March 9, 1978, and related to an assessment dated June 13, 1977.
The taxpayer’s income tax return was prepared by an accountant, and upon receipt of the assessment notice, Mr Elliott took it to his lawyer’s office — the firm of Payne, Smith et al, where it was essentially the responsibility of Mr Payne. The taxpayer was encountering marital difficulties and part of his disagreement with the assessment related to deductibility of alimony or maintenance support payments. His lawyer needed information from other parties regarding these payments in trying to deal with the Department of National Revenue. The taxpayer’s employment kept him out of town frequently and made contact with his lawyer difficult. Due to his own holidays and other matters, Mr Payne also had difficulty contacting the appropriate officials at the taxation office and following up on the dispute.
In argument, counsel for the taxpayer conceded that although some responsibility for the late filing might be attributed to the advisers engaged by the taxpayer to look after his income tax matters, the taxpayer had done all he should be required to do and should not be prevented from presenting his case on such grounds.
Counsel for the Minister made reference to the relevant section of the Act and urged that the Board’s discretion extended only to situations where “the circumstances of the case are such that it would be just and equitable to do so”. According to counsel, the significant reason for late filing was the lack of attention paid to the matter, and while he could understand the business and personal pressures which had been enumerated, these were normal, met and overcome by all taxpayers and their advisers. The Minister should be able to count on taxpayers objecting in the prescribed form within the time limit, barring anything really unusual or extraordinary, and this in particular where such professional advisers, accountants and lawyers had been engaged by the taxpayer. In this case, there were no such unusual circumstances which would warrant consideration since nothing beyond the taxpayer’s direct control had been involved. Counsel pointed out that there was little in the way of a legislative record on this particular issue, but did refer to the decision of the then Chairman of this Board, Judge K A Flanigan, QC, in Marvin Shore, Trustee of the Estate of Winegarden Paving Co Limited, a Bankrupt v MNR, [1974] CTC 2193; 74 DTC 1132, at 2194 and 1133 respectively:
In the circumstances of this application, I do not consider the bankruptcy to be an extraordinary occurrence, . . .
On all the evidence, I am not satisfied that this is a case where discretion should be exercised in favour of the applicant, and the application is therefore dismissed.
In dealing with this matter, the Board quotes the relevant passage from subsection 167(5) of the Act which determines the parameters within which the discretion of the Board under subsection 167(1) may be exercised:
(5) When order to be made. No order shall be made under subsection (1) or (4)
(c) unless the Board or Court is satisfied that,
(i) but for the circumstances mentioned in subsections (1) or (4), as the case may be, an objection or appeal would have been made or taken within the time otherwise limited by this Act for so doing,
(ii) the application was brought as soon as circumstances permitted it to be brought, and
(iii) there are reasonable grounds for objecting to or appealing from the assessment.
In the instant case, the Board is asked to accept that the employment patterns and personal dislocations of the taxpayer and his lawyer prevented appropriate action being taken during a 90-day period, and apparently continued to inhibit it for about a further six months. It would seem to me that the interpretation placed upon the circumstances by counsel for the Minister is more plausible — that the matter did not receive the attention it warranted (whether of the taxpayer or his advisers), and that no adequate explanation of the delay has been presented. The issue involved here is the use of a simple administrative section of the Act, and cannot be regarded as similar to the application of penalty provisions under section 163 of the Act in which the courts have shown reluctance to burden the taxpayer with the results of alleged acts of omission or commission by his agent.
The application is dismissed.
Application dismissed.