| 19(1) | File No. 5-9369 |
| C.R. Bowen | |
| (613) 957-2096 |
Dear Sirs:
Re: 24(1)
We are writing in reply to your letter of December 22, 1989, wherein you requested confirmation that discrepancies between the finalized agreements and the draft agreements for the Partnership (upon which our rulings were based) would not affect the binding nature of the advance income tax rulings given as long as the terms of the finalized agreement were consistent with the description of the transactions contained in our rulings.
As indicated in paragraph 4 of Information Circular 70-6R, the binding nature of an advance ruling is subject to the qualifications contained in the ruling and to the comments in paragraphs 8 to 13 of IC 70-6R. A ruling is given provided, inter alia, our understanding of the statements of fact and proposed transactions described therein are accurate and constitute complete disclosure of all of the relevant facts and proposed transactions. Should this not be the case, the taxpayer should advise the Rulings Directorate of Revenue Canada, Taxation as soon as possible. As indicated in paragraph 9 of IC 70-6R, a ruling may be revoked if there is a material omission or misrepresentation in the statement of relevant facts or disclosure of purpose. What would constitute a "material omission or misrepresentation" is a question of fact.
Where there are changes made to a draft document subsequent to the date of issuing a ruling, a ruling provided will generally continue to be binding as long as those changes are immaterial and do not affect the description of facts or proposed transactions upon which a ruling has been given. An immaterial change that would affect the description of facts or proposed transactions would not normally be regraded as an incomplete disclosure, but the statements on which a ruling was based would become inaccurate. An amended ruling may be warranted in such cased. Similarly, if there are material changes to a document subsequent to the date of issuing a ruling letter, it would be advisable to request a supplementary ruling confirming that the ruling given will still be binding based on revised wording incorporating the material changes.
Yours truly,
B.W. DathDirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch