24(1)
5-903105
W.P. Guglich
(613) 957-2102
19(1)December 10, 1990
Dear Sirs:
Re: Annulment of Bankruptcy
This is in reply to your letter of November 1, 1990 requesting our views regarding the application of section 128 of the Income Tax Act when there is an annulment of a bankruptcy under either subsection 61(1) or 181(2) of the Bankruptcy Act.
It is our view that the annulment of a bankruptcy under either subsection 61(1) or 181(1) of the Bankruptcy Act would not be retroactive. In our opinion the annulment does not invalidate the application of the rules in section 128 of the Income Tax Act for the period prior to the annulment (i.e., the period commencing on the date the taxpayer became bankrupt and ending on the date the bankruptcy is annulled).
We are not in a position to comment as to whether the Trustee may receive and utilize an income tax refund in the administration of a bankruptcy proposal as this matter would be determined under the provisions of the Bankruptcy Act.
We trust this will be of assistance to you.
Yours truly,
for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch