Serge Côté Family Trust v. Canada (Attorney General), 2010 DTC 5071 [at at 6798], 2009 FC 698 -- summary under Subsection 116(3)

The taxpayer, a non-resident family trust, transferred assets to a corporation owned by the trustee. It filed an election form (T2057) but neglected to file the T2062 form required by s. 116(3), and was assessed a $2,500 penalty by the Minister. The taxpayer appealed the Minister's assessment on the grounds that Information Circular 72-17R4 did not clearly explain the taxpayer's obligations, and so the Minister should have exercised discretion to waive the penalty. Teitelbaum J. dismissed the taxpayer's appeal. He stated (at para. 15): "nothing in [the Circular] could reasonably lead a taxpayer in the applicant's situation to conclude that it was not necessary to comply with the requirement set out in subsection 116(3) of the Act. The fact that the consequences of failure to comply with that provision is not explicitly stated in the Circular does not justify the applicant's actions, since the Income Tax Act itself was very clear on that point."