Section 244

The Crown brought a motion to quash the corporate taxpayer’s notice of appeal from a GST/HST notice of confirmation on the grounds that the notice had not been filed within 90 days of the CRA sending, by registered mail, the notice of confirmation. It sought to prove this date of mailing by filing an affidavit of the CRA Appeals officer.

Russel J found that this affidavit did not satisfy the requirement in ETA s. 335(1) (similar to ITA s. 244(5)) that the affidavit attach “the post office certificate of registration of the letter or a true copy of the relevant portion thereof.” All it did was attach a copy of the form she got back from the CRA mailroom on which someone had affixed the Canada Post tracking number. The Crown’s motion was quashed.

Where a taxpayer alleges that she did not receive a notice of assessment, ETA s. 335(6) provides that an affidavit of a CRA official in charge of the appropriate records and stating that “an examination of the records shows that a notice of assessment was mailed … to a person … is evidence of [such] statement… .” (This provision is only somewhat similar to ITA s. 244(5).)

Graham J found that an affidavit by such an official (Mr. Neill) that a particular “business client communications system cycle” had ran without errors did not establish that the assessment had been mailed as he had not directly confirmed that the taxpayer’s notice of assessment was in that cycle - nor had the Crown provided an affidavit of someone working for Mr. Neill, who might have confirmed this point.

As Graham J also found the taxpayer’s testimony, that she had not received a copy of the notice of assessment until over three years following the time of its alleged mailing, to be credible, he went on to effectively find that the taxpayer had objected on a timely basis.

Woods J found that CRA's affidavit was insufficient to prove that the taxpayer's notice of assessment had been mailed. She stated (at paras. 13-14):

First, the key facts ... are not within the knowledge of Mr. Momoh [the officer who swore the affidavit]. ...

Second, the affidavit provides only a bare-bones description of [the mailing]. Mr. Momoh states ... that the notice of reassessment was released in DAS 75 but there is no detail as to how that conclusion was reached. ... In addition, the conclusion reached by Mr. Momoh in paragraph 10 provides no detail at all except that it is "upon review of the agency's records."

Woods J therefore granted the taxpayer's application to extend the time to file a notice of objection.

The Minister was found to have reassessed the taxpayer within the normal reassessment period when on the last day of that period CRA mailed the notice of reassessment by registered mail to the proper address of the taxpayer, notwithstanding that the envelope was not delivered to the taxpayer.

In commenting on the rebuttable nature of the presumption in s. 244(5), Hershfield, J. stated (at para. 36):

"What is rebuttable here is not the delivery and registration of the notice to Canada Post. Evidence that the envelope was empty or contained something other than the notice would, for example, defeat the evidence of sending the notice."

After finding that a CRA affidavit to which were attached 90 pages of documents could not be admitted because (contrary to Rule 89) the affidavit was tabled only after the evidence had been put in at trial and without advance notice to the taxpayer, D’Arcy J went on to find that the documents could not be admitted under ETA s. 335(5) (similar to ITA s. 244(9)), stating (at paras. 46-47):

The Respondent argued that subsection 335(5) allows a document to be presented without cross-examination and that it allows the Minister to file documents without calling a witness.

There is nothing in the wording of subsection 335(5) to support such a position. The subsection simply states that the affidavit is evidence of the nature and contents of the attached CRA document. It does not state that the document is admissible in a hearing or that it can be presented without cross-examination.

Hershfield J found that the Minister was unable to rely on s. 244(10) in respect of 17 assessments that had purportedly all been mailed in 2009, as the circumstances around the mailing were clearly not part of CRA's usual mailing practices. Hershfield J stated that "the evidence in this case is haunted by a degree of hurried carelessness on the part of the CRA that strongly suggests the unreliability of evidence that relies on routine or ordinary practices" (para. 14).

Hershfield J found that the Minister's affidavit was inadequate to establish under s. 244(10) that the taxpayer's Notice of Objection had been filed after the applicable deadline, chiefly because the affidavit dealt with the wrong tax centre. The Minister's affidavit was based on the timestamp for the Notice's arrival at the Burnaby-Fraser Tax Services Office, rather than the tax centre in Surrey, BC where the taxpayer had sent the Notice. The taxpayer's own testimony as to the mailing date was credible. Hershfield J therefore granted the taxpayer's application to extend the time to file a Notice of Objection.

In reaching this conclusion, Hershfield J noted that the situation was analogous to Carcone, which dealt with a Notice of Assessment. Hershfield J stated (at para. 27):

The onus is not different in regard to the date of receipt of a notice of objection. Only the CRA would be possessed of such information.

The taxpayer's application to extend the period to file notices of objection was denied because the period had not yet commenced. The Minister was unable to prove that a notice of assessment had been communicated to the taxpayer. Apart from the taxpayer's own evidence indicating that no such communication had been received, the Minister had not met the requirements to rely on s. 244(10) - the CRA officer testifying was not the officer in charge of the taxpayers' records. The officer's testimony regarding whether the notices of assessment had been mailed was therefore disregarded as hearsay.

After paraphrasing s. 244(10), Bowman J. stated (p. 1014):

"Such evidence is obviously not irrebuttable and in any event the evidence of a departmental official that he has been unable to find something is evidence of just that and nothing more - that he has been unable to find it. It forms no basis by itself for striking out a notice of appeal."

The taxpayer argued that an assessment of it dated June 8, 2017 was only mailed, at the request of its agent, on June 6, 2022, so that its Notice of Objection thereto was timely. In granting the Crown’s motion to dismiss the taxpayer’s appeal pursuant to Rule 53(1)(d) (“no reasonable grounds for appeal”), Smith J first found (following the four-step approach in Mpamugo, 2016 TCC 215, aff’d 2017 FCA 136) that the Minister had, through affidavits (coming within s. 244(10)) of CRA employees indicating that there were no abnormalities appearing in the CRA records regarding the preparation and sending of the related batch of assessments, established, on balance, that the assessment had been mailed on June 8, 2017. Furthermore, the taxpayer had not rebutted the presumption under s. 244(14) that the assessment had been mailed on its stated date in light of some gaps in the taxpayer’s evidence, including an office move that “raise[d] the possibility that the envelope containing the Assessment was simply put aside to be dealt with at a point in time and possibly misplaced or forgotten” (para. 80).

In finding that a notice of reassessment that the Minister mailed to the wrong address within the six-month period referred to in s. 152(4.1) should not be treated as being made within that period, Bell J found that a notice of assessment mailed to the wrong address could not be considered to have been mailed for the purposes of s. 244(14). With respect to a subsequent notice of reassessment that allegedly was mailed within the six-month period, Bell J. noted that although the Minister produced evidence of mailing procedures, no evidence of the date of mailing of the notice of reassessment was produced, with the result that the Minister had failed to meet the onus of persuading the Court that the taxpayer had been validly reassessed.

After finding that an assessment of the taxpayer had been made when the assessment was picked up by a courier for delivery, Woods J. went on to indicate that he did not wish to decide on a submission that the assessment, in any event, would have been deemed to be made at the time of pick-up on the basis that delivery by courier constituted mailing as he was reluctant to make a finding on whether "mail" included courier delivery.

Notices of reassessment that were sent by registered mail by the Minister were returned by the post office, with the envelopes marked "unclaimed". After the period for reassessment expired, Revenue Canada sent out the notices of reassessment by ordinary mail with an explanation that the notices, when originally mailed, had been undeliverable "due to an address change". In fact, the taxpayer at all relevant times had been at the same address.

In these circumstances, Teskey J. found that "the onus is on the Minister to prove that the Notices were sent to the proper address", which he had failed to do. Accordingly, the taxpayer had not been reassessed within the period for doing so.

The assumption by another corporation ("Polar Oils") of the obligation of the taxpayer to pay $119,658 in consideration for the taxpayer's agreement to pay four cents per litre more for diesel fuel purchased by it from Polar Oils until the total overpayments amounted to $119,658, constituted an inducement under s. 12(1)(x). The amount of the inclusion under s. 12(1)(x) was the full amount rather than the amount of additional payments made by the taxpayer to Polar Oils in the taxation year.

No relief was available under s. 13(7.4) given the absence of a timely election.

A purported Alberta trust which wanted to have more time to make submissions to CRA that it was not resident in Ontario provided a related waiver on the prescribed (T2029) federal form. When it was ultimately reassessed for Ontario income tax (with the previously assessed Alberta tax being reversed) it unsuccessfully argued that the waiver was invalid because the T2029 form did not refer to the fact that it was a prescribed form for provincial purposes.

The taxpayer was a limited partner in Grosvenor, a limited partnership. Following a Notice of Determination by the Minister to reduce the net business loss of Grosvenor for its 2001 fiscal period, the Minister and the Grosvenor general partner entered into a settlement agreement, following which the Minister issued a Notice of Redetermination. The taxpayer argued that as she had not received the Notices of Determination and Redetermination as required under s. 152(1.5), a resulting reassessment of her was invalid.

Lafleur J found that as The Queen v Shafer, Docket: A-414-98, 2000 DTC 6542 had determined that the corresponding ETA provision was “absolute and does not create a rebuttable presumption,” s. 244(20)(b)(ii)(A) established that as the Grosvenor general partner had received the Notices of Determination and Redetermination on a timely basis, of the Act, “each limited partner of Grosvenor, including the Taxpayer, is deemed to have been provided with said Notices.”