Digests

Decision Information

Decision Content

Kutlu v. M.N.R.

T-205-96

Joyal J.

21/2/97

13 pp.

Application for judicial review of decision by Director of International Tax Services Office refusing applicants' request for extension of time for filing income tax return for 1992 taxation year-In September 1988, applicant, Deukmedjian, non-resident, purchased 18-unit residential apartment building in Westmount, Quebec-Applicant Kutlu appointed agent responsible for overall management of building, including filing of income tax returns-Building generated nothing but losses since acquired-Since 1989, agent had to complete form NR-6 in order to be taxed only on net rental income from building-Case involving two rather rigid deadlines to be met-First requiring filing of NR-6 form with Revenue Canada by commencement of fiscal year to which it relates-Second having to do with filing of income tax return itself, within six months of end of fiscal year-For 1989, 1990 and 1991 taxation years, Revenue Canada accepted tax returns filed beyond established deadlines and sent notices of assessment indicating no tax payable-1992 return subject of present proceedings-On February 10, 1994, Revenue Canada sent agent notice stating it planned to impose assessment of $31,867.25, or 25% of gross rental income, against him personally-Agent wrote Department, deploring that between 1990 and February 9, 1993, no warning, oral or written, was conveyed to him concerning date of filing of returns-On February 1, 1995, Minister forwarded notice of assessment for 1992 taxation year-Applicants served Revenue Canada with notice of objection to assessment-Without holding oral hearing, respondent Michael Québec rendered disputed decision refusing to grant applicants extension of time for filing 1992 return-Where return not filed within time provided in Income Tax Act, s. 216(1), s. 216(4) requires agent to deduct 25% of gross rent that should have been collected by him and remit amount to Receiver General-Under Act, s. 220(3), Minister has discretion to accept return even if filed beyond time provided-In exercising discretion, necessary to keep within statutory mandate and consider all factors relevant to statutory decision-making function-Discretion established in s. 220(3) primarily to remedy injustices caused by nonresident owner income tax regime-Applicants made several inquiries of Minister's officers-Latter never indicated any problem with late filing of returns-Discretion to extend time limits in Act should not be limited to consideration of circumstances which precluded taxpayer from complying with deadlines-Director failed to analyze file in context of factors on which deemed to have wished to exercise discretion-Counsel for respondents unable to suggest any adverse effect her clients might suffer if extension granted-Application allowed-Income Tax Act, S.C. 197071-72, c. 63, s. 216(1) (as am. by S.C. 1991, c. 49, s. 178(1))-Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 220(3).

 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.