Josephine Sicoli v. The Queen – Tax Court Rejects CRA’s Evidence of Date of Mailing of Assessments

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Josephine Sicoli v. The Queen[1] (June 21, 2013) dealt with 17 assessments of the applicant for source deductions[2] covering a period from 2002 to 2009.  The applicant claimed never to have received copies of the assessments until 2011.  When she received them she filed both notices of objection and applications to late file notices of objection.  The Minister refused to accept the notices of objection and rejected the application to late file notices of objection.  The applicant appealed the latter decision to the Tax Court.  The chronology involved is set out as follows:

[16]   They are:

  • CRA asserted date of mailing Assessments: May 26, 2009.
  • Applicant asserts Assessments never mailed and reproduced copies received: April 11, 2011.
  • Applicant’s Notices of Objection filed: July 7, 2011.
  • Minister’s notice refusing the Notices of Objection as late filed: August 17, 2011.
  • Application to Minister for extension of time: July 7, 2011.
  • Minister’s refusal to allow extension of time: November 15, 2011.
  • Application to Tax Court of Canada for extension of time: November 15, 2011.

[Footnotes omitted]

If, as the Minister asserted, the assessments were mailed on May 26, 2009 then the court would be without jurisdiction to extend the time to file notices of objection since the original application to the Minister to extend the time for filing a notice of objection (subsection 166.1(1) ITA) would have had to have been filed in 2010:

Paragraph 166.2(5)(a):

When application to be granted — No application shall be granted [by the Tax Court] under this section unless

(a) the application [to the Minister] was made under subsection 166.1(1) within one year after the expiration of the time otherwise limited by this Act for serving a notice of objection or making a request, as the case may be; and

The Minister filed a detailed affidavit to the effect that all 17 assessments has been filed on May 26, 2009 and relied upon subsection 244(10) of the ITA:

244(10) Proof of no appeal — An affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has charge of the appropriate records and has knowledge of the practice of the Agency and that an examination of those records shows that a notice of assessment for a particular taxation year or a notice of determination was mailed or otherwise communicated to a taxpayer on a particular day under this Act and that, after careful examination and search of those records, the officer has been unable to find that a notice of objection or of appeal from the assessment or determination or a request under subsection 245(6), as the case may be, was received within the time allowed, shall, in the absence of proof to the contrary, be received as evidence of the statements contained in it.

In this case however the Tax Court was not prepared to accept the Minister’s affidavit at face value and cited a number of problems with the evidence surrounding the mailing date:[3]

[23]   I have no doubt that in the normal assessment situation, the ordinary practices sworn to in steps 5(d) through (g), would be sufficient evidence of the mailing date. However, this does not strike me as a routine series of assessments.

[24]   To further support this conclusion and causing further concern as to the reliability of the affidavit, I note that during cross-examination of the affiant the following was acknowledged:

1)                     Some items presented in the affidavit and seemingly presented as personal knowledge of the affiant, such as the mailing practices were admitted to be known to the affiant only as being the general practice of the CRA.

[27]   The testimony of the controller was that he met with the affiant on July 22, 2009 and was told that assessments against the Applicant personally may be forthcoming. The suggestion was that if Il Nuovo Mondo Publishing Inc. was defunct, then the Applicant would be held personally liable and that assessments would be issued accordingly. That evidence casts further doubt as to whether the assessments were mailed on May 26, 2009. The evidence of the affiant during cross-examination confirmed the July meeting as well as confirming that he was requested in June, 2010 to send copies of any assessments as none had been received. Yet, he had no record of copies being sent. Rather, his notes indicated that only statements of account were sent in response to this request.

The court concluded that the Minister had not established that the assessments were mailed on May 26, 2009 and that the objections originally filed by the applicant in 2011 were timely:

[28]   All that said, I will permit the Applicant’s objection to proceed. There are just too many CRA errors here not to raise grave doubts as the mailing of the assessments. A lot was purportedly happening on May 26, 2009 in terms of rendering all these assessments, collating, bundling them etc., as listed in the CRA affidavit. It does not seem probable to me that the affiant can rely on ordinary mailing practices in such a situation. Further, I find the testimony of the controller credible in respect of his conversation with the affiant. It suggests to me that even if there was a transfer of the corporate liability to a new Business Number established for the Applicant personally on or before May 26, 2009, the mailing of the Assessments that effected such a transfer of liability got mishandled in the course of a harried attempt to complete them, issue them and mail them.

[29]   Such circumstances are such to warrant the kind of scrutiny that became issues in Carcone v. The Queen,[7] where this Court also addressed an application for extension of time to object. In Carcone, relying on subsections 244(9) and 244(10) of the ITA, an affidavit of an officer of the CRA was produced as evidence of the date and address of mailing of a notice of reassessment. Justice D’Arcy found that such affidavits were still subject to the test of reliability, which in that case the respondent did not meet. I do not wish to dwell on the specifics of that case, however, I refer to it simply as an authority that I find buoys my conviction in this case that the CRA officer’s affidavit fails under a reliability test and in any event reliance on subsection 244(10) to evidence the mailing date of May 26, 2009 can not withstand the evidence to the contrary in this case.

[30]   In other words, there are too many questions here to allow the CRA the benefit of subsection 244(10) of the ITA with respect to a May 26, 2009 mailing date. Failing proof of that or any other mailing date, the law is quite clear. The time within which an objection to an assessment must be made starts to run from the date of delivery of the assessment. See Central Springs Limited et al. v. The Queen and Grunwald v. The Queen.

[31]   The Applicant’s applications for an extension of time to file Notices of Objection to the Assessments is therefore dismissed as the Notices of Objection filed on July 7, 2011 were so filed within 90 days of notification of the Assessments.

[Footnotes omitted]

This decision is a refreshing example of the court limiting the application of subsection 244(10) to what it was clearly intended to do:  provide evidence “in the absence of proof to the contrary”.

[1] 2013 TCC 207.

[2] The application also concerned notices of objection in respect of CPP and EI but that portion of the application was dismissed since, on the evidence, it appeared that no CPP or EI assessments had been issued.

[3] The passages cited are set out as illustrations;  the reasons for judgment cite a number of other evidentiary problems for the Minister.