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Docket: 2005-1300(IT)I |
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BETWEEN: |
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PRASAD V. ADUVALA, |
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Appellant, |
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And |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Motion heard on September 19, 2005 at Belleville, Ontario
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Before: The Honourable Justice Diane Campbell |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Sherry Darvish |
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JUDGMENT
Upon motion made by the Respondent requesting that the Appellant's Notice of Appeal for his 1990, 1991 and 1992 taxation years be dismissed because it was filed beyond the statutory time for instituting an appeal to this Court and beyond the time to file for any type of extension to file the appeal;
And upon reading the Affidavits of Kenneth Berini, Patricia Lucas and Lindsay Wilcox filed;
And upon hearing what was alleged by the parties;
The Respondent's motion is granted and the Appellant's Notice of Appeal is quashed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 24th day of October 2005.
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"Diane Campbell" |
Campbell J.
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Citation: 2005TCC665 |
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Date: 20051024 |
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Docket: 2005-1300(IT)I |
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BETWEEN: |
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PRASAD V. ADUVALA, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
CampbellJ.
[1] This motion was brought by the Respondent requesting that the Appellant's Notice of Appeal for his 1990, 1991 and 1992 taxation years be dismissed because it was filed beyond the statutory time for instituting an appeal to this Court and beyond the time to file for any type of extension to file the appeal.
[2] On June 20, 1994 the Minister of National Revenue (the "Minister") reassessed the Appellant for his 1990, 1991 and 1992 taxation years. On August 4, 1994 the Appellant filed Notices of Objection for these taxation years. On September 19, 1994 the Appellant filed additional reasons for his objection to the Minister's reassessments. These reassessments were confirmed on October 5, 2001. It is from this Notice of Confirmation dated October 5, 2001 that the Appellant wishes to appeal.
[3] Section 169 of the Income Tax Act (the "Act") allows a taxpayer 90 days from the date of the mailing of the Notice of Confirmation or Reassessment to institute an appeal to this Court. Applied to the facts of this appeal, that would mean the 90-day period expired in early 2002. Subsections 167(1) and 167(5) of the Act provide to a taxpayer a window of one year from the expiration of the 90-day time limit, referred to in section 169, to make an application to this Court to extend the time within which an appeal may be instituted. With respect to the Appellant's taxation years, this time limitation for making such an application for an extension of time expired in early 2003.
[4] The Appellant did not institute an appeal within the time prescribed by section 169 nor did he make an application for an extension of time as prescribed by subsection 167(5). The Appellant's appeal respecting these taxation years was instead instituted on April 18, 2005.
[5] The Appellant's position is that he did not receive the letter of October 5, 2001 with the attached Notice of Confirmation because he had no fixed address until December 1, 2001. He argued that it only became obvious to him to institute an appeal when he received correspondence dated January 20, 2005 from Ms. A. Sword, collection enforcement officer (Exhibit "M" of the Appellant's Motion Record). In addition to not receiving this prior correspondence, subsequent correspondence contained misleading information.
[6] Upon receiving a statement of account in March 2002, he wrote to Canada Revenue Agency ("CRA") and referred to his objection (Exhibit "D" of the Appellant's Motion Record). On May 30, 2002 correspondence was forwarded to the Appellant from O.K. Johnson acknowledging receipt of the Appellant's Notice of Objection and which went on to state that:
We estimate that it will be 4 months before you will be contacted. At that time an appeals officer will call you or your authorized representative to review all the facts and discuss the matters under dispute. (Exhibit "E" of the Appellant's Motion Record).
[7] The Appellant maintains that his statements of account showed a stop order on the disputed amount (statement in 2004, Exhibit "F" of the Appellant's Motion Record). The Appellant also referred me to correspondence of Christine Spettigue dated February 14, 2003 which informed the Appellant that if he wished to pursue the 1990 to 1992 taxation years, he must appeal to the Tax Court (Exhibit "J" of the Appellant's Motion Record).
[8] In summary the Appellant argued that the only correspondence that he received, that clearly stated that these taxation years had been resolved, was the letter of January 20, 2005 from Ms. A. Sword and that prior correspondence received from the Collections Division continued to refer to these years as under dispute.
[9] The Respondent relied on affidavits of three CRA officers who dealt with this matter. The first affidavit was that of Kenneth Berini, an appeals officer. He confirmed that the Notice of Confirmation dated October 5, 2001 was mailed to the Appellant's address at 41 Markbrook Lane, Apt. 110, Etobicoke, Ontario ("Markbrook Lane"). His affidavit outlined how Revenue Canada transfers a taxpayer's taxing information, which is provided by a taxpayer when his return is submitted, to a computerized database system. Attached to his affidavit was a printout showing that as of November 22, 1999 the Appellant's address was at P07-99 Cameron Street, Toronto. A second printout from this database showed that near the end of the year 2000, the Appellant changed his address to Markbrook Lane and that as of December 6, 2000 Markbrook Lane was the Appellant's address. This address remained in effect until March 15, 2002 when the Appellant changed it to 2901 Kipling Avenue in Etobicoke.
[10] The second affidavit was that of Patricia Lucas, an international auditor in the Verification and Enforcement Division, but who was an appeals officer in 2001. On June 22, 2001, Ms. Lucas forwarded a letter to the Appellant at the Markbrook Lane address advising him that the Minister would be confirming the assessments and sending a Notice of Confirmation. She received no response. Ms. Lucas reviewed the Notices of Objection and prepared the Notice of Confirmation dated October 5, 2001. Her affidavit at paragraph 3 confirms that she sent this Notice of Confirmation by registered mail to the Appellant's address at Markbrook Lane which was from the database information. At paragraphs 4 and 5 of the affidavit she explained the procedure employed by the Agency in sending out such notices. In respect to the Appellant's case, she confirmed that after the Chief of Appeals executed the Notice of Confirmation she placed the Notice of Confirmation, together with the cover letter and envelope, in the mail bin for mailing by the mail room staff. Her affidavit also reviewed the procedure followed in the mail room. The Notice of Confirmation was mailed by registered mail on October 5, 2001 to the Appellant's Markbrook Lane address. The Canada Post registered item sheet, attached to the affidavit, showed the mailing of registered mail item number 78523642942 to this Markbrook Lane address. The affidavit went on to confirm that the Agency records did not indicate that the Notice of Confirmation and cover letter were returned by Canada Post, which is the usual practice when registered mail is not picked up by the recipient. Ms. Lucas also confirmed that the Notice of Confirmation was not returned to her personally. Her affidavit went on to state that she was informed by Christine Spettigue, an auditor in the Tax Avoidance Section, that the Appellant wrote to Ms. Spettigue on December 9, 2002 inquiring about the status of his objections respecting his 1990, 1991 and 1992 taxation years. In this correspondence the Appellant confirmed that he had received the letter from Ms. Lucas dated June 22, 2001, which she had forwarded to the Markbrook Lane address prior to forwarding the Notice of Confirmation in October of that same year. Ms. Spettigue forwarded a letter to the Appellant on February 14, 2003 advising him that the review of his 1990, 1991 and 1992 objections were completed and confirmation had been forwarded on October 5, 2001. A copy of this Notice of Confirmation was enclosed. This correspondence of February 14, 2003 was forwarded to his new address at Kipling Avenue, Etobicoke.
[11] The third affidavit, used to support the Respondent's motion, was that of Lindsay Wilcox, a collection enforcement officer, who reviewed the Appellant's income tax arrears with respect to his taxation years 1990, 1991, 1992, 1998, 1999 and 2000. She explained how a stall code is used to temporarily stall or halt collection proceedings on a taxpayer's account for those taxation years in dispute. When it is resolved the stall code is removed. When Ms. Wilcox wrote to the Appellant on March 25, 2003, to advise him of the balance of his tax arrears, she made reference to his 1990, 1991, 1992, 1999 and 2000 assessments being under dispute. She indicated that she included this information in the March 25, 2003 correspondence because, at the time, the computer records indicated that there was a stall code on the Appellant's account for those taxation years. She confirmed that it is the customary practice of the Agency to have the control unit clerks in the Appeals Division set and remove stall codes on a taxpayer's account. Ms. Wilcox herself did not have authority to set or remove a stall code. Her affidavit further confirms that according to the Agency records, the stall code on the Appellant's account was removed on March 6, 2002, approximately five months after the resolution of the Appellant's objection to the reassessments for his 1990, 1991 and 1992 taxation years. However in April 2002 the Appellant filed an application seeking relief under the Fairness provisions of the Act. As a result of this Fairness application, the staff code was reinstated on the Appellant's account on May 21, 2002. Ms. Wilcox stated that this stall code should have been removed from the Appellant's account once a determination had been made on the Fairness application but it remained on his account. Ms. Wilcox confirmed that if she had examined the computer records in detail in 2003, she would have noted that the Appellant's dispute regarding these taxation years had been resolved by Notice of Confirmation in October 2001. However Ms. Wilcox in her affidavit states that it is not her customary practice or the practice of the Collections Division to inquire beyond the stall code placed on an account when proceeding with collection efforts. When she forwarded her correspondence of March 25, 2003, she relied solely on the stall code indicated in the computer records. Ms. Wilcox also confirmed that, where a stall code is placed on a taxpayer's account with respect to a particular taxation year, the Statement of Account, generated by the Revenue Accounts' Division, will also indicate that this amount is under dispute for those particular years.
Analysis:
[12] The Appellant's argument is that the January 5, 2005 correspondence is the first communication he received from Revenue Canada that clearly indicated that these taxation years had been resolved. He also contends that he did not receive the Notice of Confirmation dated October 5, 2001 because he had no fixed address until December 1, 2001. Consequently he was unaware that the time for appeal had commenced because correspondence received after October 5, 2001 led him to believe the matter was still under review.
[13] The question is therefore whether the Minister fulfilled the obligation imposed under the Act by forwarding the Notice of Confirmation addressed to the Appellant at his Markbrook Lane residence, which was the address listed on the Agency's database system for the Appellant as of December 6, 2000.
[14] The leading case here is the Federal Court of Appeal decision in Schafer v. The Queen, 2000 DTC 6542. Although that decision deals with sections 300, 301, 303, 304, 325, 334 and 335 under the Excise Tax Act, these sections are very similar to the wording of the equivalent sections in the Income Tax Act. It is crystal clear from the Schafer case that the time period for filing a Notice of Objection begins to run on the date the Minister sends the Notice of Assessment and that receipt of the Notice is not required before this limitation period begins to run. According to the Schafer decision the only requirement that the Minister must show is that the Notice was sent. In other words if the Minister can show that the Notice was sent that will be sufficient. (emphasis added)
[15] The Appellant's claim, that his address had changed at the relevant time of mailing the Notice of Confirmation, is not sufficient alone to overcome the evidence presented on behalf of the Minister in this case. Because this is a self-assessing system there is an onus on each and every taxpayer to keep the Minister informed of current addresses and changes of address. If a taxpayer does not do so then it is logical and reasonable for the Minister to rely on the last known information provided to the Minister by that taxpayer. In this case the Agency had records to show that the Appellant's address changed near the end of the 2000 year to the Markbrook Lane residence, where eventually on October 5, 2001 the Minister forwarded the Notice of Confirmation. The Agency records do not show another change of address until March 15, 2002. This was confirmed by the affidavit of Kenneth Berini.
[16] The Minister has provided me with sufficient verification that the Notice of Confirmation was sent to the Appellant. For this purpose, I accept the affidavit of Patricia Lucas who prepared the Notice and cover letter and, after having the Notice executed by the Chief of Appeals, placed this documentation in the mail bin for mailing by departmental mail room staff. Her affidavit confirms that it was sent by registered mail on October 5, 2001, with an accompanying exhibit to support this. The records do not indicate that it was returned to the Agency from Canada Post, which would be the practice when a recipient does not pick up registered mail. Although the provisions under the Act do not specifically dictate that such a Notice be forwarded by "registered" mail, the fact, that it was, simply reinforces the evidence contained in the affidavit of Patricia Lucas, that this Notice was sent to the Appellant on October 5, 2001. Ms. Lucas in her affidavit set out clearly the steps that were followed in preparing the Notice of Confirmation and cover letter, having them executed, addressing the mail, taking them to the mail room and finally forwarding by Canada Post registered mail. In the words of Respondent counsel, when referring to the affidavit evidence of Ms. Lucas,"... no one else could have gotten [sic] closer to that document than she did". She is the one individual who had both the personal knowledge and the personal involvement in the preparation and mailing of the Notice of Confirmation. There is also evidence that the Appellant was receiving correspondence from the Agency at this Markbrook Lane address in June 2001, just several months prior to the October 5, 2001 mailing of the Notice of Confirmation. One of the exhibits attached to the Lucas affidavit was a letter that the Appellant forwarded to the then appeals officer, Christine Spettigue, in which he referred to and attached this correspondence of Ms. Lucas dated June 22, 2001. This confirms he was receiving mail at this address just several months prior to the Notice of Confirmation being forwarded to him.
[17] The Appellant's additional argument is that the nature of some of the correspondence he received after October 5, 2001 led him to believe that the dispute concerning these taxation years had not been resolved. This occurred because stall codes, that were initially removed from the Appellant's file after the Notice of Confirmation was forwarded, were re-instated in May 2002 when he filed under the Fairness provisions. According to the affidavit of Lindsay Wilcox the problems arose once the Fairness determination was made but the stall code was not removed. When collection letters went out to the Appellant, with the stall code intact on his account, they indicated inadvertently that those years were still under dispute. Some of the information contained in these collection letters, concerning the 1990, 1991 and 1992 taxation years, was not correct but I cannot accept the Appellant's argument that this in any way legally changes the facts as they apply pursuant to the clear and unambiguous language of the applicable provisions, together with the Federal Court of Appeal's interpretation respecting the requirements of such legislation. Even if the Appellant was misled in some way, it is evident from the contents of correspondence, forwarded to him on February 14, 2003 by Christine Spettigue (Exhibit "E", Tab 3 of the Respondent's Motion Record and Exhibit "K" of the Appellant's Motion Record), that these taxation years had been confirmed and that his option was an appeal to this Court. The question then arises as to why the Appellant did not take some sort of action or inquiry in early 2003. The fact, that he received conflicting information respecting these years in a collection letter of March 25, 2003, should have further triggered some type of problem and action on his part but again he took no steps until 2005.
[18] In accepting that the Minister met the requirement of sending the Notice of Confirmation on October 5, 2001, both the 90-day limitation to file an appeal pursuant to subsection 169(1) and the one year limitation to apply for extension pursuant to subsection 167(5) have expired. The Appellant's Notice of Appeal was filed on April 18, 2005, more than two years beyond the limitation periods provided under the Act. Since the Minister has met the requirements of notification set out in the Act, the Respondent's motion is granted and the Appellant's Notice of Appeal is quashed.
Signed at Ottawa, Canada, this 24th day of October 2005.
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"Diane Campbell" |
Campbell J.
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CITATION: |
2005TCC665 |
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COURT FILE NO.: |
2005-1300(IT)I |
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STYLE OF CAUSE: |
Prasad V. Aduvala and
Her Majesty the Queen |
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PLACE OF HEARING |
Belleville, Ontario |
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DATE OF HEARING |
September 19, 2005 |
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REASONS FOR JUDGMENT BY: |
The Honourable Justice Diane Campbell |
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DATE OF JUDGMENT |
October 24, 2005 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Agent for the Respondent: |
Sherry Darvish |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Canada |