INCOME TAX |
Practice |
Bugera v. M.N.R.
T-113-02
2003 FCT 392, Dawson J.
2/4/03
31 pp.
Judicial review of M.N.R.'s delegate's decision not allowing late filing of several elections under Income Tax Act (Act)--Whether M.N.R.'s delegate erred in law in deciding prerequisite to exercise of discretion that applicants must file elections and pay estimates of penalties in respect of elections-- Court not satisfied on evidence M.N.R.'s delegate viewed filing of properly signed elections and payment of properly identified monies towards penalties to be prerequisites to exercise of delegate's discretion--Had delegate considered these to be true prerequisites to exercise of discretion, request would not have been presented--On basis of delegate's reasons, delegate did have regard to absence of properly signed elections and properly identified payments when assessing whole of request on merits-- Minister may formulate general policy guidelines in order to facilitate consistent exercise of discretion--Guidelines require normally late elections should be filed together with written request for exercise of discretion under Act, s. 85(7.1)--Also, estimate of applicable penalties must be paid at time--Thus, to extent information circulars valid guidelines, relevant for delegate to have regard to whether elections filed and whether properly identified estimate of penalties paid--Court not persuaded guidelines formulated in bad faith, or with regard to irrelevant considerations or purposes extraneous to intent of legislation--Nothing in wording used in s. 85(7.1) leads Court to conclude Parliament's intent thwarted if persons seeking Minister's favourable exercise of discretion generally required to accompany request with properly completed election and required to pay properly identified estimate of penalty owing in respect of requested election--Whether delegate based decision on erroneous findings of fact--Dealing with first asserted capricious finding of fact, without doubt five of seven taxpayers failed to sign elections proffered to Minister--Not unreasonable to note absence of signed elections for all of affected taxpayers--As to second capricious finding of fact, no evidence monies paid to Revenue Canada designated as being in respect of estimated penalties--No evidence any covering explanation or correspondence accompanied payment--No evidence as to what thereafter taxpayers or professional advisors did--Based on evidence, cannot find delegate's finding proper elections not filed by children and "none of the monies paid on account ever identified to pay penalties for late filed section 85 elections" patently unreasonable--Whether delegate exceeded jurisdiction by taking into account irrelevant considerations--Delegate looked to fact if those investments had not been made, applicants would not have needed to file s. 85 elections-- Delegate therefore concluded filing requests constituted retroactive tax planning--Effect of requested elections would be detrimental to interests of most taxpayers--Open to delegate to characterize situation to be retroactive tax planning --Delegate's conclusion not patently unreasonable--Judicial review dismissed--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 85(7.1).