Income Tax
Penalties
Judicial review of decision by Minister of National Revenue denying relief from interest, penalties arising from reassessment of applicant’s 1988-1990 tax returns under Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 220(3.1)—Case involving almost $160,000 in interest, penalties with respect to taxes found not to be owing due to application of loss carry-backs—Whether Minister erred in exercising discretion under fairness provisions in denying applicant relief from penalties, interest—Act, s. 220(3.1) giving Minister broad discretion to waive, cancel penalties, interest accrued under Act—Respondent selecting December 1996 as date for cancellation of penalties, interest based on evidence applicant requested loss carry-backs as early as 1996, delay in accepting loss carry-backs partially due to CRA’s failure to communicate effectively with applicant in settling issue of loss carry-backs—Logical, reasonable same reasons would apply to interest on late filing penalties, installment interest charged after December 1996—Applicant not without fault in accumulation of debt—In view of amount of money involved, amount applicant will still pay in interest, penalties accrued prior to December 1, 1996, fair, equitable all interest accrued after that date be cancelled—Decision set aside as unreasonable—Reasonable amount owing by applicant as of December 1, 1996 $71,195.44—Application allowed.
Slau Ltd. v. Canada (Revenue Agency) (T-2118-07, 2008 FC 1142, Kelen J., judgment dated October 8, 2008, 21 pp.)