Nesbitt v. Canada
A-54-96
Strayer J.A.
15/11/96
5 pp.
Appeal from trial judgment holding Minister having right to reassess more than four years after original assessment-Taxpayer's accountant reporting total taxable capital gains based on misplaced decimal as shown in attached working papers-Reassessment issued without challenging amount of capital gain-After expiry of four years following assessment, Minister issuing reassessment, correcting error-Income Tax Act, s. 152(4)(a) requiring Minister to demonstrate taxpayer making "misrepresentation . . . attributable to neglect, carelessness or wilful default"-Trial Judge holding misrepresentation for which taxpayer responsible-Appeal dismissed-Letter from Revenue Canada dated two months prior to expiry of four-year limitation period indicating Minister's knowledge of true facts-Whether misrepresentation through neglect or carelessness in completion of return determinable at time return filed-Misrepresentation if return form containing incorrect statement, material to purposes of return and to any future reassessment-Remaining misrepresentation even if Minister could or does, by careful analysis of supporting material, perceive error on return form-Undermining self-reporting nature of tax system if taxpayers could be careless in completion of returns while providing accurate basic data in working papers, on chance Minister would not find error but if did within four years, worst consequence correct assessment at that time-Irrelevant Minister might, despite misrepresentation on return form, have ascertained true facts prior to expiration of limitation period-Faulty return remained misrepresentation within s. 152(4)(a)(i)-Income Tax Act, S.C., 1970-71-72, c. 63, s. 152(4)(a)(i) .