Executive Summary: Key Legal and Evidentiary Issues

• Applicant sought extension to file notice of objection to tax assessments issued September 13, 2022, but filed objection January 18, 2024

• Critical issue centered on whether notices of assessment were mailed to the taxpayer on September 13, 2022

• Minister's position relied on statutory presumptions under subsections 244(10) and 244(14) of the Income Tax Act regarding proof of mailing

• Court examined whether application was made within the mandatory 1-year-and-90-day deadline following assessment mailing date

• Evidence included affidavits from CRA officers describing detailed print-to-mail procedures and electronic tracking systems

• Applicant claimed non-receipt of assessments but failed to introduce evidence proving notices were not mailed on that date

Background of the dispute

Simon Ribbans Photography Inc. received tax assessments for its taxation years ending September 30, 2020, and September 30, 2021. On September 13, 2022, the Minister issued Notices of Assessment. The Applicant's position was that it never received the Notices of Assessment at the mailing address on file at the Canada Revenue Agency. The Applicant submitted that it became aware of the existence of the Notices of Assessment when it received a notice of collection in the fall of 2023. On January 18, 2024, the Applicant served a Notice of Objection to the Minister. On March 20, 2024, the Minister informed the Applicant that the Notice of Objection could not be accepted because it had not been filed within 90 days of the mailing date of the Notices of Assessment. The Minister also explained that an extension of time could not be granted since the Applicant had not applied for an extension of time within 1 year of the expiration of the time limit for serving a notice of objection. According to the Minister, the deadline to apply for an extension was December 12, 2023.

Statutory framework and procedural requirements

Pursuant to paragraph 165(1)(b) of the Income Tax Act, if the assessment is in respect of a taxpayer that is not an individual, a notice of objection must be served on or before the day that is 90 days after the day of sending of the notice of assessment. Pursuant to section 166.1, if the taxpayer does not object within 90 days of a notice of assessment being sent, the taxpayer can apply to the Minister for an extension of time to file a notice of objection. Pursuant to subsection 166.1(7), the Minister can grant an application for an extension of time only if the application is made within 1 year after the expiration of the time otherwise limited by the Act for sending a notice of objection. Consequently, pursuant to section 165 and subsection 166.1(7), the Minister can grant an application for an extension of time only if the taxpayer applied within 1 year and 90 days of the day a notice of assessment was sent. If the Minister does not grant an application for an extension of time, pursuant to section 166.2, a taxpayer can apply to the Tax Court for an extension of time. However, pursuant to subsection 166.2(5), no application shall be granted by the Court unless the application was made under subsection 166.1(1) within one year after the expiration of the time otherwise limited by the Act for serving a notice of objection. The Court examined when this time period begins to run, noting that in Canada v. Schafer, the Federal Court of Appeal explained that "sent" means "mailed." The Court endorsed the definition from Mid-Plains Contractors Ltd. v Canada that a notice is "mailed" when it is properly addressed, stamped with the proper postage, and deposited in a proper place for receipt of mail.

Evidence regarding mailing procedures

The Minister filed two affidavits. Chrisha Joseph, a CRA Litigation Officer in Toronto, Ontario, stated she has charge of the appropriate records and knowledge of the practice of the CRA. She examined the records and stated that the Minister assessed the Applicant for the taxation years ending September 30, 2020 and September 30, 2021 and issued Notices of Corporation income tax assessment dated September 13, 2022. She reviewed the Communication Item Key Details with respect to the Assessments. The Assessments were released in BCCS Cycle #000011113, whose Cycle Run date is September 9, 2022, with the notices dated September 13, 2022. Wade Smith, Manager for the Print to Mail Division located in the Prince Edward Island Taxation Centre of the CRA, explained he has charge of the appropriate records and has knowledge of the CRA's practices in respect of the mailing procedures. Smith described in detail how income tax notices of assessments or reassessments for corporations are processed electronically in the CRA's computer system and released electronically to the Print to Mail Section for printing. The print files are downloaded electronically to a Print to Mail site, which is responsible for printing, inserting and shipping the mail to Canada Post plants. The notices are printed on high-speed Xerox printers. A "trailer page" is produced at the end of printing to identify the number of notices printed and is balanced against the job ticket. The notices are delivered to the inserting area for insertion into individual envelopes, which is usually completed one to four days prior to the date of mailing. The envelopes contain a clear area cut-out, whereby the address printed directly on the Assessment Notice is visible for mailing purposes. Multiple cross-checking processes ensure no mistakes. All envelopes are placed in labelled Canada Post "letterflattainers" and then stored in labelled "monotainers" which provide the date of pick-up by Canada Post for mailing. The date for pick-up by Canada Post corresponds to the date on the Assessment Notices. Smith reviewed the relevant Electronic Daily Mailing Report and the relevant Canada Post Statement of Mailing and stated he verily believed that the procedures were properly completed for BCCS Cycle #000011113 and that the Applicant's Notices of Assessment dated September 13, 2022, were printed and they were mailed on time.

Court's analysis and application of law

The Court applied the analytical framework from Mpamugo v. R., which establishes four steps. Step 1: The taxpayer must assert that the Notice of Assessment was not mailed. Step 2: If the taxpayer asserts that the Notice of Assessment was not mailed, the Minister must introduce sufficient evidence to prove, on a balance of probabilities, that the Notice of Assessment was indeed mailed or, if the taxpayer has asserted that it was mailed to the wrong address, that it was mailed to the address that the CRA properly had on file. Step 3: If the Minister is able to prove that the Notice of Assessment was indeed mailed, then the mailing is presumed to have occurred on the date set out on the Notice (subsection 244(14)). This is a rebuttable presumption. The taxpayer may introduce evidence to prove that it was actually mailed on a different date. Step 4: Once the mailing date is established, the assessment is deemed to have been made on that date (subsection 244(15)) and the Notice of Assessment is deemed to have been received on that date (subsection 248(7)). These deeming provisions are not rebuttable. The Court found that Simon Ribbans, on behalf of the Applicant, testified that it never received the Notices of Assessment at the mailing address on file at the CRA. The address of the Applicant on file with the CRA was not at issue in this case. The Court concluded, based on the affidavits of Ms. Joseph and Mr. Smith, that the Notices of Assessment were properly addressed, stamped with the proper postage, and deposited in a proper place for receipt of mail. The Applicant did not introduce evidence to prove that the Notices of Assessment were not mailed on September 13, 2022.

Ruling and outcome

Justice Ouimet denied the application for extension of time, without costs. The Court concluded, on a balance of probabilities, that the Notices of Assessment were mailed to the Applicant on September 13, 2022. Because the Notices of Assessment were mailed on September 13, 2022, the deadline to apply for an extension of time to the Minister was December 12, 2023. The Applicant applied for an extension on January 18, 2024. Therefore, the application was not made within 1 year and 90 days of the day the Notices of Assessment were mailed. Pursuant to subsection 166.2(5) of the ITA, this Court cannot grant an extension of time to file a notice of objection unless the taxpayer has applied to the Minister for an extension of time within 1 year and 90 days of the day a notice of assessment is mailed. The Court stated that when the Minister has proven, on the balance of probabilities, that a notice of assessment was mailed to a taxpayer, it is deemed to have been received by the taxpayer on the day it was mailed, pursuant to subsection 248(7). The application was denied without costs, as the Court could not grant the application under the statutory framework of the Income Tax Act.