Income Tax
Practice
Judicial review of Minister of National Revenue’s refusal to exercise discretion under Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1 s. 220(3.1) to cancel $72,280.81 in arrears interest—Applicant holding company, sole business of which to hold shares in Conor Pacific Environment Technologies Inc. (CPET)—Applied to M.N.R. for “Fairness relief”—Guidelines framing exercise of Minister’s discretion, providing that penalties, interest may be waived or cancelled where resulting in circumstances beyond applicant’s control—Applicant alleging CPET forced to file for bankruptcy protection due to actions taken by various government departments—First and Second-level Reports regarding Fairness request, on which M.N.R. relied, containing errors of fact, omissions—Errors may have caused M.N.R. to conclude applicant’s hardship attributable to business decisions, not circumstances beyond its control—Therefore M.N.R.’s decision based on erroneous findings of fact made without regard to material on record—“Circumstances beyond taxpayer’s control” primary factor under Guidelines to be considered by M.N.R. in Fairness request—Guidelines not requiring circumstances be both “beyond taxpayers’s control”, “extraordinary”—Also, M.N.R. erring because failed to consider factors listed in paragraph 10 of Guidelines—Application allowed.
3500772 Canada Inc. v. Minister of National Revenue (T-1094-06, 2008 FC 554, Blanchard J. judgment dated April 29, 2008, 20 pp.)