Incomplete Address: Notice of Assessment Not “Mailed”
GST/HST rules provide that a notice of objection must be filed with
the minister within 90 days of the mailing of an assessment (ETA
subsection 301(1.1); the parallel provision in the ITA is subsection
165(1)). However, as established in Le sage au piano v. The Queen (2014 TCC 319),
the clock may not start ticking on the 90-day period if the CRA has
omitted important details of the taxpayer’s address on the notice of
assessment. The decision extends the doctrine from previous income tax
cases, which held that it is insufficient for the CRA to mail a notice
of assessment to an incorrect address (see, for example, Canada v. 236130 British Columbia Ltd., 2006 FCA 352).
The fact that litigation continues in this area also highlights the
fact that there is no electronic means of determining whether a notice
of assessment has been issued.
The facts of the case are simple. In a dispute regarding the amount
of net tax to be reported in relation to the fair market value of a
residential complex, the minister advised the taxpayer of the audit
results on May 23, 2013, and issued a notice of assessment on June 3,
2013. However, the notice of assessment was addressed to the taxpayer’s
office without a suite number, and the taxpayer denied receiving it. The
taxpayer became aware of the assessment only on September 16, 2013,
after the 90 days had expired. The taxpayer applied to the CRA for an
extension of time to file an objection, was refused, and made a further
application to the TCC for an extension.
At the TCC, the CRA argued that ETA subsection 334(1) creates an
irrebuttable presumption of receipt by a taxpayer once the assessment is
sent to a correct address; failures by the postal service to deliver
are not relevant. The taxpayer argued that the absence of the suite
number was important because its office was located in a multi-storey
building with 20 tenants, and the mailbox on the main floor did not bear
the taxpayer’s name. After considering the evidence, the TCC was of the
view that the address on the assessment was incomplete and that the
suite number was essential in this particular situation. The TCC found
that the minister failed to prove that the address provided by the
taxpayer did not include the suite number. Thus, the assessment had not
been “mailed.” Accordingly, the taxpayer’s application for an extension
of time was allowed.
The TCC further addressed the question of whether, had the mailing
been correct, the taxpayer could have achieved an extension of time
through the normal rules for late filing (ETA section 304). The court
concluded that the taxpayer had met all the necessary conditions (ETA
subsection 304(5)), including (1) a bona fide intention to object and
(2) that it was just and equitable to grant the application given the
reasons set out in the application and the circumstances of the case.
This case serves as a reminder to taxpayers to monitor the issuance
of assessments after audits are completed or rebate claims are filed.
However, such monitoring is not always as easy as it perhaps should be.
Individuals can check on income tax assessments through the My Account
service, but the My Business Account service does not cover such notices
for either GST or corporate income tax. Companies will therefore have
to make inquiries either in writing or orally via the CRA’s Business
Millar Kreklewetz LLP, Toronto