In CRA Document No. 2013-0487181I7
"Extension of the reassessment period" (July 12, 2013),
the CRA was asked to provide its views on the operation of
subsection 220(3) of the Income Tax Act.
Subsection 220(3) of the Act states,
220(3) The Minister
may at any time extend the time for making a
return under this Act. [emphasis added]
A corporate taxpayer failed to file a T2 return of
income for a year. The CRA issued an arbitrary assessment pursuant
to subsection 152(7) of the Act. Three years later, the taxpayer
filed its T2 return, but the CRA refused to reassess as the
"normal reassessment period" had expired (see subsection
152(4) of the Act).
In its technical interpretation, the CRA stated,
"Subsection 220(3) provides the
Minister with the discretion to extend the time for making a return
under the Act. However, such discretion must be exercised for a
taxation year that has not become statute-barred."
The CRA may be correct about the result in this particular case,
but a few points should be clarified.
It is clear that the Minister's discretion under
subsection 220(3) is not subject to any limitation.
Practically, however, if the Minister exercises her discretion
under subsection 220(3), certain other provisions relating to the
Minister's ability to assess the taxpayer's return could be
engaged. For example, the normal reassessment period does not
run until the CRA issues an initial assessment. Or,
the nature of the taxpayer could impact the CRA's ability
to reassess: Subsection 152(4.2) of the Act allows the Minister to
reassess tax, interest and penalties for a taxation year at any
time after the end of the normal reassessment period if the
taxpayer makes a request for a reassessment within 10 years after
the end of that taxation year. However, subsection 152(4.2) applies
only to individuals and testamentary trusts.
In the present case, while the CRA could, pursuant to subsection
220(3), extend the time for filing a T2 return, the CRA could not
reassess the return because the normal reassessment period had
expired and another relieving provision – such as subsection
152(4.2) – did not apply.
In another case, the result could be different.
Dentons is a global firm driven to provide you with the
competitive edge in an increasingly complex and interconnected
marketplace. We were formed by the March 2013 combination of
international law firm Salans LLP, Canadian law firm Fraser Milner
Casgrain LLP (FMC) and international law firm SNR Denton.
Dentons is built on the solid foundations of three highly
regarded law firms. Each built its outstanding reputation and
valued clientele by responding to the local, regional and national
needs of a broad spectrum of clients of all sizes –
individuals; entrepreneurs; small businesses and start-ups; local,
regional and national governments and government agencies; and
mid-sized and larger private and public corporations, including
international and global entities.
Now clients benefit from more than 2,500 lawyers and
professionals in 79 locations in 52 countries across Africa, Asia
Pacific, Canada, Central Asia, Europe, the Middle East, Russia and
the CIS, the UK and the US who are committed to challenging the
status quo to offer creative, actionable business and legal
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances. Specific Questions relating to
this article should be addressed directly to the author.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On Thursday, September 22, 2016, Dentons hosted a panel discussion about the management of liabilities and risks associated with environmental crises, including potential liabilities for directors and officers and provided insight into risk and liability techniques associated with environmental crisis management.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).