“ The Minister of National Revenue is appealing the order of Justice Rennie (2013 FC 986) dismissing the Minister’s appeal of the order of Prothonotary Aalto (2013 FC 214), who dismissed the Minister’s motion to strike two applications for judicial review. The decisions relate to a dispute under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.). The Minister takes the position that it is plain and obvious that the entire dispute falls within the exclusive appellate jurisdiction of the Tax Court of Canada.
 For the reasons explained below, I agree with Justice Rennie that there is sufficient doubt about the Minister’s position that one of the judicial review applications should be allowed to continue. The other decision is no longer the subject of a judicial review application because it has been discontinued. Accordingly, I would dismiss the appeal with respect to both applications.”
“ Fundamentally, the complaint of Sifto is that the Minister has not honoured the promise implicit in the voluntary disclosure program. In the information circular that describes that program, the Minister represents to all taxpayers that if a voluntary disclosure is accepted by the Minister as meeting the conditions in the relevant information circular, the Minister will exercise his or her statutory discretion to waive the penalties to which the voluntary disclosure relates. However, the Minister has assessed penalties against Sifto, contrary to Sifto’s understanding of its entitlement to a waiver of those penalties”
 If the Improper Penalties application is permitted to continue, there will be parallel proceedings in the Tax Court and the Federal Court relating to different aspects of the penalty assessments. It may make sense for consideration of the Improper Penalties application to be deferred until the appeal in the Tax Court is complete, because if the Tax Court finds the penalties to be invalid, the application may be moot. However, there may be good reason not to defer the hearing of the application. That is a case management matter for the Federal Court.
 For these reasons, I would dismiss the appeal.”
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- Posted by Robert Robillard
- On 10 November 2014
- 0 Comments
- Arm's length principle, Avis de cotisation, Canadian Income Tax Act, Judicial review, Jurisprudence, OECD Transfer Pricing Guidelines, Principe de pleine concurrence, Prix de transfert Canada, Reassessment, Révision judiciaire, Tax case, Transfer Pricing Canada