Income Tax
Penalties
Appeal from Federal Court decision (2008 FC 218) allowing judicial review of Minister’s decision not to waive interest owed by respondent on unpaid taxes—Respondent reassessed by Minister for taxation years 1993 to 1999 inclusive (except 1995), not allowed to deduct losses from investment in limited partnership—Advised interest would continue to accumulate on unpaid tax, notices of objection held in abeyance pending decision in test case—Told could avoid, reduce interest by paying disputed tax liability, and that any overpayments would be repaid, with interest—Respondent subsequently accepting Minister’s offer to settle, requesting interest relief, but that request refused on ground no evidence of departmental delay—Unreasonableness standard of review applicable to exercise of Minister’s discretion under Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 220(3.1) —Respondent invoking Minister’s extraordinary statutory discretion to grant exemption from basic principle of tax system, namely, taxpayers liable to pay taxes owing—Minister’s decision not lacking degree of justification, transparency, intelligibility required by unreasonableness standard of review—Reviewing court should also consider whether outcome itself unreasonable—Minister’s decision falling within range of possible, acceptable outcomes defensible in respect of facts, law, thus not unreasonable—Appeal allowed.
Telfer v. Canada (Revenue Agency) (A-141-08, 2009 FCA 23, Evans J.A., judgment dated January 28, 2009, 16 pp.)