In July 2014, the TCC granted an application for an extension to file a notice of objection in Hamer (2013-4579(IT)APP) because the Crown did not adduce sufficient evidence that the impugned notice of reassessment was mailed. The judgment deals with the evidence that the CRA must adduce to prove the fact of mailing on an application for an extension to file a notice of objection.
The 90-day period for filing a notice of objection commences when the CRA mails the underlying notice of reassessment. The TCC does not have jurisdiction to grant relief when the taxpayer argues that third party error – such as Canada Post’s failure to deliver - prevented receipt of the reassessment, because the time period commences from the time of mailing and not the time of receipt. However, the onus is on the Crown to adduce sufficient evidence to prove that the CRA actually mailed the notice of reassessment; in this case the onus was not met.
The Crown relied on the affidavit of the litigation officer in charge of the file. The affiant did not attend the hearing and his affidavit was the only evidence before the TCC. The TCC was not satisfied with the affidavit and said that although evidence does not need to be perfect, there must be a reasonable basis for accepting it as reliable. However, the affidavit relied solely on information that was told to the affiant by other CRA officials: the affiant was told and swore that
income tax reassessments are processed electronically in the agency’s computer system and the information is released electronically to the Media Services Print Shop of the Electronic and Print Media Directorate in a Daily Assessing Schedule (DAS) for printing of a notices of reassessment and that the date of the notice is post dated to the date of mailing; and the applicant’s notice of reassessment for the 2008 taxation year was released in DAS 75 of the 2009 program with a notice post-dated to March 12, 2012.
The affiant was further told and swore that
the information released by the initial returns processing section in DAS is downloaded for printing and the notices of reassessment are printed with the date of the notice post-dated to the date of mailing; the printed notices of reassessment are inserted by the inserters into individual envelopes one to four days prior to the date of mailing; inserters are the mechanical equipment that insert the notices into the envelopes; the inserters maintain a daily tally sheet of the total number of printed notices for mailing; all envelopes are placed in bins for pick up by Canada Post for mailing on the date of the notice; before the notices of reassessment are placed in the bin for pick up by Canada Post, the computerized count from the inserts is matched with the expected count from the tally sheets produced by the DAS cycle and if both counts are not the same the print job is cancelled, the print notices destroyed, and the print job is redone; and the counts were accurate for the aforementioned DAS … and the notices were mailed on time.
Based on the information provided to the affiant and on the relevant CRA records, the affiant believed that the notice of reassessment was mailed on March 12, 2012.
The TCC concluded that there were a number of significant problems with the affidavit. First, key facts in the affidavit were not within the affiant’s knowledge, and he instead relied on information from other CRA officers. The court asked rhetorically “what is the point of having a sworn affidavit if the people with the information are not required to swear the accuracy of their statements?” Although the TCC did not describe the relevant portions of the affidavit as hearsay, that was clearly the message. In Carcone (2011 TCC 550), the TCC expressed similar concerns, and said that the affiant provided hearsay evidence that was neither necessary nor reliable. The same conclusion was reached in Poulin (2013 TCC 104).
Second, the TCC noted that the affidavit provided only a bare-bones description and important details were lacking. For example, the affiant stated that the notice of reassessment was released in DAS 75, but provided no detail about that conclusion. There were similar gaps concerning the scheme for the counting of the notices of reassessment. Also, the concluding paragraph provided no detail other than to say that it was based on a review of CRA records. Those summary statements did not instill confidence in the accuracy of the information contained in the affidavit.
Moreover, the TCC stated that the affidavit appeared to be based on a standard form and in fact seemed to be very similar to an affidavit filed in Nicholls (2011 TCC 39). Interestingly, inNicholls the affidavit was sufficient proof that notices of reassessment were mailed. Unfortunately, Nicholls also included obiter statements that a taxpayer must first allege non-receipt of notices of reassessment before alleging that the CRA did not mail the assessments. If a taxpayer claims that a notice of assessment was never mailed, it is unlikely that he received it. However, because the limitation begins to run at the point of mailing, the date of mailing should be the focus of inquiry.
On balance, the TCC in Hamer did not have confidence in the diligence of the affiant or of the CRA officers who provided him with information. Moreover, none of the relevant CRA officials were available for cross-examination: that fact would not be fatal if the TCC was otherwise satisfied with the affidavit, but it proved to be problematic in this case. Considering all the evidence, the TCC allowed the application and concluded that the notice of objection was valid and not late-filed.
A notice of assessment is deemed to be made on the day that it was mailed by the CRA (subsection 244(15)) and the mailing date – and the date of receipt - is presumed to be the date that appears on the face of the notice (subsection 244(14) and paragraph 248(7)(a), respectively). But the presumption of mailing is rebuttable. The assessment process is not completed until the notice of assessment has been mailed (Aztec Industries Inc. (95 DTC 5235)) and the burden of proof is on the Crown to establish - based on reliable evidence - whether and when the notices of assessment were mailed. If the Crown cannot confirm when a notice of assessment is mailed, the TCC is unable to conclude that a notice of objectionwas late-filed. If on the facts there is confusion regarding whether or when the notice of assessment was mailed, the taxpayer must receive the benefit of the doubt (Gyimah (2011 DTC 1014)). The interpretation of the relevant provisions should recognize that Parliament did not intend to deprive a taxpayer of his rights to objection or appeal: it would thus be inappropriate to conclude that a statutory limitation period commenced without due notice (Antoniou (88 DTC 1415)). In my view, Hamer was correctly decided and further establishes the principle that even though a CRA affidavit is evidence of certain facts, if it contains little more than hearsay, a court is unlikely to find it sufficiently convincing.