Edward (Ted) Cook

The appellant corporation appealed reassessments and assessments for failure to withhold and remit income tax and CPP deductions on cheques paid to its two shareholders.

The Minister argued the cheques were salary from employment.

The Tax Court of Canada allowed the appeals, finding that the shared intention of the corporation and the shareholders at the time the payments were made was that the cheques were shareholder draws, not salary.

The Court held that the initial remittances made for the first two months were a mistake by the inexperienced bookkeeper, and the subsequent correction aligned with the parties' true intent.

The reassessments and assessments were returned to the Minister for reconsideration on the basis that the shareholders did not receive salary, and the related penalties were vacated.

The appellant appealed reassessments for the 1998 to 2015 taxation years, which included income from an undisclosed Swiss bank account and imposed gross negligence and failure to file penalties.

The Tax Court found the appellant made misrepresentations attributable to neglect or carelessness for 1998 to 2013, justifying reassessments beyond the normal period, and upheld the penalties for those years.

The appeals for 2014 and 2015 were allowed as the Minister provided no evidence to justify reassessing those statute-barred years.

The applicant applied for an extension of time to institute appeals for the 2011, 2012, and 2013 taxation years.

The Minister had issued nil assessments for those years.

The applicant argued that the Court should use its procedural rules to dispense with the requirement that an appeal must be from an assessment with tax payable.

The Tax Court held that procedural rules cannot override statutory requirements and dismissed the application because no appeal can be taken from a nil assessment.