The appellant, a residential construction company, failed to report and remit GST on two building sales in its 2011 return.
The Minister imposed a penalty under section 285 of the Excise Tax Act, alleging the omission was made knowingly or in circumstances amounting to gross negligence.
The taxpayer appealed, arguing it had no accounting knowledge and had reasonably relied on a chartered professional accountant and a third-party loan management company to handle its bookkeeping and tax filings.
The Tax Court of Canada allowed the appeal, finding that the taxpayer provided all necessary information to its accountant and did not act with wilful blindness or gross negligence.
The penalty was vacated.
