Noémie Vespignani

The Minister reassessed the appellant's 2010 taxation year beyond the normal reassessment period, adding $92,522 to his income and imposing gross negligence penalties.

The reassessment was based on an entry in the corporation's Schedule 100 showing a shareholder advance.

The appellant argued the entry was an accounting error and he did not earn the undeclared income.

The Tax Court of Canada allowed the appeal, finding the Minister failed to prove on a balance of probabilities that the appellant made a misrepresentation attributable to neglect, carelessness, or wilful default.

The evidence supported the appellant's position that the entry was an error, and the Minister's assumptions based on later years were insufficient to justify reopening the statute-barred year.

The respondent brought a motion to strike certain parts of the appellant's Notice of Appeal without leave to amend.

The impugned parts related to the appellant's request for a reduction in interest and allegations that the reassessments violated sections 7 and 8 of the Charter and sections 231.1 and 231.2 of the Income Tax Act because evidence was obtained during a criminal investigation.

The Tax Court of Canada granted the motion, finding that it lacked jurisdiction to reduce interest under subsection 220(3.1) of the Act.

The Court also held that the Minister was entitled to use investigative powers and information requests to determine tax liability even while a criminal investigation was underway, and that no prior judicial authorization was required in these circumstances.