The Minister assessed the appellant for $700,000 under subsection 224(4) of the Income Tax Act for failing to comply with a requirement to pay regarding a tax debtor, Paragon.
The appellant argued it did not owe any debt to Paragon at the time the requirement to pay was issued.
The Tax Court of Canada allowed the appeal, finding that a prior settlement agreement and the state of the joint venture accounts demonstrated that the debt had been extinguished before the requirement to pay was issued.
