Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Taxation - Income tax - Assessment - Whether Respondent must obtain judicial authorization when, in the course of auditing a taxpayer, he seeks information or documents concerning unnamed persons - Whether it matters that the request for information was made verbally rather than in writing - Whether subsection 231.2 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), mandates the Respondent’s compliance with that subsection even if there is an alternative means to obtain the same information - Whether the Federal Court has jurisdiction to vacate reassessments if the Respondent fails to adhere to a process mandated by the Income Tax Act for obtaining information to support the reassessments.

The Appellant is a registered charity affiliated with a college. It operates a program under which charitable donations finance students’ tuition and related costs. The Respondent determined that a majority of the donors used the program to fund their own children’s education in order to obtain a donation receipt for income tax purposes for 100 percent of their gift amount. Their children received 90 percent of their gifts and tuition receipts for income tax purposes. During an audit in 2003, the Respondent requested a list of all donors and all recipients of loans. The Appellant provided a list. In June 2004, the Respondent requested donor lists for the 2002 and 2003 taxation years. The Appellant refused to provide another list without a court order. The Respondent issued notices of reassessment to donors. The Appellant applied for judicial review of the Respondent’s request for third party donor information and documentation. The Federal Court, Trial Division, granted the application for judicial review; declared the Respondent’s request for information and documentation illegal; ordered the Respondent to return materials and documentation; and issued an Order restraining the Respondent’s use of documents, materials and information. The Federal Court of Appeal allowed the appeal and set aside the decision of the application judge, dismissed the application for judicial review and dismissed the cross-appeal.