Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Compliance order

• 231.7 (1) On summary application by the Minister, a judge may, notwithstanding subsection 238(2), order a person to provide any access, assistance, information or document sought by the Minister under section 231.1 or 231.2 if the judge is satisfied that

  • (a) the person was required under section 231.1 or 231.2 to provide the access, assistance, information or document and did not do so; and

  • (b) in the case of information or a document, the information or document is not protected from disclosure by solicitor-client privilege (within the meaning of subsection 232(1)).

• Marginal note:Notice required

  (2) An application under subsection (1) must not be heard before the end of five clear days from the day the notice of application is served on the person against whom the order is sought.

• Marginal note:Judge may impose conditions

  (3) A judge making an order under subsection (1) may impose any conditions in respect of the order that the judge considers appropriate.

• Marginal note:Contempt of court

  (4) If a person fails or refuses to comply with an order, a judge may find the person in contempt of court and the person is subject to the processes and the punishments of the court to which the judge is appointed.

• Marginal note:Appeal

  (5) An order by a judge under subsection (1) may be appealed to a court having appellate jurisdiction over decisions of the court to which the judge is appointed. An appeal does not suspend the execution of the order unless it is so ordered by a judge of the court to which the appeal is made.

Marginal note:Time period not to count

231.8 The following periods of time shall not be counted in the computation of the period of time within which an assessment may be made for a taxation year of a taxpayer under subsection 152(4):

• (a) where the taxpayer is sent or served with a notice of a requirement under subsection 231.2(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and

• (b) where an application is commenced by the Minister under subsection 231.7(1) to order the taxpayer to provide any access, assistance, information or document, the period of time between the day on which the taxpayer files a notice of appearance, or otherwise opposes the application, and the day on which the application is finally disposed of.

Marginal note:Definitions

• 232 (1) In this section,

  custodian

  custodian means a person in whose custody a package is placed pursuant to subsection 232(3); (gardien)

  judge

  judge means a judge of a superior court having jurisdiction in the province where the matter arises or a judge of the Federal Court; (juge)

  lawyer

  lawyer means, in the province of Quebec, an advocate or notary and, in any other province, a barrister or solicitor; (avocat)

  officer

  officer means a person acting under the authority conferred by or under sections 231.1 to 231.5; (fonctionnaire)

  solicitor-client privilege

  solicitor-client privilege means the right, if any, that a person has in a superior court in the province where the matter arises to refuse to disclose an oral or documentary communication on the ground that the communication is one passing between the person and the person’s lawyer in professional confidence, except that for the purposes of this section an accounting record of a lawyer, including any supporting voucher or cheque, shall be deemed not to be such a communication. (privilège des communications entre client et avocat)

• Marginal note:Solicitor-client privilege defence

  (2) Where a lawyer is prosecuted for failure to comply with a requirement under section 231.2 with respect to information or a document, the lawyer shall be acquitted if the lawyer establishes to the satisfaction of the court

  • (a) that the lawyer, on reasonable grounds, believed that a client of the lawyer had a solicitor-client privilege in respect of the information or document; and

  • (b) that the lawyer communicated to the Minister, or some person duly authorized to act for the Minister, the lawyer’s refusal to comply with the requirement together with a claim that a named client of the lawyer had a solicitor-client privilege in respect of the information or document.

• Marginal note:Seizure of certain documents where privilege claimed

  (3) Where, pursuant to section 231.3, an officer is about to seize a document in the possession of a lawyer and the lawyer claims that a named client of the lawyer has a solicitor-client privilege in respect of that document, the officer shall, without inspecting, examining or making copies of the document,

  • (a) seize the document and place it, together with any other document in respect of which the lawyer at the same time makes the same claim on behalf of the same client, in a package and suitably seal and identify the package; and

  • (b) place the package in the custody of the sheriff of the district or county in which the seizure was made or, if the officer and the lawyer agree in writing on a person to act as custodian, in the custody of that person.

• Marginal note:Examination of certain documents where privilege claimed

  (3.1) Where, pursuant to section 231.1, an officer is about to inspect or examine a document in the possession of a lawyer or where, pursuant to section 231.2, the Minister has required provision of a document by a lawyer, and the lawyer claims that a named client or former client of the lawyer has a solicitor-client privilege in respect of the document, no officer shall inspect or examine the document and the lawyer shall

  • (a) place the document, together with any other document in respect of which the lawyer at the same time makes the same claim on behalf of the same client, in a package and suitably seal and identify the package or, if the officer and the lawyer agree, allow the pages of the document to be initialed and numbered or otherwise suitably identified; and

  • (b) retain it and ensure that it is preserved until it is produced to a judge as required under this section and an order is issued under this section in respect of the document.

• Marginal note:Application to judge

  (4) Where a document has been seized and placed in custody under subsection 232(3) or is being retained under subsection 232(3.1), the client, or the lawyer on behalf of the client, may

  • (a) within 14 days after the day the document was so placed in custody or commenced to be so retained apply, on three clear days notice of motion to the Deputy Attorney General of Canada, to a judge for an order

    • (i) fixing a day, not later than 21 days after the date of the order, and place for the determination of the question whether the client has a solicitor-client privilege in respect of the document, and

    • (ii) requiring the production of the document to the judge at that time and place;

  • (b) serve a copy of the order on the Deputy Attorney General of Canada and, where applicable, on the custodian within 6 days of the day on which it was made and, within the same time, pay to the custodian the estimated expenses of transporting the document to and from the place of hearing and of safeguarding it; and

  • (c) if the client or lawyer has proceeded as authorized by paragraph 232(4)(b), apply at the appointed time and place for an order determining the question.

• Marginal note:Disposition of application

  (5) An application under paragraph 232(4)(c) shall be heard in camera, and on the application

  • (a) the judge may, if the judge considers it necessary to determine the question, inspect the document and, if the judge does so, the judge shall ensure that it is repackaged and resealed; and

  • (b) the judge shall decide the matter summarily and,

    • (i) if the judge is of the opinion that the client has a solicitor-client privilege in respect of the document, shall order the release of the document to the lawyer, and

    • (ii) if the judge is of the opinion that the client does not have a solicitor-client privilege in respect of the document, shall order

      • (A) that the custodian deliver the document to the officer or some other person designated by the Commissioner of Revenue, in the case of a document that was seized and placed in custody under subsection 232(3), or

      • (B) that the lawyer make the document available for inspection or examination by the officer or other person designated by the Commissioner of Revenue, in the case of a document that was retained under subsection 232(3.1),

    and the judge shall, at the same time, deliver concise reasons in which the judge shall identify the document without divulging the details thereof.

• Marginal note:Order to deliver or make available

  (6) Where a document has been seized and placed in custody under subsection 232(3) or where a document is being retained under subsection 232(3.1) and a judge, on the application of the Attorney General of Canada, is satisfied that neither the client nor the lawyer has made an application under paragraph 232(4)(a) or, having made that application, neither the client nor the lawyer has made an application under paragraph 232(4)(c), the judge shall order

  • (a) that the custodian deliver the document to the officer or some other person designated by the Commissioner of Revenue, in the case of a document that was seized and placed in custody under subsection 232(3); or

  • (b) that the lawyer make the document available for inspection or examination by the officer or other person designated by the Commissioner of Revenue, in the case of a document that was retained under subsection 232(3.1).

• Marginal note:Delivery by custodian

  (7) The custodian shall

  • (a) deliver the document to the lawyer

    • (i) in accordance with a consent executed by the officer or by or on behalf of the Deputy Attorney General of Canada or the Commissioner of Revenue, or

    • (ii) in accordance with an order of a judge under this section; or

  • (b) deliver the document to the officer or some other person designated by the Commissioner of Revenue

    • (i) in accordance with a consent executed by the lawyer or the client, or

    • (ii) in accordance with an order of a judge under this section.

• Marginal note:Continuation by another judge

  (8) Where the judge to whom an application has been made under paragraph 232(4)(a) cannot for any reason act or continue to act in the application under paragraph 232(4)(c), the application under paragraph 232(4)(c) may be made to another judge.

• Marginal note:Costs

  (9) No costs may be awarded on the disposition of any application under this section.

• Marginal note:Directions

  (10) Where any question arises as to the course to be followed in connection with anything done or being done under this section, other than subsection 232(2), 232(3) or 232(3.1), and there is no direction in this section with respect thereto, a judge may give such direction with regard thereto as, in the judge’s opinion, is most likely to carry out the object of this section of allowing solicitor-client privilege for proper purposes.

• Marginal note:Prohibition

  (11) The custodian shall not deliver a document to any person except in accordance with an order of a judge or a consent under this section or except to any officer or servant of the custodian for the purposes of safeguarding the document.

• Marginal note:Idem

  (12) No officer shall inspect, examine or seize a document in the possession of a lawyer without giving the lawyer a reasonable opportunity of making a claim under this section.

• Marginal note:Authority to make copies

  (13) At any time while a document is in the custody of a custodian under this section, a judge may, on an ex parte application of the lawyer, authorize the lawyer to examine or make a copy of the document in the presence of the custodian or the judge by an order that shall contain such provisions as may be necessary to ensure that the document is repackaged and that the package is resealed without alteration or damage.

• Marginal note:Waiver of claim of privilege

  (14) Where a lawyer has, for the purpose of subsection 232(2), 232(3) or 232(3.1), made a claim that a named client of the lawyer has a solicitor-client privilege in respect of information or a document, the lawyer shall at the same time communicate to the Minister or some person duly authorized to act for the Minister the address of the client last known to the lawyer so that the Minister may endeavour to advise the client of the claim of privilege that has been made on the client’s behalf and may thereby afford the client an opportunity, if it is practicable within the time limited by this section, of waiving the claim of privilege before the matter is to be decided by a judge or other tribunal.

• Marginal note:Compliance

  (15) No person shall hinder, molest or interfere with any person doing anything that that person is authorized to do by or pursuant to this section or prevent or attempt to prevent any person doing any such thing and, notwithstanding any other Act or law, every person shall, unless the person is unable to do so, do everything the person is required to do by or pursuant to this section.

Marginal note:Information return

• 233 (1) Every person shall, on written demand from the Minister served personally or otherwise, whether or not the person has filed an information return as required by this Act or the regulations, file with the Minister, within such reasonable time as is stipulated in the demand, the information return if it has not been filed or such information as is designated in the demand.

• Marginal note:Partnerships

  (2) Every partnership shall, on written demand from the Minister served personally or otherwise on any member of the partnership, file with the Minister, within such reasonable time as is stipulated in the demand, an information return required under section 233.3, 233.4 or 233.6.

• Marginal note:Application to members of partnerships

  (3) For the purposes of this subsection and subsection 233(2), a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership.

Marginal note:Definitions

• 233.1 (1) The definitions in this subsection apply in this section.

  reportable transaction

  reportable transaction means

  • (a) in the case of

    • (i) a reporting person for a taxation year who is not resident in Canada at any time in the year, or

    • (ii) a reporting partnership for a fiscal period no member of which is resident in Canada in the period,

    a transaction or series of transactions that relate in any manner whatever to a business carried on in Canada by the reporting person or partnership in the year or period or a preceding taxation year or period; and

  • (b) in any other case, a transaction or series of transactions that relate in any manner whatever to a business carried on by a reporting person (other than a business carried on by a reporting person as a member of a partnership) or partnership in a taxation year or fiscal period. (opération à déclarer)

  reporting partnership

  reporting partnership for a fiscal period means a partnership

  • (a) a member of which is resident in Canada in the period; or

  • (b) that carries on a business in Canada in the period. (société de personnes déclarante)

  reporting person

  reporting person for a taxation year means a person who, at any time in the year,

  • (a) is resident in Canada; or

  • (b) is non-resident and carries on a business (other than a business carried on as a member of a partnership) in Canada. (déclarant)

  transaction

  transaction includes an arrangement or event. (opération)

• Marginal note:Reporting person’s information return

  (2) Subject to subsection 233.1(4), a reporting person for a taxation year shall, on or before the reporting person’s filing-due date for the year, file with the Minister, in respect of each non-resident person with whom the reporting person does not deal at arm’s length in the year and each partnership of which such a non-resident person is a member, an information return for the year in prescribed form containing prescribed information in respect of the reportable transactions in which the reporting person and the non-resident person or the partnership, as the case may be, participated in the year.

• Marginal note:Reporting partnership’s information return

  (3) Subject to subsection 233.1(4), a reporting partnership for a fiscal period shall, on or before the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the period or would be required to be so filed if that section applied to the reporting partnership, file with the Minister, in respect of each non-resident person with whom the reporting partnership, or a member of the reporting partnership, does not deal at arm’s length in the period and each partnership of which such a non-resident person is a member, an information return for the period in prescribed form containing prescribed information in respect of the reportable transactions in which the reporting partnership and the non-resident person or the partnership, as the case may be, participated in the period.

• Marginal note:De minimis exception

  (4) A reporting person or partnership that, but for this subsection, would be required under subsection 233.1(2) or 233.1(3) to file an information return for a taxation year or fiscal period is not required to file the return unless the total of all amounts, each of which is the total fair market value of the property or services that relate to a reportable transaction in which the reporting person or partnership and any non-resident person with whom the reporting person or partnership, or a member of the reporting partnership, does not deal at arm’s length in the year or period, or a partnership of which such a non-resident person is a member, as the case may be, participated in the year or period, exceeds $1,000,000.

• Marginal note:Deemed member of partnership

  (5) For the purposes of this section, a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership.