Cogesco Sevices – a penalty imposed under an ambiguous provision was successfully challenged in the Federal Court

A non-resident corporation was assessed penalties under s. 162(2.1) for its failure to file returns (although it had no substantive liability due to losses).  Its request for relief under s. 220(3.1) for the pre-2010 penalties was premised on the law being in a "state of flux" until the Federal Court of Appeal decision in Exida.com (which found in that year that a penalty instead was exigible under another section).

CRA denied the request on the basis that this decision had settled the matter.  The Federal Court granted the non-resident corporation’s application for judicial relief on the basis that this did not at all address the taxpayer’s requested basis for relief.

Neal Armstrong  Summary of Cogesco Sevices Ltd. v. Attorney General of Canada, 2013 CF 1238, under s. 220(3.1).