Income Tax Act — I-3.3 96
ere an election referred to in subsection 96(4) was not made on or before the day on or before which the election was required by that subsection to be made and that day was after May 6, 1974, the election shall be deemed to have been made on that day if, on or before the day that is 3 years after that day, (a) the election is made in prescribed form; and (b) an estimate of the penalty in respect of that election is paid by the taxpayer referred to in subsection 97(2) or by the persons referred to in subsection 98(3), as the case may be, when that election is made. Special cases (5.1) Where, in the opinion of the Minister, the circumstances of a case are such that it would be just and equitable (a) to permit an election under subsection 97(2) or 98(3) to be made after the day that is 3 years after the day on or before which the election was required by subsection 96(4) to be made, or (b) to permit an election made under subsection 97(2) to be amended, the election or amended election shall be deemed to have been made on the day on or before which the election was so required to be made if (c) the election or amended election is made in prescribed form, and (d) an estimate of the penalty in respect of the election or amended election is paid by the taxpayer referred to in subsection 97(2) or by the persons referred to in subsection 98(3), as the case may be, when the election or amended election is made, and where this subsection applies to the amendment of an election, that election shall be deemed not to have been effective. Penalty for late-filed election (6) For the purposes of this section, the penalty in respect of an election or an amended election referred to in paragraph 96(5)(a) or 96(5.1)(c) is (a) where the election or amended election is made under subsection 97(2), an amount equal to the lesser of (i) 1/4 of 1% of the amount by which the fair market value of the property disposed of by the taxpayer referred to therein at the time of disposition exceeds the amount agreed on by the taxpayer and the members of the partnership in the election or amended election, for each month or part of a month during the period commencing with the day on or before which the election is required by subsection 96(4) to be made and ending on the day the election or amended election is made, and (ii) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in subparagraph 96(6)(a)(i); and (b) where the election is made under subsection 98(3), an amount equal to the lesser of (i) 1/4 of 1% of the amount by which (A) the total of all amounts of money and the fair market value of partnership property received by the persons referred to therein as consideration for their interests in the partnership at the time that the partnership ceased to exist exceeds (B) the total of each such person’s proceeds of disposition of that person’s interest in the partnership as determined under paragraph 98(3)(a), for each month or part of a month during the period commencing with the day on or before which the election is required by subsection 96(4) to be made and ending on the day the election or amended election is made, and (ii) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in subparagraph 96(6)(b)(i). Unpaid balance of penalty (7) The Minister shall, with all due dispatch, examine each election and amended election referred to in paragraph 96(5)(a) or 96(5.1)(c), assess the penalty payable and send a notice of assessment to the taxpayer or persons, as the case may be, and the taxpayer or persons, as the case may be, shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty.