Income Tax Act — I-3.3 131
on was, throughout a taxation year, a mutual fund corporation and a return of its income for the year has been made within 3 years from the end of the year, the Minister (a) may, on sending the notice of assessment for the year, refund an amount (in this subsection referred to as its “capital gains refund” for the year) equal to the lesser of (i) the total of (A) 14% of the total of (I) all capital gains dividends paid by the corporation in the period commencing 60 days after the beginning of the year and ending 60 days after the end of the year, and (II) its capital gains redemptions for the year, and (B) the amount, if any, that the Minister determines to be reasonable in the circumstances, after giving consideration to the percentages applicable in determining the corporation’s capital gains refund for the year and preceding taxation years and the percentages applicable in determining the corporation’s refundable capital gains tax on hand at the end of the year, and (ii) the corporation’s refundable capital gains tax on hand at the end of the year; and (b) shall, with all due dispatch, make that capital gains refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a). Application to other liability (3) Instead of making a refund that might otherwise be made under subsection 131(2), the Minister may, where the corporation is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the corporation of that action. Interest on capital gains refund (3.1) Where a capital gains refund for a taxation year is paid to, or applied to a liability of, a corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of (a) the day that is 120 days after the end of the year, and (b) the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed, and ending on the day the refund is paid or applied. Excess interest on capital gains refund (3.2) Where at any particular time interest has been paid to, or applied to a liability of, a corporation under subsection 131(3.1) in respect of a capital gains refund and it is determined at a subsequent time that the capital gains refund was less than that in respect of which interest was so paid or applied, (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the capital gains refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the corporation at the particular time; (b) the corporation shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and (c) the Minister may at any time assess the corporation in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. Application of s. 84 (4) Section 84 does not apply to deem a dividend to have been paid by a corporation to any of its shareholders, or to deem any of the shareholders of a corporation to have received a dividend on any shares of the capital stock of the corporation, if at the time the dividend would, but for this subsection, be deemed by that