Income Tax Act — I-3.3 237.3
 person has exercised the degree of care, diligence and skill to prevent the failure to file that a reasonably prudent person would have exercised in comparable circumstances. Reporting not an admission (12) The filing of an information return under this section by a person in respect of a reportable transaction is not an admission by the person that (a) section 245 applies in respect of any transaction; or (b) any transaction is part of a series of transactions. Optional disclosure — GAAR (12.1) If subsection (2) does not apply to a taxpayer in respect of a transaction or series of transactions of which the transaction is a part, the taxpayer may file an information return in prescribed form and containing prescribed information in respect of the transaction or series on or before the taxpayer’s filing-due date for the taxation year in which the transaction occurs. Late filing — GAAR (12.2) Despite subsection (12.1), a taxpayer may file the information return referred to in subsection (12.1) up to one year after the deadline referred to in that subsection, in which case (a) for the purpose of applying subparagraphs 152(4)(b)(viii) and (4.01)(b)(xi) to the transaction referred to in subsection (12.1), the reference to “3 years” in paragraph 152(4)(b) is to be read as “1 year”; and (b) for the purpose of applying subsection 245(5.1) to the transaction, the information return is deemed to have been filed within the time required by this section. Application of sections 231 to 231.3 (13) Without restricting the generality of sections 231 to 231.3, even if a return of income has not been filed by a taxpayer under section 150 for a taxation year of the taxpayer in which a transaction occurs that is relevant to the tax benefit referred to in paragraph (2)(a) that results (or is expected to result) from the reportable transaction, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the reportable transaction. Tax shelters and flow-through shares (14) For the purpose of this section, a reportable transaction does not include a transaction that is, or is part of a series of transactions that includes, (a) the acquisition of a tax shelter for which an information return has been filed with the Minister under subsection 237.1(7); or (b) the issuance of a flow-through share for which an information return has been filed with the Minister under subsection 66(12.68). Tax shelters and flow-through shares — penalty (15) Notwithstanding subsection (8), the amount of the penalty, if any, that applies on a person under that subsection in respect of a reportable transaction shall not exceed the amount determined by the formula A – B where A is the amount of the penalty imposed on the person under subsection (8), determined without reference to this subsection; and B is (a) if the reportable transaction is the acquisition of a tax shelter, the amount of the penalty, if any, that applies on the person under subsection 237.1(7.4) in respect of the tax shelter, (b) if the reportable transaction is the issuance of a flow-through share, the amount of the penalty, if any, that applies on the person under subsection 66(12.74) in respect of the issuance of the flow-through share, and (c) in any other case, nil. Anti-avoidance (16) Subsection (14) does not apply to a reportable transaction if it is reasonable, having regard to all of the circumstances, to conclude that one of the main reasons for the acquisition of a tax shelter, or the issuance of a flow-through share, is to avoid the application of this section. Solicitor-client privilege (17) For greater certainty, this section does not require the disclosure of information if it is reasonable to believe that the information is subject to solicitor-client privilege. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulation