CRA refused further relief from a T1135 late-filing penalty, relying partly on the very failure the taxpayers were asking relief for. On judicial review of that refusal — not of the penalty assessment itself — the Federal Court in Kaur v. Canada (Attorney General) found the reasoning circular and sent the request back to CRA for redetermination. The Court did not cancel the penalty, and CRA may still refuse relief. Here’s what the decision establishes for anyone facing a T1135 penalty or a refusal of relief.
