Background:

1. Situation: Zhang made a Registered Retirement Savings Plan (RRSP) excess contribution in 2013 due to an alleged error by Royal Bank of Canada (RBC), resulting in tax assessments for 2017, 2018, and 2019.
2. Canada Revenue Agency (CRA) Decision: Refused to cancel the tax assessed against Zhang for excess RRSP contributions, based on the Income Tax Act, section 204.1(4).

Legal Proceedings:

1. Request for Reconsideration: Zhang requested CRA to reconsider the refusal to cancel the tax, arguing RBC error and lack of awareness.
2. CRA's Decision: Refusal to reconsider, citing absence of evidence from RBC and Zhang's responsibility to ensure contribution compliance.
3. Judicial Review Application: Zhang sought judicial review, challenging CRA’s decision as unreasonable for not considering his circumstances.

Court's Analysis & Judgment:

1. Decision Unreasonable: The Court found CRA’s decision to be unreasonable, as it failed to adequately consider Zhang’s arguments and circumstances.
2. Misinterpretation of Notices: The Court noted that the 2017 and 2018 Notices of Assessment did not specifically alert Zhang to the 2013 over-contribution.
3. Outcome: The application for judicial review was allowed. The case was remitted for redetermination by a different decision-maker at CRA.
4. Costs: Zhang was awarded disbursements, but not costs for mental distress or stress during the COVID-19 pandemic.

Key Legal Principle:

• The case emphasized the necessity of reasonable and transparent decision-making by administrative bodies, particularly in assessing tax liabilities and considering individual circumstances and errors, including those made by third parties like banks.