Sugrim Singh was born and raised in Canada. In 2018 he graduated from the University of Toronto and in that year he obtained a position with the C.B.C. working on their foreign desk.

After two years with the C.B.C. he decided he wanted to teach languages and he obtained a position in Osaka, Japan. His original contract was for two years and could have been extended into a permanent position at Sugrims option. At the end of the two year period, Sugrim did not extend his contract because he wanted to pursue his interest in languages by furthering his education at the University of British Columbia.

When he returned to Canada, he approached your firm for advice as to his residency status in Canada for tax purposes.

In your discussions with Sugrim you ascertained that:-

1. Sugrims parents and two brothers live in Montreal
2. All of his income earned in Japan during the two years ending December 31^st.2021 was paid by the Japanese employer
3. His fiance, Muriel, visited him in Japan during her vacation periods but returned to Canada after her vacation ended
4. When he left Canada, he had put all his winter clothing and furniture in storage but took a few small items with him which he would need while in Japan
5. He had an RRSP and a TFSA with the Royal Bank in Canada and was making yearly contributions to these plans while he was living in Japan
6. He kept his Canadian drivers licence and his Canadian Health card but had cancelled his mastercard and visa when he had left for Japan
7. While in Japan, he rented an apartment, obtained a Japanese drivers licence and opened two bank accounts in Japan. He joined two social clubs in Japan.
8. He learnt the Japanese language with the intent of moving to other Asian countries to learn their languages
9. Over the two year period in Japan, he returned to Canada to spend Xmas and Easter vacations with his family.

Required:-Evaluate in detail Sugrims residency issue for the two year period and the tax consequences for him under each degree of residency.

QUESTION #3(10 MARKS)

Explain the Federal Administrative provisions with respect to:-

1. The filng of tax returns(7 marks)
2. The payment of interest and penalties(3 marks)