Heald,
J.A.:—This
is
an
appeal
from
a
judgment
of
the
Trial
Division,
which
dismissed
the
appeal
of
the
appellant
from
the
decision
of
Tax
Court
Judge
Bonner
which,
in
turn,
dismissed
the
appellant’s
appeal
from
assessments
of
income
tax
for
the
1976,
1977
and
1979
taxation
years.
In
the
Trial
Division,
this
appellant
proceeded
(quite
properly)
by
way
of
statement
of
claim.
In
her
amended
statement
of
defence
thereto
(A.B.
Vol.
I,
pages
4-12)
the
respondent
made
the
following
concessions
with
respect
to
the
assessments
in
issue:
(a)
(A.B.
Vol.
I,
page
5,
para.
5):
.
.
.
at
the
hearing
of
the
plaintiff's
appeal
before
the
Tax
Court
of
Canada
the
Minister
of
National
Revenue
did
not
seek
to
uphold
the
penalties
imposed
upon
the
plaintiff
for
her
1976,
1977
and
1979
taxation
years
and
he
said
that
he
does
not
seek
to
uphold
the
said
penalties
in
these
proceedings.
and
(b)
(A.B.
Vol.
I,
page
5,
para.
6):
.
.
.
the
Minister
of
National
Revenue
concedes
that
the
plaintiff
is
entitled
to
a
non-capital
loss
carry
back
in
the
amount
of
$5,543.48
from
her
1980
taxation
year
to
be
applied
to
her
1979
taxation
year
and
he
says
that
this
ought
to
be
taken
into
account
in
these
proceedings.
Accordingly,
it
is
apparent
that
the
taxpayer's
appeal
must
be
allowed,
at
least
to
the
extent
of
the
concessions,
supra,
as
set
out
in
paragraphs
5
and
6
of
the
respondent's
statement
of
defence.
However,
I
am
unable
to
identify
any
basis
for
further
amending
or
setting
aside
the
judgment
of
the
Trial
Division.
It
is
apparent
from
the
transcript
of
proceedings
in
the
Trial
Division
that
the
trial
judge
accepted
the
evidence
of
Dan
Shaw,
an
officer
of
the
Minister
of
National
Revenue,
to
the
effect
that,
following
an
audit
of
the
appellant's
records,
he
found
that
those
records
were
in
a
state
of
disarray
and
accordingly,
he
concluded
that
the
appellant
had
been
negligent
in
the
keeping
of
those
records
(Transcript,
page
53).
He
had
earlier
stated
(Transcript,
page
52):
.
.
.
I
tried
to
reconcile
income
and
various
expenses
to
the
amounts
reported
in
the
years
filed,
and
I
was
unable
to
do
so.
So,
therefore,
I
prepared
a
net
worth
statement
be
it
.
.
.
over
four
years.
On
the
basis
of
this
evidence,
the
Minister
was
entitled
to
rely
on
the
provisions
of
subsection
152(4)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the"Act"),
which
reads:
152
(4)
The
Minister
may
at
any
time
assess
tax,
interest
or
penalties
under
this
Part
or
notify
in
writing
any
person
by
whom
a
return
of
income
for
a
taxation
year
has
been
filed
that
no
tax
is
payable
for
the
taxation
year,
and
may
(a)
at
any
time,
if
the
taxpayer
or
person
filing
the
return
(i)
has
made
any
misrepresentation
that
is
attributable
to
neglect,
carelessness
or
wilful
default
or
has
committed
any
fraud
in
filing
the
return
or
in
supplying
any
information
under
this
Act,
reassess
or
make
additional
assessments,
or
assess
tax,
interest
or
penalties
under
this
Part,
as
the
circumstances
require.
He
was
also
required
to
have
regard
to
the
provisions
of
subsection
152(7)
of
the
Income
Tax
Act
which
reads:
(7)
The
Minister
is
not
bound
by
a
return
or
information
supplied
by
or
on
behalf
of
a
taxpayer
and,
in
making
an
assessment,
may,
notwithstanding
a
return
or
information
so
supplied
or
if
no
return
has
been
filed,
assess
the
tax
payable
under
this
Part.
The
effect
of
subsection
152(7),
supra,
was
well
articulated
by
President
Thorson
in
the
Dezura
case
(Dezura
v.
M.N.R.,
[1947]
C.T.C.
375,
3
D.T.C.
1101,
at
page
378
(D.T.C.
1102)):
The
effect
of
the
section
is
that
when
the
Minister
makes
an
assessment
under
the
section
there
is
a
presumption
of
validity
in
its
favor
[sic]
which
is
not
rebuttable
by
proof
that
its
amount
is
different
from
that
shown
on
the
taxpayer's
return
or
information
supplied
by
or
for
him
or
that
no
return
has
been
made.
The
power
is
in
the
interests
of
adequate
administration
of
the
Act.
It
extends
to
the
case
of
every
taxpayer
and
is
conferred
so
that
there
shall
be
no
gap
in
the
Minister’s
administrative
power
of
assessment
of
every
person
and
the
determination
of
the
amount
of
such
assessment
so
that
every
one
may
be
made
subject
to
liability
for
the
amount
of
tax
he
ought
to
pay
and
no
one
be
able
to
confine
the
amount
of
his
liability
to
that
which
he
has
himself
stated
or
supplied
or
to
escape
liability
by
not
making
a
return.
It
is
apparent
from
the
reasons
of
the
learned
trial
judge
that,
in
his
view,
the
presumption
of
validity
of
the
Minister’s
assessments
herein,
was
not
rebutted
by
the
evidence
and
material
submitted
by
the
appellant.
After
perusal
of
that
evidence
and
material,
I
am
unable
to
conclude
that
the
trial
judge
erred
in
so
deciding.
Accordingly,
the
appeal
is
allowed
in
part
and
the
Minister's
assessments
for
income
tax
payable
by
the
appellant
are
amended
in
the
following
particulars:
(a)
in
respect
of
the
taxation
year
1976:
the
penalties
assessed
therein
are
deleted.
(b)
in
respect
of
the
taxation
year
1977:
the
penalties
assessed
therein
are
deleted.
(c)
in
respect
of
the
taxation
year
1979:
(i)
the
penalties
assessed
therein
are
deleted.
(ii)
the
appellant
is
entitled
to
a
non-capital
loss
carry
back
in
the
amount
of
$5,543.48
from
the
1980
taxation
year
to
the
1979
taxation
year.
In
all
other
respects,
the
assessments
for
income
tax
payable
by
the
appellant
for
the
taxation
years
1976,
1977
and
1979
are
confirmed.
Since
the
respondent
has
been
substantially
successful
in
this
appeal,
she
would
normally
be
entitled
to
her
costs.
However,
counsel
indicated
that
costs
were
not
being
asked
for.
Accordingly,
there
will
be
no
order
as
to
costs
either
here
or
in
the
Trial
Division.
Appeal
allowed
in
part.
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