Aubry v. The Queen, 76 DTC 6343, [1976] CTC 598 (FCTD)

Dubé, J:—Plaintiff, who is a member of the Society of Jesus, is appealing against the assessments made by the Minister on July 9, 1974 refusing him the following deductions for the following years:

He also alleges that the Minister unlawfully imposed penalties for the years in question, but admits that these penalties follow legally from the Minister’s interpretation.

Plaintiff contends that the disallowed deductions were for charitable gifts, as provided in subsection 27(2) of the Income Tax Act, RSC 1952, c 148, for the years 1969, 1970 and 1971 and subsection 110(2), SC 1970-71-72, c 63, for 1972. These two subsections read as follows:

27. (2) Where an individual was, during the taxation year, a member of a religious order and had, as such, taken a vow of perpetual poverty, he may, in lieu of the deduction permitted by paragraph (a) of subsection (1) deduct from his income for the year an amount equal to his earned income for the year as defined by section 32, if, of his income, that amount has been paid to the order.'

110. (2) Where an individual was, during the taxation year, a member of a religious order and had, as such, taken a vow of perpetual poverty, he may, in lieu of the deduction permitted by paragraph (1)(a), deduct from his income for the year an amount equal to . . . his earned income for the year as defined by section 63 if, of his income, that amount has been paid to the order.' [1]

The Minister maintains that plaintiff is not entitled to the deductions for charitable gifts under the above subsections since an amount equal to the income earned by plaintiff each year was not paid to the religious order of which he is a member. Plaintiff admits that he paid the following amounts to the Society of Jesus in the years in question:

He also admits that in these four years he earned the following total income:

Plaintiff is a consultant at the Centre interdisciplinaire de Montréal. He took a vow of perpetual poverty but obtained authorization from the Provincial of the community to live in an apartment in town while being attached to a house of closed retreat, Villa St-Martin. He described himself as an extension of the Villa, administering his own personal expenses.

He paid his own rent and purchased and maintained a car. At the end of the year, he handed over the remainder to the Superior of the Villa. He received his pay cheques from the University of Montreal every two weeks and deposited them in the bank, along with a few small amounts as Investment interest.

There is no doubt that if plaintiff's wages and investment interest had been paid directly and in full to the community and the latter had paid plaintiff’s ordinary expenses, plaintiff could have deducted from his income for the year an amount equal to his income, as provided in the above-mentioned subsections: but can he deduct all his income when he paid only part to the community?

An individual may deduct from his income “an amount equal to his earned income for the year” (subsec 27(2) and subsec 110(2)), provided this “amount” was paid to the order.

Precedents in tax cases have clearly established that an individual who wishes to claim an exemption must fall within the four corners of the exemption section. He must show that all the conditions are present in his case and that he fulfils them all exactly.

Plaintiff has shown that he was a member of a religious order and that he had taken a vow of perpetual poverty, but he admits that he paid the community not his total earned income for the year, but only a part of it. Unfortunately for him, he does not satisfy all the conditions.

Plaintiff’s action is therefore dismissed with costs and the assessments and penalties are affirmed.