Dockets: 98-3262(IT)I
98-3695(IT)I
BETWEEN:
MARCEL BEAUREGARD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
____________________________________________________________________
Appeals
heard on April 7, 2008, at Montréal, Quebec.
Before: The Honourable
Justice Louise Lamarre Proulx
Appearances:
|
For the Appellant:
|
The Appellant himself
|
|
Counsel for the Respondent:
|
Philippe
Dupuis
Simon Petit
|
____________________________________________________________________
JUDGMENT
The appeals from the assessments made under
the Income Tax Act for the 1987 and 1989 taxation years are dismissed in
accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 18th day of April 2008.
"Louise Lamarre Proulx"
Translation
certified true
on this 17th day
of October 2008.
Brian McCordick,
Translator
Citation: 2008TCC224
Date: 20080418
Dockets: 98-3262(IT)I
98-3695(IT)I
BETWEEN:
MARCEL BEAUREGARD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
[1] The
taxation years in issue are 1987 and 1989. The partnerships in question are
Société de recherche audio-digitale enr. and Société E.C.T. Systems.
[2] At
the beginning of his brief testimony, the Appellant stated that he had not
received the letter from the Canada Revenue Agency referred to by one of the
Respondent's counsel during testimony by another Appellant at the same hearing.
The letter dealt with the proposed amendment to limit the time to which the
provision giving the Minister of National Revenue ("the Minister")
the power to waive interest would apply. The provision in question is subsection 220(3.1) of the Income Tax Act ("the Act").
[3] I
must note immediately that proceedings relating to the Minister's decision as
to whether to waive all or any portion of any penalty or interest are within
the jurisdiction of the Federal Court of Canada, and not this Court.
[4] However,
for the Appellant's information, I will quote the relevant subsection of the
Act and the history of that section:
220(3.1) Waiver of penalty or interest -- The Minister may, on or before the day that is ten
calendar years after the end of a taxation year of a taxpayer (or in the case
of a partnership, a fiscal period of the partnership) or on application by the
taxpayer or partnership on or before that day, waive or cancel all or any
portion of any penalty or interest otherwise payable under this Act by the
taxpayer or partnership in respect of that taxation year or fiscal period, and
notwithstanding subsections 152(4) to (5), any assessment of the interest and
penalties payable by the taxpayer or partnership shall be made that is
necessary to take into account the cancellation of the penalty or interest..
History: Subsection
220(3.1) of the Act, as enacted by subsection (1), applies after 2004 except
that if a taxpayer or a partnership has, before 2005, applied to the Minister
of National Revenue under subsection 220(3.1) of the Act in respect of a
taxation year or fiscal period, that subsection is to be read in respect of
that taxation year or fiscal period as follows:
(3.1) The
Minister may waive or cancel all or any portion of any penalty or interest
otherwise payable under this Act by a taxpayer or partnership in respect of a
taxation year or fiscal period, as the case may be, and notwithstanding
subsections 152(4) to (5), any assessment of the interest and penalties payable
by the taxpayer or partnership shall be made that is necessary to take into
account the cancellation of the penalty or interest.
This subsection formerly read as follows:
(3.1) The Minister may at any time waive or cancel all
or any portion of any penalty or interest otherwise payable under this Act by a
taxpayer or partnership and, notwithstanding subsections 152(4) to (5), such
assessment of the interest and penalties payable by the taxpayer or partnership
shall be made as is necessary to take into account the cancellation of the
penalty or interest.
Subsection 220(3.1) was amended by 1994, c. 7, Sched. VIII,
subs. 127(2), applicable to the 1985 and subsequent taxation years. Subsection 220(3.1)
formerly read:
(3.1) The Minister may, at any time, waive or cancel
all or any portion of any penalty or interest otherwise payable under this Act
by a taxpayer or partnership.
Subsection 220(3.1) was added by 1994, c. 7,
Sched. II, subs. 181(1), applicable with respect to penalties and
interest in respect of the 1985 and subsequent taxation years.
[5] The
Information Circular relating to this section is IC 98‑1R2.
[6] Returning
to the actual subject of these appeals, the main point for the two years in
issue is whether there was a genuine partnership, and if so, whether it carried
on a business. For 1987, there was the additional point of the eligibility of
expenses as scientific research and experimental development expenses.
[7] The
Appellant informed the Court that he did not intend to adduce evidence to rebut
the Minister's assertions.
[8] Counsel
for the Respondent then asked that the appeal be dismissed, arguing that the
Appellant had not met his burden of proof. They also referred to various
decisions of this Court relating to the same or similar research projects. All
of those appeals were ultimately dismissed. The decisions in question are: McKeown
v. Canada, [2001] T.C.J. No. 236 (QL); Boudreault v. Canada, [2005] T.C.J.
No. 518 (QL); Brillon v. Canada, [2006] T.C.J. No. 51 (QL); Binette
v. Canada, [2006] T.C.J. No. 80 (QL); Amar v. Canada, [2006] T.C.J.
No. 315 (QL); Raby v. Canada, [2006] T.C.J. No. 365 (QL); Rouleau c.
Canada, [2007] T.C.J. No. 367 (QL); Lauger v. Canada, [2007] T.C.J.
No. 434 (QL); Simard v. Canada, [2007] T.C.J. No. 483 (QL); Foster v.
Canada, [2007] T.C.J. No. 538 (QL).
[9] On the question of
the burden of proof that rests on a taxpayer in an appeal from an assessment,
the law has been settled since the decision of the Supreme Court of Canada in Johnston
v. M.N.R., [1948] S.C.R. 486: the taxpayer has the burden of establishing
that the presumptions of fact on which the Minister relied in making the
assessment are incorrect. The courts' conclusion in this regard was affirmed
again by the Supreme Court of Canada in 2006 in Placer Dome Canada Ltd v.
Ontario (Minister of Finance), [2006] 1 S.C.R. 715.
[10] In the circumstances
of these appeals, the issues being whether there was a partnership and whether
the research was eligible as meeting the criteria in section 2900 of the Income
Tax Regulations, the Minister's presumptions of fact are conclusive for the
disposition of these appeals. The Appellant therefore had to present evidence
to rebut those presumptions of fact, and he failed to do so.
[11] Accordingly, the
appeals from the assessments made under the Income Tax Act for the 1987 and 1989 taxation years must be
dismissed.
Signed at Ottawa, Canada, this 18th day of April 2008.
"Louise Lamarre Proulx"
Translation certified true
on this 17th day of October 2008.
Brian McCordick, Translator
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