Date: 20010319
Docket: 2000-2396-IT-I
BETWEEN:
MONIQUE KIROUAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Tardif, J.T.C.C.
[1]
This is an appeal from a notice of assessment in respect of the
1998 taxation year.
[2]
For the notice of assessment dated November 29, 1999, the
Minister of National Revenue (the Minister) assumed, inter
alia, the following facts:
[TRANSLATION]
(a)
under a matching programme, the Minister added, in computing the
appellant's income for the 1998 taxation year, an amount of
$5,000 resulting from a withdrawal from an RRSP (CIBC REP CENTRE)
and took into account an additional amount of $250 in respect of
tax deducted at source;
(b)
the Minister noted that when the appellant filed her tax return
for the 1997 taxation year, she failed in computing her income to
include an amount of $1,783 in interest and other investment
income;
(c)
the Minister also noted that when the appellant filed her tax
return for the 1995 taxation year, she failed in computing her
income to include an amount of $4,862 resulting from a withdrawal
from an RRSP (CIBC REP CENTRE);
(d)
for the 1998 taxation year, the Minister imposed on the appellant
a penalty totalling $500, in accordance with subsection 163(1) of
the Income Tax Act (the Act);
Interest on arrears
(e)
the tax return for the taxation year in issue should have been
filed on or before April 30, 1999;
(f)
the arrears of tax payable on April 30, 1999, amounted to $494.56
(the excess amount) for the 1998 taxation year;
(g)
the unpaid penalty as of April 30, 1999, amounted to $500 for the
1998 taxation year;
(h)
at the time of the notice of reassessment (November 29, 1999) for
the 1998 taxation year, the prescribed interest on the excess
amount and the penalty as of April 30, 1999, amounted to
$53.63.
[3]
The appellant and her accountant testified. The appellant
explained that when she made a withdrawal from an RRSP (CIBC REP
CENTRE) the officers of the financial institution told her that
an amount had been withheld to cover the tax payable on the
amount of the withdrawal. Believing that this was all she was
required to do, she did not consider it appropriate to advise her
accountant of this so that he could complete her tax returns
accordingly.
[4]
As for the amount of $1,783 in interest and other investment
income, the appellant submitted an agreement attesting to her
right to receive the investment income, but the document does not
mention any date; it can therefore be presumed that the debtor
institution for the interest payments prepared the slips
attesting to the payment of interest in accordance with the
instructions set out in the agreement.
[5]
There is no doubt in my mind that the appellant is a very honest
person who never wished to conceal any income whatsoever. As she
is unfamiliar with and knows nothing at all about what needs to
be done with respect to income tax, she has always left it up to
her accountant to complete her returns. She did not however
submit the documents obtained from the banking institution
because she was relying on information to the effect that the tax
had been duly paid.
[6]
Subsection 163(1) of the Income Tax Act reads as
follows:
163(1) Every person who
(a) fails to report an amount required to be included in
computing the person's income in a return filed under section
150 for a taxation year, and
(b) had failed to report an amount required to be so
included in any return filed under section 150 for any of the
three preceding taxation years
is liable to a penalty equal to 10% of the amount described in
paragraph (a), except where the person is liable to a
penalty under subsection (2) in respect of that amount.
[7]
On November 15, 1991, the Honourable Judge Bowman of this Court
stated the following in Maltais v. Canada (Minister of
National Revenue), [1991] T.C.J. No. 1003 (Q.L.):
. . . In a self-assessing system the taxpayer
has an obligation to ensure that his or her returns are complete.
If it turns out that the failure to declare items of income
carries with it a penalty that is different from that which the
taxpayer anticipated, the taxpayer must bear that responsibility
himself and cannot lay the blame on the officials of the
Department of National Revenue.
. . . The Appellant struck me as an honest and
honourable young man and I find as a fact that it was not his
intention to evade the payment of income tax. If it had been,
more serious penalties under subsection 163(2) might have been
considered. Mr. Ghan on behalf of the Respondent contended that
subsection 163(1) in the form which is applied to 1989 did not
require that there be a wilful intention to evade tax. In support
of this position he pointed to the wording of the former 163(1)
which referred to "Every person who wilfully attempts to
evade the payment of tax payable by him" and to the wording
of subsection 163(2) which uses the expression "knowingly or
under circumstances amounting to gross negligence". These
provisions require a mens rea of intent or of recklessness. I
agree with the Respondent on this point. In my opinion, the
omission giving rise to a penalty under subsection 163(1) as
it applied to the 1989 taxation year is one of strict
liability [Footnote 1 appended to judgment]. Otherwise,
subsection 163(2) would be superfluous. It follows that where the
Minister of National Revenue is called upon under subsection
163(3) to justify the imposition of a penalty under subsection
163(1) he meets that onus by establishing that the taxpayer had
failed to report an amount of income in one year and that he or
she had failed to report an amount in a return for any of the
three preceding taxation years. It is not necessary for me to
decide in this appeal whether the amounts which the taxpayer
fails to report in two or more taxation years need be similar in
nature.
(Emphasis added.)
[8]
In light of that judgment, with which I am in complete agreement,
the penalties have been properly assessed and there is no cause
to intervene in this regard.
[9]
As for the question of interest, the Tax Court of Canada has no
jurisdiction to cancel or even reduce interest claimed in respect
of a valid assessment: the power to do so is a discretionary
power of the Minister with respect to which the Tax Court of
Canada has no control.
[10] For these
reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 19th day of March 2001.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 6th day of September
2001.
[OFFICIAL ENGLISH TRANSLATION]
Stephen Balogh, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2000-2396(IT)I
BETWEEN:
MONIQUE KIROUAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on October 27, 2000, at
Sherbrooke, Quebec, by
the Honourable Judge Alain Tardif
Appearances
Agent for the
Appellant:
André Gince
Counsel for the
Respondent:
Valérie Tardif
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1998 taxation year is dismissed in accordance with the
attached Reasons for Judgment.
Signed at Ottawa, Canada, this 19th day of March
2001.
J.T.C.C.
Translation certified true
on this 6th day of September 2001.
Stephen Balogh, Revisor
Email this Content