Citation:
2014 TCC 144
Date: 20140513
Docket: 2013-4565(IT)I
BETWEEN:
NARUL
HASSAN,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent.
REASONS
FOR JUDGMENT
(Appeal
heard and decision rendered orally from the Bench
on
April 9, 2014 at Toronto, Ontario.)
Boyle J.
[1]
I am going to deliver my decision in this
morning's informal appeal by Mr. Hassan in Toronto, involving his claim in 2009
for a charitable tax credit relating to a contribution he reported to have made
to Operation Save Canada's Teenagers, and for which he had a 2009 receipt.
[2]
Of the $25,000 receipted, all but $300 was,
according to Mr. Hassan, not paid in 2009, but paid in 2010.
[3]
The charity's paperwork provided to Mr. Hassan
through the course of this is lacking and sloppy, and, indeed, was changed at
least once when CRA pointed out a problem with aligning the information set out
in the charity's documents.
[4]
Mr. Hassan said he made a pledge at the end of
2009 to make $25,000 of donations within the year, ending late 2010. He said he
made all of these payments in cash, and that, indeed, he had been told no
cheques would be accepted by the charity. The amounts and dates of Mr. Hassan's
supporting bank statements and schedule do not line up in any consistent
fashion with the alleged cash donations.
[5]
Mr. Hassan volunteered that he perhaps went down
the wrong path because of his tax return preparer's advice. Neither Mr. Hassan,
nor I, can make sense of giving $25,000 away to charity to help save or reduce
taxes or help pay down taxes.
[6]
Mr. Hassan had never made a large donation
before. He said he had since only made one other, which is also being
challenged on appeal with the tax authorities. Mr. Hassan has never again made
a significant contribution.
[7]
Mr. Hassan could not well describe the charity's
activities, nor describe what it did at its head office, even though he claims
to have driven there almost 20 times to make cash donations. He understood it
helped teenagers in Africa, and when asked about its name, said it also helped
Canadian children. Neither his financial advisor, nor anyone from Operation
Save Canada's Teenagers namely Mr. Mokwe and Ms. Khan, who seemed to work tag
team on this program -- appeared in court to try to explain, corroborate, or
help Mr. Hassan, or the Court, make any better sense of this.
[8]
Mr. Hassan was given a 2009 receipt for $25,000,
based upon an alleged cash donation of $300, and a pledge to pay the rest
before the end of 2010. This is obviously not permitted under the Income Tax
Act. I do not believe the $300 cash was paid. In any event, if it or any
other amount was paid in 2009, it was to obtain a $25,000 receipt, and was
therefore not a charitable gift.
[9]
The receipt which was issued did not satisfy the
prescribed information requirements. Among other things, the wrong name
appears; there is no identification of the location of where the gift was made,
at least not one that is clear; it is in the wrong amount; and may also have at
least one wrong date or missing date. In fact, one of the typos on the form is
in the charity's name.
[10]
It appears almost certain that this program
involved a fraud on the Canadian tax system, and therefore on the Canadian
public. It is not clear to me whether Mr. Hassan was complicit or merely duped.
I do note he was not assessed penalties.
[11]
In any event, it is my finding that he was not
telling the Court the truth today about his involvement with this program. I do
not accept his oral testimony that he made any of the cash donations he
testified to.
[12]
A CRA charity auditor testified. The charity's
registration was since revoked, mainly for filing falsified documents on both
donations received and charitable and other expenditures made. No records
turned up to support any donations were given to CRA, or located by CRA on
further investigation. Criminal charges were laid against the principal, who
has since fled Canada. The alleged fraud involved over $6 million in donations,
involving Mokwe and Khan. All donors have been reassessed by CRA.
[13]
Mr. Hassan, your appeal is dismissed, as I have
said before, for more than one reason: one is I don't accept that the cash
donations were made, and I would have needed more than your self interested
statements and the bank statements you were able to produce; and secondly, the
charitable receipt clearly didn't meet the prescribed information requirements.
[14]
The rules of this Court allow costs to be
awarded against an informal taxpayer if they have unduly delayed the resolution
of the appeal. In appropriate circumstances, this can apply to appeals pursued
that are totally and entirely without merit, and rely on a lack of
truthfulness. In such circumstances, I am awarding $300 of costs payable by
you, Mr. Hassan, to the Respondent.
Signed at Ottawa, Canada this 13th day of May 2014.
“Patrick Boyle”
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