2011 FCA 290
REASONS FOR JUDGMENT
This is an
appeal by Cheryl Alison Lans of a decision of the Tax Court (2011 TCC 121), in
which Justice Woods (Judge) dismissed her appeal from income tax assessments
for the taxation years 2004 and 2005. The assessments were based on Ms Lans’
excess contributions to her registered retirement savings plan (RRSP) in those
years. The assessed tax for 2004 is $1,039.88, with a penalty of $176.78, and
for 2005, $1,098.72 in tax and a penalty of $186.78.
Ms Lans had made written submissions in support of her appeal, she did not
appear at the hearing and was not represented. Ms Lans was aware of the time
and date of the hearing. The Court had earlier rejected her request that the
appeal be disposed of on the basis of the parties’ written submissions.
However, it also advised her that she could choose not to attend the hearing if
she wished, that the panel hearing the appeal would consider her memorandum of
fact and law, but that counsel for the respondent would be present and would
have the right to address the Court.
delaying the start of the hearing in order to determine if Ms Lans was in the
vicinity of the court room, and finding that she was not, the Court proceeded
in her absence. Counsel for the respondent did not add to his written submissions,
except to say, in response to a query from the Bench, that his client was
seeking costs if successful in the appeal.
204.1(2.1) of the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1 (Act),
imposes a special tax on taxpayers who exceed the amount of their allowable
RRSP contributions in any year.
held that she had no jurisdiction to vacate the tax assessed on the basis of Ms
Lans’ complaint that the Canada Revenue Agency (CRA) had included post-doctoral
grants in her income, but had not included similar grants in the income of
taxpayers in other parts of the country. The Judge noted that subsection
204.1(4) of the Act gives the Minister of National Revenue (Minister) a limited
fairness discretion to waive the 1% tax payable on excess RRSP contributions
under subsection 204.1(2.1). However, she held that only the Federal Court has
jurisdiction to review discretionary decisions made by the Minister under
penalties had been imposed on Ms Lans under subsection 162(1) of the Act, as
modified by subsection 204.3(2), for failing to file in time a special return
in respect of her excess RRSP contribution, as required by subsection 204.3(1).
Ms Lans argued that the penalties should be vacated because she reasonably
believed that an excess contribution tax would not be imposed as she had had no
taxable income in the years in question. However, the Judge was not satisfied
that the steps that Ms Lans had taken constituted due diligence.
the Judge held that she had no fairness jurisdiction to waive the interest
I am not
persuaded that, in reaching her decision, the Judge made any errors warranting
the intervention of this Court. Whether she had jurisdiction to vacate the tax
and interest on the ground of fairness, or to review the exercise of the
Minister’s discretion to waive the tax, is a question of law. This Court can
intervene if satisfied that the Judge got the law wrong. In my view, she did
that the application of the law in particular circumstances may seem harsh, or
that CRA officials may not always have been very helpful, is not a ground on
which the Tax Court can grant relief from a lawful assessment. On an appeal
against the amount of an assessment, the Tax Court had no jurisdiction to
adjudicate Ms Lans’ allegation that the Act was applied to her in a
discriminatory manner in breach of section 15 of the Canadian Charter of
Rights and Freedoms: Main Rehabilitation Co. v. Canada, 2004 FCA
403, 247 D.L.R. (4th) 597. This Court cannot reverse the Judge’s decision on an
issue that she had no jurisdiction to decide. In any event, Ms Lans provided no
factual basis for her allegation that her Charter rights had been violated.
Judge’s finding that Ms Lans had not shown due diligence warranting the grant
of relief from paying the penalties assessed against her for late filing is a
question of mixed fact and law, and can be reversed by this Court only if the
Judge made some palpable and overriding error.
I see no
such error in the Judge’s conclusion that Ms Lans had failed to take reasonable
steps to ascertain her tax liability, and had thus not established due
diligence. Although warned by the Minister in 2007 that she owed tax on her
excess RRSP contributions in 2004 and 2005, Ms Lans did not file the required
returns until 2009.
It is not
open to Ms Lans to argue in this Court, for the first time, that the
assessments were statute-barred, an assertion that is not supported by the
reasons, the appeal will be dismissed with costs.
Carolyn Layden-Stevenson J.A.”
David Stratas J.A.”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
FROM AN ORDER OF THE HONOURABLE MADAM JUSTICE JUDITH WOODS, DATED FEBRUARY 23,
2011, DOCKET NUMBER 2010-3135(IT)1
STYLE OF CAUSE: Cheryl
Alison Lans v.
Her Majesty The Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: October 18, 2011
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: LAYDEN-STEVENSON J.A.
Myles J. Kirvan
Attorney General of Canada
FOR THE RESPONDENT