Lamarre
Proulx,
T.C.C.J.:—The
appellant
appeals
from
the
assessment
of
the
respondent,
the
Minister
of
National
Revenue
(the"
Minister”),
for
the
1989
taxation
year.
The
question
is
whether
a
penalty
assessed
under
subsection
162(7)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
was
correctly
assessed.
During
the
hearing,
another
question
was
raised,
whether
the
entity
assessed
was
that
which
should
have
been
assessed
and
whether
the
assessment
was
valid.
The
provisions
of
the
Act
that
apply
more
particularly
to
the
first
point
in
issue
are
section
204
of
the
Income
Tax
Regulations
(the
"Regulations")
and
subsection
162(7)
of
the
Act.
Section
204
of
the
Regulations
and
subsection
162(7)
of
the
Act
read
as
follows:
204
(1)
Every
person
having
the
control
of,
or
receiving
income,
gains
or
profits
in
a
fiduciary
capacity,
or
in
a
capacity
analogous
to
a
fiduciary
capacity,
shall
make
a
return
in
prescribed
form
in
respect
thereof.
(2)
The
return
required
under
this
section
shall
be
filed
within
90
days
from
the
end
of
the
taxation
year
and
shall
be
in
respect
of
the
taxation
year.
(3)
This
section
does
not
apply
in
respect
of
a
trust
that
is
(a)
governed
by
a
deferred
profit
sharing
plan
or
by
a
plan
referred
to
in
subsection
147(15)
of
the
Act
as
a
revoked
plan;
(b)
governed
by
an
employees
profit
sharing
plan;
or
(c)
a
registered
charity.
162
(7)
Every
person
(a)
who
fails
to
make
an
information
return,
as
and
when
required
by
this
Act
or
by
a
regulation,
or
(b)
who
fails
to
comply
with
a
duty
or
obligation
imposed
by
this
Act
or
by
a
regulation
is
liable
in
respect
of
each
such
failure,
except
where
another
provision
of
this
Act
sets
out
a
penalty
for
the
failure,
to
a
penalty
equal
to
the
greater
of
$100
and
the
product
obtained
when
$25
is
multiplied
by
the
number
of
days,
not
exceeding
100,
during
which
the
failure
continues.
The
facts
on
which
the
respondent
relied
in
order
to
assess
the
appellant
are
described
in
paragraph
5
of
the
reply
to
the
notice
of
appeal:
5.
In
making
the
assessment
of
the
appellant
for
the
1989
taxation
year,
the
respondent,
the
Minister
of
National
Revenue,
relied,
inter
alia,
on
the
following
facts:
(a)
the
appellant
is
a
company
whose
business
is
to
manage
a
pension
plan
constituted
for
a
management
employee
of
Gestion
RST
Inc.;
(b)
the
appellant
is
a
person
having
the
control
of,
or
receiving
income,
gains
or
profits
in
a
fiduciary
capacity,
or
in
a
capacity
analogous
to
a
fiduciary
capacity;
(c)
consequently,
the
appellant
must
make
and
file
a
return
with
the
respondent
in
prescribed
form
(T3P)
within
90
days
from
the
end
of
the
taxation
year;
(d)
the
appellant's
T3P
return
for
the
1989
taxation
year
was
filed
on
May
29,
1990;
(e)
the
appellant
has
therefore
failed
to
comply
with
the
obligation
imposed
by
section
204
of
the
Income
Tax
Regulations;
(f)
the
appellant
is
therefore
liable
to
the
penalty
provided
in
subsection
162(7)
of
the
Income
Tax
Act.
[Translation.]
Mr.
Maurice
Trudel
testified
for
the
appellant.
He
informed
the
Court
that
the
pension
plan
had
been
legitimately
dissolved,
that
the
assets
had
been
distributed
and
that
he
wondered
where
the
respondent
could
collect
on
his
claim.
Regarding
subparagraph
5(a)
cited
above,
the
evidence
also
revealed
that
the
appellant
was
not
a
company.
Concerning
subparagraph
5(b)
cited
above,
counsel
for
the
respondent,
at
my
request,
forwarded
to
me
after
the
hearing
of
this
case
the
documents
that
were
supposed
to
show
that
the
appellant
was
a
fiduciary.
Counsel
for
the
respondent
drew
the
Court's
attention
to
paragraph
D,
concerning
the
committee's
operation,
part
of
paragraph
A
and
paragraph
F
of
the
Agreement
concerning
the
pension
fund
and
the
introduction
of
the
Agreement
concerning
administration.
They
read
as
follows:
OPERATION
OF
THE
COMMITTEE
(D)
The
committee
may
authorize
one
of
its
members
to
sign
on
behalf
of
the
committee
the
documents
necessary
to
transact
the
affairs
of
the
committee.
AGREEMENT
CONCERNING
THE
PENSION
FUND
(A)
.
.
.
The
committee
has
fiduciary
responsibility
for
the
fund
and
shall
administer
it
in
accordance
with
the
provisions
of
this
agreement.
.
.
(F)
Every
transaction,
investment
or
other
matter
shall
be
made
on
behalf
of
“La
caisse
de
retraite
du
Régime
de
rentes
pour
les
employés
de
direction
de
Gestion
Maurice
Inc.”
The
administration
of
the
plan
is
the
responsibility
of
the
retirement
committee.
The
latter
may
assign
this
responsibility
to
the
employer,
to
a
trust
company
or
take
on
a
company
specialized
in
this
administration.
[Translation.]
Analysis
One
sees
from
a
reading
of
section
204
of
the
Regulations
that
the
person
who
is
subject
to
its
application
must
be
a
person
and
that
that
person
must
have
a
fiduciary
capacity
or
a
capacity
analogous
to
a
fiduciary
capacity.
It
seems
clear
from
a
reading
of
the
provisions
cited
above
concerning
the
pension
plan
that
it
is
the
committee
that
is
the
fiduciary
and
not
the
appellant.
I
do
not
have
to
determine
whether
it
was
the
committee
that
should
have
been
assessed
the
present
penalty
or
the
members
of
the
committee,
and
I
shall
not
rule
on
that
subject.
However,
I
must
find
that
the
appellant
was
not
the
fiduciary.
It
seems
to
me
instead
that
it
was
the
trust.
On
the
one
hand,
the
assessment
was
in
the
name
of
the
trust,
and,
on
the
other
hand,
it
was
not
shown
to
me
that
the
trust
was
a
person.
Is
the
assessment
valid
when
it
is
not
made
in
respect
of
a
person
who
is
a
fiduciary,
but
in
respect
of
the
trust?
Are
we
dealing
here
with
a
defect
which
could
be
excused
under
subsection
152(8)
of
the
Act,
which
reads
as
follows:
An
assessment
shall,
subject
to
being
varied
or
vacated
on
an
objection
or
appeal
under
this
Part
and
subject
to
a
reassessment,
be
deemed
to
be
valid
and
binding
notwithstanding
any
error,
defect
or
omission
therein
or
in
any
proceeding
under
this
Act
relating
thereto.
I
cite
the
remarks
of
Marceau,
J.
concerning
an
error
in
an
assessment,
in
Attorney-General
of
Canada
v.
Théorêt,
December
7,
1988
(unreported),
at
pages
8
and
9:
It
is
true
that
the
Department
made
a
mistake
in
the
notices
of
assessment
with
respect
to
the
name
of
the
employer
for
whom
the
notary
had
acted:
it
wrote
Coffrage
A.C.
Inc.
instead
of
Coffrage
A.C.
Enr.
The
mistake
arose
from
the
fact
that,
just
prior
to
this,
Arthur
Lévesque
had
incorporated
his
business
and
given
notice
to
the
Department,
but
the
transfers
had
not
been
completed
and
the
corporation
had
not
yet
begun
to
operate.
The
Department
was
obviously
unaware
of
this.
But
this
is
an
error
that
did
not
bear
on
any
essential
particulars
in
the
notice
of
assessment—as
would
an
error
concerning
the
actual
name
of
the
assessee
or
the
date
of
the
assessment
or
the
amount
claimed,
the
consequences
of
which
could
cause
problems;
it
was
essentially
an
error
that
misled
no
one
and
did
no
harm.
The
fact
that
the
Unemployment
Insurance
Act,
1971
has
no
formal
provision,
as
does
the
Income
Tax
Act,
confirming
that
errors
of
this
type
have
no
effect,
is
irrelevant;
Parliament
could
not
intend
otherwise.
It
must
be
recalled
that
the
taxpayer's
obligation
is
created
not
by
the
Minister's
assessment
but
by
the
Act;
if
the
assessment
were
to
be
invalidated
for
any
error
whatever,
even
an
inoffensive
error
bearing
on
an
unessential
item
in
the
notice,
possibly
extinguishing
(with
passage
of
time)
the
obligation
it
sought
only
to
note,
we
would
be
confronted
with
a
nonsensical,
completely
incomprehensible
and
totally
unjustifiable
formalism
(Cf.
Stephens
Estate
v.
The
Queen,
[1987]
1
C.T.C.
88,
D.T.C.
5024
(F.C.A.)).
[Translation;
emphasis
added.]
I
also
wish
to
cite
Halsbury's
Laws
of
England,
4th
edition,
volume
23,
at
pages
1491-92:
An
assessment
or
determination,
warrant
or
other
proceeding
which
purports
to
be
made
in
pursuance
of
any
provision
of
the
Taxes
Acts
may
not
be
quashed,
or
deemed
to
be
void
or
voidable,
for
want
of
form,
or
be
affected
by
reason
of
a
mistake,
defect
or
omission
in
it,
if
it
is
in
substance
and
effect
in
conformity
with
or
according
to
the
intent
and
meaning
of
the
Taxes
Act,
and
if
the
person
or
property
charged
or
intended
to
be
charged
or
affected
thereby
is
designated
therein
according
to
common
intent
and
understanding.
[Emphasis
added.]
An
assessment
or
determination
may
not
be
impeached
or
affected:
(1)
by
reason
of
a
mistake
therein
as
to
the
name
or
surname
of
a
person
liable,
or
the
description
of
any
profits
or
property,
or
the
amount
of
the
tax
charged;
or
(2)
by
reason
of
any
variance
between
the
notice
and
the
assessment
or
determination.
In
this
instance,
it
is
not
a
simple
mistake
in
the
description
of
a
person,
but
rather
an
error
such
that
there
is
uncertainty
as
to
who
should
pay
the
sums
assessed.
More
specifically,
the
Act
does
not
create
the
obligation
in
question
with
regard
to
the
trust,
but
with
regard
to
the
fiduciary,
and
to
assess
the
trust
rather
than
the
fiduciary
is
an
error
of
substance
and
not
of
form.
I
therefore
conclude
that
this
is
an
error
of
substance
which
invalidates
the
assessment
under
appeal.
The
appeal
is
allowed,
without
costs,
on
grounds
of
nullity
of
the
assessment.
Appeal
allowed.
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