Tony Grosdanof v. Her Majesty the Queen, [1993] 2 CTC 2319

Taylor, T.C.C.J.:—This is the appeal of Tony Grosdanof which was heard on January 27, 1993. I reserved the decision in order to review some of the comments made by the appellant and those made by the respondent's counsel. It is my practice when ! give oral decisions on informal cases to provide a copy of the transcript to the appellant and to the counsel that was acting. It is not very long. Quite simple, as a matter of fact.

This is under the provisions of the informal procedure of the Tax Court of Canada and it was heard in Toronto, Ontario on January 27, 1993, against an assessment under the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72,

c. 63) (the "Act"). The matter at issue is the imposition of a penalty of $873.70 for the taxation year 1990 arising out of subsection 163(1) of the Act. The details in support of the penalty are spelled out in the reply to notice of appeal filed by the respondent, as is required under subsection 163(3) of the Act. There was no dispute by the appellant with these facts. He did fail to report an amount of $564 employment income in his tax return for the year 1988 and he did fail to report an amount of $8,737 income from an RRSP in 1990. His reasons for failing to report the RRSP amount above was that he knew 20 per cent had been deducted as income tax and remitted by his bank from that amount and he had not received the form T4RSP before filing his income tax return. He assumed that it was not necessary for him to report it because of these two factors. The tax had been paid in his view and nothing further needed to be done. After the assessment at issue, he had checked with bank and been informed a proper T4RSP had been sent to him but he said he did not receive it.

A detailed review of subsection 163(1) of the Act has been provided by this Court in the case of Maltais v. M.N.R., [1991] 2 C.T.C. 2651, 91 D.T.C. 1385. I need not repeat the procedure outlined therein. Counsel for the respondent in the instant appeal did note that the learned judge in Maltais, supra, had indicated that and I quote: "A defence of due diligence might have been available”, to that appellant.

I am not prepared to put that prospect of a possible defence in any more positive level than the quotation above might, that is the quotation accorded in Maltais, supra. I would note that the only exception provided in the wording of subsection 163(1) is that where a penalty under subsection 163(2) was already involved, and that could be the only exception. As I see it, if available at all, a defence of due diligence would require a substantial level of effort and support by any taxpayer upon whom such a penalty under this subsection was imposed. I need not consider that possibility further for the purpose of this judgment.

In my view, the simple explanation by this taxpayer that he assumed the income need not be reported because a deduction for estimated income tax had been made and because he had not received form T4 RSP, although he had received the proceeds from the RRSP, does not provide an excusable basis for his failure to report on time and properly. The appeal is dismissed.

Appeal dismissed.