Lamarre
Proulx,
T.C.C.J.:—The
appellant
instituted
appeals
from
assessments
by
the
Minister
of
National
Revenue
(the
“
Minister”)
for
the
1988
and
1989
taxation
years.
The
points
at
issue
concern
the
assessment
of
penalties
and
interest.
The
amounts
of
tax
are
not
at
issue.
The
facts
on
which
the
Minister
relied
in
order
to
make
his
assessments
are
described
at
paragraph
11
of
the
reply
to
the
notice
of
appeal,
as
follows:
(a)
On
November
27,
1989,
the
Minister
sent
the
appellant
a
TX11,
a
notice
of
execution
requesting
filing
of
the
1988
income
tax
return;
(b)
On
January
10,
1990,
the
Minister
sent
the
appellant
a
TX14;
this
was
a
second
request
to
file
the
1988
income
tax
return;
(c)
Concerning
the
1989
year,
on
October
23,
1990,
the
Minister
sent
the
appellant
a
TX11,
a
notice
of
execution
requesting
filing
of
the
1989
income
tax
return;
(d)
The
appellant
claimed
she
had
already
sent
the
said
returns;
Revenue
Canada
officials
conducted
searches
between
November
1,
1990
and
July
4,
1991,
but
without
success;
(e)
On
July
4,
1991,
the
Minister
sent
a
second
TX11,
a
notice
of
execution
again
requesting
filing
of
the
1989
income
tax
return;
(f)
On
August
27,
1991,
the
Minister
sent
the
appellant
a
TX14D;
this
was
a
second
request
to
file
an
income
tax
return
for
1989,
for
a
second
year;
(g)
In
a
letter
dated
September
24,
1991,
the
Minister
again
requested
that
the
1989
return
be
filed;
(h)
On
November
19,
1991,
the
appellant
filed
her
income
tax
returns
for
the
1988
and
1989
years;
(i)
No
payment
was
enclosed
with
the
said
income
tax
returns;
(j)
According
to
the
information
in
the
record,
the
Minister
added
the
amount
of
$1,223
in
unemployment
insurance
benefits
received
to
the
appellant's
income
for
1989;
(k)
The
appellant’s
income
tax
payable
and
due
amounted
respectively
to
$408.04
for
1988
and
$180.89
for
1989;
(l)
The
appellant
should
have
paid
the
amount
of
$408.04
on
or
before
April
30,
1989
and
the
amount
of
$180.89
on
or
before
April
30,
1990;
(m)
The
appellant
should
have
filed
her
income
tax
returns
for
1988
and
1989
on
or
before
April
30,
1989
for
1988
and
on
or
before
April
30,
1990
for
the
1989;
(n)
The
said
returns
were
not
filed
within
those
time
limits;
(o)
The
appellant
having
failed
to
file
the
income
tax
return
for
1988
within
the
prescribed
time
limit,
a
late
filing
penalty
of
$69.36
was
assessed
by
the
Minister
of
National
Revenue
on
December
13,
1991;
(p)
The
appellant
having
subsequently
failed
to
file
the
income
tax
return
for
1989
within
the
prescribed
deadline,
after
being
warned
to
do
so,
a
penalty
of
$83.20
for
repeated
late
filing
was
assessed
by
the
Minister
of
National
Revenue
on
December
13,
1991;
(q)
Interest
at
a
prescribed
annual
rate
is
payable
in
respect
of
unpaid
income
tax
after
the
date
on
which
an
income
tax
return
must
be
filed;
(r)
The
appellant
having
failed
to
pay
the
respective
amounts
of
$408.04
and
$180.89
on
or
before
April
30,
1989
for
1988
and
on
or
before
April
30,
1990
for
1989,
interest
on
insufficient
taxes
in
the
amount
of
$212.07
for
1988
and
$67.50
for
1989
was
assessed
by
the
Minister
on
December
13,
1991.
[Translation.]
The
appellant
did
not
remember
receiving
the
letters
mentioned
at
paragraphs
(a)
to
(e)
inclusive
of
the
reply
to
the
notice
of
appeal
(the
reply”).
She
admitted
that
she
had
received
the
letters
mentioned
at
paragraphs
(f)
and
(g)
of
the
reply.
She
surely
received
the
letter
of
October
23,
1990
mentioned
at
paragraph
(c)
of
the
reply
since,
following
a
telephone
conversation
with
the
appellant,
the
officials
of
the
Department
of
National
Revenue
(the
Department")
conducted
a
search
to
trace
the
income
tax
returns
for
1988
and
1989
which
the
appellant
claimed
to
have
mailed
at
the
required
time,
that
is
around
the
end
of
April
of
each
of
the
years
in
issue.
Upon
receiving
the
letters
described
at
paragraphs
(f)
and
(g),
and
after
talking
to
an
officer
of
the
Department
by
telephone,
the
appellant
retained
the
services
of
an
accountant
who
sent
the
appellant's
income
tax
returns
for
the
years
1987
to
1989
inclusive.
At
the
hearing,
the
appellant
filed
a
copy
of
her
income
tax
return
for
1988
as
Exhibit
A-2,
as
evidence
that
she
had
sent
that
return
and
that
it
had
been
lost.
However,
no
date
appeared
on
that
document.
She
also
stated,
without
any
supporting
document,
that
she
had
enclosed
a
cheque
with
her
return.
No
copy
of
the
return
for
1989
was
filed
in
evidence.
Analysis
The
onus
was
on
the
taxpayer
to
prove
that
her
returns
were
sent
at
the
appropriate
time.
Weak
indications
may
be
accepted
depending
on
the
circumstances.
In
the
instant
case,
for
1988,
the
document
that
was
purported
to
be
the
copy
of
the
document
sent
bore
no
date.
The
appellant
said
that
she
attached
the
cheque
to
it.
However,
no
one
found
that
cheque.
For
1989,
there
was
no
copy
of
her
tax
return.
I
therefore
have
no
evidence
that
the
returns
were
sent
during
the
months
of
April
1989
and
1990
for
the
1988
and
1989
taxation
years.
The
appellant's
assessment
for
1988
includes
late
filing
penalties
under
subsection
162(1)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act"),
interest
under
subsection
161(1)
of
the
Act
and
penalty
interest
under
subsection
161(11)
of
the
Act.
These
provisions
read
as
follows:
162(1)
Every
person
who
has
failed
to
file
a
return
of
income
for
a
taxation
year
as
and
when
required
by
subsection
150(1)
is
liable
to
a
penalty
equal
to
the
aggregate
of
(a)
an
amount
equal
to
five
per
cent
of
his
tax
for
the
year
that
was
unpaid
when
the
return
was
required
to
be
filed,
and
(b)
the
product
obtained
when
one
per
cent
of
his
tax
for
the
year
that
was
unpaid
when
the
return
was
required
to
be
filed
is
multiplied
by
the
number
of
complete
months,
not
exceeding
12,
from
the
date
on
which
the
return
was
required
to
be
filed
to
the
date
on
which
the
return
was
filed.
161(1)
Where
at
any
time
after
the
day
on
or
before
which
a
taxpayer
is
required
to
pay
the
remainder
of
his
tax
payable
under
this
Part
for
a
taxation
year,
(a)
the
amount
of
his
tax
payable
for
the
year
under
this
Part
exceeds
(b)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
paid
at
or
before
that
time
on
account
of
his
tax
payable
and
applied
as
at
that
time
by
the
Minister
against
the
taxpayer’s
liability
for
an
amount
payable
under
this
Part
for
the
year,
the
person
liable
to
pay
the
tax
shall
pay
to
the
Receiver
General
interest
at
the
prescribed
rate
on
the
excess
computed
for
the
period
during
which
that
excess
is
outstanding.
The
relevant
part
of
subsection
161(11)
reads
as
follows:
161(11)
Where
a
taxpayer
is
required
to
pay
a
penalty,
the
taxpayer
shall
pay
the
penalty
to
the
Receiver
General
together
with
interest
thereon
at
the
prescribed
rate
computed.
.
.
.
I
therefore
conclude
that
the
late
filing
penalty
was
correctly
assessed
for
1988,
since
the
income
tax
return
was
not
filed
at
the
time
required
by
the
Act.
The
interest
on
unpaid
income
tax
and
the
late
filing
penalties
follow
automatically.
The
appeal
from
the
assessment
for
1988
is
therefore
dismissed.
For
1989,
the
late
filing
penalty
was
assessed
under
subsection
162(2)
of
the
Act.
The
assessment
was
dated
December
13,
1991.
The
provision
in
effect
at
that
time
read
as
follows:
162(2)
Every
person
(a)
who
has
failed
to
file
a
return
of
income
for
a
taxation
year
as
and
when
required
by
subsection
150(1),
(b)
on
whom
a
demand
for
a
return
for
the
year
has
been
made
under
subsection
150(2),
and
(c)
who,
at
the
time
of
failure,
had
been
assessed
for
a
penalty
under
subsection
(1)
or
this
subsection
in
respect
of
a
return
of
income
for
any
of
the
three
preceding
taxation
years,
is
liable
to
a
penalty
equal
to
the
aggregate
of
(d)
an
amount
equal
to
ten
per
cent
of
his
tax
for
the
year
that
was
unpaid
when
the
return
was
required
to
be
filed,
and
(e)
the
product
obtained
when
two
per
cent
of
the
tax
for
the
year
that
was
unpaid
when
the
return
was
required
to
be
filed
is
multiplied
by
the
number
of
complete
months,
not
exceeding
20,
from
the
date
on
which
the
return
was
required
to
be
filed
to
the
date
on
which
the
return
was
filed.
[Emphasis
added.]
This
subsection
162(2)
of
the
Act
was
amended
on
December
17,1991
to
read
as
follows:
162(2)
Every
person
(a)
who
has
failed
to
file
a
return
of
income
for
a
taxation
year
as
and
when
required
by
subsection
150(1),
(b)
on
whom
a
demand
for
a
return
for
the
year
has
been
served
under
subsection
150(2),
and
(c)
by
whom,
before
the
time
of
failure,
a
penalty
was
payable
under
subsection
(1)
or
this
subsection
in
respect
of
a
return
of
income
for
any
of
the
three
preceding
taxation
years,
is
liable
to
a
penalty
equal
to
the
total
of
(d)
an
amount
equal
to
ten
per
cent
of
the
person's
tax
payable
under
this
Part
for
the
year
that
was
unpaid
when
the
return
was
required
to
be
filed,
(e)
the
product
obtained
when
two
per
cent
of
the
person's
tax
payable
under
this
Part
for
the
year
that
was
unpaid
when
the
return
was
required
to
be
filed
is
multiplied
by
the
number
of
complete
months,
not
exceeding
20,
from
the
date
on
which
the
return
was
required
to
be
filed
to
the
date
on
which
the
return
was
filed.
[Emphasis
added.]
The
assessments
for
1988
and
1989
were
made
at
the
same
time.
I
am
of
the
view
that
this
situation
is
not
that
which
was
provided
for
by
the
legislative
provision
in
effect
at
the
time
of
the
assessment.
When
Parliament
sets
out
as
a
condition
that
an
assessment
for
a
penalty
must
already
have
been
made,
this
implies
that
that
assessment
must
have
been
brought
to
the
attention
of
the
taxpayer
and
that
the
latter,
though
he
knows
or
should
know
he
has
already
been
assessed
a
penalty
for
late
filing,
nevertheless
fails
again
to
file
a
return.
For
1989,
the
penalty
under
subsection
162(2)
of
the
Act
is
therefore
struck.
The
interest
will
be
computed
accordingly.
The
appeal
is
allowed
with
regard
to
the
late
filing
penalty
assessed
for
1989
and
the
portion
of
interest
pertaining
thereto.
For
the
rest,
the
Minister's
assessment
is
correct
in
fact
and
in
law.
Appeal
allowed
in
part.
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