Porter
D.J.T.C.:
The
Appellant
in
this
case
worked
throughout
the
1990
taxation
year
for
a
corporation,
679171
Ontario
Ltd.,
operating
as
Super
Temps
and
later
as
Unistaff
Temporary
Help
Ltd.
(the
“corporation”).
His
work
was
of
a
temporary
nature
wherever
he
was
assigned
to
go
by
the
corporation.
He
reported
an
income
for
that
year
of
$11,520.
In
reassessing
his
income
for
that
year,
the
Minister
of
National
Revenue
(the
“Minister”)
issued
a
Notice
of
Reassessment
dated
December
1,
1994,
reducing
his
income
to
$10,137
and
allowing
a
non
refundable
credit
for
$164.41
and
$228.09
for
Canada
Pension
Plan
contributions
and
unem-
ployment
insurance
premiums
respectively.
The
Minister
allowed
$Nil
for
tax
deducted
and
remitted
by
the
corporation
on
behalf
of
the
Appellant.
The
Appellant
was
thus
assessed
for
income
tax
on
an
income
of
$10,137
plus
penalties
and
interest.
He
objected
to
the
reassessment.
The
Minister,
after
considering
his
objection,
confirmed
the
reassessment
on
May
15,
1998
and
the
Appellant
has
appealed
to
this
Court
from
that
decision.
The
corporation
went
into
receivership
subsequent
to
the
1990
taxation
year.
An
audit
of
the
financial
affairs
of
the
corporation
revealed
a
large
cash
operation
taking
place,
with
no
payroll
records
of
any
tax
deductions
relating
to
the
Appellant,
as
well
as,
I
understood
from
the
evidence,
other
employees.
Having
listened
to
the
evidence
of
the
Appellant,
I
found
at
the
time
of
the
hearing
of
the
appeal
that
I
was
completely
satisfied
that
amounts
had
been
deducted
for
income
tax,
by
the
corporation,
from
the
weekly
earnings
of
the
Appellant,
although
no
documents
or
payslips
were
provided
to
him
to
this
effect.
The
exact
amounts
of
the
deductions
were
unknown
due
to
this
lack
of
records.
However,
I
accepted
the
evidence
of
the
Appellant
that
deductions
were
made
each
week
from
his
pay,
which
was
given
to
him
in
cash,
in
the
approximate
ratio
of
130:180.
The
corporation
however
not
only
failed
to
keep
any
records
but
also
failed
to
remit
these
deductions
to
the
Receiver
General
as
required
by
section
153
of
the
Income
Tax
Act.
Counsel
for
the
Crown,
at
the
hearing
of
the
appeal,
submitted
that
in
these
circumstances,
even
though
deductions
had
been
made
and
not
remitted,
the
Appellant
was
still
subject
to
the
reassessment
and
liable
to
pay
the
tax.
I
requested
counsel
to
provide
written
submissions
on
this
point.
She
has
done
so
and
in
those
reasons,
filed
on
April
1,
1999,
she
has
in
paragraph
6
conceded
the
point
as
follows:
6.
The
person
liable
to
pay
tax
is
Unistaff
Temporary
Help
Ltd./Supertemps
not
Mr.
Marcus.
I
am
of
the
view
that
this
concession
is
correct
in
law,
given
subsection
227(4)
of
the
Income
Tax
Act
which
stipulates
that
amounts
deducted
are
deemed
to
be
held
separate
and
apart
from
the
moneys
of
the
withholder,
in
trust
for
Her
Majesty
the
Queen
and
for
payment
to
her
Majesty
in
accordance
with
the
Income
Tax
Act.
Accordingly,
the
appeal
is
allowed
and
the
matter
referred
back
to
the
Minister
with
the
direction
that
the
Appellant
be
assessed
on
the
basis
that
the
employer,
the
corporation,
has
withheld
the
appropriate
amounts
of
income
tax
from
the
earnings
of
the
Appellant
for
the
1990
taxation
year
in
accordance
with
section
153
of
the
Income
Tax
Act.
Appeal
allowed.
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