Hamlyn T.C.J.:
THE REGISTRAR: Order. Please rise. Court is resumed. Please be seated.
HIS HONOUR: This is in the matter of Joan Tingley and Her Majesty the Queen. It’s an appeal for the 1993, 1994, and 1995 taxation years.
At all relevant times, the appellant was resident in Canada, and the appellant received pension income from United Steel Workers of America, a source in the United States, for the 1993, 1994, and 1995 taxation years.
In calculating her taxable income from 1987 through to 1995, the appellant deducted an amount approximately equal to one-half the U.S. pension income. For the years in question, she declared as follows: 1993, U.S. pension income, $11,582.91, additional deduction amount, $5,791.45; 1994, $12,301 was the U.S. pension income, additional deduction amount, $6,150; for the 1995 taxation year, U.S. pension income, $12,301.23, additional deduction amount, $6,150.
The appellant was advised in 1997 that this practice was incorrect, and for the 1996 taxation year, she did not claim a similar amount as a deduction in calculating her taxable income.
The appellant filed her 1993, 1994, and 1995 income tax returns on time, and the Minister of National Revenue initially assessed them. Each return was subsequently re-assessed as follows. For the year 1993, the date of the original initial assessment was September 9th, 1994. The date of the re-assessment was December 23rd, 1996.
For 1994, the date of the initial assessment was June 5th, 1995. The date of the re-assessment was April 8th, 1997. For 1995, the date of the initial assessment was June 6th, 1996. The date of the re-assessment was April 8th, 1997.
In terms of the deduction claim, the appellant deducted an amount equal to half of the pension money received from the United Steel Workers in computing her taxable income for 1993, 1994, and 1995.
In reviewing the appellant’s tax liability, the Minister concluded that there was no deduction available under Subsection 110(1) of the Act in relation to her foreign pension income and that the complete pension income was to be included in calculating the appellant’s taxable income in Section 3 of the Act, pursuant to Clause 56( 1 )(a)(i)(C. 1 ) of the Act.
As I indicated, the appellant, having been fully apprised of her misapprehension of deductibility, filed her 1996 income tax return in 1997 and did not make a similar deduction.
In terms of analysis of the deduction claim and the conclusion, the benefit received by the appellant from the U.S. source was not a benefit under Social Security legislation.
The benefit received, that is, the pension benefit, was fully taxable pursuant to Article 18 of the Canada/U.S. Tax Convention, and that’s specifically Article 5 therein.
The pension income, I’ve concluded, is a pension benefit within the meaning of Subsection 56( 1 )(a)(i) of the Income Tax Act, and the appellant is not entitled to a deduction of income pursuant to Paragraph 110( 1 )(f)(i) of the Act. That is, it was not an amount exempt from taxable income in Canada because of a tax convention.
In terms of the time limitation for re-assessment, the appellant in her appeal document refers to an undue delay, and in her evidence this morning, feels the late date of the re-assessment and the interest calculated back to the due dates was improper in light of her making every effort to ensure that she filed her taxes correctly.
It would appear from the evidence that she filed her returns to the best of her knowledge and ability for what amounts to eight or nine years before the Minister finally got around to informing her that the deduction she was making was not proper.
Paragraph 152(3.1 )(b) of the Act defines the normal re-assessment period for use in interpreting Subsection 152(4). Pursuant to Paragraph 152(4)(c), the Minister may make re-assessments in the appellant’s case during the normal re-assessment period that runs for three years after the date of the mailing of the original assessment notice.
The plain meaning of these provisions leaves no ambiguity as to the limitation period involved. There was no requirement for the Minister to make re-assessments without undue delay. The very purpose of the limitation period is to provide a window during which the Minister may review and make such re-assessment and yet provide the taxpayer who has not made misrepresentations some certainty in their tax affairs.
I conclude the Minister did not re-assess outside the normal re-assessment period, and therefore, the re-assessment stands.
In relation to the last argument, which really takes the form of an estoppel argument, the appellant has suggested, in effect, that the Minister be estopped from denying the deduction because in previous taxation years, the deduction was allowed.
My conclusion from the case law is that estoppel is subject to one general rule, that 1s, it cannot override the law of the land.
The Minister is not estopped when the assessment and re-assessment is within the prescribed rules, and I conclude in this case that it was within the prescribed rules. Therefore, unfortunately for Miss Tingley, I know she feels very strongly about it, but unfortunately, Miss Tingley, I’m required by law to dismiss your appeal.
Thank you for your attendance. I appreciated hearing from you this morning.
Appeal dismissed.
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