A
J
Frost:—This
is
an
income
tax
appeal
in
respect
of
the
1965,
1966
and
1967
taxation
years.
The
case
was
partially
heard
in
Toronto,
Ontario
on
September
18,
1972
and
concluded
in
Hamilton,
Ontario
on
October
19,
1972.
The
evidence
herein
reflects
a
situation
in
respect
of
which
the
appellant
had
no
taxable
income
for
the
years
under
review
but,
nevertheless,
tax
was
levied
on
gross
receipts
which
tax,
under
normal
circumstances,
would
have
been
refunded
by
the
Department
of
National
Revenue
had
it
not
been
for
clerical
mishaps
either
in
the
filing
of
the
returns
or
in
the
reception
of
the
returns
by
the
taxing
authorities.
The
assessments
came
as
a
blow
to
the
taxpayer
who
had
been
making
declarations
since
1962
and
never
had
anything
to
pay
and
then
suddenly,
to
his
amazement,
he
was
faced
with
a
tax
levy
of
$26,250.97
although
he
knew
with
reasonable
certainty
that
he
had
no
income
subject
to
taxation
in
Canada.
Nevertheless,
the
respondent
contended
that
the
assessments
were
issued
in
accordance
with
the
Income
Tax
Act.
This
is
the
story.
The
appellant
is
a
university
professor
who
resided
in
Canada
prior
to
the
years
in
question,
but
at
all
material
times
relevant
to
the
appeal
was
a
non-resident.
He
owned
property
known
as
the
Northcliffe
Terrace
Apartments
in
the
City
of
Toronto
from
which
he
received
gross
rental
returns
but,
after
capital
cost
allowances,
did
not
enjoy
a
net
taxable
return.
The
appellant
employed
two
agents
in
Canada
to
look
after
his
affairs,
(a)
a
rental
manager
by
the
name
of
Mr
Bedder
who
failed
to
make
the
required
15%
source
deductions
pursuant
to
paragraph
106(1)(d)
of
the
Act,
and
(b)
Mr
Allan
Pyzer,
chartered
accountant,
who
had
the
responsibility
of
filing
the
appellant’s
tax
returns.
It
was
shown
in
evidence
that
all
pertinent
information
was
received
on
time
by
Mr
Pyzer
and
that
he
did
prepare
the
returns.
The
established
pattern
of
procedure
appeared
to
be
that
the
returns
were
prepared
by
Mr
Pyzer
and
forwarded
to
the
appellant
who
signed
and
returned
them
to
Mr
Pyzer
for
filing.
Copies
of
the
“filed”
returns
were
part
of
Mr
Pyzer’s
business
records.
The
appellant
owed
no
tax
provided
he
complied
with
the
filing
provisions
of
the
Act.
An
affidavit
was
filed
with
the
Board,
signed
by
an
officer
of
the
Department
of
National
Revenue,
and
the
Board
accepted
it
as
prima
facie
proof
of
failure
to
comply
with
the
filing
requirements
of
the
Act
under
subsection
136(6).
In
sum,
the
evidence
indicated
that
the
appellant
signed
the
necessary
returns,
forwarded
them
to
his
agent,
a
chartered
accountant,
who
contended
that
he
mailed
them
in
the
ordinary
course
of
business.
The
Department
claimed
however
that
the
returns
were
not
received.
Under
paragraph
106(1
)(d)
of
the
Act,
every
non-resident
person
shall
pay
an
income
tax
of
15%
on
rents
that
a
resident
person
in
Canada
pays
to
him
or
credits
to
his
account,
unless
he
files
a
return
showing
no
taxable
income
within
two
years.
Under
subsection
110(1)
of
the
Act,
a
non-resident
is
permitted
to
file
a
return
as
a
resident
under
Fart
I
of
the
Income
Tax
Act.
The
respondent’s
case
rests
on
whether
the
appellant
did
or
did
not
file
a
return
under
Part
I
of
the
Act.
The
onus
of
proving
the
necessary
filing
was
Clearly
on
the
appellant,
and
the
affidavit
filed
established
a
prima
facie
case
for
the
respondent
which
was
not
upset.
In
view
of
the
unequivocal
provisions
of
the
Act,
the
Board
cannot
render
what
it
would
consider
to
be
an
equitable
decision
in
this
case.
However,
I
do
not
hesitate
to
state
that
the
appellant
should
be
entitled
to
relief
even
though
no
such
relief
can
be
given
by
this
Board
under
the
Income
Tax
Act.
The
Board
therefore
brings
to
the
attention
of
the
appellant
and
his
counsel,
both
of
whom
are
non-residents,
that
under
Canadian
law
in
a
case
like
this
relief
may
be
sought
and
found
under
the
Financial
Administration
Act.
Appeal
dismissed.
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