Beaubier
J.T.C.C.:
—
This
matter
was
heard
at
Vancouver,
British
Columbia,
on
December
6,
1995.
The
evidence
was.
contained
in
an
Agreed
Statement
of
Facts
which
reads
as
follows:
1.
The
Appellant
was,
during
all
relevant
periods
of
time,
the
sole
officer
and
director
of
a
private
company
known
as
Uphill
Holdings
Ltd.
which
was
incorporated
under
the
laws
of
the
Province
of
Saskatchewan.
2.
During
the
period
July
1,
1982
to
June
30,
1985
the
Appellant
borrowed
funds
from
Uphill
Holdings
Ltd.
from
time
to
time
and
repaid
such
amounts
within
the
time
period
specified
in
subsection
15(2)
of
the
Income
Tax
Act
(Canada),
(the
“Act”).
3.
By
Notice
of
Reassessment
dated
December
23,
1987
(Tab
1
of
Book
of
Exhibits),
the
Minister
of
National
Revenue
reassessed
the
Appellant’s
1983
taxation
year
and,
among
other
adjustments,
included
in
income
the
amount
of
$756,053.88
as
a
shareholder’s
loan
with
Uphill
Holdings
Ltd.
pursuant
to
subsection
15(2)
of
the
Act.
4.
By
Notice
of
Reassessment
dated
December
23,
1987,
(Tab
2
of
Book
of
Exhibits),
the
Minister
of
National
Revenue
reassessed
the
Appellant’s
1984
taxation
year
and,
among
other
adjustments,
included
in
his
income
for
that
year
a
shareholder’s
loan
with
Uphill
Holdings
Ltd.
in
the
amount
of
$299,451.85
pursuant
to
subsection
15(2)
of
the
Act.
5.
By
Notice
of
Reassessment
dated
December
23,
1987,
(Tab
3
of
Book
of
Exhibits),
the
Minister
of
National
Revenue,
reassessed
the
Appellant’s
1985
taxation
year
by
allowing
the
deduction
of
$1,055,505.73
pursuant
to
paragraph
20(l)(j)
of
the
Act
in
respect
of
a
shareholder
loan
repayment
to
Uphill
Holdings
Ltd.
with
the
result
that
nil
tax
was
assessed
for
that
year.
6.
On
March
22,
1988,
the
Appellant
filed
Notices
of
Objection
(Tabs
4,
5
and
6
of
Book
of
Exhibits),
in
respect
of
the
Notices
of
Reassessment
for
the
Appellant’s
1983,
1984
and
1985
taxation
years.
7.
By
letter
dated
September
19,
1989,
(Tab
7
of
Book
of
Exhibits),
Revenue
Canada
advised
the
Appellant
that
no
appeal
was
available
in
respect
of
the
nil
assessment
for
the
Appellant’s
1985
taxation
year
and
therefore
the
Notice
of
Objection
in
relation
to
that
year
could
not
be
considered
to
be
valid.
8.
On
September
26,
1989,
the
Minister
of
National
Revenue
confirmed
the
Notices
of
Reassessment
in
respect
of
the
Appellant’s
1983
and
1984
taxation
years
(Tab
8
of
Book
of
Exhibits).
9,
At
no
time
before
or
after
the
Minister
of
National
Revenue
reassessed
the
Appellant’s
1985
taxation
year
did
the
Minister
of
National
Revenue
request
the
Appellant
to
file
a
waiver
in
respect
of
the
application
of
the
limitation
period
under
the
Income
Tax
Act
to
the
Appellant’s
1985
taxation
year
nor
did
the
Appellant
volunteer
to
provide
a
waiver
to
the
Minister
in
respect
of
his
1985
taxation
year.
10.
On
November
23,
1989
the
Appellant
filed
a
Notice
of
Appeal
with
the
Tax
Court
of
Canada
in
respect
of
the
Notices
of
Reassessment
for
his
1983
and
1984
taxation
years
(Tab
9
of
Book
of
Exhibits).
11.
The
appeal
of
the
Appellant
was
heard
by
the
Tax
Court
of
Canada
on
May
26,
1992
and
judgement
was
rendered
on
December
3,
1992
(93
D.T.C.
148)
with
the
result
that
the
matter
was
referred
back
to
the
Minister
of
National
Revenue
on
the
basis,
among
other
things,
that
the
amounts
of
$756,053.88
in
1983
and
$299,451.85
in
1984
previously
included
in
the
Appellant’s
income
for
the
1983
and
1984
taxation
years
respectively
pursuant
to
subsection
15(2)
of
the
Act
be
deleted.
12.
By
Notice
of
Reassessment
dated
June
4,
1993,
the
Minister
of
National
Revenue
notified
the
Appellant
in
respect
of
his
1985
taxation
year
(Tab
11
of
Book
of
Exhibits)
that
the
deduction
by
the
Appellant
of
the
amount
of
the
loan
repayment
to
Uphill
Holdings
Ltd.
was
being
disallowed
however
no
tax
was
assessed
because,
as
admitted
by
the
Minister,
the
Appellant’s
“...
return
is
statute
barred
pursuant
to
subsection
152(4)
of
the
Income
Tax
Act.”
13.
By
Notice
of
Reassessment
dated
September
23,
1993,
the
Minister
of
National
Revenue
reassessed
the
Appellant
in
respect
of
his
1985
taxation
year
(Tab
12
of
Book
of
Exhibits)
that,
“Total,
Net
and
Taxable
income
remain
as
previously
calculated
in
the
Notice
of
Reassessment
dated
June
4,
1993.
This
assessment
is
raised
pursuant
to
subsection
152(4.3)
of
the
Income
Tax
Act
as
a
result
of
consequential
adjustments
resulting
from
the
Tax
Court
of
Canada
judgment
dated
December
3,
1992.”
The
result
of
this
reassessment
was
an
increase
of
tax
of
$67,479
together
with
interest
of
$84,504
for
a
total
of
$151,983
on
assessed
income
of
$140,031.
14.
On
November
16,
1993,
the
Appellant
filed
a
Notice
of
Objection
in
respect
of
the
Notice
of
Reassessment
dated
September
23,
1993
(Tab
13
Book
of
Exhibits).
15.
On
March
17,
1994,
the
Minister
of
National
Revenue
again
reassessed
the
Appellant’s
1985
taxation
year
in
response
to
the
Notice
of
Objection
filed
by
the
Appellant
and
allowed
a
forward
averaging
deduction
of
$32,791
but
in
all
other
respects
confirmed
the
result
of
the
Notice
of
Reassessment
dated
September
23,
1993.
This
resulted
in
a
reduction
of
the
amount
of
tax
and
interest
assessed
by
the
amount
of
$1,527.79
(Tab
14
Book
of
Exhibits).
16.
On
June
9,
1994,
the
Appellant
filed
the
within
Notice
of
Appeal
pursuant
to
subsection
169(1)
of
the
Act.
Subsection
152(4.3)
was
amended
to
apply
to
reassessments
and
redeterminations
in
respect
of
taxation
years
made
after
June
10,
1993
that
relate
to
changes
in
balances
for
other
taxation
years
made
as
a
result
of
assessments
made
or
decisions
on
appeals
rendered
after
December
20,
1991.
Thus
the
amendment
applies
to
the
matter
before
the
Court.
It
reads:
Notwithstanding
subsections
(4),
(4.1)
and
(5),
where
the
result
of
an
assessment
or
a
decision
on
an
appeal
is
to
change
a
particular
balance
of
a
taxpayer
for
a
particular
taxation
year,
the
Minister
may,
or
where
the
taxpayer
so
requests
in
writing,
shall,
before
the
later
of
the
expiration
of
the
normal
reassessment
period
in
respect
of
a
subsequent
taxation
year
and
the
end
of
the
day
that
is
one
year
after
the
day
on
which
all
rights
of
objection
and
appeal
expire
or
are
determined
in
respect
of
the
particular
year,
reassess
the
tax,
interest
or
penalties
payable,
or
redetermine
an
amount
deemed
to
have
been
paid
or
to
have
been
an
overpayment,
under
this
Part
by
the
taxpayer
in
respect
of
the
subsequent
taxation
year,
but
only
to
the
extent
that
the
reassessment
or
redetermination
can
reasonably
be
considered
to
relate
to
the
change
in
the
particular
balance
of
the
taxpayer
for
the
particular
year.
Broken
into
its
charging
components,
as
they
affect
the
matter
before
the
Court,
subsection
152(4.3)
reads:
Where
the
result
of
a
decision
is
to
change
a
particular
balance
of
a
taxpayer
for
a
particular
taxation
year
[NAMELY,
1983
AND
1984],
the
Minister
may...
(1)
reassess
the
tax,
interest
or
penalties
payable,
(2)
or
redetermine
an
amount
deemed
(a)
to
have
been
paid
(b)
or
to
have
been
an
overpayment,
under
this
Part
by
the
taxpayer
in
respect
of
the
subsequent
taxation
year
[namely
1985]....
Paragraph
12
of
the
Agreed
Statement
of
Facts
describes
what
the
Minister
states
he
did
on
June
4,
1993.
He
did
two
things:
1.
The
deduction
by
the
Appellant
of
the
amount
of
the
loan
repayment
was
disallowed.
2.
No
tax
was
assessed.
Paragraph
13
describes
what
the
Minister
states
he
did
pursuant
to
subsections
152(4.3)
on
September
23,
1993.
He
did
two
things:
1.
Total,
Net
and
Taxable
income
remain
as
previously
calculated
on
June
4,
1993.
2.
There
was
a
reassessment
of
tax
and
interest
of
$151,983
on
assessed
income
of
$140,031.
As
a
result
of
these
two
reassessments,
the
Minister:
First
—
On
June
4,
1993,
determined
that
the
deduction
by
the
Appellant
was
disallowed.
Second
-
On
September
23,
1993,
reassessed
tax
and
interest
on
the
amount
which
he
had
redetermined
on
June
4,
1993.
The
issues
to
be
decided
are
summarized
in
the
Appellant’s
Memorandum
of
Argument
in
five
points
which
are
quoted
hereafter.
In
answer
to
the
issues
raised
by
the
Appellant,
the
Court
finds:
1.
Did
subsection
152(4.3)
(in
either
of
its
versions)
of
the
Income
Tax
Act
(Canada),
(the
“Act”)
allow
the
Minister
of
National
Revenue,
(the
“Minister”),
to
reassess
the
Appellant’s
1985
taxation
year
on
September
23,
1993,
by
which
time
the
limitation
period
for
the
reassessment
of
that
year
had
expired?
Yes.
Subsection
152(4.3)
specifically
deals
with
the
matter
described
in
the
Agreed
Statement
of
Facts.
2.
If
the
Minister
was
entitled
to
reassess
the
Appellant’s
1985
taxation
year
on
September
23,
1993
under
subsection
152(4.3),
what
version
of
subsection
152(4.3)
was
applicable?
The
version
of
subsection
152(4.3)
which
entitles
the
reassessment
is
the
one
in
effect
on
September
23,
1993
for
two
reasons
-
(a)
the
Minister
is
entitled
to
reassess
more
than
once,
and
(b)
the
Notice
of
Reassessment
dated
September
23,
1993
can
only
be
done
by
the
Minister
pursuant
to
the
Income
Tax
Act
as
it
was
amended
on
June
15,
1994
to
apply
to
reassessments
made
after
June
10,
1993.
3.
Under
the
circumstances
of
this
case
is
the
Minister
prevented
from
asserting
(within
the
provisions
of
the
second
version
of
subsection
152(4.3))
that
this
Court’s
“redetermination”
on
December
3,
1992
“can
reasonably
be
considered
to
relate”
to
the
Appellant’s
1985
“balance”
such
that
the
Minister
was
entitled
to
reassess
1985?
No.
On
the
clear
wording
of
subsection
152(4.3)
on
September
23,
1993
-
(a)
the
result
of
the
Tax
Court
of
Canada’s
decision
(Hill
v.
Minister
of
National
Revenue,
[1993]
1
C.T.C.
2021,
93
D.T.C.
148)
is
to
change
the
Appellant’s
balance
for
the
particular
years
of
1983
and
1984,
and
(b)
the
reassessment
of
the
Appellant’s
1985
taxation
year
can
reasonably
be
considered
to
relate
to
the
change
in
the
particular
balance
of
the
Appellant’s
1983
and
1984
taxation
years.
Thereafter,
the
Minister
is
the
person
who
may
or
shall
redetermine
the
Appellant’s
tax
and
interest
in
respect
of
the
subsequent
taxation
year.
(“Subsequent”
means
1985,
since
it
follows
both
1983
and
1984
and
it
is
“the
subsequent”
year
in
which
the
deduction
was
allowed.)
4.
Under
the
circumstances
of
this
case
is
the
Minister
entitled
to
collect
interest
pursuant
to
the
provisions
of
subsection
161(1)
of
the
Act
for
the
period
prior
to
the
reassessment
dated
September
23,
1993?
Yes.
The
words
are
clear
in
both
subsection
152(4.3)
and
161(1).
5.
Is
this
an
appropriate
case
for
the
Court
to
recommend
that
the
Minister
should
waive
all
or
part
of
the
interest
charged
against
the
Appellant
pursuant
to
subsection
220(3.1)?
No.
The
Appellant
is
entitled
to
make
an
application
pursuant
to
the
Fairness
Package.
The
Court
sometimes
makes
a
recommendation,
but
that
usually
occurs
where
a
transcript
of
evidence
is
not
likely
to
be
available
to
the
Minister.
Here
the
Agreed
Statement
of
Facts
speaks
for
itself.
The
appeal
is
dismissed
with
costs
in
favour
of
the
Respondent.
Appeal
dismissed.