Date:
20021223
Docket:
2002-2803-IT-I
BETWEEN:
ANDREW
MASHFORD,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Reasons
for Judgment
Little,
J.
A.
FACTS
[1]
The Appellant testified that he was hired by Aisco Systems Inc.
of Burlington, Ontario ("Aisco") in December
1996.
[2]
The Appellant was employed by Aisco from December 1996 until
March 2000. In March 2000 the Appellant left Aisco and moved to
British Columbia.
[3]
When the Appellant filed his 1997 income tax return he retained
the assistance of an accountant and his 1997 income tax return
was prepared and filed by the accountant under the e-filing
procedure. The Appellant provided his accountant with a T-4 slip
issued by Aisco for the 1997 taxation year and the accountant
used the information contained in the T-4 slip in determining the
Appellant's income for the 1997 taxation year.
[4]
Counsel for the Respondent filed an Affidavit of
Diane Martineau (the "Affidavit"), an official in
the Vancouver office of the Canada Customs and Revenue Agency
("CCRA").
[5]
Exhibit B of the Affidavit is a computer printout which indicates
that Aisco issued a Supplementary T-4 slip for the
Appellant's 1997 taxation year. The Supplementary T-4 slip
stated that the Appellant had earnings in 1997 of
$2,535.00.
[6]
The Appellant said that he believes that the Supplementary T-4
slip was issued for the period December 15, 1996 to sometime
in early January 1997. He said that he may have received a
payment in January 1997 for this two-week period.
[7]
The Appellant said that he was completely unaware of this
Supplementary T-4 slip issued by Aisco when his accountant filed
his 1997 income tax filing using the e-filing
procedure.
[8]
The Appellant also testified that when he was reassessed for the
1997 taxation year to include the amount shown on the
Supplementary T-4 slip from Aisco he accepted the Reassessment.
Records filed by counsel for the Respondent indicate that the
additional income payable by the Appellant as a result of the
Reassessment for the 1997 taxation year was $250.00. (Note - tax
was withheld by Aisco on the income shown on the Supplementary
T-4 slip.)
[9]
On March 30, 2000 the Appellant moved from Orangeville, Ontario
to British Columbia and accepted employment with Westport
Innovations in the City of Vancouver
("Westport").
[10] The
Appellant testified that in 2000 he separated from his wife and
he withdrew funds from his RRSP. (Note - income tax was withheld
and remitted on the funds withdrawn from his RRSP.)
[11] The
Appellant testified that in February-March of 2001 he phoned
officials of Aisco and asked them to send him a copy of a T-4
slip for the period January 1, 2000 to March 2000. When the
Appellant prepared his income tax return for the 2000 taxation
year he had not received the T-4 slip from Aisco. The Appellant
testified that he telephoned the number established by the CCRA
to request advice on what he should do when he filed his income
tax return for the 2000 taxation year since he did not have a
copy of the T-4 slip issued by Aisco, his previous employer. The
Appellant said that he was told by an official of the CCRA to
sign and file his 2000 tax return with the T-4 slip from Westport
but without the T-4 slip from Aisco. The Appellant stated that
this instruction did not seem to be unusual or unreasonable since
tax, CPP and EI had been withheld by Aisco on the income that he
received from Aisco from January 2000 to
March 2000.
[12] By letter
from the CCRA dated the 6th day of December 2000 the Appellant
was advised that the 2000 taxation year was being reassessed to
include the amount of $20,726.00 that he received from Aisco for
the period January-March 2000. (Note - tax of $5,836.61, CPP of
$766.33 and EI premiums of $495.96 had been withheld and remitted
by Aisco on the income.)
[13] On the 27th
day of December 2001 the Appellant's 2000 taxation year was
reassessed. The said Reassessment imposed additional tax of
$4,460.92, a penalty under the Federal Income Tax Act of
$4,346.30 and interest of $527.99. Counsel for the Respondent
advised the Court that the penalty in the amount of $4,346.30 was
imposed under subsection 163(1) of the Income Tax Act
since the Appellant failed to report the income from Aisco when
he filed his income tax return for the 2000 taxation year and the
Appellant failed to report income of $2,535.00 from Aisco when he
filed his income tax return for the 1997 taxation
year.
B.
ANALYSIS
[14] The facts
in this situation are unusual. I cite the following:
(a)
The Appellant was unaware that Aisco had issued a Supplementary
T-4 slip in connection with his 1997 taxation year;
(b)
The Appellant retained the services of an accountant to prepare
and file his income tax return for the 1997 taxation year. (As
noted above the additional tax imposed by the Minister in the
Reassessment for the 1997 taxation year was only
$250.00);
(c)
When the Appellant prepared his tax return for the 2000 taxation
year he requested but did not receive a copy of the T-4 slip from
Aisco;
(d)
The Appellant obtained instructions from the CCRA 1-800 line and
followed those instructions when he filed his 2000 tax
return;
(e)
I also find that the Affidavit filed by counsel for the Crown was
deficient since it did not contain a copy of the original T-4
slip issued by Aisco for the 1997 taxation year. Since the
Appellant did not have a copy of the original T-4 slip filed by
Aisco he could not establish the make-up of the income in the
Supplementary T-4 slip.
[15] Based on
the above facts I have concluded that the penalty imposed under
subsection 163(1) should not be applied in these
circumstances.
[16] I am not
authorized to eliminate the interest that has been imposed in the
Reassessment for the 2000 taxation year.
[17] The
Minister is instructed to reassess the Appellant's 2000
taxation year to eliminate the penalty of $4,346.30. No further
relief will be granted.
Signed at
Vancouver, British Columbia, this 23rd day of December
2002.
J.T.C.C.
COURT FILE
NO.:
2002-2803(IT)I
STYLE OF
CAUSE:
Andrew Mashford and
Her Majesty the Queen
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
December 19, 2002
REASONS FOR
JUDGMENT BY: The Honourable Judge L.M.
Little
DATE OF
JUDGMENT:
December 23, 2002
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for
the
Respondent:
Raj Grewal
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2002-2803(IT)I
BETWEEN:
ANDREW
MASHFORD,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Appeal heard
on December 19, 2002 at Vancouver, British Columbia,
by
the
Honourable Judge L.M. Little
Appearances
For the
Appellant:
The Appellant himself
Counsel for
the
Respondent:
Raj Grewal
JUDGMENT
The appeal from the assessment made under the Income Tax
Act for the 2000 taxation year is allowed, without
costs, and the assessment is referred back to the Minister of
National Revenue for reconsideration and reassessment in
accordance with the attached Reasons for Judgment.
Signed at
Vancouver, British Columbia, this 23rd day of December
2002.
J.T.C.C.
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