[OFFICIAL ENGLISH TRANSLATION]
Date: 20020318
Docket: 2000-5005(IT)I
BETWEEN:
CAROLINE DIONNE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal for the 1997 and
1998 taxation years.
[2] The issue is whether the Minister
of National Revenue ("the Minister") was justified in
issuing notices of redetermination of child tax benefit dated
July 20 and August 18, 2000, to the appellant and
in claiming repayments of $1,536.25 and $1,674.02 for the 1997
and 1998 base taxation years, respectively.
[3] In issuing the notices of
redetermination, the respondent made the following assumptions of
fact:
[TRANSLATION]
(a) for the 1997 and
1998 base taxation years, the appellant had two qualified
dependants;
(b) for the 1997 and
1998 base taxation years, the appellant and Steve Proulx
both indicated that their marital status was "living common
law" in their respective tax returns;
(c) for 1997, the
appellant and Steve Proulx also entered their spouse's
first name and social insurance number in the boxes provided for
that purpose;
(d) for 1998, the
appellant and Steve Proulx entered their spouse's first
name in the box provided for that purpose but left the box for
the spouse's social insurance number blank;
(e) although their
marital status was correctly recorded when the tax returns were
initially assessed, the appellant's CCTB was determined by
taking into account her income alone;
(f) on July
20, 1998, the Minister sent the appellant an initial notice of
determination of CCTB for the 1997 base taxation year in which
[TRANSLATION] "the information used to calculate the benefit
amounts to which she was entitled" was indicated;
(g) on July 20,
1999, the Minister sent the appellant an initial notice of
determination of CCTB for the 1998 base taxation year in which
[TRANSLATION] "the information used to calculate the benefit
amounts to which she was entitled" was indicated;
(h) the two notices
of determination of CCTB specified that the appellant should
review the information and contact the Department of National
Revenue if there were any discrepancies;
(i) the two
notices of determination of CCTB indicated that the family income
was $4,511 and $6,159 for the 1997 and 1998 base taxation
years;
(j) that
income corresponded to the appellant's income alone;
(k) the appellant
did not report any discrepancies in the information provided by
the Minister;
(l) on July
20, 2000, the Minister issued notices of redetermination of child
tax benefit for the 1997 and 1998 base taxation years and claimed
repayments of $1,536.25 and $2,232 for each of those years,
respectively;
(m) on July 20, 2000, the
appellant sent a request to change her marital status from
"living common law" to "single" as of
March 31, 2000;
(n) further to the
appellant's request, the Minister reviewed the calculation of
the appellant's child tax benefit as regards CCTB credits for
the 1998 base taxation year;
(o) on
August 18, 2000, the CCTB credit repayment amount for the
1998 base taxation year was adjusted to $1,674.02 to take account
of the appellant's change in marital status as of
March 31, 2000.
[4] The appellant admitted all of the
assumed facts, with the exception of subparagraph 10(k).
[5] The evidence was made up of the
testimony of the appellant, her father, Claude Dionne, her
former spouse, Steve Proulx, and the appeals officer,
Louise Girard.
[6] The facts were not disputed. Each
year, Claude Dionne, the appellant's father, prepared
draft tax returns for his daughter and her former spouse. They
copied out their own returns neatly, completed the returns by
signing them, and sent everything to the Department.
[7] The evidence showed that
everything was prepared and recopied in good faith and that no
false information was provided.
[8] For 1998, the social insurance
number of the appellant's former spouse was not given. Again,
this was not an intentional omission, and the explanation
provided was plausible and appropriate. It seems that the former
spouse's social insurance number was already printed on the
form, which was why he and the appellant did not think fit to
write it in by hand as well.
[9] In 2000, the appellant notified
the Minister that she no longer had a spouse. As a result of that
notification and its recording, it was found that the income of
the appellant's spouse had never been considered for previous
years in doing the calculations to determine the child tax
benefit to which the appellant was entitled.
[10] After that administrative error was
found, notices of redetermination were issued for 1997 and 1998,
the previous years being statute-barred.
[11] The appellant, who did not understand
why she had been reassessed, explained that, following a
conversation with a friend, she had already checked whether the
amounts she was receiving were correct. She said that the person
with whom she spoke had indeed confirmed that she was fully
entitled to the amounts and that everything had been calculated
correctly.
[12] The appellant maintained that she had
always acted properly, had always been in good faith and had
concealed or omitted absolutely nothing when filing her returns
for the years at issue.
[13] She therefore concluded that she should
not be penalized or have to suffer the consequences of an
administrative error to which she did not contribute in any
way.
[14] The Minister admitted the
administrative error but relied on subsection 152(4), which
reads as follows:
152(4) The Minister may at any time make an assessment,
reassessment or additional assessment of tax for a taxation year,
interest or penalties, if any, payable under this Part by a
taxpayer or notify in writing any person by whom a return of
income for a taxation year has been filed that no tax is payable
for the year, except that an assessment, reassessment or
additional assessment may be made after the taxpayer's normal
reassessment period in respect of the year only if
. . .
[15] First of all, it should be made clear
that, contrary to what she claims, the appellant is not being
penalized in the slightest. The notices of redetermination of
child tax benefit do not penalize her in any way or deprive her
of anything. They merely re-establish, in accordance
with the Income Tax Act ("the Act"), the
amount actually owed to her after considering all the factors
provided for in the Act.
[16] Admittedly, the claim has caused
problems and inconvenience. It is unfortunate that the appellant
has to be so inconvenienced because of an administrative error.
However, this is not sufficient to cancel the claim or allow the
appeal. Moreover, the error has benefited her to some extent
since she has received amounts that have not been claimed because
of the time limit.
[17] The only basis for the appellant's
appeal is equity. The Tax Court of Canada has no authority to
dispose of an appeal on that basis. Its jurisdiction is basically
to decide whether the notices of redetermination comply with the
relevant provisions of the Act. Moreover, this is an issue
that has been dealt with in several decisions. Some passages from
a few of those decisions should be reproduced.
Dubé v. Canada, [1996] T.C.J. No. 1545 (Q.L.),
Lamarre T.C.J.:
6 The
appellant invoked the administrative error in an attempt to have
the assessment vacated. He contended that the Minister had all
the evidence in hand at the time he issued the first assessment
in which the child care expense deduction was allowed. It was in
the reassessment dated December 4, 1995, that the Minister
subsequently denied the appellant the deduction.
7 I will
respond to this contention by saying that there was no
administrative error since the Minister acted within the time
limits required by subsection 152(4) of the Act in issuing a
reassessment. Furthermore, the case law is clear that the
Minister is not bound by his previous decisions if they do not
comply with the letter of the Act.
Chilton v. Canada, [1994] T.C.J. No. 354 (Q.L.),
Beaubier T.C.J.:
4 The
Appellant realized his liability, filed his 1990 Income Tax
Return properly and paid his taxes. Revenue Canada reassessed him
incorrectly, refunded him money and when he phoned them, told him
the law had changed. The Appellant spent the refund and has since
lost his job. He is not as well off as he was in 1990 and 1991
and asks for the mercy of the Court in respect of these
circumstances which arise from Revenue Canada's error.
5
Unfortunately, this Court does not have the power to do as the
Appellant asks. It has only the power to deal with the
correctness of the assessment.
Video Adventures Ltd. v. Canada, [1994] T.C.J. No. 751
(Q.L.), Kempo T.C.J.:
10 The Court has a
lot of sympathy for Mr. Naugler who, it seems, was doing his
personal best to comply with new and complex legislation.
However, there is a long, well-established line of authority that
mistakes made by fiscal officials do not drive the law, and that
estoppel is subject to the general rule that it cannot override
the law of the land. No errors concerning the application of the
law have been established during this hearing.
[18] In the case at bar, the appellant would
like her appeal to be allowed solely because she had nothing to
do with the error that was made and that has caused her much
inconvenience. There is no doubt that the appellant has suffered
some prejudice, but that is not the question. The only questions
that I can and must answer are as follows: were the notices of
redetermination correctly issued under the applicable provisions
of the Act, and were they correctly calculated within the
required time? Since the answer is yes, I must simply dismiss the
appeal.
Signed at Ottawa, Canada, this 18th day of March 2002.
J.T.C.C.
Translation certified true
on this 21st day of May 2003.
Sophie Debbané, Revisor
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