[OFFICIAL ENGLISH TRANSLATION]
Date: 20020319
Docket: 2000-4747(IT)I
BETWEEN:
CHANTAL KENDALL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal for the 1997
taxation year.
[2] In issuing and maintaining the
notice of determination dated July 10, 1998, and the child tax
benefit notice dated July 20, 1998, concerning the 1997 taxation
year, the Minister of National Revenue (the "Minister") assumed,
inter alia, the following facts:
(a) in filing her
tax return for the taxation year at issue, the appellant
indicated her marital status as "divorced";
(b) the appellant is
the mother of two children, Patrice and Vicky;
(c) the Minister
established the appellant's net income at $58,303, as
reported;
(d) when the net
family income of $58,303 was taken into account for the 1997
taxation year, the appellant was ineligible for the GST
credit;
(e) in calculating
the child tax benefits for the 1997 base taxation year, the
effect of taking the net family income of $58,303 into account
was that the amount of benefit payable for the period from July
1998 to June 1999 was $420.90.
[3] The appellant admitted all of the
facts with the exception of paragraph (d).
[4] Subsection 152(4) of the Income
Tax Act (the "Act") states the following on this
point:
(4) Assessment and reassessment - Subject to subsection
(5), the Minister may at any time assess 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, and may
(a) at any time, if the taxpayer or person filing
the return
(i) has made any misrepresentation that is attributable to
neglect, carelessness or wilful default or has committed any
fraud in filing the return or in supplying any information under
this Act, or
(ii) has filed with the Minister a waiver in prescribed form
within the normal reassessment period for the taxpayer in respect
of the year,
(b) before the day that is 3 years after
the expiration of the normal reassessment
period for the taxpayer in respect of
the
year, if
(i) an assessment or reassessment of the tax of the taxpayer was
required pursuant to subsection (6) or would have been required
if the taxpayer had claimed an amount by filing the prescribed
form referred to in that subsection on or before the day referred
to therein,
(ii) there is reason, as a consequence of the assessment or
reassessment of another taxpayer's tax pursuant to this
paragraph or subsection (6), to assess or reassess the
taxpayer's tax for any relevant taxation year,
(iii) there is reason, as a consequence of a transaction
involving the taxpayer and a non-resident person with whom the
taxpayer was not dealing at arm's length, to assess or
reassess the taxpayer's tax for any relevant taxation year,
or
(iv) there is reason, as a consequence of an additional payment
or reimbursement of any income or profits tax to or by the
government of a country other than Canada, to assess or reassess
the taxpayer's tax for any relevant taxation year, and
(c) within the normal reassessment period for the
taxpayer in respect of the year, in any other case, reassess or
make additional assessments, or assess tax, interest or penalties
under this Part, as the circumstances require, except that a
reassessment, an additional assessment or an assessment may be
made under paragraph (b) after the normal reassessment
period for the taxpayer in respect of the year only to the extent
that it may reasonably be regarded as relating to
(d) the assessment or reassessment referred to in
subparagraph (b)(i) or (ii),
(e) the transaction referred to in subparagraph
(b)(iii), or
(f) the additional payment or reimbursement
referred to in subparagraph (b)(iv).
[5] Through her counsel, the appellant
submitted arguments that were essentially based on equitable
principles. The appellant's case is deserving of sympathy;
unfortunately, the Tax Court of Canada has no jurisdiction to
accept such equitable arguments. The sole authority it has is to
determine whether the reassessments comply with the relevant
provisions of the Act. Moreover, this issue has been dealt
with in a number of 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.
[6] The Minister was justified in
adjusting the appellant's calculations for the child tax benefit;
accordingly, he could issue a reassessment.
[7] The two questions at issue
consisted in determining, first, whether the Minister had
correctly established the appellant's Goods and Services Tax
credit as nil for the 1997 taxation year and, second, whether the
child tax benefit had been correctly established for the 1997
taxation year.
[8] In both cases, the Minister
performed the calculations correctly and in accordance with the
provisions of the Act. Consequently, despite the
significant inconveniences suffered by the appellant, I must
dismiss her appeal.
Signed at Ottawa, Canada, this 19th day of March 2002.
J.T.C.C.
Translation certified true
on this 29th day of May 2003.
Sophie Debbané, Revisor
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