Walzak v. The Queen, docket 1999-2428-IT-I (Informal Procedure)

Date: 20000117

Docket: 1999-2428-IT-I

BETWEEN:

HUGH WALZAK,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

(Delivered orally on September 13,1999, at North Sydney, Nova Scotia)

McArthur J.T.C.C.

[1] This is an appeal by Hugh Walzak with respect to his 1994 and 1995 taxation years. In computing his income during those years, the Appellant worked for New Waterford District Commission as a maintenance man. The company as his employer contributed 5% of his income to his RRSP and the Appellant himself also contributed 5% of his income.

[2] The employer, in error, indicated that the contribution made by it was to a registered pension plan rather than to a registered retirement savings plan and the employer ticked off the box indicating that the contribution was made to a RPP rather than a RRSP. In 1994 and 1995, the amounts shown as contributed to a pension plan was $1,820 and $1,972, respectively. These amounts would appear to be approximately 10% of the Appellant's income from the taxation years in issue.

[3] When the error was discovered, the Minister of National Revenue reassessed the Appellant's returns to reflect no contributions to a registered pension plan in the years leaving the contributions to the RRSP intact. In computing his income for the years in question, the Minister stated that the Appellant deducted both amounts as contributions and in reassessing, the Minister revised the amount of deduction to delete the RPP contribution.

[4] What is troubling in these appeals is that paragraph 7 of the Reply to the Notice of Appeal indicates that the issue to be decided is whether the Minister was correct in assessing interest to the increased tax payable when reassessing the 1994 and 1995 taxation years. The Appellant's appeal is to the effect that any fault lies with his employer and not with him and that he should not be penalized for the acts of his employer. Counsel for the Minister could not inform the Court what the interest was or how those amounts were calculated. The Minister takes the position that the Appellant had the burden of proof and the Appellant was challenging the mistakes of his employer rather than concentrating on the issue in the Reply, which is whether or not the Minister was correct in assessing interest.

[5] The increased tax payable as a result of the reassessment and the interest thereon was not available to the Court. I am not prepared, without knowledge of how the interest was calculated and to satisfy myself that it was correctly calculated, to grant judgment for the Respondent. I agree with counsel for the Minister that I do not have jurisdiction to question the interest assessed as long as it was properly assessed. That question, however, has not been answered. For these reasons, not knowing what the interest is and how it was calculated, I am not prepared to follow the submissions of the Respondent and therefore, I allow the appeal.

Signed at Ottawa, Canada, this 17th day of January, 2000.

"C.H. McArthur"

J.T.C.C.