Brulé,
TCJ
[ORALLY]:—What
is
before
the
Court
today
is
a
motion
by
the
taxpayer
concerning
his
1979,
1980
and
1981
taxation
years.
The
motion
stems
from
assessments
which
included
by
the
Minister
the
application
of
subsection
74(5)
of
the
Income
Tax
Act.
In
his
notices
of
objection
the
appellant
clearly
objected
to
reallocation
of
income
under
subsection
74(5).
The
Minister
as
prescribed
must
then
follow
the
provisions
of
subsection
165(3).
He
has
the
choice
of
vacating,
confirming
or
varying
the
assessments,
or
reassessing.
He
chose
to
confirm
or,
in
other
words,
to
continue
to
base
his
assessments
on
a
repealed
subsection
of
the
Income
Tax
Act.
The
notice
of
appeal
clearly
pointed
out
that
this
subsection
had
been
repealed.
In
his
reply
to
this
notice
of
appeal
the
Minister
ignored
this
plea,
and
I
readily
say
that
any
reply
which
does
not
respond
to
the
contents
of
the
notice
of
appeal,
and
especially
with
reference
to
such
a
vital
point,
is
not
a
very
helpful
document
to
the
Court.
An
assessment
must
be
supported
in
law.
There
may
be
errors
and
subsection
152(3)
protects
these,
but
not,
in
my
opinion,
those
matters
which
are
fundamentally
incorrect,
and
this
is
the
case
in
this
appeal.
The
Minister
has
included
in
his
assessments
a
reallocation
of
income
relying
on
subsection
74(5),
a
power
which
he
did
not
have.
In
the
notice
of
confirmation
the
Minister
changed
his
reliance
for
the
assessments
and
supported
the
matter
by
indicating
he
was
confirming
on
the
basis
of
section
3
and
subsection
9(1).
I
do
not
find
this
acceptable.
He
should
have
reissued
proper
assessments
as
is
provided.
The
motion
is
therefore
granted.
As
to
relief
it
is
not
for
me
to
determine.
The
assessments
are
wrong
in
part
and
the
matter
will
be
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
subsection
74(5)
has
no
application
in
the
original
assessments
made
by
him.
There
existed
no
right
in
law
to
reallocate
income
on
the
suggested
basis,
and
such
error
was
not
corrected
although
open
to
the
Minister
to
so
do.
Motion
granted.
Email this Content