D
E
Taylor
[TRANSLATION]:—This
appeal
was
heard
at
Montreal,
Quebec,
on
December
7,
1982.
Mr
Lafrenière
is
appealing
notices
of
reassessment
issued
by
the
Minister
with
respect
to
the
1977
and
1978
taxation
years.
His
appeal
is
based
on
the
following
facts
and
grounds:
1.
The
fees
paid
by
the
clinic
were
for
work
I
did
not
perform
myself.
During
the
original
investigation
by
the
Department,
those
in
charge
of
the
clinic
acknowledged
this.
It
therefore
seems
wrong
to
me
that
I
should
be
taxed
for
work
I
did
not
perform.
2.
The
clinic
administrators
had
told
me
that
these
amounts
were
not
taxable.
Moreover,
since
the
amounts
were
paid
to
third
parties
and
I
did
not
derive
any
income
from
them,
it
was
natural
for
me
not
to
report
them,
the
amounts
paid
out
being
equal
to
the
amounts
received.
It
therefore
seems
wrong
to
me,
since
I
was
acting
in
good
faith,
that
a
penalty
should
be
imposed
on
me.
3.
There
was
undue
delay
on
the
part
of
the
Department
in
investigating
the
facts.
As
a
result
of
a
change
in
personnel,
it
took
over
a
year
and
a
half
to
complete
the
matter.
Since
the
Department
was
responsible
for
the
delay,
it
seems
wrong
to
me
that
I
should
be
charged
interest
for
a
period
that
was
beyond
my
control.
In
his
reply
to
the
notice
of
appeal,
respondent
relied
on
the
following
presumptions
of
fact,
inter
alia:
(a)
On
March
1,
1977
appellant
signed
a
contract
with
La
Polyclinique
Médicale
Populaire
whereby
he
undertook
to
carry
out
maintenance
work
for
the
said
clinic;
(b)
During
the
1977
and
1978
taxation
years,
appellant
received
the
following
fees
pursuant
to
the
said
contract:
|
1977
|
$6,660.00
|
|
1978
|
$8,880.00
|
(c)
In
reporting
his
income
for
the
1977
and
1978
taxation
years,
appellant
omitted
to
report
the
amounts
referred
to
in
the
preceding
subparagraph;
(d)
The
amounts
referred
to
in
subparagraph
(b)
constitute
income
of
the
appellant
for
the
1977
and
1978
taxation
years;
(e)
In
computing
his
income
for
the
1977
and
1978
taxation
years
for
purposes
of
the
Income
Tax
Act,
appellant
made
a
false
statement
or
omission
knowingly
or
under
circumstances
amounting
to
gross
negligence;
(f)
The
amount
paid
by
appellant
as
tax
payable
for
the
1977
and
1978
taxation
years
before
the
deadline
for
mailing
tax
returns
for
the
said
years
is
less
than
the
amount
of
tax
payable
for
the
said
years
under
the
Income
Tax
Act:
(g)
During
the
taxation
years
in
question,
appellant
did
not
incur
any
expenses
for
the
purpose
of
gaining
income
from
the
maintenance
services
he
provided
to
La
Polyclinique
Médicale
Populaire
during
the
said
years.
Respondent
relied
on
sections
3,
9,
161
and
163(2)
of
the
Income
Tax
Act,
SCD
1970-71-72,
c
63,
as
amended,
inter
alia,
and
maintained
that
the
$6,660
and
$8,880
receiving
during
the
1977
and
1978
taxation
years
respectively
constituted
income
of
appellant
and
consequently
should
be
included
in
computing
his
income
for
the
said
years.
Respondent
also
maintained
that
the
amount
of
the
penalty
and
of
the
interest
to
be
paid
in
respect
of
the
assessments
in
question
had
been
determined
correctly.
The
testimony
and
other
evidence
established
that
in
addition
to
the
building
noted
by
the
Minister,
appellant
was
responsible
for
the
maintenance
of
various
other
buildings
in
the
Montreal
area
for
several
years.
This
evidence
is
of
little
relevance
to
the
building
maintenance
contracts
involved
in
the
present
case,
however.
The
evidence
adduced
by
the
Minister
contradicts
appellant’s
claim
that
as
he
received
these
amounts
he
spent
them
on
the
contracts
in
question.
The
Minister’s
evidence
also
established
that
the
amounts
under
the
contracts
in
question
were
paid
to
appellant
personally
by
the
building
administrator.
Mr
Lafreniere
did
not
keep
any
documents
to
support
his
position.
In
summary,
the
Board
finds
that
appellant
was
aware
of
the
fact
that
the
amounts
in
question
had
been
paid
to
him
and
formed
part
of
his
income
and
that
he
knowingly
omitted
to
include
them
in
the
income
he
reported.
The
appeal
is
dismissed.
Appeal
dismissed.
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