Hamlyn J. (Orally):
This is in the matter of Lion K. Huvespian and Her Majesty the Queen, and it is an appeal with respect to the 1995 taxation year. In assessing the appellant for the 1995 taxation year, the Minister of National Revenue assessed instalment interest in the amount of $222.18 and interest in the amount of $2.26.
In assessing the appellant, the notice of assessment mailed June the 6th, 1996, the Minister made certain assumptions of fact that were accepted by the appellant. These were, the income tax return for the 1995 taxation year was required to be filed on April 30th, 1996. During the 1995 taxation year, the appellant’s net income was $38,366.00. The appellant’s chief source of income was neither farming nor fishing. During the 1995 taxation year, the appellant’s income, from which amounts were deducted at source, was nil. The appellant’s tax payable for the 1995 taxation year was $5,659.44, and the appellant paid the amounts of $1,110.00 on March the 15th, 1995, $1,000.00 on June 30th, 1995, $1,070.00 on September 15th, 1995, and $2,000.00 on December 20th, 1995 as instalment payments and paid the amount of $3,666.33 on behalf of taxes owing upon the filing of his income tax return for 1995 and April 30th, 1996.
The appellant disputed the following as an assumption. On or before March 15th, June 15th, September 15th and December 15th, 1995, the appellant was liable to pay to the Receiver General of Canada the amounts of $1,110.00, $1,110.00, $3,219.00, and $3,219.00, respectively, as instalment payments. While the appellant disputed this, the matter was put to the appellant in evidence, and it would appear that that assumption of the Minister was correct, and I find it as a fact in this case.
So the appellant, really, raises two points in this case. One was whether he had to make payments on instalments before the actual receipt of the income, and he also questioned the calculation of the interest.
The Income Tax Act is straight-forward when it comes to instalment payments that are to be paid by a taxpayer. Paragraph 156.1 (2)(b) of the Act states that an individual whose chief source of income is neither fishing nor farming is not required to make instalment payments in his net tax owing for the particular years not greater than his instalment threshold of $2,000.00.
And in the present appeal, the appellant was responsible for making instalment payments for his income tax owing in the 1995 taxation year. It is clear the appellant’s net tax owing for the 1995 taxation year exceeded his instalment threshold, as he had paid the amount of $3,666.33 on behalf of taxes owing upon the filing of his 1995 income tax return on April 30th, 1996. He also received notices of the payments that he was required to pay and he did not comply with it fully.
The Minister has stated that the appellant was liable for instalment payments in the 1995 taxation year and has set out the amounts the appellant was responsible for paying. Plus, the burden falls on the appellant to disprove the amounts owed for his instalment payments were incorrectly calculated. As I indicated, his argument was based on that he did not have the income at the time the instalment payments were required and he should be able to wait until the end of the year.
The appellant, as I said, his argument, that he does not owe the tax on income until he is in actual receipt of the income; therefore, he should not have to pay instalment payments in March, June, September and December, because he did not receive the interest income until October and early November. The appellant sees this as unfair and he believes the treatment that he has received is unfair. Unfortunately, the Tax Court is not a court of equity and the Court does not have the capability to make a ruling based on an alleged arbitrary ruling of fairness.
The Act makes it quite clear that the appellant was liable for instalment payments in the taxation year. The amounts as set forth appear to be correct, and he was required to pay them, and his submission about being in receipt of the income is not accepted because there is no law to support it.
Secondly, in relation to how the interest calculation was made, the appellant has submitted to the court that the interest rates are wrong, and he submitted a piece of paper that, apparently, he received from a bank, to say that the interest rates as charged and set forth by Revenue Canada were wrong. Exhibit R-l clearly sets out how the calculations were made. It clearly sets out the interest rates, and there is no evidence other than that before the court, that is acceptable, to show that those calculations are incorrect, and I therefore conclude exhibit R-l is correct, and the calculations are correct, and the appellant’s evidence and submissions did not substantiate the point that he makes, and as such, unfortunately, I have listened to the argument, but, unfortunately, I must dismiss the appeal.
Thank you for your submissions, sir. I heard your point. I have given you my reasons why I cannot agree to it. Thank you for your attendance. Thank you for your submission. Your appeal is dismissed.
Appeal dismissed.
Email this Content