A
W
Prociuk:—This
appeal
is
from
the
respondent’s
reassessment
of
the
appellant’s
income
for
the
taxation
year
1975
wherein
the
appellant’s
two
fiscal
periods
covering
a
total
of
22
consecutive
months,
each
ending
in
the
said
taxation
year,
were
assessed
on
the
basis
that
all
that
income
was
taxable
in
one
12-month
period.
The
appellant,
in
reporting
his
income,
filed
two
returns:
one
for
the
period
from
March
1,
1974
ending
on
February
28,
1975,
being
his
income
from
self-employment;
and
the
second
return
for
the
period
from
March
1,
1975
ending
on
December
31,
1975,
which
covered
one
month
of
self-employment
income
and
9
months
of
income
from
office
or
employment.
He
claimed
personal
exemptions
in
the
first
return
for
a
full
12-month
period;
and
in
the
second
return
he
prorated
the
said
exemptions
for
the
remaining
10
months
of
the
taxation
year
1975.
The
reassessment
by
the
respondent
resulted
in
an
increase
of
the
tax
payable
by
some
$3,000,
notwithstanding
the
application
of
the
averaging
provisions
of
section
118
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63
as
amended.
The
appellant
is
an
architect
by
profession
and
until
March
31,
1975
practised
his
profession
in
the
City
of
Toronto,
as
a
sole
proprietorship.
His
fiscal
period
since
1962
ended
on
February
28
in
each
year.
Accordingly,
his
income
tax
return
would
be
filed
at
least
a
year
later.
In
the
late
fall
of
1974
he
accepted
a
position
with
the
National
Capital
Commission
to
commence
on
April
1,
1975.
On
or
about
January
27,
1975
the
appellant
stated
that
he
wrote
to
the
District
Taxation
Office
in
Toronto
advising
that
he
had
accepted
employment
and
that
he
wished
to
obtain
permission
to
change
his
fiscal
period
from
February
28
to
December
31,
effective
that
year.
On
or
about
March
19
he
received
permission
to
do
so
by
letter
from
the
audit
office
of
the
Toronto
District
Taxation
Office
which
reads
as
follows:
Further
to
your
letter
dated
January
27,
1975,
permission
is
granted
to
change
your
fiscal
period
from
February
28
to
December
31,
effective
December
31,
1975.
This
permission
is
granted
on
the
understanding
that
the
request
was
not
made
for
the
purpose
of
minimizing
or
avoiding
taxation.
Your
attention
is
directed
to
Section
248(1)
of
the
Income
Tax
Act,
which
provides
that
a
fiscal
period
may
not
exceed
a
period
of
twelve
(12)
months.
Mr
Gordon
stated
that
he
did
not
quite
understand
the
letter
and
telephoned
Mr
Rees
of
the
audit
office
for
further
enlightenment.
He
also
stated
that
he
was
advised
to
file
two
returns
for
the
22-month
period
which
he
did.
It
was
not
until
the
summer
of
1976
that
he
learned
that
this
practice
was
no
longer
allowed.
Subsection
41(3)
of
the
Income
Tax
Application
Rules
which
permitted
this
method
could
no
longer
be
invoked
as
it
applied
only
to
any
taxation
year
ending
after
1971
and
before
1974.
The
appellant
stated
that
had
he
been
apprised
of
the
ramifications
of
the
change
in
time,
he
could
have
taken
steps
to
meet
the
situation
by
recognized
means
such
as
a
registered
retirement
savings
plan
for
instance.
Unfortunately,
it
is
too
late
to
do
so
now.
While
I
have
no
reason
for
one
moment
to
doubt
what
Mr
Gordon
stated
under
oath,
I
equally
feel
that
whatever
advice
he
obtained
from
Mr
Rees
was
given
in
good
faith.
Either
the
appellant
interpreted
the
advice
erroneously
or
Mr
Rees
erred
in
his
advice
to
the
appellant.
It
is
cold
comfort
to
say
to
the
appellant
that
the
Board
fully
sympathizes
with
his
position
since
the
financial
hardship
that
he
has
been
put
to
cannot
now
be
rectified.
The
complicated
averaging
provisions
of
section
118,
which
are
automatically
applied,
grant
some
relief
but
certainly
not
to
the
extent
that
the
appellant
would
have
obtained
had
he
known
in
time.
The
Board
has
no
alternative
but
to
dismiss
the
appeal.
Appeal
dismissed.
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