Richard J.:

Nature of the Proceeding

1 This proceeding raises the issue of compliance with subsection 231.2(1) of the Income Tax Act.

McDonald J.A.:

1 This is an appeal by the Crown from a judgment of the Tax Court of Canada permitting the Respondent to deduct payments described as “participatory interest” in an issue of bonds pursuant to paragraph 20(1)(e) of the Income Tax Act[FN1: <p>R.S.C. 1985 (5th Supp.).</p>] .

Bowie T.C.J.:

MacGuigan J.A. (Henry D.J.):

1 This case involves a constitutional challenge to the “inquiry provision,” s. 231.4 of the Income Tax Act, S.C. 1970-71-72, c. 63, as amended (“the Act”), on the basis of ss. 7 and 8 of the Canadian Charter of Rights and Freedoms (“the Charter”).

Watson D.J.T.C.:

1 This appeal, heard under the Informal Procedure in St. John's, Newfoundland on October 3, 1997, concerns the Appellant's 1989, 1990 and 1991 taxation years.

Tardif T.C.J.:

1 This is an appeal under the informal procedure regarding notices of assessment for 1991 and 1992. The applicable statutory provisions are ss. 3, 9, 13, 152, 248(1) and 20(1)(a) of the Income Tax Act (“the Act”).

2 The facts on which the assessments are based are set out in paragraph 6 of the Reply to the Notice of Appeal as follows:

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• (a) the appellant is a notary;

Brulé T.C.J.:

1 These appeals, heard on common evidence, were as a result of the Minister of National Revenue (the “Minister”) disallowing business expenses claimed by the Appellants against their personal income in the taxation year 1993.

Lamarre Proulx T.C.J.:

Christie A.C.J.T.C.:

1 This appeal is governed by the informal procedure provided for under section 18 and following sections of the Tax Court of Canada Act. The year under review is 1994.

2 The issues are whether the appellant is liable for interest under subsection 161(2) and to a penalty under section 163.1 of the Income Tax Act (“the Act”).

Strayer J.A.:

1 We are all of the view that the decision of the Tax Court Judge must be set aside and the matter remitted to that Court for a new hearing.