Section 177

"The section does not permit of an appeal being allowed 'in part'. If an appeal is successful in any respect then the appeal is to be allowed." A reference in a draft consent judgment to an appeal being allowed "in part" was deleted.

Although the plaintiff did not claim in the alternative in his statement of claim that if an amount were taxable income to him, he should be able to deduct therefrom legitimate expenses, it was held, in dismissing his appeal, that "the Minister must take the expenses incurred into account in his assessments ...&nbsp. Since this claim was not raised in the pleadings, the plaintiff will have to accept the Minister's decision as to the amount of expenses deductible, or appeal the reassessment."

The taxpayer, whose two children were attending at the Canadian Christian School at Jarvis, Ontario (which was a registered charity), paid $590 to the school in 1968, and deducted $390 as a charitable contribution on the basis that the non-deductible tuition portion of the payment was $200. The Department reassessed on the basis that the tuition component was $200 per child, rather than $200 per family.

Heald, J. held that although "the arbitrary figure of $200 selected by the Minister is on the low side," this was "not a case however where the assessments should be referred back to the Minister since that course of action would result in an increase in the assessments. This would have the effect of allowing an appeal by the Minister from his own assessment."

In addition, since the subject assessments were based on the assessor's best estimate at the time of the actual costs of educating a student, it was not improper to give effect to them.

After a finding at trial that a $200,500 amount was includible in the taxpayer's income, the Court of Appeal lacked the jurisdiction to grant a consent judgment the effect of which would be to set aside the judgment of the Trial Division and refer the assessment back to the Minister to reassess the taxpayer's tax and interest in the total amount of $100,000. Jackett, C.J. stated: "the Minister has a statutory duty to assess the amount of tax payable on the facts as he finds them in accordance with the law as he understands it. It follows that he cannot assess for some amount designed to implement a compromise settlement and that, when the Trial Division, or this Court on appeal, refers an assessment back to the Minister for re-assessment, it must be for re-assessment on the facts in accordance with the law and not to implement a compromise settlement."