Date: 20021223
Docket: 2002-2803-IT-I
BETWEEN:
ANDREW MASHFORD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Little, J.
A. FACTS
[1] The Appellant testified that he was hired by Aisco Systems Inc. of Burlington, Ontario ("Aisco") in December 1996.
[2] The Appellant was employed by Aisco from December 1996 until March 2000. In March 2000 the Appellant left Aisco and moved to British Columbia.
[3] When the Appellant filed his 1997 income tax return he retained the assistance of an accountant and his 1997 income tax return was prepared and filed by the accountant under the e-filing procedure. The Appellant provided his accountant with a T-4 slip issued by Aisco for the 1997 taxation year and the accountant used the information contained in the T-4 slip in determining the Appellant's income for the 1997 taxation year.
[4] Counsel for the Respondent filed an Affidavit of Diane Martineau (the "Affidavit"), an official in the Vancouver office of the Canada Customs and Revenue Agency ("CCRA").
[5] Exhibit B of the Affidavit is a computer printout which indicates that Aisco issued a Supplementary T-4 slip for the Appellant's 1997 taxation year. The Supplementary T-4 slip stated that the Appellant had earnings in 1997 of $2,535.00.
[6] The Appellant said that he believes that the Supplementary T-4 slip was issued for the period December 15, 1996 to sometime in early January 1997. He said that he may have received a payment in January 1997 for this two-week period.
[7] The Appellant said that he was completely unaware of this Supplementary T-4 slip issued by Aisco when his accountant filed his 1997 income tax filing using the e-filing procedure.
[8] The Appellant also testified that when he was reassessed for the 1997 taxation year to include the amount shown on the Supplementary T-4 slip from Aisco he accepted the Reassessment. Records filed by counsel for the Respondent indicate that the additional income payable by the Appellant as a result of the Reassessment for the 1997 taxation year was $250.00. (Note - tax was withheld by Aisco on the income shown on the Supplementary T-4 slip.)
[9] On March 30, 2000 the Appellant moved from Orangeville, Ontario to British Columbia and accepted employment with Westport Innovations in the City of Vancouver ("Westport").
[10] The Appellant testified that in 2000 he separated from his wife and he withdrew funds from his RRSP. (Note - income tax was withheld and remitted on the funds withdrawn from his RRSP.)
[11] The Appellant testified that in February-March of 2001 he phoned officials of Aisco and asked them to send him a copy of a T-4 slip for the period January 1, 2000 to March 2000. When the Appellant prepared his income tax return for the 2000 taxation year he had not received the T-4 slip from Aisco. The Appellant testified that he telephoned the number established by the CCRA to request advice on what he should do when he filed his income tax return for the 2000 taxation year since he did not have a copy of the T-4 slip issued by Aisco, his previous employer. The Appellant said that he was told by an official of the CCRA to sign and file his 2000 tax return with the T-4 slip from Westport but without the T-4 slip from Aisco. The Appellant stated that this instruction did not seem to be unusual or unreasonable since tax, CPP and EI had been withheld by Aisco on the income that he received from Aisco from January 2000 to March 2000.
[12] By letter from the CCRA dated the 6th day of December 2000 the Appellant was advised that the 2000 taxation year was being reassessed to include the amount of $20,726.00 that he received from Aisco for the period January-March 2000. (Note - tax of $5,836.61, CPP of $766.33 and EI premiums of $495.96 had been withheld and remitted by Aisco on the income.)
[13] On the 27th day of December 2001 the Appellant's 2000 taxation year was reassessed. The said Reassessment imposed additional tax of $4,460.92, a penalty under the Federal Income Tax Act of $4,346.30 and interest of $527.99. Counsel for the Respondent advised the Court that the penalty in the amount of $4,346.30 was imposed under subsection 163(1) of the Income Tax Act since the Appellant failed to report the income from Aisco when he filed his income tax return for the 2000 taxation year and the Appellant failed to report income of $2,535.00 from Aisco when he filed his income tax return for the 1997 taxation year.
B. ANALYSIS
[14] The facts in this situation are unusual. I cite the following:
(a) The Appellant was unaware that Aisco had issued a Supplementary T-4 slip in connection with his 1997 taxation year;
(b) The Appellant retained the services of an accountant to prepare and file his income tax return for the 1997 taxation year. (As noted above the additional tax imposed by the Minister in the Reassessment for the 1997 taxation year was only $250.00);
(c) When the Appellant prepared his tax return for the 2000 taxation year he requested but did not receive a copy of the T-4 slip from Aisco;
(d) The Appellant obtained instructions from the CCRA 1-800 line and followed those instructions when he filed his 2000 tax return;
(e) I also find that the Affidavit filed by counsel for the Crown was deficient since it did not contain a copy of the original T-4 slip issued by Aisco for the 1997 taxation year. Since the Appellant did not have a copy of the original T-4 slip filed by Aisco he could not establish the make-up of the income in the Supplementary T-4 slip.
[15] Based on the above facts I have concluded that the penalty imposed under subsection 163(1) should not be applied in these circumstances.
[16] I am not authorized to eliminate the interest that has been imposed in the Reassessment for the 2000 taxation year.
[17] The Minister is instructed to reassess the Appellant's 2000 taxation year to eliminate the penalty of $4,346.30. No further relief will be granted.
Signed at Vancouver, British Columbia, this 23rd day of December 2002.
|
"L.M. Little" |
J.T.C.C.
COURT FILE NO.: 2002-2803(IT)I
STYLE OF CAUSE: Andrew Mashford and
Her Majesty the Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: December 19, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge L.M. Little
DATE OF JUDGMENT: December 23, 2002
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Raj Grewal
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2002-2803(IT)I
BETWEEN:
ANDREW MASHFORD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on December 19, 2002 at Vancouver, British Columbia, by
the Honourable Judge L.M. Little
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Raj Grewal
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 2000 taxation year is allowed, without costs, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 23rd day of December 2002.
|
"L.M. Little" |
J.T.C.C.