Date: 20010319
Docket: 2000-2396-IT-I
BETWEEN:
MONIQUE KIROUAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Tardif, J.T.C.C.
[1] This is an appeal from a notice of assessment in respect of the 1998 taxation year.
[2] For the notice of assessment dated November 29, 1999, the Minister of National Revenue (the Minister) assumed, inter alia, the following facts:
[TRANSLATION]
(a) under a matching programme, the Minister added, in computing the appellant's income for the 1998 taxation year, an amount of $5,000 resulting from a withdrawal from an RRSP (CIBC REP CENTRE) and took into account an additional amount of $250 in respect of tax deducted at source;
(b) the Minister noted that when the appellant filed her tax return for the 1997 taxation year, she failed in computing her income to include an amount of $1,783 in interest and other investment income;
(c) the Minister also noted that when the appellant filed her tax return for the 1995 taxation year, she failed in computing her income to include an amount of $4,862 resulting from a withdrawal from an RRSP (CIBC REP CENTRE);
(d) for the 1998 taxation year, the Minister imposed on the appellant a penalty totalling $500, in accordance with subsection 163(1) of the Income Tax Act (the Act);
Interest on arrears
(e) the tax return for the taxation year in issue should have been filed on or before April 30, 1999;
(f) the arrears of tax payable on April 30, 1999, amounted to $494.56 (the excess amount) for the 1998 taxation year;
(g) the unpaid penalty as of April 30, 1999, amounted to $500 for the 1998 taxation year;
(h) at the time of the notice of reassessment (November 29, 1999) for the 1998 taxation year, the prescribed interest on the excess amount and the penalty as of April 30, 1999, amounted to $53.63.
[3] The appellant and her accountant testified. The appellant explained that when she made a withdrawal from an RRSP (CIBC REP CENTRE) the officers of the financial institution told her that an amount had been withheld to cover the tax payable on the amount of the withdrawal. Believing that this was all she was required to do, she did not consider it appropriate to advise her accountant of this so that he could complete her tax returns accordingly.
[4] As for the amount of $1,783 in interest and other investment income, the appellant submitted an agreement attesting to her right to receive the investment income, but the document does not mention any date; it can therefore be presumed that the debtor institution for the interest payments prepared the slips attesting to the payment of interest in accordance with the instructions set out in the agreement.
[5] There is no doubt in my mind that the appellant is a very honest person who never wished to conceal any income whatsoever. As she is unfamiliar with and knows nothing at all about what needs to be done with respect to income tax, she has always left it up to her accountant to complete her returns. She did not however submit the documents obtained from the banking institution because she was relying on information to the effect that the tax had been duly paid.
[6] Subsection 163(1) of the Income Tax Act reads as follows:
163(1) Every person who
(a) fails to report an amount required to be included in computing the person's income in a return filed under section 150 for a taxation year, and
(b) had failed to report an amount required to be so included in any return filed under section 150 for any of the three preceding taxation years
is liable to a penalty equal to 10% of the amount described in paragraph (a), except where the person is liable to a penalty under subsection (2) in respect of that amount.
[7] On November 15, 1991, the Honourable Judge Bowman of this Court stated the following in Maltais v. Canada (Minister of National Revenue), [1991] T.C.J. No. 1003 (Q.L.):
. . . In a self-assessing system the taxpayer has an obligation to ensure that his or her returns are complete. If it turns out that the failure to declare items of income carries with it a penalty that is different from that which the taxpayer anticipated, the taxpayer must bear that responsibility himself and cannot lay the blame on the officials of the Department of National Revenue.
. . . The Appellant struck me as an honest and honourable young man and I find as a fact that it was not his intention to evade the payment of income tax. If it had been, more serious penalties under subsection 163(2) might have been considered. Mr. Ghan on behalf of the Respondent contended that subsection 163(1) in the form which is applied to 1989 did not require that there be a wilful intention to evade tax. In support of this position he pointed to the wording of the former 163(1) which referred to "Every person who wilfully attempts to evade the payment of tax payable by him" and to the wording of subsection 163(2) which uses the expression "knowingly or under circumstances amounting to gross negligence". These provisions require a mens rea of intent or of recklessness. I agree with the Respondent on this point. In my opinion, the omission giving rise to a penalty under subsection 163(1) as it applied to the 1989 taxation year is one of strict liability [Footnote 1 appended to judgment]. Otherwise, subsection 163(2) would be superfluous. It follows that where the Minister of National Revenue is called upon under subsection 163(3) to justify the imposition of a penalty under subsection 163(1) he meets that onus by establishing that the taxpayer had failed to report an amount of income in one year and that he or she had failed to report an amount in a return for any of the three preceding taxation years. It is not necessary for me to decide in this appeal whether the amounts which the taxpayer fails to report in two or more taxation years need be similar in nature.
(Emphasis added.)
[8] In light of that judgment, with which I am in complete agreement, the penalties have been properly assessed and there is no cause to intervene in this regard.
[9] As for the question of interest, the Tax Court of Canada has no jurisdiction to cancel or even reduce interest claimed in respect of a valid assessment: the power to do so is a discretionary power of the Minister with respect to which the Tax Court of Canada has no control.
[10] For these reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 19th day of March 2001.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 6th day of September 2001.
[OFFICIAL ENGLISH TRANSLATION]
Stephen Balogh, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2000-2396(IT)I
BETWEEN:
MONIQUE KIROUAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on October 27, 2000, at Sherbrooke, Quebec, by
the Honourable Judge Alain Tardif
Appearances
Agent for the Appellant: André Gince
Counsel for the Respondent: Valérie Tardif
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1998 taxation year is dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 19th day of March 2001.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 6th day of September 2001.
Stephen Balogh, Revisor