[OFFICIAL ENGLISH TRANSLATION]
2000-565(IT)I
BETWEEN:
GEORGES NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of Antoun Nassif (2000-566(IT)I), Khalil Nassif (2000-827(IT)I) and Hamid Nassif (2000-926(IT)I)
on March 11 and 13, 2002, and judgment delivered from the bench
at Montréal, Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nathalie Lessard and Simon Crépin
JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1992 and 1993 taxation years are dismissed in accordance with the attached Reasons for Judgment. The penalties were wholly justified.
Signed at Ottawa, Canada, this 19th day of March 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 27th day of May 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2000-566(IT)I
BETWEEN:
ANTOUN NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on common evidence with the appeals of Georges Nassif (2000-565(IT)I), Khalil Nassif (2000-827(IT)I) and Hamid Nassif (2000-926(IT)I)
on March 11 and 13, 2002, and judgment delivered from the bench
at Montréal, Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nathalie Lessard and Simon Crépin
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1993 taxation year is dismissed in accordance with the attached Reasons for Judgment. The penalty was wholly justified.
Signed at Ottawa, Canada, this 19th day of March 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 27th day of May 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2000-827(IT)I
BETWEEN:
KHALIL NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on common evidence with the appeals of Georges Nassif (2000-565(IT)I), Antoun Nassif (2000-566(IT)I) and Hamid Nassif (2000-926(IT)I)
on March 11 and 13, 2002, and judgment delivered from the bench
at Montréal, Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nathalie Lessard and Simon Crépin
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1993 taxation year is dismissed in accordance with the attached Reasons for Judgment. The penalty was wholly justified.
Signed at Ottawa, Canada, this 19th day of March 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 27th day of May 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2000-926(IT)I
BETWEEN:
HAMID NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on common evidence with the appeals of Georges Nassif (2000-565(IT)I), Antoun Nassif (2000-566(IT)I) and Khalil Nassif (2000-827(IT)I)
on March 11 and 13, 2002, and judgment delivered from the bench
at Montréal, Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nathalie Lessard and Simon Crépin
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1993 taxation year is dismissed in accordance with the attached Reasons for Judgment. The penalty was wholly justified.
Signed at Ottawa, Canada, this 19th day of March 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 27th day of May 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20020319
Docket: 2000-565(IT)I
BETWEEN:
GEORGES NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2000-566(IT)I
BETWEEN:
ANTOUN NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket:2000-827(IT)I
BETWEEN:
KHALIL NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and Docket:2000-926(IT)I
BETWEEN:
HAMID NASSIF,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is one of four appeals in which the parties agreed to proceed by way of a common hearing; the respondent brought the same evidence for the four appeals.
[2] The appeals raise three questions:
- Was the Minister of National Revenue (the "Minister") justified in disallowing the appellants the credit claimed in respect of charitable donations?
- Was the Minister justified in assessing a penalty for the taxation years in issue in respect of the credit claimed by the filing of the receipts in issue?
- Could the Minister reassess after the normal period set out in paragraph 152(4)(a) of the Income Tax Act had expired?
[3] The first two questions involve all four cases. However, the third question does not apply to the case of Hamid Nassif (2000-827(IT)I) since the reassessment for 1993 was made within the prescribed time.
Facts
[4] The evidence showed that all appellants are related. They came to Canada in the early 1990s when their native country, Lebanon, was going through very difficult times. All Catholic, they stated that they soon contacted or were contacted by the Ordre Antonien libanais des Maronites (the "Ordre").
[5] Concerned by the war in Lebanon, which was having tragic consequences and forcing thousands of inhabitants to leave the country, the appellants said they had been called upon by the Ordre Antonien libanais des Maronites to assist in meeting the many needs of refugees. They said the Ordre acted as a kind of refuge to which all refugees turned for their basic needs. It was a kind of cornerstone that met the basic needs of many Lebanese refugees.
[6] After explaining their motivation and expressing their solidarity, the appellants curtly said that they had given various cash amounts totalling the figures appearing on the receipts in issue. They acknowledged that they had refused to cooperate in any way to shed any light whatsoever on the ground that they had receipts, that those receipts were valid and that the respondent had to accept them as such, without questioning anything whatever.
[7] Stating that they were utterly indifferent to the outcome of the investigation, they added that, while several hundreds of persons had taken part in a tax evasion scheme, they had not, and that the gifts corresponded to the amounts indicated on their receipts.
[8] The appellants stated that they had obtained the receipts in issue as a result of gifts made by means of a number of instalments. They said they had never kept any books or notes enabling them to keep track of the gifts they made. They also mentioned that everything had been done in a very private context and that no witness was in a position to confirm their claims.
[9] They regularly repeated their basic argument, which was that they had made a gift, obtained a receipt and appended it to their income tax returns. In the appellants' view, a charitable donation is an intimately private act, which concerns no one but the donor and the donee.
[10] The appellants contended that they were indifferent to Revenue Canada's findings and conclusions. In their view, their receipts stated an amount, and the respondent had to assume that they had paid the amount stated and to accept it without questioning anything. They added that, if tax evasion had been committed, Revenue Canada had only to blame the tax evaders and that they had had nothing to do with that.
[11] In essence, the appellants claim that, failing direct and absolute evidence that proves that they did not pay the amounts appearing on the receipts, their appeals should be allowed.
[12] Not only is this way of seeing and doing things unacceptable, I would have had to find that their testimony had some value in order for their theory to be admissible. That in fact was not the case and, in my view, the appellants lied throughout the trial.
[13] My assessment of the credibility of their testimony is based on a number of factors, in particular, the following: on a number of occasions, they avoided answering the questions, claimed they did not remember facts or simply refused to answer. As to the answers provided, they were obviously deceptive, vague, confused and often implausible. At certain points, the appellants' evidence was also marked by shocking inconsistencies.
[14] The only unwarranted, clear and unequivocal statement in their testimony was that they had indeed paid the amounts stated on the receipts in cash. They adduced nothing, strictly nothing, that might render their claims plausible.
[15] Furthermore, they systematically refused to cooperate on the ground that they had had nothing to do with the purported tax evasion scheme. They refused to comply with the requirements stated in the subpoenas served on them on the basis that they were unjustified, pointless and baseless. They even expressed frustration and repugnance over attempts to shed light on their personal files, even though the respondent had in her possession the results of an extensive investigation that had yielded exceptional and decisive findings concerning the scope of the scheme, thus, fully justifying the conclusions made with respect to the appellants.
[16] The amounts of the gifts constituted a significant percentage of their disposable income. Lastly, in all cases the amounts were, by chance, round figures even though all the amounts were totals of several contributions of uneven amounts ($2,000, $2,000, $2,000, $3,000 and $4,000).
[17] As chance would also have it, despite their humanitarian concern, developed sense of solidarity with the Lebanese community, considerable generosity and their concern for the well-being of their own kind, the appellants had made gifts on an ad hoc basis only and in a year in which, given their tax burden, they benefited greatly from the receipts in issue.
[18] Despite all the indications undermining the appellants' claims, the appellants showed such indifference in their testimony that they even allowed themselves to be arrogant, appalled and insulted that the respondent question the quality of the receipts filed in support of their tax returns. For all these reasons, I conclude without hesitation that their testimony lacked credibility and was worthless and, therefore, must be rejected.
[19] The respondent, on the other hand, brought well-documented evidence resulting from a very elaborate investigation. The evidence was substantiated by credible and, especially, decisive exhibits and documents establishing the validity of the conclusions reached, that is to say, that the receipts filed by the appellants were false documents.
[20] It is clear from the evidence that the Ordre Antonien libanais des Maronites had established an organization that issued tax receipts stating amounts substantially higher than the consideration it had received. It generally cost between 10 and 20 percent of the stated amount to obtain a receipt. In other words, the Maronites community was simply in the business of income tax receipts. Consequently, the purported donors and donees were enriching themselves at the expense of Canadian society. The income tax refunds obtained as a result of filing false receipts were generally higher than the outlay made to obtain the receipt. The evidence showed that those who had received such receipts were simply partners and full-fledged accomplices in a genuine tax evasion scheme. Consequently, it is utterly inappropriate to say that any gifts were made in such circumstances; rather, this was a fraudulent act from which the appellants wished to benefit.
Penalties
[21] The evidentiary standard in the matter of penalties is high and requires evidence establishing bad faith and reprehensible conduct. Analyzing and assessing whether penalties are justified requires taking into consideration a number of factors that are revealing of the taxpayer's behaviour and intention at the time he filed his return. In the instant case, it seems on a balance of probabilities that the appellants were perfectly aware of the benefit resulting from the filing of a receipt certifying that a charitable donation had been made. They knowingly and deliberately filed receipts that they knew contained false amounts in order to derive a benefit, a tax refund, from it.
[22] The coherence of all the evidence brought by the respondent satisfactorily showed on a balance of probabilities that the receipts were false.
[23] I also find that the appellants' arrogance and indifference to the reassessments made showed their bad faith. They never attempted to substantiate the validity of their claims. They never requested supporting documents from the Ordre Antonien libanais des Maronites.
[24] Not only did they refuse to cooperate by not acting on a written request for information, they deliberately chose not to comply with the written demands in the subpoena on the ground that they had done nothing wrong and that this was a pointless request.
[25] The receipts filed generated income tax deductions. The appellants had to be able to establish and prove the value and quality of those receipts. Not only did they not do that, they also expressed their impatience with and aversion and utter indifference to the fraudulent scheme.
[26] I conclude without hesitation that the reassessments made in the four cases are valid and confirm that the penalties are justified. The respondent discharged her burden of proof, whereas the appellants confined themselves to claiming that they had made gifts, the amounts of which appeared on the receipts. For this to be an effective explanation, the appellants' testimony would have had to be credible. In fact, I consider the testimony of the four appellants to be of no value, convinced that they never told the truth. Their answers, attitudes and behaviour as a whole showed that the appellants were capable of lying with disconcerting ease. They were arrogant to the point of expressing their frustration at having to explain themselves.
[27] The respondent discharged her burden of proof in these cases to justify the reassessments made after the new period had expired.
[28] For all these reasons, the appeals are dismissed. The penalties were fully justified and were rightly assessed.
Signed at Ottawa, Canada, this 19th day of March 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 27th day of May 2003.
Sophie Debbané, Revisor