Date: 19981002
Docket: 97-3484-IT-I
BETWEEN:
MICHAEL G. SACCO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Christie, A.C.J.T.C.
[1] This appeal is governed by the Informal Procedure prescribed under section 18 and following sections of the Tax Court of Canada Act. The year under review is 1994.
[2] The Notice of Appeal reads:
"I wish to appeal a Notice of Reassessment originally dated February 2, 1996 and subsequently varied with a letter dated August 5, 1997 for the 1994 taxation year under the Informal Procedures.
Following my original Notice of Objection dated February 26, 1996, Revenue Canada has accepted all claims submitted but continues to disallow a valid Disability Tax Credit for self. Given my condition at the time, it was Dr. Selwyn Smith's opinion that I was entitled to the Disability Tax Credit for 1994, as claimed in the 1993 taxation year.
I feel that Revenue Canada is disallowing my Disability Tax Credit Certificate dated February 19, 1996 as a result of the legal proceedings that I have launched against the federal government, for harassment in the workplace in the Department of Public Works and Government Services Canada."
[3] The opening paragraph and paragraphs 1 to 12 inclusive of the Reply to the Notice of Appeal read:
"In reply to the Notice of Appeal for the 1994 taxation year, filed on October 22, 1997, the Deputy Attorney General of Canada says:
A. STATEMENT OF FACTS
1. He admits the facts stated in the first sentence of the second unnumbered paragraph of the Notice of Appeal but he otherwise has no knowledge of and says that the statements made in the remainder of the said paragraph are made principally by way of argument and does not admit any allegation of fact incidentally made therein.
2. He denies the facts alleged in the third unnumbered paragraph of the Notice of Appeal.
3. He can discern no other allegation of fact in the remainder of the Notice of Appeal to admit, not admit or deny.
4. By Notice of Assessment dated May 23,1995, the Minister of National Revenue (the 'Minister') assessed the Appellant's income tax return for the 1994 taxation year.
5. In computing his tax payable for the 1994 taxation year, the Appellant claimed in the computation of his non-refundable tax credits, among other things, the amount of $4,233.00 for the credit for mental or physical impairment for self.
6. By Notice of Reassessment dated February 2, 1996, the Minister reassessed the Appellant's income tax return for the 1994 taxation year by disallowing the credit for mental or physical impairment referred to in paragraph 5 above as well as other issues not currently under dispute.
7. The Appellant served on the Minister a Notice of Objection dated July 8, 1996 with respect to the 1994 taxation year but the said objection was filed beyond the time limit prescribed by subsection 165(1) of the Income Tax Act (the 'Act').
8. By letter also dated July 8, 1996, the Appellant requested to the Minister for an extension of time to file a Notice of Objection for the 1994 taxation year.
9. By letter dated September 9, 1996, the Appellant was granted an extension of time to file a Notice of Objection for the 1994 taxation year and the objection was considered to have been filed on the date of the said letter.
10. By Notice of Reassessment dated August 5, 1997, the Minister reassessed the Appellant's income tax return for the 1994 taxation year by allowing issues not currently under dispute and by concluding that the reassessment, not to allow the credit for mental or physical impairment for the said taxation year, was made in accordance with the provisions of the Act.
11. In so reassessing the Appellant's income tax return for the 1994 taxation year, the Minister made the following assumptions of fact:
(a) the Appellant suffers from major depressive and generalized anxiety disorders;
(b) the Disability Tax Credit Certificate Form T2201, as prepared by Dr. Selwyn M. Smith and signed February 19, 1996, failed to certify that the Appellant was suffering from a severe and prolonged mental or physical impairment, which markedly restricted his ability to perform a basic activity of daily living during the 1994 taxation year;
(c) the Appellant was not suffering from a severe and prolonged mental or physical impairment, which markedly restricted his ability to perform a basic activity of daily living during the 1994 taxation year; and
(d) the Appellant is not entitled to the credit for mental or physical impairment in the computation of his non-refundable tax credits and tax payable for the 1994 taxation year.
B. ISSUE TO BE DECIDED
12. The issue is whether the Appellant is entitled to a non-refundable tax credit for mental or physical impairment pursuant to subsection 118.3(1) of the Act, in the computation of his tax payable for the 1994 taxation year."
[4] Subsections 118.3(1) and 118.4(1) of the Income Tax Act ("the Act") provide:
"118.3 (1) Where
(a) an individual has a severe and prolonged mental or physical impairment,
(a.1) the effects of the impairment are such that the individual's ability to perform a basic activity of daily living is markedly restricted,
(a.2) a medical doctor, or where the impairment is an impairment of sight, a medical doctor or an optometrist, has certified in prescribed form that the individual has a severe and prolonged mental or physical impairment the effects of which are such that the individual's ability to perform a basic activity of daily living is markedly restricted,
(b) the individual has filed for a taxation year with the Minister the certificate described in paragraph (a.2), and
(c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year by the individual or by any other person,
for the purposes of computing the tax payable under this Part by the individual for the year, there may be deducted an amount determined by the formula
A x $4,118
where
A is the appropriate percentage for the year.
118.4 (1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection,
(a) an impairment is prolonged where it has lasted, or can reasonably be expected to last, for a continuous period of at least 12 months;
(b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living;
(c) a basic activity of daily living in relation to an individual means
(i) perceiving, thinking and remembering,
(ii) feeding and dressing oneself,
(iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual,
(iv) hearing so as to understand, in a quiet setting, another person familiar with the individual,
(v) eliminating (bowel or bladder functions), or
(vi) walking; and
(d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living."
[5] In his brief evidence-in-chief the appellant indicated that he was relying on a Disability Tax Credit Certificate pertaining to 1994/1995 signed by Dr. Selwyn M. Smith. It reads:
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Revenue Canada DISABILITY TAX CREDIT CERTIFICATE · Please read the attached information sheet carefully. It is important that you understand the eligibility requirements, and that you complete this form correctly. · Revenue Canada or Human Resources Development Canada may ask for more information about this claim. · Any medical assessment or form completion fees to have Part B of this form completed are the responsibility of the applicant or representative. Provincial medicare plans do not cover these fees. |
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Part A - To be completed by the applicant or representative · If you need more information, read our pamphlet called Tax Information for People with Disabilities. You can get a copy from one of our Revenue Canada income tax offices. Complete this part before taking the form to your doctor for completion of Part B of the form. |
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Name of person making this claim Social insurance no. of 713 Relationship of person with disability SACCO, MICHAEL person making this claim to person making this claim 440-481-489 1. d Self 2. Spouse 3. Other |
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Date of birth of person Maiden name of person Name of dependant 714 Social insurance number of with disability with disability with disability dependant with disability 29-04-1943 SACCO, MICHAEL |
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If you are claiming the credit for a dependant, Yes No does the dependant reside with you? If no, indicate the dependant's address. |
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Please provide the name(s), address(es) and telephone numbers of all medical doctors or optometrists who know about the individual's disabling condition(s). Attach a separate sheet if you need more space. Name Address Telephone number SMITH, SELWYN 155 Queen 786-3172 |
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I authorize any physician, optometrist or other medical agency having medical records about the disabled person to disclose the information contained in these records to Revenue Canada or to Human Resources Development Canada for the purpose of determining whether the person meets the eligibility requirements for the disability tax credit. "Michael G. Sacco" 821-1535 Feb. 19, 1996 ________________________________ ______________________ ________________________ Signature of person with disability or Telephone number Date person with Power of Attorney |
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Part B - To be completed by medical doctor or an optometrist · Complete the boxes that apply. 715 Date the basic activity of daily 716 The patient will be restricted in a basic activity of daily living: living became restricted: 1. Permanently or Temporarily/ Year Please give year Month Year Indefinitely 1994/1995 restriction ceased to be _____ ______ or should be reevaluated. |
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717 Indicate which basic activity of daily living is severely restricted: 1. o Vision 2 . o Walking 3. o Speaking 4. d Mental functions 6. o Hearing 7. o Feeding & Dressing 8. o Elimination |
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718 o DO NOT USE THIS AREA |
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Part B – Continued (To be completed by a medical doctor or an optometrist) Indicate medical diagnosis relevant to the impairment and describe aids used: - Major Depression - Generalized |
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Complete the boxes that apply. |
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1. Vision Is your patient able to see, using corrective lenses if necessary? Yes No (Visual acuity of 20/200 or better in either eye, and 20 degrees or more visual field in the best eye, after correction.) CNIB # d |
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2. Walking Is your patient able to walk, using an aid if necessary? d (For example, at least 50 metres on level ground.) |
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3. Speaking Is your patient able to speak so as to be understood in a d quiet setting, using an aid if necessary? (Exclude language differences.) |
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Yes No 4. Mental functions Is your patient able to think, perceive, and remember, using medication or d therapy if necessary? (For example, can manage personal affairs or do personal care without supervision.) |
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5. Hearing Is your patient able to hear so as to understand a spoken conversation in a d quiet setting, using an aid if necessary? (Exclude language differences.) |
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6. Feeding & dressing a) Is your patient able to feed himself/herself, using an aid if necessary? d b) Is your patient able to dress himself/herself, using an aid if necessary? d |
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7. Elimination Is your patient able to control and personally manage bowel and bladder functions, d using an aid if necessary? (For example, has uncomplicated ostomy or uses a catheter.) |
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8. Has the impairment lasted, or is it expected to last, for a continuous period of d at least 12 months? 9. Is the impairment severe enough to restrict the basic activity of daily living d identified above, all or almost all the time, even with the use of appropriate aids, devices, medication, or therapy? |
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Having read this form, and the information sheet, I certify that to the best of my knowledge the foregoing information is true and complete. "Selwyn M. Smith" __________________________________________________ Signature of doctor or optometrist |
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Name (please print) Date SELWYN M. SMITH M.D. 19-2-96 900-155 Queen St. Ottawa, Ontario Telephone number Canada K1P 6L1 (613) 786-3172 |
[6] The onus is on the appellant to establish on a balance of probability that the reassessment is in error. That onus has not been discharged. An examination of the Certificate does not indicate that the appellant is within the ambit of the legislation cited. The appellant gave evidence in cross-examination about his mental functions, but in this regard special note is to be made of the answer given by Dr. Smith to question no. 4. Although the Certificate is in prescribed form, it does not certify as what is required under paragraph 118.3(1)(a.2) of the Act.
[7] In answer to a question from the Bench the appellant said he has been continuously employed by the federal Department of Public Works and Government Services since 1980.
[8] During argument he referred to and produced the Certificate he successfully relied on pertaining to his 1993 taxation year. It is also signed by Dr. Smith. It contains these statements: "Major depressive disorder. Generalized anxiety disorder." It was pointed out to the appellant that because he was granted a credit for mental or physical impairment in 1993, it does not necessarily follow that he is automatically entitled to the credit in 1994. The 1994 taxation year must be examined on its own merits.
[9] This is said in Luxton v. The Queen, [1996] T.C.J. No. 848 and is repeated in Nayar v. The Queen, [1996] T.C.J. No. 1243:
"In Parsons, [1996] T.C.J. No. 880, Bowie T.C.J. said with reference to subsections 118.3(1) and 118.4(1) that in order for a taxpayer to qualify for a disability tax credit he must meet rigorous requirements. 'Parliament intended the deduction to be available only to individuals who suffer from the most extreme disabling conditions.' He went on to add: 'I also agree with Judge Bowman's opinion (in Lawlor, [1996] T.C.J. No. 58) that the legislation should be interpreted 'with a degree of compassion and understanding that achieves the objective of this section'. The section referred to is section 118.4 of the Act."
[10] The appeal is dismissed.
Signed at Ottawa, Canada, this 2nd day of October 1998.
"D.H. Christie"
A.C.J.T.C.