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Docket: 2000-4699(IT)I |
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BETWEEN: |
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GEORGES GOSSELIN, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent.
[OFFICIAL ENGLISH TRANSLATION] |
____________________________________________________________________
Appeals heard on June 14, 2004, at Montréal, Quebec
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Before: The Honourable Judge Brent Paris |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Annick Provencher |
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JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1994 and 1995 taxation years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 13th day of August 2004.
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"B. Paris" |
Paris J.
Translation certified true
on this 25th day of January 2005.
Colette Dupuis-Beaulne, Translator
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Citation: 2004TCC544 |
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Date: 20040813 |
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Docket: 2000-4699(IT)I |
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BETWEEN: |
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GEORGES GOSSELIN, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN |
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Respondent. |
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[OFFICIAL ENGLISH TRANSLATION] |
REASONS FOR JUDGMENT
ParisJ.
[1] This is an appeal from an assessment dated April 4, 1996, for the 1994 taxation year. With this assessment, the Minister of National Revenue (the "Minister") imposed a penalty for late filing, pursuant to subsection 162(2) of the Income Tax Act.
[2] The only issue at bar is whether the Appellant exercised due diligence to ensure that his income tax returns were filed within the timeframe prescribed by the Act.
[3] The evidence submitted by Christian Plouffe, witness for the Respondent, shows that the Appellant filed his 1994 income tax return with the Minister on March 13, 1996. Prior to this date, the Minister had sent the Appellant two requests to file a return for the 1994 taxation year.
[4] According to the Appellant, his 1994 return was sent to the Minister prior to April 30, 1995, and sent a second time in March 1996, further to the Minister's requests to file. Revenue Canadahas no record prior to March 13, 1996, of the receipt of a return filed by the Appellant for 1994.
[5] Even where a taxpayer fails to file an income tax return within the prescribed timeframe, subsection 162(2) of the Act allows for a due diligence defence. This defence requires that the taxpayer demonstrate a high level of diligence with respect to the obligations imposed on him by the Act. In this case, it is not possible for me to conclude that due diligence was exercised.
[6] The Appellant testified that he had hired an accountant to prepare and file his income tax return, because his tax situation was complicated by the fact that he had taken his retirement from Hydro Québec in 1994, and he had received large sums from his pension plan. He claimed that he received a letter from the accountant stating that the accountant had sent his federal and provincial returns and that a cheque for $14,822 was payable to the Minister of National Revenue. A copy of this letter, dated May 9, 1995, was filed in evidence. The letter reads as follows:
[TRANSLATION]
May 9, 1995
Personal and confidential
GEORGES GOSSELIN
2056 MEXICO
CHOMEDEY
QUEBEC
H7M3C6
GEORGES GOSSELIN
Attached is a copy of your federal and Quebec income tax returns for 1994. Please keep these copies for your files.
FEDERAL
Your federal income tax return shows that you have a balance owing of $14,822.00. Please attach a cheque or money order payable to the Receiver General before APRIL 30, 1995. Write down your social insurance number and "1994 taxation year" on the back of your cheque.
PROVINCIAL
Your Quebec income tax return shows that you are entitled to a refund of $3,246.50.
The income you are reporting includes the sum of $21.00 in capital gains to which an election applies. This election was made to benefit from the $100,000 capital gain deduction for the last year.
Should you receive a Notice of Assessment that is different from the return as it was submitted, please forward it to us. We must determine whether the Notice of Assessment is accurate prior to the expiry of the time limitation for filing an objection.
You must make federal instalment payments totalling $14,820 to Revenue Canada.
Based on the income you earned, you can contribute up to $10,657 to your registered retirement savings plan in 1995.
Regards,
DESJARDINS GAGLIARDI, C.A.
[7] The evidence does not show what took place with the accountant regarding the Appellant's income tax return. The accountant was not called to testify about what he did to file this return, and the Appellant was unable to provide this information. His recollection of his dealings with the accountant was unclear. When counsel for the Respondent asked him whether the accountant had sent the return directly to the Agency, he replied:
[TRANSLATION]
Well, I think that's what was done, because I received the letter telling me that they were sending me my copies of the tax returns and that I should keep these two copies.
The Appellant also said that he sent a cheque to the Minister, as requested in the letter from the accountant, but the cheque was never cashed. He claims that he followed up by telephone in May, June, and July, and that he had been told that there was a delay of up to three months for processing files. During cross-examination, the Appellant admitted that, after the first telephone call in May 1995, he may have waited until January 1996, following the receipt of a provincial assessment for his 1994 taxation year, to enquire again about his federal return. It appears that, in January 1996, the Appellant received a request from Revenue Canada to file this return. The fact that the Appellant waited until January 1996 to seek information from the Minister further supports the statement of facts he made in his Notice of Objection prepared in August 1996, rather than the facts he related in Court. Evidently, he believed that his accountant had already filed his returns.
[8] It is my opinion that the appropriate time to determine whether the Appellant's conduct meets the requirements for a due diligence defence is the time at which the return was to be filed. Does the simple fact that the Appellant used the services of an accountant to file his return show that he exercised due diligence? I feel that, to successfully make his claim, the Appellant had to demonstrate that the accountant exercised due diligence in performing his duties. In the absence of evidence to show that this was the case, the Appellant cannot successfully appeal this matter before this Court.
[9] In Roberts v. Canada, [1997] T.C.J. No. 771, Bowman J. said:
Here it is true the appellant hired bookkeepers for one of the periods in question and paid them what appears to me to be excessive amounts for their incompetence and inaction. This might justify an action by the appellant against them, but it does not amount to due diligence. The accountants are after all the appellant's agents and the appellant is responsible of what they did or failed to do. In the same way as the exercise of due diligence on the part of a taxpayer's accountants or bookkeepers would be attributed to the taxpayer and would justify the removal of a penalty, so too does the absence of due diligence on the part of the taxpayer's accountants or bookkeepers disentitle him or her to the relief envisaged by the Pillar Oilfield case.
[10] Some inconsistencies in the May 9, 1995, letter from the accountant should be noted. For example, the Appellant was asked to "Please attach a cheque or money order payable to the Receiver General before APRIL 30, 1995," even though the Appellant claimed that his return had been sent by the accountant directly, and even though the letter from the accountant was dated nine days later than April 30, 1995. These points raise more questions about what had been agreed on with respect to filing the return and the steps taken by the accountant; these questions remain unanswered.
[11] The burden in establishing a due diligence defence is the Appellant's. In this case, he has not discharged this burden, and the appeal is dismissed.
Signed at Ottawa, Canada, this 13th day of August 2004.
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"B. Paris" |
Paris J.
Translation certified true
on this 25th day of January 2005.
Colette Dupuis-Beaulne, Translator
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CITATION: |
2004TCC544 |
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COURT FILE No.: |
2000-4699(IT)I |
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STYLE OF CAUSE: |
Georges Gosselin and Her Majesty the Queen |
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PLACE OF HEARING: |
Montréal, Quebec |
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DATE OF HEARING: |
June 14, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable Judge B. Paris |
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DATE OF JUDGMENT: |
August 13, 2004 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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For the Respondent: |
Annick Provencher |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |