Tax - Income tax - Administration and enforcement
Taxpayer was reassessed under Income Tax Act for 2004 to 2008 taxation years on basis that taxpayer had failed to report certain business income. Taxpayer appealed from reassessment. Pleadings included allegation of unlawful conduct on part of auditor which arose when civil audit division and criminal enforcement division were examining taxpayer’s tax affairs simultaneously. Crown brought successful motion to strike out parts of notices of appeal filed by taxpayer. Tax Court of Canada determined that it was plain and obvious that Court could not vacate assessments based on wrongful conduct by officials of Minister of National Revenue, that it was plain and obvious that there was no breach under ss. 7 or 8 of Canadian Charter of Rights and Freedoms and therefore evidence could not be excluded on that basis, that decision in 2010 Supreme Court of Canada decision did not extend limited jurisdiction of Tax Court, and that discretionary remedy under s. 24 of Charter had no application. Taxpayer appealed. Appeal allowed in part. Taxpayer’s pleaded facts were completely inadequate to support conclusion that auditor acted for primarily penal purpose. It was plain and obvious that allegations of unlawful conduct could not succeed because pleadings did not contain sufficient material facts that, if proven, could establish unlawful conduct. Taxpayer also raised issue concerning Tax Court’s order striking out paragraphs concerning allegation that some of taxpayer’s paper income tax returns had either been lost or destroyed by Minister. It was agreed that there was inconsistency. At hearing Crown acknowledged that inconsistency was caused by its oversight as Tax Court simply granted order that it requested. Appeal was allowed to limited extent of permitting taxpayer to argue that loss or destruction of his T1 returns was appropriate circumstance for Tax Court to shift onus of proof and order of Tax Court was varied accordingly.
Brooks v. Canada (2019), 2019 CarswellNat 6871, 2019 FCA 293, J.D. Denis Pelletier J.A., Johanne Gauthier J.A., and J. Woods J.A. (F.C.A.); varied (2019), 2019 CarswellNat 604, 2019 TCC 47, Diane Campbell J. (T.C.C. [General Procedure]).
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