During 2010 and 2011 taxation years, taxpayer carried on business of purchasing and importing cheese and other products from U.S. and reselling them to restaurants in Canada. Taxpayer did not report any income from his business activities for his 2010 and 2011 taxation years. Pursuant to reassessment, Minister included in taxpayer’s income amount of $23,916 for 2010 taxation year and $84,216 for his 2011 taxation year as unreported income from business. Minister levied penalties under s. 163(2) of Income Tax Act. Taxpayer admitted that he operated business in 2010 and 2011 taxation years but contested quantum of amounts included in his income and penalties levied under s. 163(2) of Act. Taxpayer’s motion to strike certain paragraphs of reply to notice of appeal was allowed in part. Taxpayer applied to set aside order allowing his motion to strike certain paragraphs of reply to notice of appeal only in part. Appeal dismissed. There was no basis for interfering with order of Tax Court of Canada. Tax Court of Canada applied correct legal principles and did not commit palpable and overriding errors in finding that paragraphs in question were relevant to issues that Tax Court of Canada would be required to determine on appeal. Given that convictions had been entered, it was open to Tax Court of Canada to find that impugned pleadings were relevant to both amount of taxpayer’s unreported income and to issue of whether penalties for gross negligence were properly assessed.
Heron v. Canada (2017), 2017 CarswellNat 6588, 2017 CarswellNat 8750, 2017 FCA 229, 2017 CAF 229, Rennie J.A., Mary J.L. Gleason J.A., and Laskin J.A. (F.C.A.); affirmed (2017), 2017 CarswellNat 1982, 2017 TCC 71, Johanne D’Auray J. (T.C.C. [General Procedure]).