Shreedhar v. R. - TCC: Assessment not nil, included $2.10 in interest - appeal allowed to proceed

Shreedhar v. R. - TCC:  Assessment not nil, included $2.10 in interest - appeal allowed to proceed

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/182141/index.do#

Shreedhar v. The Queen (November 9, 2016 – 2016 TCC 254, Boyle J.).

Précis:   This is an oddball case that may or may not involve some unresolved family drama.  Mr. Shreedhar was a student.  A Registered Education Saving Plan (“RESP”) established by his grandfather reported to CRA taxable funds allegedly payable to him.  CRA then assessed Mr. Shreedhar in respect of this amount but applied  unclaimed education‑related deductions available to him resulting in no additional tax payable.  Mr. Shreedhar appealed to the Tax Court because he said he had never received any such amount and knew nothing about the RESP.  As a preliminary matter the Crown moved to quash the appeal as an appeal of a nil assessment.

The Tax Court rejected the Crown’s motion since there was a small amount ($2.10) of interest assessed and the appeal was therefore not from a nil assessment.  Therefore the appeal was set back down for hearing.  There was no order as to costs on the motion.

Decision:  The Crown’s motion was held to be defective since in fact there was a very small amount of interest assessed against Mr. Shreedhar:

[5]             On its face, the reassessment of the Appellant was not a nil assessment. An amount of interest was assessed by the CRA in its reassessment of him. Assessed interest, as opposed to post-assessment accrued interest, forms part of the assessment. As it is not a nil assessment, an appeal can proceed. See my more detailed review of this issue in Cooper v. The Queen, 2009 TCC 236, and the cases referred to therein. This is consistent with paragraph 15 of Canada v. Interior Savings Credit Union, 2007 FCA 151, wherein the Federal Court of Appeal says that there is nothing to appeal unless the taxpayer challenges the tax, interest or penalties assessed in the year. Such an appeal can proceed with respect to any aspect of the assessment and is not limited to the interest assessed. In Cooper, the amount of interest was $6.47 and in the Appellant’s case it is $2.10. These are very modest amounts but they are not nil. They are amounts CRA chose to add to the particular reassessments.

[6]             For these reasons, the Respondent’s objection is dismissed and the appeal should be set back down for hearing.

[7]             I wish to add‎ the observation that the Appellant was clear that his driving concern in appealing was that he was not aware of, or provided with, the information by the CRA, the Respondent or his grandfather with which he could conclude that the amount was properly includable in his income. It is not entirely clear to me that a court hearing will help resolve this aspect unless he is prepared to subpoena his grandfather. I would hope that between the Respondent and the Appellant’s grandfather, a more efficient way to help the Appellant ascertain if his concerns are warranted can easily be recognized and acted upon.

There was no order as to costs on the motion to quash.