http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/71808/index.do 
Atutornu v. The Queen (May 28, 2014 – 2014 TCC 174) was another in the spate of “agency” deduction cases. Both husband (Rasper) and wife (Peace) filed appeals.
[1] These two appeals were heard on common evidence. The appellants appeal from reassessments with respect to the 2009 taxation year.
[2] Although the name “fiscal arbitrator” did not come up at the hearing these cases look a lot like cases that have been referred to as “fiscal arbitrator” cases.
[3] The reassessments disallowed substantial deductions claimed on line 232, “Other deductions”. In the tax return of each party after the word “specify” on the preprinted form, the words “DUE TO ANIMATOR AS AGENT” were added to the form.
[4] In the case of Rasper, the deduction claimed was $87,109.66. In the case of Peace, the amount claimed was $50,698.79.
[5] As a result of these deductions on line 232, the appellants filed returns claiming that they were not liable to any federal or Ontario income tax whatsoever and claiming a refund of all tax withheld.
[6] In support of this claim at Tab 1 of Exhibits R-1 and R-2, respectively, are documents entitled “Notice of Usage” (at page 4) and “Annual Statement for Agent’s Activities” (at page 5).
[7] These documents are meaningless. For example, in the case of Rasper, Rasper is both the agent and the animator and, based on nonsensical calculations, the “Annual Statement for Agent’s Activities” concludes that Rasper, as animator, owes Rasper, as agent, $87,109.66. This amount of $87,109.66 is then claimed on line 232.
As with all the other similar cases the court dismissed the appeals and upheld the imposition of penalties by the Minister:
[27] Before concluding, I should deal briefly with two matters.
[28] First, the appellants suggested that the Canada Revenue Agency was at fault because it had a duty of care to prevent them from getting refunds to which they were not entitled and, accordingly, they should not be penalized.
[29] This argument is unfounded. The penalties under subsection 163(2) would be applicable even if the Canada Revenue Agency had intercepted the claims and had never paid the refunds. It does not require that the taxpayer actually benefit from the false statement.
[30] Further, the section imposes a penalty if two elements are met. There must be a false statement and that statement must have been made knowingly or under circumstances amounting to gross negligence. Both requirements are met here.
[31] Second, the appellants alleged that they were facing hardships and asked that that be taken into account.
[32] I appreciate that the penalties are severe ones; however, as I said at the hearing, that is not something I can consider. The only question I can decide on the penalties is whether they are well founded or not. I cannot adjust the amount.