2017 QCCQ 14732, 2017 QCCQ 14732

Choudhry c. Agence du revenu du Québec 2017 QCCQ 14732 COUR OF QUÉBEC CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTRÉAL « Chambre civile » DATE : September 15, 2017 ______________________________________________________________________ BY THE HONOURABLE MADAM JUSTICE MARIE MICHELLE LAVIGNE, J.C.Q. ______________________________________________________________________ N° : 500-80-034495-177 SANA CHOUDHRY Plaintiff c. L’AGENCE DU REVENU DU QUÉBEC Defendant ______________________________________________________________________ N° : 500-80-034496-175 ASIDULLAH CHOUDHRY Plaintiff c.

L’AGENCE DU REVENU DU QUÉBEC Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiffs Asidullah Choudhry and Sana Choudhry were reassessed by L’Agence du revenu du Québec (ARQ) after the tax credits for child care expenses that they received were refused. [ 2 ] The ARQ is of the opinion that the tax credits for child care expenses were obtained fraudulently based on false receipts from child care providers. [ 3 ] Asidullah Choudhry was reassessed for the taxation years 2010, 2011, 2012 and 2013. [ 4 ] Sana Choudhry was reassessed for the taxation year 2011. [ 5 ] The interest of sections 28 and 28.1 of the Tax Administration Act (TAA) [1] and the penalty of

section 59.3 of the Tax administration Act were added to the tax assessment. [ 6 ] According to the income tax returns filed for the taxation years of 2010, 2011, 2012 and 2013, Plaintiff’s household allegedly incurred the following child care expenses, namely: 2010 TAXATION YEAR CHILD DECLARED child-care provider child-care expenses Huda (age 3) Das, Nipa $9,000 Muhammed Ibrahim (age 1) Djomo Wotchoko, Dévice $9,000 TOTAL (2010) $18,000 2011 TAXATION YEAR

CHILD DECLARED child-care provider child-care expenses Huda (age 4) Khawar, Awan $7,000 Choudhry, Sundas $2,000 Muhammed Ibrahim (age 2) Khawar, Awan $7,000 Choudhry, Sundas $2,000 TOTAL (2011) $18,000 2012 TAXATION YEAR CHILD child-care provider child-care expenses Muhammed Ibrahim (age 3) Cerillo, Amabel $4,500 Sohail, Ayesha $4,500 TOTAL (2012) $9,000 2013 TAXATION YEAR CHILD child-care provider child-care expenses Huda (age 6) Anjum, Fehmida $6,000 Langdon Daycare Inc. $60 Muhammed Ibrahim (age 4) Anjum, Fehmida $9,000 TOTAL (2013) $15,060 [ 7 ] The Plaintiff Asidullah Choudhry claimed all the child care expenses for the 2010, 2011, 2012 and 2013 taxation years, and the Plaintiff and the Plaintiff’s spouse Sana Choudhry each claimed half of the child care expenses for the 2011 taxation year: TAXATION YEAR TOTAL INCOME CHILD-CARE EXPENSES TAX CREDIT FOR CHILD-CARE EXPENSES 2010 $15,505.76 $18,000 $13,500 2011 $12,064.00 $9,000 $6,750 2012 $13,722.00 $9,000 $6,750 2013 $19,389.00 $15,060 $11,295 [ 8 ] Further to its audit, the ARQ established that the percentage of household declared income allegedly incurred regarding child care expenses during the 2010, 2011, 2012 and 2013 taxation years was as follows: TAXATION YEAR DECLARED HOUSEHOLD INCOME CHILD-CARE PERCENTAGE 2010 $28,110.76 $18,000 64% 2011 $ 22,564.00 $18,000 80% 2012 $23,031.46 $9,000 39% 2013 $31,389.00 $15,060 48% [ 9 ] The ARQ concluded that the Plaintiffs were not entitled to the tax credits for child care expenses as filed in their income tax return for the 2010, 2011, 2012, and 2013 taxation years and, to reflect the adjustments issued the notices of assessment filed as Exhibit D-1. [ 10 ] In reassessing the Plaintiffs, the Defendant imposed penalties pursuant to s. 59.3 of the Tax Administration Act (“ TAA ”), because Plaintiffs had claimed false child care expenses knowingly and/or under circumstances amounting to gross negligence.

[ 11 ] On or about April 29, 2015, the Plaintiffs filed a notice of objection regarding the notices of reassessment issued for the 2010, 2011, 2012 and 2013 taxation years . [ 12 ] By letter dated May 27, 2016, the ARQ advised Plaintiffs of its decision to ratify the notices of assessment issued for the 2010, 2011, 2012 and 2013 taxation years [2] . [ 13 ] The ARQ is not bound by any fiscal return or information furnished by or in the name of any person, and the Minister may, make an assessment in accordance with

section 95.1 of the TAA . In addition, the assessments are deemed valid and binding according to

section 1014 of the Quebec Taxation Act ( “ QTA ”), and the burden is on the Plaintiffs to show that the said assessments are unfounded, which burden the Plaintiffs did not discharged. [ 14 ] Section 1010

(2) b) of the Quebec Taxation Act (QTA) provides that the Minister may redetermine the tax, interest and penalties payable and make a reassessment at any time, if the taxpayer has made a misrepresentation that is attributable to negligence or wilful default or has committed any fraud in filing the return or in supplying any information provided in his income tax return. This is the case. [ 15 ] Asidullah Choudhry is the only Plaintiff present in Court on the day of the hearing.

He claims to speak for his spouse Sana Choudhry who does not speak or understand French or English. [ 16 ] Asidullah Choudhry admitted right away that all the deductions for child care expenses that he and his wife Sana Choudhry claimed are false. He recognized that aside from Ally Abdullah Choudhry his brother and Sundas Choudhry is sister in law, he does not know any of the persons who signed the receipts for child care services allegedly provided to the Plaintiff’s children. [ 17 ] Asidullah Choudhry makes it clear that he and his spouse claimed these false child care expenses on the recommendation of Mr.

Malay Barman and it is Malay Barman who provided the false receipts to Asidullah Choudhry. [ 18 ] Malay Barman presented himself as an accountant and holder of a master degree in business administration. He also claimed to be the head of a religious temple located in his residence. [ 19 ] Malay Barman represented to Asidullah Choudhry that he was knowledgeable in the field of accounting and that all the tax claims he was proposing were legal. [ 20 ] Asidullah Choudhry now recognizes that Malay Barman was lying. He asked Mr. Barman to be present in Court to assist him for today’s hearing.

He is surprised that Malay Barman did not appear as promised. [ 21 ] Asidullah Choudhry admits that he and his wife have claimed false deductions for child care services that were not provided to their children. [ 22 ] Plaintiff’s Motions in appeal of the Notices of assessment issued against Asidullah Choudhry and Sana Choudhry are hereby dismissed and the Notices of assessment issued to Asidullah Choudhry for the taxation years 2010, 2011, 2012 and 2013 and to Sana Choudhry for the taxation year 2011 are confirmed. FOR THESE REASONS THE COURT DISMISSES the

Summary appeal respecting a fiscal matter filed by Sana Choudhry and Asidullah Choudhry in Court file number 500- 80-034495-177 and 500-80-034496-175; CONFIRMS the Notices of assessment issued against Sana Choudhry and Asidullah Choudhry. These Notices of assessment are as follows: To Sana Choudhry: the Notice of Assessment 2011 no. MW134401C01 dated February 6, 2015; To Asidullah Choudhry: Notice of Assessment 2010 no. MU911632C01 dated February 6, 2015; Notice of Assessment 2011 no. MW134402C01 dated February 6, 2015; Notice of Assessment 2012 no.

MW644062C01 dated February 6, 2015; Notice of Assessment 2013 no. MW786307C01 dated February 6, 2015. THE WHOLE WITH JUDICIAL COSTS. __________________________________ MARIE MICHELLE LAVIGNE, J.C.Q.

500-80-034495-177 The Plaintiff Sana Choudhry is represented by Asidullah Choudhry Me Ryan Allen Larivière Meunier Attorney for the Defendant L’Agence du revenu du Québec 500-80-034496-175 The Plaintiff Asidullah Choudhry is representing himself Me Ryan Allen Larivière Meunier Attorney for the Defendant L’Agence du revenu du Québec Date of hearing : September 7, 2017