Executive Summary: Key Legal and Evidentiary Issues

• Mr. Aslam's tax credit claim under section 118.1 of the Income Tax Act was denied due to his lack of donative intent in the "Global Learning Gifting Initiative" arrangement.

• The Federal Court of Appeal declined to retry the case, finding no palpable and overriding error, legal error, or procedural unfairness in the Tax Court's judgment.

• Allegations of an unfair hearing were rejected, as the Tax Court provided the unrepresented appellant a full and fair opportunity to adduce evidence and make submissions.

• The appellant's personal circumstances — including his newcomer status and lack of legal training — were deemed irrelevant to tax credit eligibility.

• A subsequent cost assessment under Tariff B, Column III resulted in 14 units allowed for assessable services totaling $2,520, with 2 units under Item 27 disallowed for double indemnification.

• Disbursements were partially reduced from $746.67 to $495.89 after certain courier and photocopy expenses were found not reasonable and necessary for the conduct of the proceedings.

The facts of the case

Muhammad Ejaz Aslam, an unrepresented taxpayer and newcomer to Canada at the relevant time, participated in a tax arrangement known as the "Global Learning Gifting Initiative." Through this arrangement, he claimed a tax credit under section 118.1 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) for the 2006 taxation year. The arrangement was one open to question given the significant disparity between the donation and the credit. Mr. Aslam's tax assessment was appealed to the Tax Court of Canada, where the central issue was whether he possessed the donative intent necessary to qualify for the credit.

The Tax Court proceedings

Mr. Aslam's appeal was heard under the informal procedure before Justice Bocock of the Tax Court of Canada. The Tax Court dismissed the appeal by judgment dated February 1, 2024. Key to the Tax Court's decision to deny the credit was its factually suffused finding, based on the assumptions triggered by the Minister's pleading and the particular evidence in this case, that Mr. Aslam had participated in a series of transactions with the intention to gain, not to lose. As a result, he lacked the donative intent necessary to qualify for the credit. Mr. Aslam was unrepresented throughout the proceeding, and the Tax Court took steps to assist him: briefly explaining the procedure at the outset, twice confirming that he had offered all the evidence he had available to him and had no other testimony to offer, explaining the legal test for donative intent during submissions, asking questions to ensure it understood his positions and to give him an opportunity to explain them, and allowing him to provide more testimony after the evidentiary phase of the tax appeal had ended.

The appeal to the Federal Court of Appeal

Mr. Aslam appealed the Tax Court's judgment to the Federal Court of Appeal, which heard the matter at Edmonton, Alberta, on November 20, 2024, before Justices Stratas, Mactavish, and Biringer. Judgment was delivered from the bench on the same day. On appeal, Mr. Aslam essentially asked the Court to retry the case and come to a conclusion different from the one the Tax Court reached. The Court stated that it could not reweigh the evidence and come to a different conclusion on the facts. Instead, its role was limited to examining whether the Tax Court erred in law, committed an obvious error capable of changing the result of the case (i.e., "palpable and overriding error"), or acted in a procedurally unfair way. Given that this was an appeal from a case decided under the informal procedure in the Tax Court, the standard was even more deferential — the Tax Court's judgment on factual issues must have been made "in a perverse or capricious manner or without regard for the material before it" under section 27(1.3)(d) of the Federal Courts Act. The Court found that none of these flaws were present.

The appellant's arguments and the Court's response

Mr. Aslam advanced several arguments. He cited his lack of knowledge about the transactions he was entering into and the legal documents he was signing, his lack of legal training, and his status at the time as a newcomer to Canada. The Court found that these were not relevant to his eligibility to the tax credit, noting that the Minister of National Revenue has a duty to assess a taxpayer's tax liability on the basis of the provisions of the Act and the evidence in the case, nothing else. He also submitted that the Tax Court did not give him, an unrepresented litigant, a fair hearing, but the Court disagreed, finding that the Tax Court gave Mr. Aslam a full and fair opportunity to adduce evidence and make submissions responsive to the relevant factual and legal issues. Mr. Aslam himself admitted in oral argument before the Federal Court of Appeal that the Tax Court was being "helpful" with its questions and interventions during the hearing. Mr. Aslam further raised the Tax Court's refusal to consolidate his case with his related cases in other taxation years, but the Court found this did not work unfairness to him, as the presence of other cases would not have changed the procedural, factual or legal matrix of this case. Moreover, before the hearing, Mr. Aslam had requested consolidation, the Tax Court refused it, and Mr. Aslam did not appeal from that ruling; thus, the issue of consolidation was off the table at the time of the hearing. The appellant also referred to an upcoming case in the Federal Court of Appeal concerning the same scheme, but the Court stated that case would not affect this case. Finally, Mr. Aslam asked the Court to recommend to the Minister of National Revenue that the interest on the tax he owes be waived, but the Court held it could not do so, as it has the power only to allow or dismiss appeals from the Tax Court, not to make recommendations on discretionary decisions that Parliament has given to others to make, such as the discretionary decision of the Minister to waive interest under s. 220(3.1) of the Act.

The cost assessment proceeding

Following the dismissal of the appeal with costs, the respondent initiated an assessment of costs under section 406 of the Federal Courts Rules, SOR/98-106, by filing a bill of costs and the affidavit of Linda Plitt, sworn on June 26, 2025, with Exhibits A to D, on July 3, 2025. Assessment Officer Karine Turgeon considered the matter at Ottawa, Ontario, without personal appearance of the parties and delivered her reasons on February 27, 2026. Because the Judgment was rendered before the amended Tariff B came into force on December 21, 2025, Tariff B as it read on December 20, 2025, applied to this assessment. Several preliminary issues arose. The appellant contended that the Court should exercise its discretion to award costs based on Column I, and that the Court should inquire into which services were rendered by counsel and which were rendered by a law clerk or a paralegal. The Assessment Officer determined that Column III must be used for this assessment pursuant to Rule 407, as ordered by the Court, and that the respondent lawfully formulated its claims as services rendered by counsel. The appellant also challenged the evidence set out in the affidavit of Linda Plitt, but the Assessment Officer found no grounds to question the validity or veracity of the respondent's affidavit and concluded that the appellant's contentions regarding the affidavit would have no bearing on the assessment.

Assessable services and disbursements

The Assessment Officer allowed 14 of the 16 units claimed for assessable services: the memorandum of fact and law under Item 19 (5 units), the requisition for hearing under Item 20 (1 unit), counsel fee on hearing of appeal under Item 22(a) (4 units, being 2 units multiplied by 2 hours), services after judgment under Item 25 (1 unit), and assessment of costs under Item 26 (3 units), amounting to $2,520. The 2 units claimed under Item 27 for "such other services as may be allowed by the assessment officer or ordered by the Court" were disallowed, as allowing an additional unit under Item 27 for the assessment of costs would result in double indemnification, which is not permitted in taxation, and no other specific submissions were made in support of the claim. Regarding disbursements, the respondent claimed $746.67 — comprising $724 for photocopies made internally and $22.67 for courier fees. The Assessment Officer reduced this amount. Of the three courier charges, only the $7.64 fee for delivering a hard copy of the condensed book to the appellant was allowed, as paragraph 61 of the Federal Court of Appeal Consolidated Practice Direction requires a hard copy of a condensed book to be provided to all parties before an in-person appeal hearing. The courier fees of $7.23 for the notice of appearance and $7.80 for the respondent's factum were disallowed: the notice of appearance had already been acknowledged by the appellant upon service without delay, making the additional courier service unnecessary; and the respondent had previously advised the appellant that documents not requiring personal service would be served electronically, so the appellant should not have to bear the courier cost for the factum. Regarding photocopies, the Assessment Officer allowed one printed copy of each document for the respondent's own use, as well as four additional copies of the condensed book for the members of the Court and the appellant's use at the hearing. However, second copies of the appellant's factum, the appeal book, the respondent's factum, and the joint book of authorities were disallowed for various reasons, including that certain documents had been served and filed by the appellant or electronically. The rate of $0.25 per page was upheld as appropriate and reasonable. After the reductions, $488.25 was allowed for photocopies and printing expenses, bringing total disbursements to $495.89.

The ruling and outcome

The Federal Court of Appeal dismissed Mr. Aslam's appeal with costs in the November 20, 2024 judgment, affirming the Tax Court's denial of the tax credit. In the subsequent cost assessment dated February 27, 2026, the respondent's bill of costs was assessed and allowed in the amount of $3,015.89 — consisting of $2,520 for assessable services and $495.89 for disbursements — payable by the appellant to the respondent.