Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on late filing penalties assessed by the Minister of National Revenue for tax years 2020 and 2021

• Appellant claimed he operated a business and was entitled to a later tax filing deadline

• Tax Court found the appellant was an employee, not a business operator, under the Income Tax Act

• Allegations of procedural unfairness were dismissed as unfounded

• Appeal reviewed for correctness in law and palpable and overriding error in fact

• Federal Court of Appeal upheld the Tax Court’s decision and dismissed the appeal without costs

Facts and outcome of the case

Hesham Ghobarah appealed a decision from the Tax Court of Canada, which had dismissed his challenge to late filing penalties imposed by the Minister of National Revenue. The penalties were related to the 2020 and 2021 taxation years. Mr. Ghobarah argued that he should be considered a business operator for tax purposes, which would entitle him to a later filing deadline under clause 150(1)(d)(ii)(A) of the Income Tax Act (ITA). The Tax Court ruled against him, determining that he was an employee, not an independent business operator.

The appeal was heard by the Federal Court of Appeal in Toronto on May 14, 2025. Mr. Ghobarah represented himself, while the respondent, His Majesty the King, was represented by Jacky Chiu and Katie Beahen from the Department of Justice Canada, with Shalene Curtis-Micallef as solicitor of record.

In reviewing the appeal, the Federal Court of Appeal applied the standard of correctness for legal questions and the standard of palpable and overriding error for factual matters. The Court found no merit in Mr. Ghobarah’s claims of procedural unfairness. It concluded that the Tax Court had provided him with sufficient opportunity to present his case and clearly explained the nature of the proceedings. The appellant’s motion to strike parts of the Minister’s reply was also properly dismissed.

Ultimately, the appellate court agreed with the Tax Court’s assessment that Mr. Ghobarah was an employee and thus subject to the earlier tax filing deadline under subparagraph 150(1)(d)(i) of the ITA. The evidence presented, including employment income reported on T4 slips and the absence of business income, supported this conclusion.

The appeal was dismissed without costs, affirming the Tax Court’s original decision and upholding the application of late filing penalties.