The non-resident taxpayer received rents from Canada in 1997 to 2001 without withholding of Part XIII tax, and in 2002 filed returns under s. 216(1) in respect of those years in which she showed no Part I tax owing due to the claiming of expenses. The taxpayer was assessed for her joint liability under s. 227(8.1) for interest that had accrued, up to the date she filed her returns, on the Part XIII tax on the rents that the resident Canadian payor thereof had failed to withhold and remit.
Trudel, J.A. rejected the taxpayer's submission that, in light of the "in lieu of" wording of s. 216(1), the filing of the s. 216(1) returns displaced the withholding and remittance obligations of the resident tenant ab initio.