In Ellis, S. v. the Queen, 2015 TCC 285, the taxpayer appealed an assessment made pursuant to section 160 of the Income Tax Act (the “Act”) in respect of her husband’s taxes and penalties, which included a gross negligence penalty of $10,199.73. The assessment was issued after the husband had transferred a 50% undivided interest in the matrimonial home to the taxpayer. The Court held that the Minister bears the burden of providing prima facie evidence of the transferor’s tax liability upon which the section 160 assessment is based. In this case, the Minister failed to discharge the burden in respect of the gross negligence penalty as no explanation was provided at trial as to why the penalty was assessed. Accordingly, the penalty is to be removed from the section 160 assessment.