Newfoundland Transshipment (NTL)'s case involved capital cost allowance claims. NTL had filed its 2002-2005 tax returns showing its pipeline as a Class 1 asset (4% depreciation). In 2007, NTL filed amended returns to change its claim to Class 6 (10%).
When NTL filed its amendment requests, the time for filing objections had passed (except for the 2005 tax year.) But NTL was still within the normal reassessment period; so CRA had power to agree to the amendments. But CRA did not agree to the amendments; it thought the pipeline was rightly included in Class 1. So CRA did not reassess the 2002-2005 tax years.
In her reasons, Justice D'Auray said that a taxpayer has no right to force CRA to accept an amended return:
" ... a request to amend an income tax return will not necessarily result in a reassessment, as it is merely a request to the Minister. ... 'An amended return for a taxation year that has already been the subject of a notice of assessment does not trigger the Minister's obligation to assess ... nor does it start anew any of the statutory limitation periods ...'
" ... the Minister cannot be compelled to accept an amended return."
As noted above, s. 152(4)(a)(ii) allows CRA to reassess at any time, if the taxpayer has filed a waiver within the normal reassessment period. Though CRA may have a policy of treating an application to amend a return as a waiver in some cases, it isn't bound by that policy and the TCC will not question the reasonableness of CRA's refusal to treat the application as a waiver. (See para. 22)
In February 2012, CRA wrote NTL that it would reassess the 2006-2010 tax years to treat the pipeline as Class 1 property and that it would not reassess 2002-2005 to allow NTL to claim the pipeline in Class 6. In November 2012, NTL filed a notice of objection to the 2002-2005 tax years, claiming that CRA's February 2012 letter was a "reassessment" of those tax years. Looking at the specific wording of CRA's letter, Justice D'Auray did not agree that the letter was a "reassessment". But she left open the possibility that a differently worded CRA letter might constitute a reassessment. (Still, the CRA's letter was after the normal reassessment period; so, it was too late to reassess. See para. 28.)
It's clear from this case that when applying to CRA to amend a return, one must keep in mind the applicable deadlines. Often, it may be too late to file a notice of objection. If so, you must accept that CRA has discretion to refuse the amendment. But even if CRA agrees to amend, it may be unable to do so unless you filed a waiver on time. So, if you want to protect your ability to amend your return, you may want to file a notice of objection (if there's time) or a waiver with the amendment. (Under the Taxpayer Relief rule in s. 152(4.2)(a), CRA also has power to allow taxpayers who are individuals or testamentary trusts (unlike NTL, a corporation) to amend their returns within 10 years after the taxation year.)
See Newfoundland Transshipment Limited v. The Queen, (2013 TCC, D'Auray)