While subsection 152(5), read literally, would only preclude the Minister from including additional amounts in "income" when reassessing a taxpayer under subsection 165(3), the courts have held that the restriction on the Minister is broader than that necessarily implied by the language of subsection 152(5). The cases discussed below establish the following general principles for reassessments issued pursuant to subsection 165(3):
- the Minister cannot reassess the taxpayer to increase its tax payable;
- reassessments following the issuance of a notice of objection are generally limited to allowing relief, but the Minister may make "mechanical" adjustments when reassessing in response to a notice of objection; and
- the Minister may not offset a requested adjustment on one issue by making an adjustment on another issue not raised in or contemplated by the objection.
[Then discusses: Anchor Pointe Energy v. The Queen, 2003 DTC 5512 (F.C.A.); Stone Container v. The Queen, 98 DTC 1508 (T.C.C.); Gilbert c. The Queen, 2009 DTC 1364 (T.C.C.); Petro-Canada v. The Queen, 2003 DTC 94 (F.C.A.); and 943372 Ontario Inc. v. The Queen, 2007 DTC 1051 (T.C.C.)]
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