Windsor Clinical Research – Tax Court of Canada notes that the taxpayer or Crown can amend their pleading to change the process or reasoning underlying their position

SR&ED claims of the taxpayer for various projects had been denied. The Crown now sought to amend its Reply to allege that the work conducted was in the field of psychology rather than dermatology and make related submissions.

In rejecting the submission of the taxpayer that these amendments “would deprive [it] of its right to rely on the specific approach taken by the auditors and appeal officers”, Jorré J stated:

[T]he ultimate issue on an appeal is: whether the amount of tax is too high, not the process or reasoning by which it was reached? …

[N]either party is bound by their approach prior to the court appeal.

Regarding the statement in Continental Bank ([1998] 2 SCR 298) that “[t]he Crown is not permitted to advance a new basis for reassessment after the limitation period has expired,” Jorré J found (without need to refer to s. 152(9)) that the “proposed amendments do not constitute a new or additional basis of assessment.”

Neal Armstrong. Summary of Windsor Clinical Research Inc. v. The King, 2023 TCC 179 under Rule 54 and s. 152(9).