In objections of the taxpayer to the Minister’s reassessments of its 2008, 2010 and 2011 taxation years to reflect upward transfer pricing adjustments under s. 247(2), the taxpayer included requested downward adjustments pursuant to s. 247(10). The Minister then vacated the reassessments, but with the requested downward adjustments being refused. The taxpayer sought judicial review of such refusal before the Federal Court, and filed this appeal to the Tax Court from such further reassessments. The taxpayer noted that if, in response to an order of the Federal Court, the Minister determined that a downward adjustment was appropriate under s. 247(10), the Minister would not be able to reassess the taxpayer for the years under appeal to the Tax Court if that appeal was dismissed.
MacPhee J followed Dow Chemical in finding (at para. 15) that the “Tax Court has no jurisdiction to interfere in any way with the Minister’s discretion in disallowing a downward adjustment”.
In also rejecting a request by the taxpayer that the Tax Court give an opinion that the correct pricing methodology under s. 247 was as submitted by the taxpayer (and reflected in its request for downward adjustments), MacPhee J indicated (at para. 23) that the taxpayer was “seemingly seeking an expert opinion from the Tax Court that a downward adjustment is warranted, pursuant to a 247(2) analysis” and agreed with the Crown that such an opinion was not authorized under s. 171(1)(b)(iii) and that the request amounted to “seeking to obtain and use a judgment of the Tax Court as a collateral attack on the absolute discretion of the Minister under 247(10)” (para. 23).