In 2015-0588971C6, CRA indicated that the proposition that “the late-filing penalty of $2,500 under subsection 162(7) applies automatically… is currently under study.” CRA has now indicated that having completed that study, it is:
still of the opinion that [the penalty] applies automatically where all the conditions of that subsection are satisfied. …
CRA went on to acknowledge the six-year normal reassessment period under s. 152(4)(b.2), and referenced the exception thereto for neglect etc., and stated:
Failure to file Form T1135 when required by subsection 233.3(3) constitutes, in the CRA's view, a misrepresentation. However, whether this misrepresentation is due to neglect, carelessness, or willful default or to any fraud committed by the taxpayer or person filing the return is a question of fact determinable on a case-by-case basis.