The taxpayer referenced the statement in IT-474R, para. 10 that “[w]here the provisions of paragraph 87(2)(a) produce unintended consequences … the Corporate Rulings Directorate … is prepared on a case by case basis to consider whether relief is appropriate,” and requested relief on the basis that the short taxation year (which had not been anticipated) resulting from an amalgamation produced an additional administrative burden. CRA responded:
The comments in paragraph 10 of IT-474R are not intended to suggest that paragraph 87(2)(a) would not be applied in some cases, but rather that the fact that a predecessor corporation is continued by the amalgamated corporation may give rise to problems of application of the Act resulting in unintended tax consequences, which we are prepared to consider and resolve.
For example, we have previously allowed an amalgamated corporation to make the subsection 20(24) election, even though technically it could only be made by the predecessor corporation … .