http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/62908/index.do 
Golini v. The Queen[1] (September 19, 2013) was a motion by the Crown to strike portions of the appellant’s notice of appeal attacking what might be termed a “protective” reassessment issued by CRA designed to prevent the expiration of the normal reassessment period prior to the completion of their audit of the appellant. [Prior to the issuance of the reassessment in question CRA had asked the appellant for a waiver of the normal limitation period and none was forthcoming.] The impugned pleadings in question read as follows:
50. On January 25, 2013, the Appellant requested by way of an application under the Privacy Act (Canada) (“PA”) all documentation in possession of the CRA relating to the Appellant’s 2008 taxation year and specifically the audit report.
51. By letter dated January 31, 2013, the CRA confirmed that the Appellant’s 2008 personal tax return was still under review by the Audit Division of the CRA and that information and documentation supporting the reassessment would be provided upon completion of CRA’s review of the Appellant’s 2008 tax return.
52. By letter dated March 12, 2013, the Appellant received a response from the CRA in respect of his request under the PA.
53. The CRA refused to provide the audit report or any other documents supporting the Reassessment on the basis that the disclosure could reasonably be expected to be injurious to the enforcement of any law of Canada or the conduct of lawful investigations including any documents relating to the existence or nature of a particular investigation.
55(a) the Reassessment issued by the Minister arbitrarily and without the completion of an audit is a valid assessment under the Act;
57. The CRA chose to issue the Reassessment without completing an audit, arbitrarily and without support, adding a taxable dividend in the amount of $7,500,000 and denying carrying charges and interest expenses claimed in the amount of $438,626 in computing the Appellant’s taxable income for the 2008 taxation year.
58. The CRA cannot reassess a taxpayer based only on hypothesis, without verification of the facts and without completion of its audit.
59. The term “assessment” refers not only to the “procedure by which the tax is assessed”, but also to the “product” of this assessment. Thus, to arrive at a “product”, the amount established by the assessment, the CRA must first and foremost have completed an audit enabling it to determine the tax assessed.
60. This product, being the amount of tax payable by a taxpayer for a particular taxation year, may only be established from facts that have been duly verified, are complete, accurate and correct, and are stated honestly and openly to enable the taxpayer to determine what he must prove.
61. Taxpayers must know the basis on which an assessment is based to submit a proper objection.
62. As evidenced by the CRA’s response to the Appellant’s request under the PA, and by way of letter dated January 31, 2013, the CRA admits that their audit was not complete prior to issuing the Reassessment and is refusing to provide any documents supporting the Reassessment.
63. Moreover, more than six months later, an audit report still cannot be provided to the Appellant by the Minister to support the Reassessment.
64. Accordingly, the Reassessment was not issued in accordance with the requirements of the Act and is therefore not valid.
The court accepted the Crown’s argument and struck the paragraphs in question:
[22] I find that the Federal Court of Appeal’s conclusion in
Karda that a protective assessment is valid where there has been a request for information, none forthcoming and then a refusal of a waiver request, is an acknowledgment that there will be situations, as I indicated in
Karda, where more time is necessary to investigate and examine a taxpayer’s affairs, and if a protective assessment is necessary to do so, then the assessment is valid. None of the cases to which I have been referred draw any distinction between further examination being simply a request for more information or a full blown audit. It does not make a difference.
[23] What I draw from these cases is that, yes, there can be an issue with respect to the validity of an assessment. There is no law, however, to the effect that a protective assessment is invalid if issued for the sole purpose of leaving the door open to conduct or continue an audit. I can find no precedent that this is a procedural unfairness that overrides the clear statement in section 152(8) of the Act that:
An assessment shall, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, be deemed to be valid and binding notwithstanding any error, defect or omission in the assessment or in any proceeding under this Act relating thereto.
[24] Indeed, the law, I find, is clear that some review by the CRA followed by inquiries for more information and a request for a waiver, subsequently refused, is sufficient for a protective assessment to be a valid assessment. And that is exactly what we have here.
[25] It is clear from the Amended Notice of Appeal (paras 36 – 42) the CRA were not sitting idly waiting for the last day to issue a reassessment. They were actively engaged with the Appellant, providing explanations and seeking further information, and finally requesting a waiver. The Appellant refused. There is no basis in law upon which an assessment issued in those circumstances can be found invalid. The Appellant’s case based on the impugned paragraphs is, I conclude, hopeless. The test has therefore been met that such provisions should be struck and I do so.
This decision appears to be solidly rooted in prior jurisprudence. The interesting questions remain open: What if CRA had been “idly waiting” for the last day to issue a reassessment? What if they had not asked for taxpayer information or a waiver? Would such circumstances justify setting aside a “protective” reassessment? One will have to wait for future jurisprudence to opine on these issues.
[1] 2013 TCC 293.