Section 29 again, a damn cheek

As previously posted, I had an an oficer open a "discovery" on a client under Section 29 TMA 1970, on the pretence that we had underdeclared share option income for a client on the 2003-2003 return (out of time for a Section 9a Enquiry). In fact we had not, and had (correctly) shown some of the income as a capital gain.

I wrote to the officer stating that she had no grounds for opening the enquiry, and also asking her under what basis she considered an enquiry appropiate under Section 29. She has replied citing Para 4 which states "fraudulent or negligent conduct" and still asking us to justify the use of the capital gain.

Now I have a small quandry, I could reply simply sending the documentation and get the whole things closed, BUT if I were to do so, I am effectively allowing this officer to trample wholesale (in my opinion) over the enquiry deadlines and condoning the misuse of Section 29.

My inclination is to write back stating that this is not an appropiate use of the legislation, asking for it to be closed, and asking for a commissioners hearing should they resist. They ought at the very least to follow the legislation and assess my client, which I can then appeal against.

However, this might not be in my client's best interest, but might be in the wider interest of all taxpayers.

I'd value any comments, advice or has anyone had anything similar?
Ian Clark