In fact the judge mentioned this very point in his judgment.
It is yet another instance where HMRC has set itself the standard of issuing s8 notices to a class of people regardless of whether they are needed, and where HMRC officers appear to believe there is a s7 obligation even though there isn't.
As he points out, if you have an income of £5million all covered by PAYE, you don't have the remotest duty to notify HMRC of the fact - but they will still insist on sending you a tax return to fill in.
One of the problems with being an executive body is the tendency to confuse mere departmental policy with the law of the land. HMRC Policy can impose an obligation on HMRC staff, but it can't impose one on the taxpayer.
As has been pointed out, most HMRC staff never get to see the raw legislation. Even in my IR days (way back before SA), I was regarded as an anomaly, being a TO(HG) who actually read the TMA...
I seem to recall, eons ago in the pre-SA days, a case where an Inspector decided to assess a woman on her earnings from prostitution but, being a bit prim and mealy-mouthed, he used the (then current) euphemism "French lessons" as the source of income.
At the Commissioners, he was asked whether he had any evidence that the lady actually taught French; on replying no, he was told that the assessment would be dismissed as it assessed a non-existent source....
Distant memory only, and might be purely apocryphal, but we can dream.
Actually, since the claim related to the carry-back of loss relief from one year to the preceding year, it falls within TMA 1970 Schedule 1B. As a result, although it is calculated by reference to the earlier year's income and gains, it is executed as a claim of the later year. Which would enable carelessness to be used to extend the assessment window to April 2015.
That very thing (ie Tooth amending his 07/08 return for a later year loss when there was no statutory authority to do so) should have triggered an immediate enquiry, even without the fact that Tooth actually told them to raise one!