If you right clik on the T2 form  or the S7, and select CRA Submission view,  do you see S7 in the data. You should see something like in the picture if its being transmitted.

Otherwise, it means the form is not used.

The form is used.

There is data in Part 6

S7 is not sent, and CRA disallows the deduction.

This happens each time.

Have you checked the CRA submission view?

iT is not in the CRA submission view.

That is the problem.

I see, it looks like avalid issue.  I will get back to you

Is there any overrides on your file?

So you are correct, S7 will not be transmitted in this case.  Do you have a notice of assesment?  What was the exact wording from CRA to explain that they refused the SMD ?

Sorry , I meant to write Small Business Deduction (SBD)