Reasons for making a proposal to have a property rebanding are here.
http://www.voa.gov.uk/council_tax/can_i_appeal .htm
There are 13 of them - these may be the same as the 12 reasons given in the letter your parents have received in that the 13th concerns demolition and is clearly not applicable in their case.
Notes the wording carefully on this website - it says 'making a prosal to alter' - not appeal against. This implies to me that you can apply to have a band changed in future - not retrospectively claim against an incorrect band. I'm not 100% sure of this but the wording is most odd.
If so this makes sense of the letter your parents have received - a retrospective claim is invalid but they will undertake a review against future Banding.