My mom is in Canada on multi-entry TRV. I wanted to extend her stay after 6 months. We just visited US by driving across the border and coming back after 2 days. To my surprise visa officer told me that my mother will still have to go back to India before her original 6 months stay. I noticed that there is no entry stamp on her passport .
Does going out of country for more than a day not reset the counter for duration of stay? My only option is to apply for extension?
No - going to the US certainly does not automatically extend your stay. It is up to the CBSA officer if someone's stay is extended or not extended. What you did (flagpoling) to try to extend your mother's status is sometimes frowned upon by CBSA. It's not at all surprising that her visit wasn't extended.
Yes - your only option is to apply for an extension from within Canada if your mother wishes to stay longer.
...Does that mean my mother can stay in Canada for ~146 days irrespective of the outcome of application? (assuming it will take 146 days for decision).