Surigao vs CTA 57 SCRA 523 Facts: Petitioner Surigao Electric Co., grantee of a legislative electric franchise, contested a warrant of distraint and levy to enforce the collection from "Mainit Electric" of a deficiency franchise tax plus surcharge. Thereafter the Commissioner, by letter dated April 2, 1961, advised the petitioner to take up the matter with the General Auditing Office, enclosing a copy of the 4th Indorsement of the Auditor General dated November 23, 1960. This indorsement indicated that the petitioner's liability for deficiency franchise tax for the period from September 1947 to June 1959 was P21,156.06, excluding surcharge. Subsequently, in a letter to the Auditor General dated August 2, 1962, the petitioner asked for reconsideration of the assessment, admitting liability only for the 2% franchise tax in accordance with its legislative franchise and not at the higher rate of 5% imposed by Sec. 259 of the NIRC, which latter rate the Auditor General used as basis in computing the petitioner's deficiency franchise tax. An exchange of correspondence between the petitioner, on the one hand, and the Commissioner and the Auditor General, on the other, ensued ensued,, all on the matter matter of the petiti petitione oner's r's liabil liability ity for defici deficienc ency y franch franchise ise tax. tax. The The contro controver versy sy culminated in a revised assessment dated April 29, 1963 in the amount of P11,533.53, representing the petitioner's deficiency franchise-tax and surcharges thereon for the period from April 1, 1956 to June 30, 1959. 1959. The petiti petitione onerr then then reques requested ted a recompu recomputat tation ion of the revise revised d assess assessmen mentt in a letter letter to the Commissioner dated June 6, 1963. The Commissioner, however, in a letter dated June 28, 1963 denied the request for recomputation.
Petitioner appealed to the CTA which was subsequently dismised on the ground that the appeal was filed beyond the thirty-day period of appeal provided by Sec. 11 of Republic Act 1125. Issue: WON the petitioner's appeal to the CTA was time-barred.
Ruling: YES. To sustain the petitioner's contention that the Commissioner's letter of June 28, 1963 denying its request for further amendment of the revised assessment constitutes the ruling appealable to the tax court and that the thirty-day period should, therefore, be counted from July 16, 1963, the day it received the June 28, 1963 letter, would, in effect, leave solely to the petitioner's will the determination of the commencement of the statutory thirty-day period, and place the petitioner — and for that matter, any taxpayer — in a position, to delay at will and on convenience the finality of a tax assessment. This absurd interp interpret retati ation on espous espoused ed by the petiti petitione onerr would would result result in grave grave detrim detriment ent to the the inter interest estss of the Government, considering that taxes constitute its life-blood and their prompt and certain availability is an imperative need.
Silkair vs CIR CA GR SP No. 82902, September 13, 2004 Facts: Silkair, an online international air carrier, filed with the Bureau of Internal Revenue (BIR) a written application for the refund of P4,567,450.79 excise taxes it claimed to have paid on its purchases of jet fuel from Petron Corporation from January to June 2000. As the BIR had not yet acted on the application, Silkair Silkair filed a Petition Petition for Review Review before before the CTA. Opposing Opposing the petition, petition, respondent respondent CIR alleged alleged that petitioner failed to prove that the sale of the petroleum products was directly made from a domestic oil company to the international carrier.
CTA denied Silkair’s petition on the ground that as the excise tax was imposed on Petron Corporation as the manufacturer of petroleum products, any claim for refund should be filed by the latter; and where the burden of tax is shifted to the purchaser, the amount passed on to it is no longer a tax but becomes an added cost of the goods purchased. Hence, this appeal. Issue: Whether Silkair may claim for the refund of excise taxes erroneously paid. Held: NO. As the excise tax was imposed on Petron Corporation as the manufacturer of petroleum products, any claim for refund should be filed by the latter; and where the burden of tax is shifted to the purchaser, the amount passed on to it is no longer a tax but becomes an added cost of the goods purchased.
Therefore, the right to claim for the refund of excise taxes paid on petroleum products lies with Petron Corporation who paid and remitted the excise tax to the BIR. Respondent, on the other hand, may only claim from Petron the reimbursement of the tax burden shifted to the former by the latter. The excise tax partaking the nature of an indirect tax, is clearly the liability of the manufacturer or seller who has the option whether or not to shift the burden of the tax to the purchaser. Where the burden of the tax is shifted to the purchaser, the amount passed on to it is no longer a tax but becomes an added cost on the goods purchased which constitutes a part of the purchase price. In sum, the incidence of taxation or the person statutorily liable to pay the tax falls on Petron though the impact of taxation or the burden of taxation falls on another person, which in this case is petitioner Silkair.
Republic vs Enriquez 166 SCRA 608 Facts: Enriqu Enriquez, ez, respon responden dentt deputy deputy sherif sheriff, f, levied levied on 2 barges barges belong belonging ing to Mariti Maritime me Compan Company y of the Philippines pursuant to a writ of execution issued by the RTC of Manila in favor of the plaintiff Genstar Containers. Accordingly, respondent sheriff scheduled a public auction sale of the levied barges. The CIR then wrote to respondent sheriff, registering an adverse claim, informing the latter that the barges, particularly Barge MCP-1 and Barge MCP-4, were among properties previously distrained and seized by the petiti petitione onerr Republ Republic, ic, throug through h the CIR, CIR, to satisf satisfy y variou variouss defici deficienc ency y taxes taxes of said said compan company. y. Neverthel Nevertheless, ess, respondent respondent sold at public public auction auction the 2 barges barges and issued the correspond corresponding ing sheriffs certificate of sale to the highest bidder, which was the levying creditor. Petitioner prayed that respondent be ordered to desist and refrain from further proceedings in connection with the execution and that respondent's notice of levy be declared null and void.
CA dismissed the petition, hence, this appeal. Issue: WON the writ of execution issued by the RTC and the levy on execution and auction sale of the barges in question is valid and should be given effectivity. Ruling: NO. It is settled that the claim of the government predicated on a tax lien is superior to the claim of a private litigant predicated on a judgment. The tax lien attaches not only from the service of the warrant of distraint of personal property but from the time the tax became due and payable. Besides, the distraint on the subject properties of Maritime Company as well as the notice of their seizure were made by petitioner, through the CIR, long before the writ of execution was issued by the RTC. There is no question then that at the time the writ of execution was issued, the 2 barges were no longer properties of the Maritime.
Estate of Fidel Reyes vs CIR CTA Case No. 6747 January 16, 2006 Facts: The estates of spouses Fidel and Teresita Reyes availed of the Voluntary Assessment Program of the BIR. The heirs even declared property that were no longer part of the estates; hence, this negated any deceitful intention to defraud the government of revenues. The CTA, however, declared that the estates filed false returns after taking into account that: 1) despite having reported conjugal and paraphernal property, the estate of Fidel failed to declare basic deficiency estate tax worth P497,789.12; 2) instead of the vanishing deductions claimed of P10,680,355.43, the estate of Teresita may only claim vanishing deduction deductionss of P663,027. P663,027.01; 01; the failure failure to include include correctly correctly the deduction deductionss actually actually incurred incurred by the taxpayer lowered the deficiency estate tax; and 3) the estate of Y did not report basic deficiency estate tax of P664,661.27. Ruling: While there are no indicia of fraud, fr aud, the filing of a false return is sufficient to warrant assessment of ten 10 years from date of discovery of the falsity.
Roxas y Cia vs CTA 23 SCRA 276 Facts: Don Pedro Roxas and Dona Carmen Ayala, Spanish subjects, subjects, transmitt transmitted ed to their grandchil grandchildren dren by hereditary hereditary succession succession several several properties properties.. To manage manage the above-ment above-mentioned ioned properties, properties, said children, children, namely, Antonio Roxas, Eduardo Roxas and Jose Roxas, formed a partnership called Roxas y Compania. At the conclusion of the WW2, the tenants who have all been tilling the lands in Nasugbu for generations expressed their desire to purchase from Roxas y Cia. the parcels which they actually occupied. For its part, the Government, in consonance with the constitutional mandate to acquire big landed estates and apport apportion ion them them among among landle landless ss tenant tenants-f s-farm armers ers,, persu persuade aded d the Roxas Roxas brothe brothers rs to part part with with their their landholdings. Conferences were held with the farmers in the early part of 1948 and finally the Roxas brothers agreed to sell 13,500 hectares to the Government for distribution to actual occupants for a price of P2,079,048.47 plus P300,000.00 for survey and subdivision expenses. It turned out however that the Government did not have funds to cover the purchase price, and so a special arrangement was made for the Rehabilitation Finance Corporation to advance to Roxas y Cia. the amount of P1,500,000.00 as loan. Collateral for such loan were the lands proposed to be sold to the farmers. Under the arrangement, Roxas y Cia. allowed the farmers to buy the lands for the same price but by installment, and contracted with the Rehabilitation Finance Corporation to pay its loan from the proceeds of the yearly amortizations paid by the farmers.
The CIR demanded from Roxas y Cia the payment of deficiency income taxes resulting from the inclusion as income of Roxas y Cia. of the unreported 50% of the net profits for 1953 and 1955 derived from the sale of the Nasugbu farm lands to the tenants, and the disallowance of deductions from gross income of various business expenses and contributions claimed by Roxas y Cia. and the Roxas brothers. For the reason that Roxas y Cia. subdivided its Nasugbu farm lands and sold them to the farmers on installment, the Commissioner considered the partnership as engaged in the business of real estate, hence, 100% of the profits derived therefrom was taxed. The Roxas brothers protested the assessment but inasmu inasmuch ch as said said protes protestt was denied denied,, they they instit institute uted d an appeal appeal in the CTA which which sustai sustained ned the assessment. Hence, this appeal. Issue: Is Roxas y Cia. liable for the payment of deficiency income for the sale of Nasugbu farmlands? Ruling: NO. The proposition of the CIR cannot be favorably accepted in this isolated transaction with its peculiar circumstances in spite of the fact that there were hundreds of vendees. Although they paid for their respective holdings in installment for a period of 10 years, it would nevertheless not make the vendor Roxas y Cia. a real estate dealer during the 10-year amortization period. It should be borne in mind that the sale of the Nasugbu farm lands to the very farmers who tilled them for generations was not only in consonance with, but more in obedience to the request and pursuant to the policy of our Government to allocate lands to the landless. It was the bounden duty of the Government to pay the agreed compensation after it had persuaded Roxas y Cia. to sell its haciendas, and to subsequently subdivide them among the farmers at very reasonable terms and prices. However, the Government could not comply with its duty for lack of funds. Obligingly, Roxas y Cia. shouldered the Government's burden, went out of its way and sold lands directly to the farmers in the same way and under the same terms as would have been the case had the Government done it itself. For this magnanimous act, the municipal council of Nasugbu passed a resolution expressing the people's gratitude.
In fine, Roxas y Cia. cannot be considered a real estate dealer for the sale in question. Hence, pursuant to Section 34 of the Tax Code the lands sold to the farmers are capital assets, and the gain derived from the sale thereof is capital gain, taxable only to the extent of 50%.
CIR vs Reyes and Reyes vs CIR GR Nos. 159694, 163581 Facts: Decedent Tancinco left a 1,292 square-meter residential lot and an old house thereon. The heirs of the decedent received a final estate tax assessment notice and a demand letter, letter, both dated April 22, 1998, for the amount amount of P14,91 P14,912,2 2,205 05.47 .47,, inclu inclusiv sivee of surcha surcharge rge and inter interest est.. The CIR issued issued a prelim prelimina inary ry collec collectio tion n letter letter to Reyes, Reyes, follow followed ed by a Final Final Notic Noticee Before Before Seizur Seizure. e. Subseq Subsequen uently tly,, a Warran Warrantt of Distraint and/or Levy was served upon the estate. Reyes initially protested the notice of levy but then the heirs proposed a compromise settlement of P1,000,000.00. The CIR rejected Reyes’s offer, pointing out that since the estate tax is a charge on the estate and not on the heirs, the latter’s financial incapacity is immaterial as, in fact, the gross value of the estate amounting to P32,420,360.00 is more than sufficient to settle the tax liability. As the estate failed to pay its tax liability within the deadline, BIR notified Reyes that the subject property would be sold at public auction on August 8, 2000. Reyes filed a protest with the BIR Appellate Division. Assailing the scheduled auction sale, she asserted that the assessment, letter of demand, and the whole tax proceedings against the estate are void ab initio. She offered to file the corresponding estate tax return and pay the correct amount of tax without surcharge or interest. Issue: WON the assessment in this case can be used as a basis for the perfection of a tax compromise against the. Ruling: NO. The 2nd paragraph of Sec. 228 of NIRC is clear and mandatory insofar as taxpayers shall be informed in writing of the law and the facts on which the assessment is made, otherwise the assessment shall be void. RA 8424 has already amended the provisions of Sec. 229 of NIRC on protesting an assessment. The old requirement of merely notifying the taxpayer of the CIR’s findings was changed in 1998 of informing the taxpayer of not only the law, but also of the facts on which an assessment would be made, otherwise, the assessment itself would be invalid. Being invalid, the assessment canot be in turn be used as a basis for the perfection of a tax compromise.
Hence, Hence, it is premat premature ure to declar declaree the compromi compromise se on the tax liabi liabilit lity y of the estate estate perfec perfected ted and consummated considering that the tax assessment is void. While administrative agencies, like the BIR, were not bound by procedural requirements, they were still required by law and equity to observe substantive due process. The reason behind this requirement, said the CA, was to ensure that taxpayers would be duly apprised of -- and could effectively protest -- the basis of tax assessments against them.7 Since the assessment and the demand were void, the proceedings emanating from them were likewise void, and any order emanating from them could never attain finality.
RCBC vs CIR 522 SCRA 144 Facts: RCBC received a Formal Letter of Demand dated May 25, 2001 from the respondent CIR for its tax liabilities particularly for Gross Onshore Tax in the amount of P53,998,428.29 and Documentary Stamp Tax for its Specia Speciall Saving Savingss Placeme Placement ntss in the amount amount of P46,71 P46,717,9 7,952 52.76 .76,, for the taxab taxable le year year 1997.Petitioner filed a protest letter/request for reconsideration/reinvestigation reconsideration/reinvestigation pursuant to Section 228 of the NIRC. As the protest was not acted upon by the respondent, petitioner filed a petition for review with the CTA for the cancellation of the assessments. Respondent filed a motion to resolve first the issue of CTA’s jurisdiction, which was granted by the CTA in a Resolution dated September 10, 2003.8 The petition for review was dismissed because it was filed beyond the 30-day period following the lapse of 180 days from petitioner’s submission of documents in support of its protest, as provided under Section 228 of the NIRC and Section 11 of R.A. No. 1125, otherwise known as the Law Creating the Court of Tax Appeals. Petitioner did not file a motion for reconsideration or an appeal to the CTA En Banc from the dismissal of its petition for review. Consequently, the September 10, 2003 Resolution became final and executory on October 1, 2003 and Entry of Judgment was made on December 1, 2003.9
Therea Thereafte fter, r, respon responden dentt sent sent a Demand Demand Letter Letter to petiti petitione onerr for the paymen paymentt of the defic deficien iency cy tax assessments. On February 20, 2004, petitioner filed a Petition for Relief from Judgment on the ground of excusable negligence of its counsel’s secretary who allegedly misfiled and lost the September 10, 2003 Resolu Resolutio tion. n. The CTA Second Second Divisi Division on set the case case for hearin hearing g on April April 2, 200411 200411 during during which which petition petitioner’s er’s counsel counsel was present.12 present.12 Respondent Respondent filed filed an Oppositi Opposition13 on13 while while petitione petitionerr submitted submitted its Manifestation and Counter-Motion. On May 3, 2004, the CTA Second Division rendered a Resolution15 denying denying petitioner’s petitioner’s Petition Petition for Relief Relief from Judgment. Judgment. Petitione Petitioner’s r’s motion for reconside reconsideratio ration n was denied in a Resolution dated November 5, 2004,16 hence it filed a petition for review with the CTA En Banc, docketed as C.T.A. EB No. 50, which affirmed the assailed Resolutions of the CTA Second Division in a Decision dated June 7, 2005. Ruling: As provided in Sec. 228, the failure of the taxpayer to appeal from an assessment on time rendered the assessment final, executory and demandable. RCBC is precluded from disputing the correctness of the assessment. While the right to appeal a decision of the Commissioner of CTA is merely a statutory remedy, nevertheless the requirement that it must be brought within 30 days is jurisdictional. If a statutory remedy provides as a condition precedent that the action to enforce it must be commenced within a prescribed time, such requirement is jurisdictional and failure to comply therewith may be raised in a MTD.
CIR vs Fireman's Fund Insurance Co. 148 SCRA 315 Facts: From January, 1952 to 1958, private respondent Fireman's Fund Insurance Co. entered into various insurance contracts involving casualty, fire and marine risks, for which the corresponding insurance policies were issued. From January, 1952 to 1956, documentary stamps were bought and affixed to the monthly statements of policies issues; and from 1957 to 1958 documentary stamps were bought and affixed to the corresponding pages of the policy register, instead of on the insurance policies issued.
In 1959, respondent company discovered that its monthly statements of business and policy register were lost and reported such to the NBI and the CIR. The CIR through its examiner, after conducting an investigation of said loss, ascertained that respondent company failed to affix the required documentary stamps to the insurance policies issued by it and failed to preserve its accounting records within the time prescribed by Sec. of the Revenue Code by using loose leaf forms as registers of documentary stamps without written authority from the CIR. As a consequence of these findings, petitioner assessed and demanded from petitioner the payment of documentary stamp taxes for the years 1952 to 1958 in the total amount of P 79,806.87 and plus compromise penalties, a total of P 81,406.87. Issue: WON the CIR may impose and require the payment of the subject stamp tax for the documents in question. Ruling: NO. There is no justification for the government which has already realized the revenue which is the object of the imposition of subject stamp tax, to require the payment of the same tax for the same documents. Enshrined in our basic legal principles is the time honored doctrine that no person shall unjustly enrich himself at the expense of another. It goes without saying that the government is not exempted from the application of this doctrine.
While there appears to be no question that the purpose of imposing documentary stamp taxes is to raise revenue, revenue, however, the correspond corresponding ing amount has already already been paid by responden respondentt and has actually actually become part of the revenue of the government. In the same manner, evidence was shown to prove that the affixture of the stamps on documents not authorized by law is not attended by bad faith as the practice was adopted from the authority granted to one of respondent's general agents.
Mambulao Lumber vs Republic 4 SCRA 622 Facts: Mambulao Lumber Company agreed to an installment plan, whereby Mambulao Lumber obligated itself to pay such obligation in 12 equal monthly installments. To secure the installment payments, Mambulao Lumber Lumber and Mambul Mambulao ao Insura Insurance nce and Surety Surety Corpo Corporat ration ion execut executed ed a surety surety bond bond in favor favor of the Republic. Mambulao Lumber defaulted in the payment of its obligation. Thus, the Republic proceeded against the surety bond. Mambulao Lumber sought the dismissal of the case against it on the ground of prescription, arguing that under Sec. 331, in relation to Sec. 183(A), of the NIRC (NIRC), internal revenue taxes must be assessed within five (5) years from the filing of the corresponding return. Issue: WON Mambulao was liable for deficiency sales tax to the Republic. Ruling: YES. The NIRC was inapplicable to the case and that the Republic had ten (10) years from default of payment within which to collect the indebtedness of MLC. We explained that an action based upon a surety bond cannot be considered a tax collection case. Rather, such action would properly be a case based on a contract.
FMF Dev. Corp vs CIR CTA Case No. 6153 March 20, 2003 Facts: FMF filed its Corporate Annual Income Tax Return for taxable year 1995 and declared a loss of Php 2,826,541. The BIR then sent sent FMF pre-assessment notices informing it of its alleged tax liabilities. liabilities. FMF filed a protest against these notices with the BIR and requested for a reinvestigation. FMF was advised of the informal conference set on February 2, 1999 to allow it to present evidence to dispute the BIR assessment assessments. s. Subsequen Subsequently, tly, FMF President President Enrique Fernandez executed a waiver waiver of the three-year three-year prescriptive period for the BIR to assess internal revenue taxes, hence extending the assessment period until October 31, 1999. 1999. The waiver was accepted and signed signed by Revenue District District Officer Zambarrano. On October 18, 1999, FMF received amended pre-assessment notices dated October 6, 1999 from the BIR. FMF immediately immediately filed filed a protest protest on November November 3, 1999 but on the same day, it received received BIR’s Demand Letter and Assessment Notice No. 33-1-00487-95 dated October 25, 1999 reflecting FMF’s alleged deficiency taxes and accrued interests
FMF filed a letter of protest on the assessment invoking, inter alia, the defense of prescription by reason of the invalidity of the the waiver. In its reply, the BIR insisted that that the waiver is valid because it was signed signed by the RDO, a duly authorized authorized representative of petitioner. petitioner. It also ordered FMF to immediately settle settle its tax liabilities; otherwise, otherwise, judicial action will will be taken. Treating this as BIR’s final decision, decision, FMF filed a petition for review with the CTA challenging the validity of the assessment. Issue: WON the waiver waiver extended extended the three-year three-year prescriptiv prescriptivee period within within which the BIR can make a valid assessment. Held: NO. The waiver did not extend the three-year prescriptive period within which the BIR can make a valid assessment because it did not comply with the procedures laid down in Revenue Memorandum Order (RMO) No. 20-90. First, the waiver did not state state the dates of execution and acceptance of the waiver, waiver, by the taxpayer and the BIR, respectively; thus, it cannot be determined with certainty if the waiver was executed executed and accepted accepted within the prescribed prescribed period. Second, Second, evidence was shown that FMF was not furnished a copy of the waiver signed by RDO Zambarrano. Zambarrano. Third, the since the case case involves an amount of more than P1 million, and the period to assess is not yet about to prescribe, prescribe, the waiver should have been signed by the CIR, and not a mere RDO.
United International Pictures vs CIR CTA Case No. 5884 June 5, 2002 Facts: This case involves a disputed assessment issued against petitioner for deficiency internal revenue taxes in the aggregate amount of P13,137,261.29, inclusive of interests and surcharges, covering the taxable year ended December 31, 1994. Petitioner United International Pictures filed its corporate income tax return for the calendar year ended December 31, 1994. In August 9, 1995, Letter of Authority No. 89422 was issued by the Revenue District Officer of Revenue District No. 34, authorizing the examination of the 1994 books of accounts and other accounting records of petitioner for all internal revenue taxes for the period January 1, 1994 to December 31, 1994. For failure on the part of the petitioner to comply with the said subpoena, a criminal complaint complaint was filed. A memorandum report was made by the revenue revenue officer in-charge recommending the issuance of the final assessment notice and the collection of petitioner's deficiency internal revenue taxes based on the best evidence obtainable. On August 19, 1998, petitioner received from the respondent a Preliminary Collection Letter (PCL) for the former's internal revenue liabilities for 1994 to which petitioner protested on the ground that the issuance of the PCL without prior assessment notice has no legal basis and that the assessment notice is invalid for its failure to comply with Section 228 of the Tax Code, i.e., the assessment notice does not state the facts and the law upon which the assessment was made. Issue: WON the assessment notice was validly filed? Ruling: NO. After a meticulous examination of the transmittal letter and related documents, we find that said transm transmitt ittal al letter letter does does not clearly clearly indica indicate te that that what what was actual actually ly mailed mailed were were the formal formal or final final assessment notices with appurtenant demand letters. As a matter of fact, we note that except for VAT deficiency assessment, the amounts listed in the transmittal record are quite different from the amounts indicated in the formal assessment notices. For in reality, the amounts pertain to the amounts mentioned in the pre-assessment notices as a s petitioner's tax liabilities excluding interest charges.
It appearing that no final assessment notice was sent or that petitioner did not receive any final assessment notice, it follows that the same could not become final and demandable.
Prulife vs CIR CTA Case No. 6774 Facts: The instant Petition for Review seeks the cancellation of the assessment issued by the CIR against Prulife of UK Insurance Corp. for deficiency premium and documentary stamp taxes and compromise penalties in the aggregate amount of P5,756,316.21 P5,756,316.21 for taxable year 1999. On January 24, 24, 2003, respondent issued Assess Assessmen ment/D t/Deman emand d Notice Noticess No. No. 34-99 34-99 3 findin finding g the the Prulif Prulifee liabl liablee for the paymen paymentt of defici deficienc ency y premium tax and documentary stamp tax. Petitioner protested but lacked the relevant documents in support of its protest insofar as the premium tax assessment is concerned. Issue: WON Prulife may contest the premium tax assessment? Ruling: NO. The effect of Prulife’s lack of supporting documents submitted is that, it lost its chance to further contest the premium tax assessment. The finality of the assessment simply means that where the taxpayer decides to forgo with the opportunity to present the documents in support of its claim within 60 days from the filing of its protest, it merely lost its chance to further contest the assessment.
Its non-compliance with the submission of the necessary documents would either mean that Prulife no longer wishes to further submit any document for the reason that its protest letter filed was more than enough to support its claim, or that Prulife failed to comply thus it can no longer give justification with regard to its objections as to the correctness of the assessment notices. The necessity of the submission of the supporting documents lies on Prulife. It cannot be left to the discretion of the CIR for in doing so would leave Prulife’s case at the mercy of the whims of the CIR. It is for Prulife to decide whether or not supporting documents are necessary to support its protest for it is the best position, being the affected party to the assessment to determine which documents are necessary and essential to garner a favourable decision from CIR. The mere claim of Prulife that its cash collection did not comprise entirely of premiums collected cannot be given credence. Prulife should have presented supporting documents to prove such claim. Since Prulife failed to present a scintilla of evidence to that effect, CTA sustains CIR’s basis of such collections. Assessments should not be based on presumption no matter how logical the presumption might be. In order to stand the test of judicial scrutiny, the assessment must be based on actual facts.
Wintelecom vs CIR CTA First Division Case No. 7056 February 20, 2008 Facts: Wintelecom seeks to cancel the assessment notices issued by the CIR holding the former liable in the aggregate amount of P553,344,468.98 allegedly representing deficiency taxes for the taxable years 2001 and 2000, namely: income tax, value-added tax (VAT), withholding tax on compensation, expanded withhold withholding ing tax and fringe benefits tax. By virtue of a subpoena subpoena duces tecum, copies of petitioner's petitioner's invoices and other documents were taken by the BIR examiners when they concluded an audit. For this reason, petitioner's counsel requested the BIR to return the documents of petitioner pertaining to taxable years 2000 and 2001 since they support petitioner's factual arguments in its protest on respondent's Final Assessment Notice. In a letter dated May 31, 2004, 10 Mr. Rolando Balbino, the BIR Group Supervisor handling the subject assessments, replied that the request of petitioner's counsel was referred to the BIR Legal Service for appropriate action. Thereafter, the petitioner was informed that Assistant Commissioner Milagros Regalado of the BIR Legal Service, in a Memorandum dated June 7, 2004, 11 denied the request request of petitione petitioner's r's counsel. counsel. Due to the decision decision of the BIR Legal Legal Service Service not to make the subject subject records available to petitioner, the latter merely adopted its previous contention in its letter dated July 31, 2003 when it filed its protest 12 on the Final Assessment Notice. Issue: Whether or not the subject assessments from the BIR are null and void considering that petitioner's constitutional constitutional rights were violated when it was prevented from sufficiently contesting the assessments after respondent deliberately withheld from the petitioner the documentary evidence it submitted to respondent during investigation. investigation. Ruling: NO. Respondent's failure to return the documents to petitioner would not make the assessment conducted by the BIR null and void. The presumption of regularity in the official function of government officials is not defeated by a mere allegation that petitioner was deprived of the opportunity to fully contest the subject assessments. Petitioner was given the chance to present its position before this Court with the option option to require respondent respondent to bring the alleged documentary documentary evidence. Respondent Respondent could not be considered at fault for petitioner's negligence in failing to retain copies of the subject documentary evidence. In fact, petitioner's lone witness admitted that it was her mistake that she did not make an inventory of the documents that the BIR took from their office. Notwithstanding the absence of these documents, petitioner was able to rebut the findings of the BIR. Thus, petitioner was not deprived of its right right as it was able to protes protestt the same adminis administrati tratively vely and and file the case case before before this Court. Court. More import importan antly tly,, the consti constitut tution ional al right rightss to public public record recordss and of inform informati ation on are not violat violated ed in this this particular case considering that the subject documentary evidence came from petitioner itself. This shows that the non-return of documents would not limit the validity of the assessment made by the BIR. Hence, it will not render the assessment null and void.
NCH Phil. Inc. Vs CIR CTA Case No. 6840, April 4, 2007 Facts: Petitioner is appealing the Decision on Disputed Assessment, dated November 24, 2003, rendered by Revenue Revenue District District Officer Emperio Emperio which denied petitioner's petitioner's protest against against the BIR's fiscal fiscal year ended Februa February ry 1998 1998 defici deficienc ency y income income tax, tax, valuevalue-add added ed tax and withho withholdi lding ng tax, tax, and prayin praying g for the cancellation and withdrawal of the assessments of deficiency income tax, expanded withholding tax, value-added tax and documentary stamp tax in the total amount of P5,131,655.66, as per respondent's "Amended Formal Letter of Demand" dated February 16, 2004, all assessments covering the fiscal year ended February 28, 1998. The protest was filed on the ground that that aforesaid assessment notices for lack of factual and legal bases. Issue: Which decision was appealable to the CTA? Ruling: Respondent's Decision on Disputed Assessment dated November 24, 2003 is the final "decision” that should be appealed to the CTA within 30 days from receipt, otherwise the same shall become final, executory and demandable. Respondent himself acknowledged in his Decision on Disputed Assessment dated November 24, 2003 that it is his final decision.
Hence, respondent's Decision on Disputed Assessment dated November 24, 2003 is the one appealable to this Court. Consequently, this Court has acquired exclusive appellate jurisdiction over the case when petition petitioner er appealed appealed on December December 23, 2003 with this Court, Court, respondent respondent's 's said Decision on Disputed Disputed Assessmen Assessment. t. Thereafter Thereafter,, responden respondentt lost jurisdiction jurisdiction over the assessed assessed deficienci deficiencies es covered covered by said Decision in view of the fact that petitioner has already perfected its appeal. The respondent has no more authority to issue the Amendment to the Formal Letter of Demand on February 16, 2004 covering the same taxable year and the same type of taxes. Hence, said Amendment to the Formal Letter of Demand is null and void and is no longer binding to petitioner, as petitioner has already appealed said Decision on Disputed Assessment of respondent to this Court.
