Compilation of Digests on Tax
Cases involving Remedies
In partial fulfilment of the requirements
of Tax 2
Professor Dina D. Lucenario
UP College of Law
nd
2 Semester, AY 2011-2012
Bustamante, Blesie Mae
Dela Cruz, Mabel
Laperal, Fatima
Madrid, Kristoffer Gabriel
Nisperos, Benedict
Patagan, Gerille Hope
Pulido, Karina
Sotto, Leighton John
Cases Covered
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Silk Air v. CIR
CIR v. Aegis People Support
CIR v. Keihin-Everett Forwarding
San Roque v. CIR
CIR v. PIL Management
CIR v. Mirant Philippines
Manila North Tollways Corp. v. CIR
CIR v. FarEast Bank
Mermac Inc. v. CIR
Maunsell Philippines v. CIR
CIR v. PNB
Stablewood Philippines v. CIR
St. Paul College v. CIR
CIR v. KEPCO Iljan Corp.
Republic, represented by the Commissioner of
Customs, v. NPC Alliance Corp.
City of Makati v. CIR
Festo Holdings v. CIR
PNB v. CIR
DNATA Inc. v. CIR
Sea Lion Fishing Corp. v. People
CIR v. AsiaTrust Development Corp.
Luzon Hydro Corp. v. CIR
Union Cement Corp. v. CIR
La Flor dela Isabela v. CIR
Fax N Parcel Inc. v. CIR
Hermano San Miguel Febres Cordero Medical
Foundation v. CIR
Laurence Lee Luang v. Esquivias
Cargill Philippines v. CIR
RCBC v. CIR
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Edison (Bataan) Cogeneration Corp. v. CIR
International Exchange Bank v. CIR
People v. Lim and Coronacion
People v. Kintanar
Silk Air Singapore Ltd. V. CIR
25 January 2012
Silkair (Singapore) Pte. Ltd. is a foreign corporation duly licensed by the SEC
to do business in the Philippines as an on-line international carrier operating
the Cebu-Singapore-Cebu and Davao-Singapore-Davao routes. In the course
of its international flight operations, petitioner purchased aviation fuel from
Petron Corporation (Petron) from July 1, 1998 to December 31, 1998, paying
the excise taxes thereon in the sum of P5,007,043.39. It filed an administrative
claim for refund in the amount of P5,007,043.39 representing excise taxes on
the purchase of jet fuel from Petron, which it alleged to have been erroneously
paid. The claim is based on Section 135 (a) and (b) of the 1997 Tax Code,
which provides:
SEC. 135. Petroleum Products Sold to International Carriers and Exempt
Entities or Agencies. – Petroleum products sold to the following are exempt
from excise tax:
(a) International carriers of Philippine or foreign registry on their use or
consumption outside the Philippines: Provided, That the petroleum
products sold to these international carriers shall be stored in a
bonded storage tank and may be disposed of only in accordance with
the rules and regulations to be prescribed by the Secretary of Finance,
upon recommendation of the Commissioner;
(b) Exempt entities or agencies covered by tax treaties, conventions and
other international agreements for their use or consumption:
Provided, however, That the country of said foreign international
carrier or exempt entities or agencies exempts from similar taxes
petroleum products sold to Philippine carriers, entities or agencies;
and
Petitioner also invoked Article 4(2) of the Air Transport Agreement between
the Government of the Republic of the Philippines and the Government of
the Republic of Singapore (Air Transport Agreement between RP and
Singapore). Due to inaction of the CIR, it filed a petition for review with the
CTA.
CTA denied the same, ruling that while petitioner’s country indeed exempts
from similar taxes petroleum products sold to Philippine carriers, petitioner
nevertheless failed to comply with the second requirement under Section 135
(a) of the 1997 Tax Code as it failed to prove that the jet fuel delivered by
Petron came from the latter’s bonded storage tank.
On appeal, the CA affirmed the CTA, ruling that while petitioner is exempt
from paying excise taxes on petroleum products purchased in the Philippines
by virtue of Section 135 (b), petitioner is not the proper party to seek for the
refund of the excise taxes paid.
ISSUE: WON Silk Air has the legal personality to file an administrative claim
for refund of excise taxes allegedly erroneously paid to its supplier of aviation
fuel in the Philippines
HELD: No
Excise taxes, which apply to articles manufactured or produced in the
Philippines for domestic sale or consumption or for any other disposition and
to things imported into the Philippines, is basically an indirect tax. While the
tax is directly levied upon the manufacturer/importer upon removal of the
taxable goods from its place of production or from the customs custody, the
tax, in reality, is actually passed on to the end consumer as part of the transfer
value or selling price of the goods, sold, bartered or exchanged. In early cases,
we have ruled that for indirect taxes (such as valued-added tax or VAT), the
proper party to question or seek a refund of the tax is the statutory
taxpayer, the person on whom the tax is imposed by law and who paid
the same even when he shifts the burden thereof to another. Thus, in
Contex Corporation v. Commissioner of Internal Revenue, we held that while it is true
that petitioner corporation should not have been liable for the VAT
inadvertently passed on to it by its supplier since their transaction is a zerorated sale on the part of the supplier, the petitioner is not the proper party to
claim such VAT refund. Rather, it is the petitioner’s suppliers who are the
proper parties to claim the tax credit and accordingly refund the petitioner of
the VAT erroneously passed on to the latter.
2
In the first Silkair case decided on February 6, 2008, this Court categorically
declared:
The proper party to question, or seek a refund of, an indirect tax is the
statutory taxpayer, the person on whom the tax is imposed by law and who
paid the same even if he shifts the burden thereof to another. Section 130 (A)
(2) of the NIRC provides that “[u]nless otherwise specifically allowed, the
return shall be filed and the excise tax paid by the manufacturer or producer
before removal of domestic products from place of production.” Thus, Petron
Corporation, not Silkair, is the statutory taxpayer which is entitled to claim a
refund based on Section 135 of the NIRC of 1997 and Article 4(2) of the Air
Transport Agreement between RP and Singapore.
Even if Petron Corporation passed on to Silkair the burden of the tax, the
additional amount billed to Silkair for jet fuel is not a tax but part of the price
which Silkair had to pay as a purchaser.
The decision in the second Silkair case reiterated the rule that in the refund of
indirect taxes such as excise taxes, the statutory taxpayer is the proper party
who can claim the refund. We also clarified that petitioner Silkair, as the
purchaser and end-consumer, ultimately bears the tax burden, but this does
not transform its status into a statutory taxpayer.
Even if the tax is shifted by Petron to its customers and even if the tax is billed
as a separate item in the aviation delivery receipts and invoices issued to its
customers, Petron remains the taxpayer because the excise tax is imposed
directly on Petron as the manufacturer.
Furthermore, petitioner has not demonstrated that it dutifully complied with
its contractual undertaking to timely submit to Petron a valid certificate of
exemption so that Petron may subsequently file a claim for excise tax
credit/refund pursuant to Revenue Regulations No. 3-2008 (RR 3-2008). It
was indeed premature for petitioner to assert that the denial of its claim for tax
refund nullifies the tax exemption granted to it under Section 135 (b) of the
1997 Tax Code and Article 4 of the Air Transport Agreement.
CIR v. Aegis People Support Inc. – could not find a copy
of this case :/
CIR v. Keihin-Everett Forwarding
February 2012
The person entitled to claim a tax refund is the statutory taxpayer. Section
22(N) of the NIRC defines a taxpayer as “any person subject to tax.” In
Commissioner of Internal Revenue v. Procter and Gamble Phil. Mfg.
Corp., the Court ruled that:
FACTS:
‘A “person liable for tax” has been held to be a “person subject to tax” and
properly considered a “taxpayer.” The terms “liable for tax” and “subject to
tax” both connote a legal obligation or duty to pay a tax.’
On December 21, 2004 and May 10, 2005, respondent filed with the BIR
RDO an administrative claim for issuance of TCC for its alleged unutilized
input VAT for the four quarters of taxable year 2003 for P3 M and P3.7 M in
2004.
The excise tax is due from the manufacturers of the petroleum products
and is paid upon removal of the products from their refineries. Even
before the aviation jet fuel is purchased from Petron, the excise tax is already
paid by Petron. Petron, being the manufacturer, is the “person subject to tax.”
In this case, Petron, which paid the excise tax upon removal of the products
from its Bataan refinery, is the “person liable for tax.” Petitioner is neither a
“person liable for tax” nor “a person subject to tax.” There is also no legal
duty on the part of petitioner to pay the excise tax; hence, petitioner cannot be
considered the taxpayer.
Keihin is in a forwarding business. It filed its Quarterly VAT Returns for the
third quarter of 2003 and 4th qtr in 2004.
Alleging petitioner's inaction on its application for issuance of TCC,
respondent sought judicial intervention via a Petition for Review filed on
October 25, 2005, but covering only the claim for the 3rd and 4th quarters of
2003.
CTA Division granted petition partially. Not convinced, petitioner sought a
reconsideration.
3
CIR said that the CTA Division erred when it ruled that the two Petitions for
Review were filed within the two year prescriptive period reckoned from the
date of filing of the corresponding quarterly VAT Returns for being contrary
to the clear and unequivocal provision of the NIRC. CIR added that Keihin
filed its appeal beyond the 30-day period in doing so.
ISSUE: Whether or not the tax claim is within the prescriptive period.
HELD: NO
The governing provision is Section 112 of the NIRC, as amended. The
provision is explicit on the period within which an administrative as well as
judicial claim for refund should be filed to merit consideration:
"SEC. 112. Refunds or Tax Credits of Input Tax. (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person,
whose sales are zero-rated or effectively zero-rated may, within two (2) years
after the close of the taxable quarter when the sales were made, apply for the
issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales, except transitional input tax, to the extent that such
input tax has not been applied against output tax:
FACTS:
San Roque, a corporation engaged in operating power-generating plants and
under contract with the Govt., allegedly had unutilized input VAT credits in
2007. On May 28, 2008, it filed an administrative claim for refund of
unutilized input VAT for the 1st and 2nd quarters of 2007 (first claim), and
another admin claim for unutilized VAT credit for the 3rd and 4th quarters on
March 30, 2009 (second claim) with the CIR. In view of CIR’s inaction and to
suspend the running of 2-year prescriptive period, it filed a judicial claim with
the CTA on March 13, 2009 for the first claim and on June 26, 2009 for the
second claim.
HELD: The 30-day period within which to file an appeal with the CTA
as provided in Sec 112 of NIRC is jurisdictional and failure to comply
therewith would bar the appeal and deprive the CTA of its jurisdiction.
Such period is not merely directory but mandatory and it is beyond the power
of the courts to extend the same. This rule applies to cases of tax refund or
issuance of tax credit certificate where the taxpayer may, within 30 days upon
receipt of decision denying the claim or after expiration of 120 days, appeal the
decision or the unacted claim with the CTA.
From the foregoing, it is clear that a VAT-registered person, such as
respondent, has two (2) years after the close of the taxable quarter when the
pertinent sales were made, within which to apply with the CIR a claim for
refund or tax credit of creditable input tax that remains unutilized. The CIR,
on the other hand, has 120 days from the date of submission of complete
documents in support of the application for refund or tax credit of input tax to
grant such claim.
Both administrative claims were filed on time. However, the judicial claim for
the first claim was filed out of time or 140 days after the filing of admin claim
– beyond the 120-day period. On the other hand, the second judicial claim
was prematurely filed, or only after 88 days from filing of the administrative
claim.
If denied, upon notice of denial or expiration of the allowable period of
120 days without any action on the part of the CIR, the VAT-registered
person has 30 days, within which to appeal the adverse decision or the
inaction of the CIR with the Court of Tax Appeals.
FACTS:
San Roque v. CIR
CTA Cases 7882 & 7937
16 February 2012
CIR v. PL Management
PL earned P24M in 1997 from UMPC, where UMPC withheld P1.2M. In 1998
PL filed a lost for its 1997 earnings and signified that it had a creditable
withholding tax of P1,200,000.00 for 1997 to be as tax credit in 1998.
In 1999, it filed for a loss of P2.7M so it was not able to claim the P1.2M
credit. On April 12, 2000, the respondent filed with CIR a claim for the refund
of the P1.2M refund.
4
CIR did not act so PL filed cases with CTA, which later denied claim of PL
saying the refund claim was filed out of time. Tax payment on nApril 13, 1998,
claim of refund is on April 14, 2000, beyond the two year allowed.
Appeal with the CA was for PL, the CA saying that the prescriptive period is
not jurisdictional and might be suspended for reasons of equity.
ISSUE: Whether the two-yr prescriptive period for tax claim is nonjurisdictional and can be suspended for equity
HELD: No, PL already chose to carry over the excess, refund can’t be availed
of.
The Court of Appeals mistakenly understood the phrase "for that taxable
period" as a prescriptive period for the irrevocability rule. There is a misplaced
application of the CIR v. BPI case. The evident intent of the legislature, in
adding the last sentence to Section 76 of the NIRC of 1997, is to keep the
taxpayer from flip-flopping on its options, and avoid confusion and
complication as regards said taxpayer's excess tax credit. The interpretation of
the Court of Appeals only delays the flip-flopping to the end of each
succeeding taxable period.
The irrevocability rule:
Section 76. Final Adjustment Return. - Every corporation liable to tax under Section 27
shall file a final adjustment return covering the total taxable income for the preceding
calendar or fiscal year. If the sum of the quarterly tax payments made during the said
taxable year is not equal to the total tax due on the entire taxable income of that year the
corporation shall either:
(A) Pay the balance of tax still due; or
(B) Carry over the excess credit; or
(C) Be credited or refunded with the excess amount paid, as the case may be.
In case the corporation is entitled to a refund of the excess estimated quarterly
income taxes paid, the refundable amount shown on its final adjustment return
may be credited against the estimated quarterly income tax liabilities for the
taxable quarters of the succeeding taxable years. Once the option to carry-over
and apply the excess quarterly income tax against income tax due for the
taxable quarters of the succeeding taxable years has been made, such option
shall be considered irrevocable for that taxable period and no application for
tax refund or issuance of a tax credit certificate shall be allowed therefor. The
options are alternative.
The amount being claimed as a refund would remain in the account of the
taxpayer until utilized in succeeding taxable years, as provided in Section 76 of
the NIRC of 1997. It is worthy to note that unlike the option for refund of
excess income tax, which prescribes after two years from the filing of the FAR,
there is no prescriptive period for the carrying over of the same. PL already
chose to carry over the excess tax paid, refund can’t be availed.
Commissioner of Internal Revenue v. Asiatrust
Development Bank, Inc., CTA EB No. 614; Asiatrust
DevelopmentBank v. Commissioner of Internal
Revenue, CTA EB No. 677
18 November 2011
FACTS:
Taxpayer filed a Petition for Review before the CTA in Division for failure of
the CIR to act on its protest within the prescribed period. Both the CIR and
the taxpayer filed Motions for Partial Reconsideration assailing the decision of
the Court in Division partially granting the petition. The Court in Division
denied the Commissioner of Internal Revenue’s plea for reconsideration for
lack of merit, while it partially granted that of the taxpayer. The Court in
Division substantially modified its former decision prompting the taxpayer to
file another Motion for Partial Reconsideration of the amended decision which
was denied by the Court. The CIR did not file the same motion but instead
filed a Petition for Review before the Court of Tax Appeals En Banc.
ISSUE: WON the appeal may be filed with the CTA en banc.
HELD: Before an appeal may be filed with the Court of Tax Appeals En
Banc by aggrieved party, it must be preceded by the filing of a motion for
reconsideration or new trial with the Division that rendered the questioned
decision.
CIR v. Mirant (Philippines) Operations Group
5
15 June 2011
FACTS:
3) The fact of withholding must be established by a copy of a statement duly
issued by the payor to the payee showing the amount paid and the amount of
the tax withheld.
Mirant entered into Operating and Management Agreements with Mirant
Pagbilao Corporation (formerly Southern Energy Quezon, Inc.) and Mirant
Sual Corporation (formerly Southern Energy Pangasinan, Inc.) to provide
these companies with maintenance and management services in connection
with the operation, construction and commissioning of coal-fired power
stations situated in Pagbilao, Quezon, and Sual, Pangasinan respectively.
Mirant complied with all the legal requirements and it is entitled, as it opted, to
a refund of its excess creditable withholding tax for the taxable year 2000 in
the amount of ₱38,620,427.00.
On September 20, 2001, Mirant wrote the BIR a letter claiming a refund of
₱87,345,116.00 representing overpaid income tax.
Held: In claiming refund of overpaid CWT, submission of the original
Monthly Remittance Return of CWT (BIR Form No. 1601-E) is mandatory.
Amended return will not suffice. The original form will help ascertain if the
two-year prescriptive period has been met and the alleged overpaid CWT has
been remitted.
CTA 1st Division: Partially granted Mirant’s claim for refund but the amount
was reduced to P38 million which constitutes the duly substantiated unutilized
creditable withholding taxes.
ISSUE: WON Mirant is entitled to a tax refund or to the issuance of a tax
credit certificate and, if it is, then what is the amount to which it is entitled.
Manila North Tollways Corp. v. CIR
23 September 2011
CIR v. FarEast Bank & Trust Company (now Equitable
PCI Bank)
15 March 2010
HELD: YES but it is limited to the substantiated claim.
Ratio:
1. Once a corporation exercises the option to carry-over and apply the excess
quarterly income tax against the tax due for the taxable quarters of the
succeeding taxable years, such option is irrevocable for that taxable period.
Having chosen to carry-over the excess quarterly income tax, the corporation
cannot thereafter choose to apply for a cash refund or for the issuance of a tax
credit certificate for the amount representing such overpayment.
2. Mirant complied with all the requirements for the refund of its unutilized
creditable withholding taxes for taxable year 2000.
The requisites for claiming a tax credit or a refund of creditable
withholding tax:
1) The claim must be filed with the CIR within the two-year period from the
date of payment of the tax;
2) It must be shown on the return that the income received was declared as
part of the gross income; and
FACTS:
Far East filed Corporate Annual Income Tax Return for 1994 for Corporate
Banking Unit and Foreign Currency Deposit Unit with reflected refundable
income tax of P12M. The P12M refund was carried over and applied for the
1995 income tax return.
In 1995, Far East claimed that it overpaid tax payments by P17M. P13M is
being sought for refund and chose that the remaining will be carried over. Far
East then claimed for the refund of the P13.6M, which the CIR did not act
upon. Far East filed a claim for refund.
CTA denied claim for refund. CA reversed the CTA, ruling that Far East duly
proved that the income derived from rentals and sale of real property upon
which the taxes were withheld were included in the return as part of the gross
income.
ISSUE: WON respondent is entitled to the refund.
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HELD: NO, The burden of proof for the claim is with the claimant which it
failed to establish.
and establish fact of withholding by submitting a copy of the withholding tax
statement (BIR Form 2307) issued by the payor/buyer.
A taxpayer claiming for a tax credit or refund of creditable withholding tax
must comply with the following requisites:
In the instant case, the payee/seller took charge of deducting the amount of
withholding tax from the payment received, remitting the same to the BIR. To
prove fact of withholding of CWT, the taxpayer/refund claimant (MERMAC)
presented BIR Form 1606 (withholding tax remittance return), which it filed
relative to the sale of its real property. Due to CIR’s inaction on its claim for
refund amounting to 2,010,452.00, it filed a Petition for Review w/ the CTA
2nd Division, which partially granted MERMAC’s claim for refund but only as
to the amount of 92, 899.80 . It filed a Petition for Review with the CTA En
Banc.
1) The claim must be filed with the CIR within the two-year period from the
date of payment of the tax;
2) It must be shown on the return that the income received was declared as
part of the gross income; and
3) The fact of withholding must be established by a copy of a statement duly
issued by the payor to the payee showing the amount paid and the amount of
the tax withheld.
Moreover, the fact that the petitioner failed to present any evidence or to
refute the evidence presented by respondent does not ipso facto entitle the
respondent to a tax refund. It is not the duty of the government to disprove a
taxpayer’s claim for refund. Rather, the burden of establishing the factual basis
of a claim for a refund rests on the taxpayer.
And while the petitioner has the power to make an examination of the
returns and to assess the correct amount of tax, his failure to exercise
such powers does not create a presumption in favor of the correctness of
the returns. The taxpayer must still present substantial evidence to
prove his claim for refund. As we have said, there is no automatic grant of
a tax refund.
ISSUE: WON BIR Form 1606 suffices to establish fact of withholding
HELD: No, it does not suffice because it did not emanate from the payor.
A claim for refund of excess creditable withholding taxes in accordance with
settled jurisprudence, must comply w/ the following requisites:
1) Claim for refund filed within 2-year prescriptive period under Sec. 204
(C) in relation to Section 229 of the NIRC
2) It is shown on the return of the recipient that the income payment
received was declared as part of gross income
3) Fact of withholding established by a copy of a statement duly issued by
payor (withholding agent) to the payee, showing the amount paid and amount
of tax withheld
FACTS:
Petitioner complied with the first two requisites, but failed to comply with the
third. It is the BIR Form No. 2307 issued by the income payor, the duly
constituted withholding agent, which establishes the fact of
withholding. The BIR Form 1606 (withholding tax remittance form) should
come from the payor and not the payee since the payor is in a better position
to state that the withholding of tax was in fact made, being the duly
constituted withholding agent.
MERMAC wanted to avail of the refund or issuance of tax credit certificate of
excess or unapplied creditable withholding tax (CWT) under Section 204 of
the Tax Code. Section 2.58.3 (B) of the RR 2-98 requires that such taxpayer
claiming refund of excess CWT must show on the return that the income
payment subjected to withholding tax was declared part of its gross income,
To be entitled to a refund or issuance of tax credit certificate of
excess/unapplied creditable withholding tax, the fact of withholding, among
others, must be established. The document, which may be accepted as
evidence to establish fact of withholding, must (1) emanate from the payor
itself, and not merely from the payee, and must (2) indicate the name of the
Mermac Inc. v. CIR
CTA EB 699, 27 July 2011
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payor, the (3) income payment basis of the tax withheld, the (4) amount of tax
withheld, and the (5) nature of the tax paid.
Hence, for purposes of entitlement to refund or excess creditable withholding
tax, the only acceptable evidence is BIR Form No. 2307 to establish fact of
withholding.
The provisions of the law must be applied accordingly, and industry practice,
i.e. for real estate companies to remit on behalf of clients (mostly individual
buyers) the creditable withholding tax due on its income from the sale of
property, does not justify non-compliance with the law.
The original return is important in order for CTA to ascertain whether the
filing of the administrative and judicial claims for refund or issuance of a tax
credit certificate was made within the two-year reglementary period. Absent
such document, it has no way of determining whether the claim was timely
filed.
Moreover, the original return is necessary for the CTA to verify if petitioner's
original option was to be issued a tax credit certificate for the unapplied
creditable taxes withheld since once the option to carry-over and apply the
excess quarterly income tax against income tax due for the taxable quarters of
the succeeding taxable years has been made, such option shall be considered
irrevocable for that taxable period.
Dispositive: petition denied
Maunsell Philippines, Inc. v CIR
CTA case, 26 December 2011
Maunsell claims that in 2006, it accumulated creditable withholding taxes
amounting to P3,839,671.31. In its AMENDED income tax return for 2006, it
chose the option "To be issued a Tax Credit Certificate" for its overpaid taxes.
On July 13, 2007 it filed on administrative claim for the issuance of a tax credit
certificate with the BIR. Since, BIR did not act on the claim, the company filed
a petition before the CTA on January 15, 2009.
ISSUE: WON Petitioner's right to claim for issuance of tax credit certificate
of the overpaid income taxes for FY 2006 is substantiated with supporting
documents?
HELD: No
Maunsell failed to offer evidence of its filing of ORIGINAL income tax return
for 2006.
Sec. 229 provides that “in any case no such suit or proceeding shall be filed
after the expiration of 2 years from the date of payment of the tax or penalty
regardless of any supervening cause”. In PAL vs. CIR, it was held that the
counting should be made from the date of filing of the original final
adjustment return and not from the date of filing of the amended return.
Under Section 76, if quarterly tax payments made during the said taxable year
is not equal to the total tax due the corporation has an option to
(A) Pay the balance of tax still due; or
(B) Carry-over the excess credit; or
(C) Be credited or refunded with the excess amount paid.
Thus, if petitioner has originally chosen the option "to be carried-over as tax
credit next year/quarter", it will be precluded from claiming the issuance of a
tax credit certificate for the said excess payment.
CIR v. PNB
CTA EB 577 & 580, Resolution of 6 February 2012
FACTS:
PNB submitted its Annual ITR (covering the year 2003) before the CIR in
April 2004 where it reflected the amount of P33M, representing its unused and
unutilized income tax. PNB’s ITR was amended on October 25, 2004, where
the amount was increased to P 40.114M, and on November 8, 2004, where the
amount was again increased to P 40.165M. On February 17, 2005, petitioner
filed its administrative claim for refund. However, on March 29, 2005, PNB
again filed its amended Annual ITR which showed the amount of P 45.456M
as overpayment. On the same date, PNB filed its amended administrative
claim for refund or issuance of tax credit certificate, thus superseding its earlier
administrative claim for refund of its alleged unutilized creditable withholding
taxes for the taxable year 2003 in the amount of P40.25 M, claiming that it
carried over the amount of P 4.93 M as prior year’s credit.
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As respondent has not acted on petitioner’s claim, PNB filed a Petition for
Review before the CTA for the refund or issuance of tax credit certificate
representing its unused and unutilized creditable withholding taxes for the
calendar year 2003 pursuant to Sec. 76 and 229 of the NIRC.
The CTA Division granted PNB’s petition, but only to the extent of
P39.3M.Both appealed. PNB wanted to have a refund amounting to P 40.25M.
CIR, in its petition, raised the argument that PNB is not entitled to the refund
of its excess creditable withholding tax credits because it failed to sufficiently
prove that it did not carry-over and apply its 2003 excess tax credits against its
quarterly income tax liabilities for the succeeding years. CIR alleged that PNB's
failure to formally offer as evidence its quarterly income tax returns for the
taxable year 2004 is fatal to its claim for refund.
ISSUE: WON The presentation of the quarterly income tax returns is a legal
requisite for the claim for refund of excess creditable withholding tax credits.
HELD: NO
The presentation of the quarterly income tax returns of PNB for the first,
second and third quarters of the taxable year 2004 is not a legal requisite for
the claim for refund of excess creditable withholding tax credits for the taxable
year 2003.
The NIRC of 1997 did not require the presentation of the quarterly
income tax returns to prove the claim for refund of creditable
withholding taxes. According to Sec. 76, a corporate taxpayer who is entitled
to a tax credit or refund of the excess estimated quarterly income taxes paid
has two options: (1) to carry-over the excess credits to the succeeding taxable
years; (2) to apply for the issuance of a tax credit certificate or to claim a cash
refund. Furthermore, Section 2.58 of BIR Revenue Regulations No. 2-98, as
amended, set forth the requisites for the entitlement to a refund of excess
creditable withholding tax credits:
1. That the claim for refund was filed within the two-year prescriptive period
as provided under Section 204 (c) in relation to Section 229 of the NIRC of
1997;
2. That the fact of withholding is established by a copy of a statement duly
issued by the payor (withholding agent) to the payee, showing the amount paid
and the amount of tax withheld therefrom ; and
3. That the income upon which the taxes were withheld were included in the
return of the recipient.
Nowhere in the law or in its implementing rules and regulations is it indicated
that the presentation of quarterly tax returns for the succeeding taxable years is
a requisite to establish the entitlement to the refund of excess creditable
withholding tax credits.
As regards PNB’s claim, the CTA found that PNB failed to prove and
substantiate each and every component of the Total Tax Credits/ Payments
reflected on its final adjustment return. In order to establish the factual basis
of its claim for refund, petitioner must substantiate its prior year's excess tax
credits to overcome the burden of proof required.
Stablewood Philippines v. CIR
CTA EB 712, 15 November 2011
FACTS:
Stablewood is the successor-in-interest of Orca Plant which was dissolved by
operation of law by virtue of its merger with Rolls-Royce Power Ventures
(Philippines), Inc. and Orca Energy, Inc. In 2006, Orca Plant filed its 2005
Annual ITR through the Electronic Payment and Filing System (EFPS)
indicating that its creditable withholding tax (CWT) is “to be refunded’. On
that same year, a claim for refund was filed by Orca through SGV & Co. Due
to the inaction of the BIR, a Petition for Review was filed with the CTA.
CTA denied the refund claim because Orca carried-over its excess tax credits
of 2005 inclusive of the claimed amount as “Prior year’s Excess Credits” in its
Quarterly ITRs for the first three quarters of taxable year 2006. Orca’s original
option to refund the said amount was thus negated by its very act of carrying
over said excess amount to the succeeding taxable quarters of 2006.
Orca filed a petition for review with the CTA En Banc. It argued that the CTA
has no basis to conclude that it exercised its option to carry-over because the
quarterly tax returns were not final.
Ruling of the CTA En Banc:
Sec. 76 of the NIRC – “… Once the option to carry-over and apply the excess
quarterly income tax against income tax due for the taxable quarters of the
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succeeding taxable years had been made, such option shall be considered
irrevocable for that taxable period and no application for cash refund or
issuance of a tax credit certificate shall be allowed therefore.”
The BIR Ruling interpreted the provisions of the NIRC. It was issued in the
exercise of the Commissioner’s power to interpret tax laws.
The
administrative remedy is to appeal the adverse ruling with the Sec. of Finance
within 30 days from the receipt of such ruling.
St. Paul College of San Rafael v. CIR
CTA Resolution, 2 February 2012
Because St. Paul did not file an appeal with the Sec. of Finance, it has failed to
exhaust all available administrative remedies before filing the Petition for
Review with the CTA.
FACTS:
Failure to exhaust all available administrative remedies results to lack of cause
of action, one of the grounds for dismissing a complaint.
St. Paul College is a non-stock, non-profit educational institution. In a letter
dated Feb. 23, 2009, the RDO required it to explain its failure to affix the P15
documentary stamp tax on school diplomas issued to graduates in the school
years 2006-2007 and 2007-2008.
St. Paul filed its reply, which was forwarded to the BIR National Office. BIR
Ruling No. 143-2010 was issued. The Ruling stated that even if non-stock,
non-profit educational institutions are exempt from the DST, they are
“collecting agents” for the BIR and shall be personally liable for failure to
remit the DST as “collecting agents”.
No notice of assessment has been issued against St. Paul. Instead of filing an
appeal with the Sec. of Finance to have the BIR Ruling set aside, it filed a
Petition for Review with the CTA, contesting the BIR Ruling.
ISSUE: WON the CTA has jurisdiction
RULING:
The CTA’s jurisdiction to resolve tax disputes excludes the power to rule
on the constitutionality or validity of a law, rule or regulation. The
authority is vested before the regular courts.
The validity of BIR Ruling should have been elevated to the Sec. of
Finance and eventually before the regular courts, not with the CTA.
Petition dismissed for being prematurely filed and for lack of jurisdiction.
Dispositive: MR denied for lack of merit.
ISSUE: WON the petition for review is premature for non-exhaustion of
administrative remedies.
RULING:
Before a party is allowed to seek the court’s intervention, he/she/it should
have availed of all administrative processes. The aggrieved party must not
only initiate the prescribed administrative procedure, but must also
pursue it to its appropriate conclusion before seeking judicial
intervention.
Sec. 4, NIRC – The power to interpret the provisions of this Code and other
tax laws shall be under the exclusive and original jurisdiction of the
Commissioner, subject to review by the Secretary of Finance.
CIR v. Kepco Ilijan Corp.
CTA EB Resolution, 15 November 2011
FACTS:
Kepco Ilijan Corporation (Petitioner) is a domestic corporation engaged in the
production and sale of electricity as an Independent Power Producer (IPP),
whose produced electricity is sold solely to NPC.
For the first three quarters of taxable year 2005 and for October 2005,
petitioner filed its Quarterly and Monthly VAT Returns showing that it
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incurred expenses representing importation and domestic purchases of goods
and services, for which petitioner also incurred input VAT.
Petitioner filed an administrative claim for refund with the BIR representing
input VAT allegedly incurred by petitioner from importations and domestic
purchases of capital goods/equipment and services preparatory to its
production and eventual sale of electricity to NPC.
Due to respondent's inaction and in order to suspend the running of the twoyear prescriptive period under the National Internal Revenue Code (NIRC),
petitioner filed the present Petition for Review on April 24, 2007.
HELD:
The administrative claim for refund or issuance of tax credit certificate of
unutilized input VAT attributable to zero-rated sales is governed by Section
112 (A) of the 1997 NIRC. Based on Section 112 (A) the application for
refund of unutilized input VAT attributable to zero-rated sales may be
made only within two (2) years after the close of the taxable quarter
when the sales were made.
This period, however, refers solely to applications for refund/credit filed
with the Commissioner of Internal Revenue (CIR) and not to appeals
made to the CTA. The period within which to file judicial claims is found
under Section 112 (0)10 of the 1997 NIRC.
Accordingly, judicial claim for refund should be filed within thirty (30)
days from receipt of the decision of the CIR or upon the expiration of
the one hundred twenty (120) days in case of inaction of the CIR. The
observance of these periods is mandatory and non-compliance therewith
would result in the denial of the claim.
Applying the same to the present case, the administrative claim for refund filed
by respondent covering the first to third quarters of 2005 was filed on October
28. 2005 and for the month of October 2005, the administrative claim was
filed on December 7, 2005.
It is clear that the administrative claims were filed within the two-year
prescriptive period. However, despite the timely filing of the administrative
claims, this Court is constrained to deny respondent's refund claim on the
ground that its judicial claim was filed out of time. Records show that
respondent filed its Petition for Review on April 24, 2007, way beyond the 30day period from the lapse of the 120-day period for the CIR to decide the
claim.
Republic of the Philippines, represented by the
Commissioner of Customs, v. NPC Alliance Corp.
CTA EB Resolution, 20 January 2012
A Decision or Order which is appealable to the Court of Tax Appeals En
Banc is that which has resolved the case with finality, and which, in
effect, terminates or finally disposes of a case, as it leaves nothing to be
done by the court as the case has finally been decided on the merits.
The Commissioner of Customs filed a Petition for Review before the Court of
Tax Appeals En Banc assailing the Resolution of a division of the Court
denying the Bureau of Customs Motion for Reconsideration, which allowed
the posting of a bond. The Court held that the petition was prematurely filed
before the Court of Tax Appeals En Banc for being interlocutory as it still
leaves something to be done by the court a quo and the same may not be
subject of review under the Revised Rules of the Court of Tax Appeals. In
fact, Section 1, Rule 41 of the 1997 Rules of Civil Procedure, as amended,
which applies suppletorily to proceeding before the Court of Tax Appeals,
expressly provides that no appeal may be taken from an interlocutory order.
The proper procedure that petitioner should have taken in this case was to
await for the final termination of the proceedings before the Court in Division,
prior to the filing of the instant petition for review, because it is a well-settled
rule that only final orders or judgments on the merits may be the subject of
appeal.
CIR v. City of Makati
CTA EB 641, Resolution of 19 January 2012
FACTS:
City of Makati received assessment notices imposing deficiency taxes in the
amount of 1.3B for the years 1999-2002. Makati, however, protested. BIR, on
its part, said that the assessments against Makati were already final and
executory.
11
Makati, nonetheless, requested for another reinvestigation. Revenue officer
and a deputy commissioner granted the request. Meetings were thereafter
made between Makati and the Secretary of Finance, and BIR officials for the
reconciliation of the records and positions of Makati and the BIR and Makati
offered compromise settlement of the tax liabilities for 1999-2001. Pursuant to
the compromise settlement, Makati paid P100M in payment of the taxes due
for 1999-2001. Makati, thereafter, offered compromise settlement of the taxes
due for 2002-2004 but BIR denied, and issued tax assessments anew against
Makati. BIR said that Makati is still liable for deficiency taxes for the taxable
years 1999-2001, and 2002-2004. Makati protested. CIR denied. Makati then
filed a Petition for Review with the CTA.
ISSUE: WON the reinvestigation of the case reversed the finality of the
assessments
HELD: No
Only the Commissioner of Internal Revenue has the power to reverse,
revoke or modify any existing ruling of the Bureau of Internal Revenue
(“BIR”), which power cannot be delegated. In assessment cases, a
reopening/reinvestigation after a final decision on disputed assessment
(“FDDA”) has been issued must be initiated by the commissioner. Otherwise,
the reopening / reinvestigation is without authority and failure to appeal the
FDDA to CTA would render the assessment final and executory. Here, the
reinvestigation was merely granted by a revenue officer and a deputy
commissioner.
Festo Holdings Inc. v. CIR
CTA Case 8226, 2 September 2011
FACTS:
Respondent filed a Motion to Dismiss the Petition for Review commenced by
Festo Holdings on the ground of lack of jurisdiction. The Revenue District
Officer who signed the letter which became the basis of the instant petition,
cannot be deemed an alter ego of the CIR for purposes of issuing a final
decision on petitioner's protest under a delegated authority. As such, the
subject letter is not the CIR's final decision on petitioner's protest; thus, the 30
day period to file an appeal was yet to commence, rendering the instant
petition premature.
ISSUE: WON the CTA has jurisdiction
HELD/RATIO: NO. The appeal was premature.
In the event that a taxpayer's protest against the final assessment notice is
denied by the CIR's duly authorized representative, the aggrieved party has the
option whether to directly file an appeal with the Court of Tax Appeals within
the thirty (30) day period, or move for a reconsideration with the CIR also
within the same period.
In this case, the petitioner appealed the case before this Court within the
reglementary period. However, the Revenue District Officer who issued the
letter cannot be considered as the CIR's decision appealable to this Court, in
the absence of any proof that the former was authorized to decide and act in
behalf of the latter on the protest of a taxpayer.
Nowhere is it provided that a Revenue District Officer can issue decisions that
are appealable to this Court. Therefore, there being no decision of the CIR in
the present case, this Court cannot take cognizance of the present case.
PNB v. CIR
14 December 2011
PNB appeals from the adverse ruling of the CTA. The CTA Division held that
payments of withholding taxes for a certain taxable year were creditable to the
payee’s income tax liability as determined after it had filed its income tax
returns the following year. Since PNB posted net losses, it was not liable for
any income tax and consequently, the taxes withheld during the course of the
taxable year, which was 1998, while collected legally under Revenue
Regulations No. 02-98, Section 2.57 (B), became untenable and took on the
nature of erroneously collected taxes at the end of that year.
While the right to a refund is not automatic and must be established by
sufficient evidence, there is nothing in the Tax Code that would suggest that
the actual remittance of the withholding tax is a condition precedent to claim
for a tax refund. Moreover, the CTA Division added, that the CIR failed to
present the certification to prove his contention of PNB’s non-remittance of
the disallowed amount.
However, the CTA Division affirmed the
disallowance of eight transactions, amounting to ₱445,578.92 as they had
12
already been reported as income for other years, had not been recorded, or
were not supported by pertinent documents.
ISSUE: WON the CTA En Banc should give due course to PNB’s petition for
review mailed through LBC Express instead of registered mail
HELD: No
PNB failed to comply w/ these procedural rules:
1) Petition was filed late, 4 days beyond extended period, and offered no
justification as to why it sent its petition via ordinary mail instead of
registered mail
2) Petition was not accompanied by required duplicate originals or
certified true copies of assailed Decision, and Affidavit of Service.
DNATA, Inc. v. CIR
CTA Resolution, 11 October 2011
DNATA was issued a formal assessment notice on sept 12, 2007 for P8.3
million in deficiency income tax, value-added tax, withholding tax on
compensation, and expanded withholding tax for 2003. On Oct 18 2007,
DNATA filed a letter of protest assailing the validity of the FAN, and praying
for its cancellation and withdrawal.
On March 18, 2008, the CIR issued a final decision denying DNATA 's
protest, on the ground that it failed to submit proof/documents necessary for
the cancellation and withdrawal of the FAN within the 60 days reglementary
period from the filing of the protest. DNATA then filed a petition for review
with the CTA through registered mail.
DNATA raised the issue of the BIR's failure to inform them of the need for
additional supporting documents.
ISSUE: Whether or not the petition was perfected on time
HELD: NO
Ratio: DNATA filed the petition through registered mail on the next working
day after the deadline, which was a Saturday. But it did not pay the docket fees
through postal money order; instead, it paid the docket fees on the day the
registered mail was received by the Court, or May 5, 2008. While petitioner
was deemed to have filed its petition for review on time, it failed to perfect its
appeal for non-payment of the corresponding docket and other lawful fees at
the same time that it filed its initiatory pleading as required in Sec 1, Rule 42 of
the Rules of Civil Procedure.
Basic is the rule that docket and other lawful fees must be paid within the
period for taking an appeal, and that where the filing of the initiatory pleading
is not accompanied by payment of the docket fees, the court may allow
payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period.
The payment of the docket fees within the prescribed period is mandatory for
the perfection of the appeal. Without payment, the appellate court does not
acquire jurisdiction on the subject matter of the action and the decision sought
to be appealed from becomes final and executory.
In the case of Villena v Rupisan, the Supreme Court went further to say that
the appellate court acquires jurisdiction on the subject matter of the action
only upon payment of the correct amount of docket fees regardless of the date
of filing of the case. While it is true that petitioner subsequent to the filing of
its petition for review paid the required docket and other fees, the same did
not cure the defect as the payment was effected beyond the reglementary
period for perfecting an appeal.
The payment of appellate docket fees is not a mere technicality of law or
procedure but an essential requirement for the perfection of an appeal. It is
jurisdictional, an issue that may be raised even for the first time on appeal. The
lack of it will render the proceedings conducted null and void.
The strict application of the jurisdictional nature of the rule on payment of
appellate docket fees may be mitigated under exceptional and meritorious
circumstances to better serve the interest of justice. However, there is no
showing of any satisfactory reason to justify relaxation of what otherwise
should be a stringent application of the rule.
For failure to pay the corresponding docket fees on time, petitioner also failed
to seasonably perfect its appeal, divesting the CTA of jurisdiction or authority
to take cognizance of the instant Petition for Review. As provided in Section
228 of the NIRC, for failure to perfect an appeal on time, the decision
rendered by CIR has become final, executory and demandable.
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Sea Lion Fishing Corp. v. People
23 March 2011
FACT:
The Captain, crew and fishermen aboard F/V Sea Lion were arrested for
illegal fishing in Mangsee Island in Balabac, Palawan. Various charges were
filed against them but the Provincial Prosecutor found probable cause only
against the Chinese fishermen and recommended the vessel and all the fishing
gadgets, paraphernalia and equipment (which were previously confiscated)
released upon proper showing of evidence of its ownership of the aforesaid
vessel by Sea Lion Fishing Corp (which claims to be its owner).
The RTC found the fishermen guilty and the confiscated vessel and equipment
were placed under the [temporary] custody of the Philippine Coast Guard. Sea
Lion’s Motion for Reconsideration was denied. It then filed a petition for
Certiorari and Mandamus with the CA, but the same was also denied. Thus,
Sea Lion filed a Petition for Review on Certiorari with the SC raising the sole
issue of whether the confiscation of F/V Sea Lion was valid.
Held:
The confiscation of the vessel and equipment allegedly used in the commission
of the crime can be confiscated, regardless of ownership. When these are
claimed by a third-party not liable to the offense, such third-party must first
establish
its
ownership
over
the
same.
On Remedy:
Petitioner pursued an incorrect remedy when it sought recourse before the
CA. The filing of a Petition for Certiorari under Rule 65 of the Rules of Court
before the CA is limited only to the correction of errors of jurisdiction or
grave abuse of discretion on the part of the trial court.
The CA did not find either lack or error of jurisdiction or grave abuse of
discretion. There was no jurisdictional error because based on the
Informations, the offenses were committed within the territorial jurisdiction of
the trial court.
The penalties imposable under the law were also within its jurisdiction. As a
necessary consequence, the trial court had the authority to determine how the
subject fishing vessel should be disposed of. Likewise, no grave abuse of
discretion attended the issuance of the trial court's order to confiscate F/V Sea
Lion considering the absence of evidence showing that said vessel is owned
by a third party. Evidently, the remedial relief pursued by the petitioner was
infirm
and
improper.
We also agree with the CA's observation that the trial court impliedly
recognized petitioner's right to intervene when it pronounced that petitioner
failed to exercise its right to claim ownership of the F/V Sea Lion. This being
the case, petitioner should have filed an appeal instead of a petition
for certiorari before the CA. Under Rule 65 of the Rules of Court, certiorari is
unavailing when an appeal is the plain, speedy, and adequate remedy.
CIR v. AsiaTrust Development Bank
CTA, 16 November 2011
Facts:
Taxpayer filed a Petition for Review before the CTA in Division for failure of
the CIR to act on its protest within the prescribed period. Both the CIR and
the taxpayer filed Motions for Partial Reconsideration assailing the decision of
the Court in Division partially granting the petition. The Court in Division
denied the Commissioner of Internal Revenue’s plea for reconsideration for
lack of merit, while it partially granted that of the taxpayer. The Court in
Division substantially modified its former decision prompting the taxpayer to
file another Motion for Partial Reconsideration of the amended decision which
was denied by the Court. The CIR did not file the same motion but instead
filed a Petition for Review before the Court of Tax Appeals En
Banc.
Issue: W/N the appeal may be filed with the CTA en banc.
Held: Before an appeal may be filed with the Court of Tax Appeals (CTA) En
Banc by aggrieved party, it must be preceded by the filing of a motion for
reconsideration or new trial with the Division that rendered the questioned
decision.
Luzon Hydro Corporation v. CIR
CTA EB 722, 6 January 2012
14
Facts:
LHC is duly registered as a VAT taxpayer. A Power Purchase Agreement
(PPA) with the Napocor was entered into by The Consortium of Northern
Mini Hydro Corp.; Ever Electrical Manufacturing Inc.; Aboitiz Equity
Ventures Inc; Pacific Hydro Limited. The PPP was for the development of
Bakun hydroelectric facilities.
administrative and judicial claims for tax refund was filed within two (2) years
after the close of the taxable quarter when the sales were made in accordance
with Sections 112 (A) and (D). Take note that the reckoning of the 2-year
period for filing/claiming refund or issuance of TCC is from the close of the
quarter when such sales were made and compliance with the "120-30 day
period" under Section 112 (C) is crucial in filing a judicial claim.
LHC filed administrative claim with BIR for refund of its unutilized VAT
from June to September 2006 in the amount of P4,151,852.39.
When petitioner filed its administrative claim for tax refund on 30 April 2007,
respondent had 120 days within which to decide on petitioner's claim for tax
refund. And in case of full or partial denial of the claim or failure of
respondent to act on the application within the 120 day period, petitioner has
30 days to appeal the decision or inaction with the Court of Tax Appeals.
Thus, respondent had to render a decision within 120 days from 30 April 2007
or until 27 August 2007. However, petitioner filed the instant petition for
review with the Court of Tax Appeals only on 18 July 2008, almost a year after
the lapse of the period allowed by law to file the judicial claim for tax refund
with the Court of Tax Appeals. Clearly, the instant petition for review was filed
out of time.
CTA 3rd Division: Dismissed the claim for having been filed beyond the 30day period for claiming refund.
Issue: WON the administrative and judicial claim were filed within the
reglementary period allowed by law. The administrative claim was filed within
the reglementary period of 2 years from the close of the taxable quarter, the
judicial claim was filed beyond the period mandated under Section 112 (C).
Note: This case only discussed procedural issues as regards the mandatory
period for the filing of a motion for reconsideration which is 15 days.
When a judgment becomes final and executory, it becomes immutable and
unalterable and any amendment or alteration which substantially affects a final
and executor judgment, is null and void for lack of jurisdiction, including the
entire proceedings held for that purpose.
Held: The assailed decision was received by LHC on November 26, 2010 and
petitioner had 15 days or until December 11, 2010 to file its Motion for
Reconsideration. However, petitioner filed its motion only on December 22,
2010 or nine days after the lapse of the prescribed period.
Note: The more detailed discussion is in the 2008 case of CIR v. Mirant.
CIR v. Mirant Pagbilao Corporation (MPC)
12 September 2008
GR No. 172129
The claim for refund of creditable Value Added Tax input taxes in the amount
of Php4,151,852.39 for the months of June to September 2006 must be strictly
construed and petitioner has the burden of proving that the requirements were
met or complied with especially the requirement that petitioner's
Under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can
be shifted or passed on to the buyer, transferee, or lessee of the goods,
properties, or services of the taxpayer. The fact that the subsequent sale or
transaction involves a wholly-tax exempt client, resulting in a zero-rated or
effectively zero-rated transaction, does not, standing alone, deprive the
taxpayer of its right to a refund for any unutilized creditable input VAT, albeit
the erroneous, illegal, or wrongful payment angle does not enter the equation.
Held: While the administrative claim was filed within the reglementary period
of 2 years from the close of the taxable quarter, the judicial claim was filed
beyond the period mandated under Section 112 (C). Thus, the Court is
constrained to DENY the petitioner's claim for refund or issuance of TCC.
La Flor dela Isabela, Inc. v CIR
La Flor is a domestic corporation. In 2000 the letter of authority for
assessment for taxable year 1999 was issued by the BIR. From 2002 to 2005,
La Flor executed five Waivers to extend BIR’s period to assess the taxes. The
Formal Letter of Demand (FDL) for the tax deficiency was received by La
Flor before the expiration of the 5th waiver in 2005.
15
La Flor immediately filed a protest against the FDL. It also filed a
supplemental protest less than two weeks after. After 2 years, June 2007, La
Flor received a Final Decision on Disputed Assessments (FDDA) indicating
its deficiency taxes in the total amount of P10,460,217.23.
On October 2007, petitioner filed an application for tax amnesty. Ten days
later it also filed an application for compromise agreement pursuant to Section
204 of the Tax Code. La Flor received an undated Warrant of Distraint and/or
Levy (WDL) issued by BIR.
ISSUE: WON La Flor can still validly assail the assessment.
HELD: NO.
If a protest is not acted upon by respondent within 180 days from submission
of supporting documents, the taxpayer adversely affected by such inaction may
appeal to the CTA within 30 days from the lapse of the 180-day period. La
Flor should have appealed to the CTA when it did not receive action on its
protest immediately.
To reiterate, the failure of a taxpayer to file a petition for review with the
Court of Tax Appeals within the statutory period rendered the disputed
assessment final, executory and demandable, thereby precluding the
said taxpayer from interposing the defenses of legality or validity of the
assessment and prescription of the Government's right to assess. Indeed,
any objection against the assessment should have been pursued following the
avenue paved in Section 229 (now Section 228) of the NIRC on protests on
assessments of internal revenue taxes.
Fax N Parcel, Inc. v CIR
CTA Case 7415, 22 November 2011
FACTS: Fax N Parcel is contesting the assessments issued by the CIR for
deficiency income tax and VAT for the 4th quarter of 2002. In March 2005,
the CIR had issued against petitioner a Preliminary Assessment Notice (PAN),
with attached details of discrepancies for unreported income from
understatement of sales during the 4th quarter of 2002. In April, the CIR
issued a Formal Assessment Notice (FAN), prompting petitioner to file a
Protest Letter in July, which the CIR failed to act on, hence this petition for
review.
ISSUE: WON the assessment for alleged undeclared income from petitioner’s
unreported sales for the 4th quarter of 2002 based on the BIR’s computergenerated Quarterly Report on third party Information on Purchases is valid
HELD: No
When served with subpoena duces tecum and ad tesfificandum, 11 of the 15
alleged purchasers of petitioner, through their duly authorized officers or
representatives, either controverted or denied respondent’s allegations. The
quarterly report of the BIR also showed considerable discrepancies. As
admitted by the respondent’s own witness, the summary lists of purchases
received by the BIR were not verified with other externally sourced data to
check the integrity of the information gathered. The Integrated Tax System of
the BIR can only check or validate the format and possible viruses in the
computer program, not the content or substance of the encoded summary lists
of purchases.
While assessments have the presumption of correctness and regularity in its
favor, it is also equally true that assessments should not be based on mere
presumptions, no matter how reasonable or logical the presumption might be
(citing CIR v. Hantex Trading, March 31, 2005). Assessments lack sufficiency
in evidence when it is based on the BIR’s computer-generated third party
information which was not verified with other externally sourced data; esp.
when third parties controvert the allegations.
Finally, imputation of fraud against petitioner adding 50% surcharge to its
alleged income and VAT liabilities is erroneous since the claimed fraudulent
intent was merely deduced from the fact that there was an under-declaration of
sales/income for the 4thquarter of 2002, which respondent failed to establish.
Fraud cannot be presumed but must be proved.
Dispositive: petition granted
Hermano (San Miguel) Febres Cordero Medical
Foundation, Inc. v. CIR
C.T.A. CASE NO. 8194
9 January 2012
16
Hermano is seeking the cancellation of Final Assessment Notice (FAN) issued
by the BIR for VAT deficiency amounting to P2,607,933.07, arising from its
sale of pharmacy items to its in-patients, in line with its rendering of “hospital
services.”
Hermano’ grounds are: (1) The FAN is void for they merely showed a
mathematical computation of petitioner's tax liability without stating the
factual and legal bases of the same; (2) CIR failed to take into consideration
that its sales of pharmacy items to its in-patients are exempt from VAT
pursuant to Section 109(L).
Ruling:
FAN is not void based in the first ground.
Section 228 provides that in the assessment, “The taxpayers shall be informed
in writing of the law and the facts on which the assessment is made; otherwise,
the assessment shall be void” to ensure that taxpayers are duly apprised of the
basis of the tax assessments against them.
Here, in the "Details of Discrepancies", attached to the assessment, the details
contained therein showed that the factual basis for assessing petitioner for
deficiency VAT was the discrepancy from RELIEF and Third-Party Matching.
In a long line of cases, the SC has ruled that the requirement of the law to
inform the taxpayer of the basis of the assessment does not necessarily mean
that it be a full narration of the facts and laws on which the assessment is
based. Here, Hermano was able to intelligently make its protest by stating that
its sales of pharmaceutical items in favor of its in-patients are exempt from
VAT. This circumstance proves that petitioner was sufficiently informed of
the facts and the law as to why the assessment has been issued against it.
However, the assessment of VAT deficiency was incorrect. As held in
Perpetual Succour Hospital vs. CIR and St. Luke's Medical Center v. CTA &
CIR, hospital services includes not only the services of the doctors, nurses and
allied medical personnel, but also the necessary laboratory services, and making
available the medicines, drugs and pharmaceutical items that are necessary in
the diagnosis, treatment and care of patients. Sale of drugs or pharmaceutical
items to inpatients of the hospital are, therefore, considered part of the
hospital services covered by Section 109 (l) of the NIRC of 1997, as amended.
Laurence Lee v. Luang and Sixto Esquivias IV in his
capacity as Commissioner of Internal Revenue
CTA Resolution, 23 February 2012
Petitioner owned a Unioil gas station. He sent a letter dated June 21, 2005 to
the BIR to inform said office that his business operations would cease by the
middle of the year 2005 and that taxes were to be incurred only up to June 30,
2005. Said letter was also meant to inform the BIR of the cessation of
reportorial requirements that must be complied with by the taxpayer pursuant
to the operation of a business entity. Petitioner filed his second (2nd) quarter
VAT return on July 26, 2005.
Petitioner received a copy of a Formal Letter of Demand and a FAN on
November 5, 2008 for alleged deficiency VAT, deficiency income tax, and
compromise penalties for the year 2005 amounting to P 7.7M. Petitioner filed
a Protest to the FAN, but there was no response from the CIR. Petitioner thus
filed a Petition for Review before the CTA, claiming that after the issuance of
the Letter Notice (LN) dated April 30, 2007, there is no evidence that a
Preliminary Assessment Notice (PAN) was served upon petitioner pursuant to
RR No. 12-99 and as such, petitioner believes that the deficiency VAT and
income tax assessments issued against him must be considered void for being
violative of the due process.
On the other hand, respondent argues that the absence of a PAN may not
invalidate the assessment, and that what is essential is that petitioner was able
to file his protest to the FAN/Formal Letter of Demand within thirty (30)
days from receipt of the same.
W/N the absence of a Preliminary Assessment Notice violates invalidates an
assessment.
HELD: YES. Section 228 of the Tax Code requires that the taxpayer must first
be informed that he is liable for deficiency taxes through the sending of a
PAN. He must be informed of the facts and the law upon which the
assessment is made. The law imposes a substantive, not merely a formal,
requirement. The sending of a PAN to taxpayer to inform him of the
assessment made is but part of the 'due process requirement in the issuance of
a deficiency tax assessment,' the absence of which renders nugatory any
assessment made by the tax authorities. The use of the word 'shall' in
subsection 3.1.2 of Revenue Regulations 12-99 describes the mandatory nature
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of the service of a PAN. The persuasiveness of the right to due process
reaches both substantial and procedural rights and the failure of the CIR to
strictly comply with the requirements laid down by law and its own rules is a
denial of petitioner's right to due process.
Cargill Philippines Inc. v CIR
CTA Case 7928, 23 August 2011
In Sept 9, 2008, Cargill received a Preliminary Assessment Notice (PAN)
assessing deficiency VAT and compromise penalty for the period covering
Sept 2005 to Aug 2005. Soon after, Cargill also received a Final Assessment
Notice (FAN) together with an Audit Result / Assessment Notice. It was
found liable of VAT in the amount of Php5.4M++. Cargill filed a protest but
the same was not acted upon. Thus, it filed a Petition for Review with the
CTA.
Cargill argues that it was denied due process and that the assessment period
has lapsed.
In its answer, the CIR said that Cargill the assessment was proper because it
failed to respond to the PAN with the 15-day allowable period.
Ruling of the CTA:
The CIR has substantially complied with the requirements of due process
because Cargill was given the opportunity to refute the PAN and was able to
exercise its option to protest the FAN.
However, the period to assess has prescribed – assessments should be served
to the taxpayer within a three-years period counted from the day the return
was filed. Therefore, the assessments served on Sept 9, 2008 for the periods of
Sept 2004 to May 2005 are barred by prescription.
RCBC v. CIR
7 September 2011
FACTS:
- RCBC filed its Corporate Annual Income Tax Return for Foreign Currency
Deposit Unit for 1994 and 1995.
- CIR issued Letter of Authority, authorizing a special audit team to examine
RCBC’s books of accounts and other records for all internal revenue taxes
from Jan. 1, 1994 to Dec. 31, 1995.
- Jan. 23, 1997. RCBC executed 2 Waivers of the Defense of Prescription
Under the Statute of Limitations of the NIRC covering the internal revenue
taxes for 1994 and 1995, effectively extending the period of the BIR to assess
up to Dec. 31, 2000.
- Jan. 27, 2000. RCBC received a Formal Letter of Demand with Assessment
Notices for deficiency tax assessments.
- RCBC filed a protest on Feb. 24, 2000. On Nov. 20, 2000, it filed a petition
for review with the CTA.
- Dec. 6, 2000. RCBC received another Formal Letter of Demand with
Assessment Notices. The original amount of deficiency taxes was drastically
reduced (from P4.1B to P303M).
- RCBC paid P15M but refused to pay assessments for deficiency onshore tax
and DST. It claimed that the waivers of the Statute of Limitations were not
valid because they were not signed or conformed to by the CIR as required
under Sec. 222(b) of the Tax Code.
- CTA (1st Div.) rendered its Decision partially granting the petition for
review. It considered as closed and terminated the assessments for deficiency
taxes, except for the final tax on FCDU onshore income and deficiency DST
for 1994 and 1995. It ordered RCBC to pay the amounts due plus 20%
delinquency tax.
- RCBC filed MR. CTA modified its decision for its inadvertence in the
addition of the total deficiency taxes. CTA en banc denied RCBC’s petition
for lack of merit.
ISSUE: WON RCBC, by paying the other tax assessment covered by the
waivers, is estopped from questioning the validity of the said waivers with
respect to the assessment of deficiency onshore tax.
RULING:
RCBC, through its partial payment of the revised assessments issued within
the extended period as provided for in the waivers, impliedly admitted the
validity of those waivers.
Had it truly believed that the waivers are invalid and that the assessments were
issued beyond the prescriptive period, it should not have paid the reduced
amount of taxes in the revised assessment.
Upon the receipt of the revised assessment, RCBC immediately made payment
on the uncontested taxes. It is estopped from questioning the validity of the
waivers.
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ISSUE: WON RCBC can be held liable for deficiency onshore tax
HELD: Yes
The liability of the withholding agent is independent from that of the taxpayer.
The former cannot be made liable for the tax due because it is the latter who
earned the income subject to withholding tax. The withholding agent is liable
only insofar as he failed to perform his duty to withhold the tax and remit the
same to the government. The liability of the tax remains with the taxpayer
because the gain was realized and received by him.
RCBC cannot evade its liability for FCDU Onshore Tax by shifting the blame
on the payor-borrower as the withholding agent.
Petition denied.
assessments for deficiency withholding tax on compensation and expanded
withholding tax for taxable year 2000.
The EBCC, on the other hand, was ordered to pay the CIR the amount of
Two Million Two Hundred Thirty Two Thousand One Hundred Forty Six
Pesos and 91/100 (P2,232,146.91), representing EBCC's deficiency final
withholding tax.
Both appealed the decision to CTA En Banc.
Assessment in Issue:
Interest Payments from EBCC's Intercompany Loans from Ogden Power
International Holdings, Inc. amounting to P7,707,504.96;
Interest Payments on Syndicated Loans in Dollars made by EBCC amounting
to P2,520,117.76.
CTA En Banc Ruling:
Edison (Bataan) Cogeneration Corp. v. CIR
30 January 2012
Facts:
On February 2, 2004, Edison (Bataan) Cogeneration Corporation (EBCC)
received respondent's Formal Letter of Demand and Final Assessment Notice,
dated January 23, 2004, assessing petitioner for alleged deficiency income tax,
VAT, withholding tax on compensation, EWT and FWT for taxable year
2000,
On March 3, 2004, petitioner protested said assessments by filing a letterprotest dated March 2, 2004 with respondent CIR. Subsequently, petitioner
and the assigned BIR examiners had several meetings between March and May
2004, where petitioner furnished respondent with certain documents, as
requested by the examiners.
CIR failed to render a decision on petitioner's protest, within the 180-day
period prescribed in Section 228 of the Tax Code; thus, on November 25,
2004, petitioner filed the instant Petition for Review.
On November 30, 2010, the Court Former Second Division partially granted
the Petition for Review and ordered CIR to cancel and set aside the
The determination of EBCC's liability for the deficiency FWT on Interest
Payments from Inter-company loans from Ogden Power is subject to the
provision of Revenue Regulation (RR) No. 2-98, the controlling revenue
issuance at the time the loan agreement was entered into.
Applying RR No. 2-98, there is no question then that the obligation to
withhold only accrues when the loan is paid or becomes payable or when it
becomes due, demandable or legally enforceable, whichever comes first.
Upon analysis of the loan agreement between EBCC and Ogden, the Court En
Bane finds no controversy on the date when the obligation to pay the loan to
the lender has commenced, which as indicated in the loan agreement is on
June 1, 2002.
The CIR alleges that it is on January 5, 2000, when the loan document was
notarized that the interest started to accrue. On the part of EBCC, it alleges
that the intention of the parties was to set simultaneously the payment of the
loan and the interest.
The obligation to withhold the interest over the loan only commenced on June
1, 2002.
EBCC alleges that with the admission of the CIR's witness, Revenue Officer
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Dahlia V. Nitura, of EBCC's payment of FWT amounting to P2,842,630.20
the liability imposed by the Court Former Second Division is already complied
with. On the other hand, the CIR reiterates EBCC's failure to prove the
remittance of the withholding tax by the lending banks due to lack of evidence.
EBCC is duty bound to prove that indeed it has remitted the amount of
P2,842,630.20 as payment for its deficiency FWT. For cases filed before the
Court are litigated de novo/ party litigants should prove every minute aspect
of their cases. Unfortunately, in this case, EBCC has failed to present sufficient
evidence to prove remittance of its payment. Thus, the Court En Bane adopts
the computation of the Court Former Second Division on EBCC's deficiency
FWT on its interest payments on its dollar-denominated syndicated loan
liability amounting to P1,785,717.53 for the year 2000.
International Exchange Bank v. CIR
CTA Case 7875, 18 October 2011
Petitioner, a banking institution duly organized and existing under the laws of
the Philippines, was on April 13, 1999 served Letter of Authority by the
Commissioner of Internal Revenue directing the examination by a "Special
Team created pursuant to RSO 797-98" of petitioner’s books of accounts and
other accounting records for the year 1997 and "unverified prior years." An
examination of said documents was in fact conducted.
Petitioner subsequently received on November 16, 1999 a "Notice to
Taxpayer" from the Assistant Commissioner, Enforcement Service of the
Bureau of Internal Revenue, notifying it of the results of the examination
conducted by the Special Team regarding its tax liabilities, which amounted to
P465,158,118.31 for 1996 and P17,033,311,974.23 for 1997, and requesting it
to appear for an informal conference to present its side. On January 6, 2000,
petitioner was personally served with an undated Pre-Assessment Notice
(PAN) assessing it of deficiency on its purchases of securities from the Bangko
Sentral ng Pilipinas or Government Securities Purchased-Reverse Repurchase
Agreement (RRPA) and its FSD for the taxable years 1996 and 1997. On
January 12, 2000, petitioner received a Formal Assessment Notice (FAN) for
deficiency DST on its RRPA and FSD, including surcharges, in the amounts of
P25,180,492.15 for 1996 and P75,383,751.55 for 1997, and an accompanying
demand letter requesting payment thereof within 30 days.
Acting on the FAN, petitioner filed on February 11, 2000 a protest letter
alleging that the assessments should be reconsidered on the grounds that: (1)
the assessments are null and void for having been issued without any authority
and due process, and were made beyond the prescribed period for making
assessments; (2) there is no law imposing DST on RRPA, and assuming that
DST was payable, it is the Bangko Sentral ng Pilipinas which is liable therefor;
(3) there is no law imposing DST on its FSD; and (4) assuming the deficiency
assessments for DST were proper, the imposition of surcharges was patently
without legal authority.
Petitioner argued that its FSD is not subject to DST since it was not one of the
documents enumerated either under the 1977 Tax Code (Tax Code) or the
1997 National Internal Revenue Code (NIRC). Respondent on the other hand
argued that petitioner should be liable not only for DST on its FSD but also
on its RRPA.
The First Division of the CTA and the CTA En Banc upheld the propriety of
the DST.
ISSUE: WON a Savings Account-Fixed Savings Deposit (FSD) evidenced by a
passbook issued by petitioner subject to documentary stamp tax (DST) for the
years 1996 and 1997
HELD: NO
RATIO: The applicable provision is Section 180 of the Tax Code, as amended
by R.A. 7660, which reads:
Sec. 180. Stamp tax on all loan agreements, promissory notes, bills of
exchange, drafts, instruments and securities issued by the government or any
of its instrumentalities, certificates of deposit bearing interest and others not
payable on sight or demand. - On all loan agreements signed abroad wherein
the object of the contract is located or used in the Philippines; bills of
exchange (between points within the Philippines), drafts, instruments and
securities issued by the Government or any of its instrumentalities
or certificates of deposits drawing interest,or orders for the payment of any
sum of money otherwise than at sight or on demand, or on all promissory
notes, whether negotiable or non-negotiable, except bank notes issued for
circulation, and on each renewal of any such note, there shall be collected a
documentary stamp tax of Thirty centavos (P0.30) on each two hundred pesos,
or fractional part thereof, of the face value of any such agreement, bill of
exchange, draft, certificate of deposit, or note: Provided, That only one
documentary stamp tax shall be imposed on either loan agreement, or
promissory notes issued to secure such loan, whichever will yield a higher tax:
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Provided, however, That loan agreements or promissory notes the aggregate of
which does not exceed Two hundred fifty thousand pesos (P250,000) executed
by an individual for his purchase on installment for his personal use or that of
his family and not for business, resale, barter or hire of a house, lot, motor
vehicle, appliance or furniture shall be exempt from the payment of the
documentary stamp tax provided under this section.
As correctly found by the CTA En Banc, a passbook representing an interest
earning deposit account issued by a bank qualifies as a certificate of deposit
drawing interest.
A document to be deemed a certificate of deposit requires no specific form as
long as there is some written memorandum that the bank accepted a deposit
of a sum of money from a depositor. What is important and controlling is the
nature or meaning conveyed by the passbook and not the particular label or
nomenclature attached to it, inasmuch as substance, not form, is paramount.
Contrary to petitioner’s claim, not all certificates of deposit are negotiable. A
certificate of deposit may or may not be negotiable as gathered from the use of
the conjunction or, instead of and, in its definition. A certificate of deposit
may be payable to the depositor, to the order of the depositor, or to some
other person or his order.
In any event, the negotiable character of any and all documents under Section
180 is immaterial for purposes of imposing DST.
Orders for the payment of sum of money payable at sight or on demand are of
course explicitly exempted from the payment of DST. Thus, a regular savings
account with a passbook which is withdrawable at any time is not subject to
DST, unlike a time deposit which is payable on a fixed maturity date.
As for petitioner’s argument that its FSD is similar to a regular savings deposit
because it is evidenced by a passbook, and that based on the legislative
deliberations on the bill which was to become R.A. 9243 which amended
Section 180 of the NIRC (which is to a large extent the same as Section 180 of
the Tax Code, as amended by R.A. 7660), Congress admitted that deposits
evidenced by passbooks which have features akin to time deposits are not
subject to DST, the same does not lie.
The FSD, like a time deposit, provides for a higher interest rate when the
deposit is not withdrawn within the required fixed period; otherwise, it earns
interest pertaining to a regular savings deposit. Having a fixed term and the
reduction of interest rates in case of pre-termination are essential features of a
time deposit.
People v. Katherine Lim
CTA Criminal Case 0-113, 12 December 2011
FACTS:
Katherine M Lim and Edelyn Coronacion were president and accountant,
respectively, of UEAM, a company engaged in the manufacture of automotive
spare parts. Sometime in 2000, UEAM informed the BIR of its decision to
permanently close and cease operations. BIR issued UEAM a tax verification
notice relative to its closure of business. The verification resulted in the
issuance of an assessment for alleged value-added tax (VAT) deficiency on the
company’s allegedly taxable inventories appearing in its audited financial
statements, which were considered by the BIR as “transaction deemed sale”
subject to VAT under Section 106(B)(4) of the Tax Code. Lima and
Coronacion, however, failed to pay the tax. Hence, a criminal case was filed
against them pursuant to Sec. 255, in relation to Sec. 253 (d), and 256 of the
Tax Code.
To negate criminal liability, Lim and Coronacion argued UEAM’s lack of
willfulness in its default saying that the prosecution failed to prove that UEAM
indeed received the preliminary assessment notice (PAN).
ISUE: WON prosecution failed to prove that UEAM received the PAN.
HELD: YES
A taxpayer may deny that he received an assessment form BIR. And if he does
so, it is incumbent upon the BIR to prove by competent evidence that such
notice was indeed received by the addressee. The onus probandi shifts to the
BIR to prove that the taxpayer received the assessment in the due course of
the mail. Willfulness of not paying the tax requires the showing of knowledge
and voluntariness. Here, the prosecution failed to present the registry return
receipts. The prosecution, therefore, failed to prove that Lim and Coronacion
had knowledge of their obligation to pay the taxes of UEAM. The prosecution
was not able to prove that Lim and Coronacion willfully failed to pay the
assessed tax.
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People v. Gloria Kintanar
CTA Criminal Case, Resolution of 16 November 2011
FACTS:
Spouses Kintanar allegedly failed to file their income tax returns for the years
2000 and 2001. The BIR, asking them to cooperate, make the tax returns, and
pay the taxes, sent them the following documents:
1) Letter of Access No. 00029663, dated March 28, 2003, which was received
by petitioner's husband on April 3, 2003;
2) Second Request for Presentation of Records, dated April21, 2003 ,
was received by a certain George Llorente on April23, 2003;
3) Final Notice, dated May 5, 2003, was received by George Llorente;
4) Subpoena Duces Tecum, dated June 11, 2003;
5) Letter by Chief Rosimo, dated September 3, 2003;
6) Preliminary Assessment Notice, dated December 9, 2003, together with the
Details of Discrepancies, for taxable years 1999 to 2002;
7) Memorandum, dated February 26, 2004;
8) Formal Letter of Demand, dated February 26, 2004, together with
Assessment Notices;
9) Letter of Chief Guballa, dated September 30, 2004; and
10)Final Decision on Disputed Assessment, dated December 13, 2004.
The spouses did not heed these notices and failed to cooperate. Two separate
informations were filed against them. Criminal action for tax evation ensued.
Section 255 of the NIRC of 1997, as amended, contemplates four different
situations punishable by law, each of which constitutes failure to perform in a
timely manner, an obligation imposed by the NIRC of 1997, as amended, to
wit:
1) To pay any tax;
2) To make a return;
3) To keep any record; and
4) To supply correct and accurate information.
1) The accused is a person required to make or file a return;
2) The accused failed to make or file the return at the time required by law;
and
3) That failure to make or file the return was willful.
The defenses were:
It was the husband who filed.
The husband delegated an accountant who did not properly file the tax
returns.
The return (evidence for the defense) was made in Novaliches, instead of in
Paranaque, the RDO with jurisdiction over their legal residences.
ISSUE: WON the Spouses are guilty beyond reasonable doubt of tax evation.
HELD: Yes
BIR, through documentary and testimonial evidence, were able to prove all of
the elements of Sec 255 with respect to failure to make or file a return.
Dispositive for both cases (2000 and 2001):
GUlLTY beyond reasonable doubt of violation of Section 255 of the National
Internal Revenue Code of 1997, as amended, and is hereby SENTENCED to
suffer an indeterminate penalty of one (1) year, as minimum, to two (2) years,
as maximum, and is ORDERED to pay a fine in the amount of P10,000.00,
with subsidiary imprisonment in case accused has no property with which to
meet the said fine, or unable to pay such fine, pursuant to Section 280 of the
NIRC of 1997, as amended.
As regards the civil liability, accused is ORDERED to PAY deficiency income
tax for taxable year 2000, the amount of P3,156,470.22, inclusive of penalties,
surcharges and interests, plus 20% interest per annum accounted from April
12, 2005 until full payment thereof, pursuant to Section 249 (C ) (3) of the
NIRC of 1997, as amended.
The elements of Violation of Section 255 of the NIRC of 1997, as amended,
for failure to make or file a return, are, as follows:
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