TAXATION REMEDIES CASESCIR v. Julieta Ariete By: Roman Almalbis FACTS: May 21, 1997: Informer filed affidavit with SID, Davao, declaring that no ITRs were filed by taxpayer for 1994-1996. May 23, 1997: SID Chief issued Mission Order. Oct 15, 1997: RO reported no ITRs were filed. Dec 2, 1997: Respondent filed ITRs for 1993-1996 when BIR offered VAP under RMO 59-97, as amended by RMO 60-97 and 63-97. July 28, 1998: RD issued LA for 1993-1996. After investigation, 4 assessment notices were issued in total amount of P191,463.04. Feb 22, 1999: Protest was filed. Mar 30, 1999: Protest was denied. Taxpayer is not entitled to benefits under VAP. Apr 16, 1999: Respondent offered compromise, but it was denied by BIR. Respondent filed petition for review with CTA. Jan 15, 2002: CTA rendered decision cancelling deficiency assessments. MR filed by CIR but denied by CTA. Petitioner appealed to CA. June 14, 2004: CA affirmed CTAs decision. Petitioner filed appeal to SC.

ISSUE: Is the recording in the Official Registry Book of the BIR of the information filed by informer a mandatory requirement before taxpayer may be excluded from coverage of Voluntary Assessment Program (VAP)? SC DECISION: Yes. Where the language of the law is clear and unequivocal, it must be given its literal application and applied without interpretation. RMO 59-97, 60-97, and 63-97 consistently provided that persons under investigation as a result of verified information filed by an informer under Sec 281 of the NIRC, and duly recorded in the Official Registry Book of the Bureau before the date of availment under VAP are excluded from the coverage of the VAP. This denotes that in addition to the filing of verified information, the same should also be duly recorded in the ORB of BIR. The conjunctive word and is not without legal significance. It means in addition to. The word and, whether it is used to connect words, phrases or full sentences, must be accepted as binding together and as relating to one another. It implies conjunction or union. This interpretation is bolstered by the fact that BIR issued RR 18-2005 and reiterated the same provision in the implementation of the Enhanced VAP. When a tax provision speaks unequivocably, it is not the province of a Court to scan its wisdom or its policy. The more correct course of dealing with a question of construction is to take the words exactly what they say. Findings of facts of the CTA are final and binding upon the SC, specially if these are similar findings of the CA, which is the final arbiter of questions of fact.CIR vs Metro Star SuperamaGR No. 185371

By: Jon Cerlan Bangoy

FACTS:

Respondent is a duly organized domestic corporation. On January 26, 2001, the regional director Legazpi City issued a letter of authority for the revenue officer to examine respondents books of accounts and other accounting records for taxable year 1999. Respondent failed to comply for requests for presentation of records and a subpoena duce tecum, thus the investigation proceeded based on the best evidence obtainable for the issuance of assessment notice.

On November 8, 2001, RDO issued a Preliminary 15-day Letter, received on November 9, 2001 stating a deficiency of VAT and withholding taxes in the amount of PhP292,874. On April 11, 2002, a Final Assessment Notice was received by the respondent for the deficient amount. Subsequently the RDO sent a Final Notice of Seizure on May 12, 2003 received on May 15. On February 6, 2004 a Warrant of Distraint and/or Levy demanding payment. Respondent filed a Motion for Reconsideration on July 30, 2003. On February 8, 2005 the CIR denied the MR.

Respondent corporation as a defense raised the defense that it never received a Preliminary Assessment Notice and was not afforded due process when it filed a petition for review with the CTA.

CTA SECOND DIVISION:

Found in favor in Metro Star Superama and granted an order to desist the collecting of taxes.

The CTA-SecondDivision opined that [w]hile there [is] a disputable presumption that a mailedletter [is] deemed received by the addressee in the ordinary course of mail, a direct denial of thereceipt of mail shifts the burden upon the party favored by the presumption to prove that the mailedletter was indeed received by the addressee.It also found that there was no clear showing thatMetro Star actually received the alleged PAN, dated January 16, 2002. It, accordingly, ruled that theFormal Letter of Demand dated April 3, 2002, as well as the Warrant of Distraint and/or Levy datedMay 12, 2003 were void, as Metro Star was denied due process.

CIR moved for a motion for reconsideration. CTA En Banc denied and dismissed for lack of merit.

ISSUE:

WON a Preliminary Assessment Notice (PAN) is necessary since the respondent corporation received the Final Assessment Notice.

HELD:

YES. The PAN is necessary to accord due process to tax payers, even if a FAN was ultimately issued. The SC cited the case of Barcelon, Roxas Securties vs CIR:

Jurisprudence is replete with cases holding that if the taxpayer denies ever having received an assessment from the BIR, it is incumbent upon the latter to prove by competent evidence that such notice was indeed received by the addressee. The onus probandi was shifted to the respondent to prove by contrary evidence that the Petitioner received the assessment in the due course of mail.

Section 228 of the Tax Code also states that:

Protesting of Assessment. - When the Commissioner or his duly authorized representative finds that proper tax should be assessed, her shall first notify the taxpayer of his findings, provided, however, that a preassessment notice shall not be required in the followingcases:(a) When the finding for any deficiency tax is the result of mathematical error in thecomputation of the tax as appearing on the face of the return; or(b) When a discrepancy has been determined between the tax withheld and the amountactually remitted by the withholding agent; or(c) When a taxpayer who opted to claim a refund or tax credit of excess creditablewithholding tax for a taxable period was determined to have carried over and automaticallyapplied the same amount claimed against the estimated tax liabilities for the taxable quarter orquarters of the succeeding taxable year; or(d) When the excise tax due on exciseable articles has not been paid; or(e) When the article locally purchased or imported by an exempt person, such as, butnot limited to, vehicles, capital equipment, machineries and spare parts, has been sold, tradedor transferred to non-exempt persons.

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.

The SC also used the Revenue Regulation No. 12-99 of the BIR for strict compliance of the issuance of the PAN. (See below)

SC also cited CIR vs Algue stating the life blood doctrine but emphasized that:

But even as we concede the inevitability and indispensability of taxations, it is a requirement in all democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure.

R.R. No 12-99:

SECTION 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment.3.1 Mode of procedures in the issuance of a deficiency tax assessment:3.1.1 Notice for informal conference. The Revenue Officer who audited the taxpayersrecords shall, among others, state in his report whether or not the taxpayer agrees with hisfindings that the taxpayer is liable for deficiency tax or taxes. If the taxpayer is not amenable,based on the said Officer's submitted report of investigation, the taxpayer shall be informed, inwriting, by the Revenue District Office or by the Special Investigation Division, as the case maybe (in the case Revenue Regional Offices) or by the Chief of Division concerned (in the case ofthe BIR National Office) of the discrepancy or discrepancies in the taxpayer's payment of hisinternal revenue taxes, for the purpose of "Informal Conference," in order to afford thetaxpayer with an opportunity to present his side of the case. If the taxpayer fails to respondwithin fifteen (15) days from date of receipt of the notice for informal conference, he shall beconsidered in default, in which case, the Revenue District Officer or the Chief of the SpecialInvestigation Division of the Revenue Regional Office, or the Chief of Division in the NationalOffice, as the case may be, shall endorse the case with the least possible delay to theAssessment Division of the Revenue Regional Office or to the Commissioner or his dulyauthorized representative, as the case may be, for appropriate review and issuance of adeficiency tax assessment, if warranted.3.1.2 Preliminary Assessment Notice (PAN). If after review and evaluation by theAssessment Division or by the Commissioner or his duly authorized representative, as the casemay be, it is determined that there exists sufficient basis to assess the taxpayer for anydeficiency tax or taxes, the said Office shall issue to the taxpayer, at least by registered mail, aPreliminary Assessment Notice (PAN) for the proposed assessment, showing in detail, the factsand the law, rules and regulations, or jurisprudence on which the proposed assessment isbased (see illustration in ANNEX A hereof). If the taxpayer fails to respond within fifteen (15)days from date of receipt of the PAN, he shall be considered in default, in which case, a formalletter of demand and assessment notice shall be caused to be issued by the said Office, callingfor payment of the taxpayer's deficiency tax liability, inclusive of the applicable penalties.3.1.3 Exceptions to Prior Notice of the Assessment. The notice for informal conferenceand the preliminary assessment notice shall not be required in any of the following cases, inwhich case, issuance of the formal assessment notice for the payment of the taxpayersdeficiency tax liability shall be sufficient:(i) When the finding for any deficiency tax is the result of mathematical error inthe computation of the tax appearing on the face of the tax return filed by thetaxpayer; or(ii) When a discrepancy has been determined between the tax withheld and theamount actually remitted by the withholding agent; or(iii) When a taxpayer who opted to claim a refund or tax credit of excesscreditable withholding tax for a taxable period was determined to have carriedover and automatically applied the same amount claimed against theestimated tax liabilities for the taxable quarter or quarters of the succeedingtaxable year; or(iv) When the excise tax due on excisable articles has not been paid; or(v) When an article locally purchased or imported by an exempt person, such as,but not limited to, vehicles, capital equipment, machineries and spare parts,has been sold, traded or transferred to non-exempt persons.

3.1.4 Formal Letter of Demand and Assessment Notice. The formal letter of demand andassessment notice shall be issued by the Commissioner or his duly authorized representative.The letter of demand calling for payment of the taxpayer's deficiency tax or taxes shall state thefacts, the law, rules and regulations, or jurisprudence on which the assessment is based,otherwise, the formal letter of demand and assessment notice shall be void (see illustration inANNEX B hereof).

The same shall be sent to the taxpayer only by registered mail or by personal delivery.If sent by personal delivery, the taxpayer or his duly authorized representative shallacknowledge receipt thereof in the duplicate copy of the letter of demand, showing thefollowing: (a) His name; (b) signature; (c) designation and authority to act for and in behalf ofthe taxpayer, if acknowledged received by a person other than the taxpayer himself; and (d)date of receipt thereof.

x x x.

BPI vs CIRBy: Red Gabriel Convocar G.R. No. 174942 March 7, 2008Facts:Respondent, through its Revenue Service Chief, issued to the petitioner a pre-assessment notice (PAN) dated November 26, 1986.Petitioner, in a letter dated November 29, 1986, requested for the details of the amounts alleged as 1982-1986 deficiency taxes mentioned in the November 26, 1986 PAN.On April 7, 110

989, respondent issued to the petitioner, assessment/demand notices for deficiency withholding tax at source (Swap Transactions) and DST involving the amounts of P190,752,860.82 and P24,587,174.63, respectively, for the years 1982 to 1986.On April 20, 1989, petitioner filed a protest on the demand/assessment notices.The tax court ordered Petitioner to pay the respondent the amount of P24,587,174.63 representing deficiency documentary stamp tax for the period 1982-1986, plus 20% interest starting February 14, 2003 until the amount is fully paid pursuant to Section 249 of the Tax Code.The tax court, applying the case of Commissioner of Internal Revenue v. Wyeth Suaco Laboratories, Inc., (Wyeth Suaco case), ruled that BPIs protest and supplemental protest should be considered requests for reinvestigation which tolled the prescriptive period provided by law to collect a tax deficiency by distraint, levy, or court proceeding.BPI argues that the governments right to collect the DST had already prescribed because the Commissioner of Internal Revenue (CIR) failed to issue any reply granting BPIs request for reinvestigation manifested in the protest letters dated 20 April and 8 May 1989. It was only through the 9 August 2002 Decision ordering BPI to pay deficiency DST, or after the lapse of more than thirteen (13) years, that the CIR acted on the request for reinvestigation, warranting the conclusion that prescription had already set in. Issue:Whether or not the collection of the deficiency DST is barred by prescriptionHeld:Yes. The CIR has three (3) years from the date of actual filing of the tax return to assess a national internal revenue tax or to commence court proceedings for the collection thereof without an assessment.

When it validly issues an assessment within the three (3)-year period, it has another three (3) years within which to collect the tax due by distraint, levy, or court proceeding. The assessment of the tax is deemed made and the three (3)-year period for collection of the assessed tax begins to run on the date the assessment notice had been released, mailed or sent to the taxpayer.As applied to the present case, the CIR had three (3) years from the time he issued assessment notices to BPI on 7 April 1989 or until 6 April 1992 within which to collect the deficiency DST. However, it was only on 9 August 2002 that the CIR ordered BPI to pay the deficiencyThe Tax Code states that in order to suspend the running of the prescriptive periods for assessment and collection, the request for reinvestigation must be granted by the CIR.There is nothing in the records of this case which indicates, expressly or impliedly, that the CIR had granted the request for reinvestigation filed by BPI. What is reflected in the records is the piercing silence and inaction of the CIR on the request for reinvestigation, as he considered BPIs letters of protest to be.Neither did the waiver of the statute of limitations signed by BPI supposedly effective until 31 December 1994 suspend the prescriptive period. The CIR himself contends that the waiver is void as it shows no date of acceptance.BPIs letters of protest and submission of additional documents pertaining to its SWAP transactions, which were never even acted upon, much less granted, cannot be said to have persuaded the CIR to postpone the collection of the deficiency DST.The inordinate delay of the CIR in acting upon and resolving the request for reinvestigation filed by BPI and in collecting the DST allegedly due from the latter had resulted in the prescription of the governments right to collect the deficiency.PJAceMoog Controls Corporation vs. CIR By: Gwapo FACTS: As culled from the records of the case, it is not disputed that on January 8, 2003, petitioner received the Formal Letter of Demand with the Assessment Notices, assessing it for deficiency income and final withholding taxes for the period covering October 1998 to September 1999 in the total amount of P 38,604,536.94, inclusive of surcharges and interest. On February 7, 2003, a Letter of Protest addressed to the Revenue Regional Director, Jaime Q. Concepcion, of BIR Revenue Region No. 2 of the Cordillera Administrative Region was subsequently filed by herein petitioner. On April 4, 2003, petitioner submitted its supporting documents, as evidenced by a copy of the transmittal letter addressed to herein respondent. On May 9, 2003, a letter from Regional Director Jaime Q. Concepcion, denying with finality petitioner's protest letter dated February 7, 2003, was received by petitioner. ISSUE: Whether or not the Court has jurisdiction over the case? HELD: No. A decision on the protest has to be rendered by the Commissioner of Internal Revenue before this Court may acquire jurisdiction to act on the case. Also, as specifically mentioned under Section 228 of the Tax Code, when the Commissioner of Internal Revenue fails to act on the protest of the taxpayer after the lapse of one hundred eighty (180) days from the submission of its supporting documents, the taxpayer may elevate the appeal to this Court. It is a fundamental and mandatory rule in law that an aggrieved taxpayer must first exhaust all available administrative remedies before he can be able to avail of the benefits of a judicial remedy. The purpose of this is to enable the administrative tribunals, especially where their sound discretion and competence are demanded, to extend the necessary knowledge and expertise to determine the matters of the case. This rule finds application in the case at bar. The decision received on May 9, 2003, by herein petitioner was rendered by the BIR Regional Director of Revenue Region No. 2. Subsequently, petitioner seasonably filed an administrative protest with the Commissioner of Internal Revenue on June 9, 2003. However, on the very same date, and obviously without waiting for any response from the Commissioner, this instant petition for review was likewise filed by petitioner with this court. Apparently, a decision has yet to be rendered by Commissioner of Internal Revenue which is to be the subject of review by this court. In other words, there is no decision yet to speak of, which would confer jurisdiction on this Court. It is also argued by herein petitioner that the subsequent inaction by the respondent on its protest for more than one hundred eighty (180) days already rendered the issue of prematurity moot and academic. We cannot agree. It seems like herein petitioner failed to cautiously appreciate the facts of the case. It is very clear from the records that petitioner filed this instant petition for review on the very same date it filed its appeal with the Commissioner of Internal Revenue. Petitioner did not wait for any response from the Commissioner; in fact, it did not give the Commissioner the opportunity to decide on its case. As such, while obviously there is no decision; there is no "inaction" on the part of the Commissioner to speak of either. The period provided for under Section 228 of the Tax Code refers to the period of inaction by the Commissioner of Internal Revenue on the protest of a taxpayer, which period should be counted from the time the required documents supporting the taxpayer's protest are submitted to the Commissioner. In other words, the Commissioner has a period of one hundred eighty (180) days, from the date the aggrieved taxpayer submits his supporting documents, to act on the protest filed, and consequently, his failure to seasonably act on the protest will entitle the taxpayer to elevate the appeal to this Court within thirty (30) days from the lapse of the 180 day period. "In the case at bar, petitioner opted to seek immediate relief to the Court of Tax Appeals instead of waiting for the decision of the respondent. Hence, we opine that petitioner is bound to follow the periods provided for in Section 228 of the Tax Code, in relation to Section 11 of RA No. 1125" (Rizal Commercial Banking Corporation vs. Commissioner of Internal Revenue/ CTA case No. 647~ September 10/ 2003). Petitioner should have waited for the lapse of the 180-day period of inaction by the Commissioner of Internal Revenue before filing its Petition for Review with this court within the 30-day period provided by law, instead of filing it on the same day that petitioner filed its administrative appeal with the Commissioner of Internal Revenue. In Commissioner of Internal Revenue vs. Villa/ 22 SCRA 3/ the Supreme Court said that "[T]he Tax Court is a court of special jurisdiction. As such, it can take cognizance only of such matters as are clearly within its jurisdiction." The other issue raised pertaining to want of pre-assessment conference may be raised by the petitioner as matter of defense if this court acquired jurisdiction."LA FLOR DELA ISABELA v. CIR By: Edgar Praile IIFacts: Mar 21, 2005 -- Petitioner received Formal Letter of Demand with attached deficiency tax assessments. Mar 30 and Apr 12, 2005 Petitioner filed its protest and supplemental protest. July 9, 2007 Petitioner received Final Decision on Disputed Assessments. Oct 8, 2007 Petitioner filed application for tax amnesty pursuant to RA 9480. Oct 18, 2007 Petitioner filed application for compromise under Sec 204, NIRC. Nov 29, 2007 -- Petitioner filed petition for review with CTA. Issue:WON the petition was filed In time with the court. Held:While the right to appeal a decision of the Commissioner to the CTA is merely a statutory remedy, nevertheless the requirement that it must be brought within thirty (30) days is jurisdictional. Instead of appealing the Final Decision on Disputed Assessment dated June 1, 2007 to the CTA, or instead of elevating its protest to the Commissioner, petitioner availed of the tax amnesty pursuant to RA 9480, for the assessed income and VAT deficiencies, and likewise filed an application for compromise, for the assessed withholding tax deficiencies, on October 8, 2007 and October 18, 2007, respectively. Pursuant to Section 228 of the NIRC of 1997, as amended, petitioner's failure to appeal the Final Decision on Disputed Assessment dated June 1, 2007 to the Court, within the statutory period, rendered the disputed assessment final, executory and demandable, thereby precluding it from interposing the defense of legality or validity of the assessment. Petitioners failure to appeal within the 30-day period rendered the disputed assessment final, executory and demandable, thereby precluding it from interposing the defense of legality or validity of assessment. The assessment ceases to be a disputed assessment, and the same can no longer be contested by means of a disguised protest (La Flor dela Isabela, Inc v. CIR, CTA Case 7709, Jun 9, 2010). " RIZAL COMMERCIAL BANKING CORPORATION v.COMMISSIONER OF INTERNAL REVENUEG.R. No. 168498, 24 April 2007, J. Ynares-Santiago (Third Division)By: Enna Fleur TrivilegioThe Court of Tax Appeals (CTA) is a court of special jurisdiction and can only take cognizance of such matters as are clearly within its jurisdiction. The jurisdiction of the CTA has been expanded to include not only decisions or rulings but inaction as well of the Commissioner of Internal Revenue. The decisions, rulings or inaction of the Commissioner are necessary in order to vest the CTA with jurisdiction to entertain the appeal, provided it is filed within the period provided for by Section 3(a) (2), Rule 4 of the Revised Rules of the Court of Tax Appeals. In case the Commissioner failed to act on the disputed assessment within the 180-day period from the date of submission of documents, a taxpayer can either: (1) file a petition for review with the CTA within 30 days after the expiration of the 180-day period fixed by law for the Commissioner to act on the disputed assessments; or (2) await the final decision of the Commissioner on the disputed assessments and appeal such final decision to the CTA within 30 days after the receipt of a copy of such decision. The 30-day period within which to file an appeal is jurisdictional and failure to comply therewith would bar the appeal and deprive the CTA of its jurisdiction to entertain and determine the correctness of the assessments. Such period is not merely directory but mandatory and it is beyond the power of the courts to extend the same. Moreover, these options are mutually exclusive and resort to one bars the application of the other.

Rizal Commercial Banking Corporation (RCBC) sought to file a petition for review with the Court of Tax Appeals (CTA) for failure of the Commissioner of Internal Revenue (Commissioner) to act on its disputed tax assessment. However, The CTA Second Division denied the petition because it was not file within the reglementary period required by law. The CTA En Banc affirmed the ruling of its second division. RCBC filed this Motion for Reconsideration of the decision of the Court, affirming the decision of the CTA En Banc. RCBC maintained that its former counsels failure to file petition for review with the CTA within the reglementary period was excusable.

ISSUE:

Whether or not RCBC had timely filed its petition for review before the Court of Tax Appeals in order to give the latter jurisdiction over the case

HELD:

Petitioners motion for reconsideration is DENIED.

The Court of Tax Appeals (CTA) is a court of special jurisdiction and can only take cognizance of such matters as are clearly within its jurisdiction. Section 7 of Republic Act 9282, amending R.A. 1125, the Law Creating the Court of Tax Appeals, and Section 3, Rule 4 of the Revised Rules of the Court of Tax Appeals provide that the CTA shall have exclusive appellate jurisdiction to review by appeal the: (1) decisions of the Commissioner of Internal Revenue (Commissioner) in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered the Bureau of Internal Revenue (BIR); (2) inaction by the Commissioner in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the BIR, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial.The jurisdiction of the CTA has been expanded to include not only decisions or rulings but inaction as well of the Commissioner. The decisions, rulings or inaction of the Commissioner are necessary in order to vest the CTA with jurisdiction to entertain the appeal, provided it is filed within the period provided for by Section 3(a) (2), Rule 4 of the Revised Rules of the Court of Tax Appeals. In case the Commissioner failed to act on the disputed assessment within the 180-day period from the date of submission of documents, a taxpayer can either: (1) file a petition for review with the CTA within 30 days after the expiration of the 180-day period fixed by law for the Commissioner to act on the disputed assessments; or (2) await the final decision of the Commissioner on the disputed assessments and appeal such final decision to the CTA within 30 days after the receipt of a copy of such decision. The 30-day period within which to file an appeal is jurisdictional and failure to comply therewith would bar the appeal and deprive the CTA of its jurisdiction to entertain and determine the correctness of the assessments. Such period is not merely directory but mandatory and it is beyond the power of the courts to extend the same. Moreover, these options are mutually exclusive and resort to one bars the application of the other.

In the instant case, the Commissioner failed to act on the disputed assessment within 180 days from the date of submission of documents. Thus, RCBC opted to file for review before the CTA. Unfortunately, the petition for review was filed out of time, i.e. it was filed more than 30 days after the lapse of the 180-day period. Consequently, it was dismissed by the CTA for late filing. RCBC did not file a motion for reconsideration or make an appeal; hence, the disputed assessment became final, demandable and executory.

RCBC cannot now claim that the disputed assessment is not yet final as it remained unacted upon by the Commissioner and thereafter appeal the same to the CTA. This legal maneuver cannot be countenanced. After availing the first option, i.e., filing a petition for review which was however filed out of time, RCBC cannot successfully resort to the second option, i.e. awaiting the final decision of the Commissioner and appealing the same to the CTA, on the pretext that there is yet no final decision on the disputed assessment because of the Commissioners inaction.Royal Bank vs. CIR By: Vanity Gail Trivilegio

Facts:-Petitioner Royal bank of Scotland Phil., inc. is a domestic corporation duly registered w/ SEC and authorized by BSP to engage in commercial banking.-Petitioner received a formal assessment notice or FAN for alleged deficiency documentary stamp tax (DST).-In the said FAN, CIR claimed that the reverse repurchase agreements with the BSP are considered as "deposit substitutes" under the NIRC.-Petioner filed its protest letter on January 28, 2004.-As the protest was not acted upon by the respondent, on October 25, 2004, petitioner filed a Petition for Review with this Court.-On September 10, 2008, the First Division rendered the assailed Decision dismissing the petition for lack of jurisdiction.-On September 30, 2008, petitioner filed a motion for reconsideration which was denied for lack of merit by the First Division in a Resolution dated November 27, 2008.-Hence, the instant Petition for Review.

Issue: WON CTA has jurisdiction.

Held: No. The 180-day period, as prescribed in the said provision, should be reckoned from the filing of petitioner's protest on January 28, 2004, which .lapsed on July 26, 2004. From July 26, 2004, petitioner had thirty (30) days or until August 25, 2004 to appeal the decision or inaction of the CIR to this Court. However, record shows that petitioner filed its Petition for Review with this Court on October 25, 2004 only, sixty (60) days way beyond the thirty (30) day reglementary period prescribed under Section 228 of the NIRC of 1997, as amended.Thus, for petitioner's failure to appeal the CIR's inaction within the reglementary period, the assessment had become final, executory and demandable. Consequently, petitioner is precluded from disputing the correctness of the assessment. Petition for review for the cancellation of the deficiency documentary stamp tax assessment for taxable year 1999 is hereby dismissed for lack of jurisdiction.

HPCO AGRIDEV CORPORATION vs. COMMISSIONER OF INTERNALREVENUEC.T.A. CASE NO. 6355, JULY 1 8, 2002

By: Kristiane Osorio

FACTS:This case stemmed from an assessment issued against petitioner for deficiency value-added tax and expanded withholding tax for the taxable year 1997 in the aggregate amount of P2,165,373.93, inclusive of surcharge, interests and compromise penalties. Petitioner is a corporation organized and existing under the laws of the Philippines with office address at corner Washington and Figueroa Streets, Silay City, Negros Occidental. It is engaged, among others, in the business of developing and leasing private agricultural lands and planting, cultivating and selling products of such lands. On January 24, 2001, petitioner received Notice of Assessment Nos. 00007-2001 and 00008-2001 from the Bureau of Internal Revenue (BIR), together with the corresponding demand letter, all dated January 10, 2001. As of October 17, 2001, however, respondent had not yet resolved/decided petitioner's protest. Consequently, to prevent the assessment notices from becoming "final, executory and demandable" pursuant to Section 228 of the 1997 NIRC, petitioner filed the instant petition on November 16, 2001.

ISSUES:The petitioner and the respondent stipulated the issues to be resolved by this court, to wit:(1) Whether or not the right of the government to assess deficiency VAT and EWT for taxable year 1997 has already prescribed;(2) Whether or not the Assessment Notices are void for failure of the respondent to inform petitioner of the facts and the law upon which the assessment is based; and(3) Whether or not the imposition of surcharge and compromise penalties is proper.

RULING:As to the first issue: Only the assessment for deficiency VAT for the last quarterof 1997 and the assessment for deficiency expanded withholding tax for December of 1997 were issued within the period allowed by law.The assessments made on January 16, 2001 for deficiency VAT covering the taxable year 1997 had already prescribed with respect to the first, second and third quarters thereof.The assessment was issued on January 10, 2001, said issuance was within the three-year prescriptive period. As regards the EWT assessment, the same was issued within the period allowed by law for respondent had until March 1, 2001 within which to assess pursuant to Section 5l (c) of the 1993 Tax Code.Pursuant to Section 203 in relation to Section 110 of the Tax Code and Section 2 of Revenue Regulations No. 5-93, the period to assess commences after the last day prescribed by law for the filing of the return. In the case of VAT, it is twenty (20) days following the close of each taxable quarter. Hence, if the return was filed earlier than the last day allowed by law, the period to assess shall still be counted from the last day prescribed for filing of the return. However, if the return was filed beyond the period prescribed by law, the three-year period shall be counted from the day the return wasfiled. Under then Section 110 of the Tax Code, as implemented by Section 2 ofRevenue Regulations No. 5-93, the taxpayer is required to file a quarterly VAT return not later than twenty days following the close of each quarter. For each quarter, the taxpayer is mandated to file an adjusted and complete return. A final or adjustment return is not required in the case of value-added tax, unlike in the case of an annual Income TaxReturn filed for income tax purposes. The Supreme Court on several occasions ruled that it is the date when the demand letter or notice of assessment is released, mailed or sent to the taxpayer that constitutes an actual assessment. The law does not require that the demand or notice be received within the prescriptive period. As long as the release thereof iseffected before prescription sets in, the assessment is deemed made on time even if the same is actually received by the taxpayer after the expiration of the prescriptive period.As disclosed by the records in this case, both the assessment notices and demandletter were mailed only on January 16, 2001 (BIR Records, pages 234 to 236).Apparently, the three (3)-year period within which respondent has to assesspetitioner of expanded withholding tax shall be counted from the last day required by law for filing a monthly remittance return, which is ten (10) days after the end of each calendar month (save December) and twenty-five (25) days after the end of December fortaxes withheld from the last compensation/income payment for the said month.Consequently, the assessment notice received by the petitioner on January 24, 2001 for deficiency expanded withholding tax, had already prescribed for the months of January to November of 1997.

As to the second issue:In the case at bar, the pre-assessment notice merely stated that "please beinformed that as a result of the review of the report of investigation, x xx, on yourcompany's internal revenue tax liability for the year 1997, there has been found due and collectible from your company the amount of P2,088,353.78 as deficiency value-added and withholding taxes, inclusive of penalties, as per attached computation sheet." (BIR. records, page 216). While there was an attached audit sheet to the pre-assessment notice, the same, however, merely stated the sections of the NIRC or the revenue regulationswhere the stated computations were based. There was no explanation whatsoever on how the assessment was arrived at. Neither did the demand letter dated January 10, 2001 contain information on the law and facts on which the assessment was made (BIR records, page 234). Ditto with the assessment notices both dated January 10, 2001 (BIR. records, pages 235 and 236). It must be stressed that Section 228 of the Tax Code is quite precise in providing that "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".

As to the third and last issue:The question of propriety of the imposition of compromise penalty,the same becomes moot and academic in view of the findings that the assessments were issued out of time and were void for failure to inform petitioner of the law and facts on which they were made.WHEREFORE, in view of all the foregoing, the assessments issued against petitioner for deficiency VAT and EWT in the total amount of P2, 165,373.93 covering the year 1997 are hereby CANCELLED and SET ASIDE.COMMISSIONER OF INTERNAL REVENUE vs. KUDOS METAL CORPORATION- Waiver of the Statute of Limitations

FACTS:CIR assessed Kudos Metal Corporation for taxable year 1998. A Waiver of the Statute of Limitations was executed on December 2001. The CTA issued a Resolution canceling the assessment notices issued against Petitioner for having been issued beyond the prescriptive period as the waiver purportedly failed to (a) have the valid officer execute the same (i.e., only the Assistant Commissioner signed it and not the CIR); (b) the date of acceptance was not indicated; (c) the fact of receipt by the taxpayer was not indicated in the original copy.

ISSUE:Has the CIRs right to assess prescribed?

HELD:YES. The requirements for a valid waiver as laid down in RMO 20-90 and RDAO No. 5-01 are mandatory to give effect to Section 222 of the Tax Code. Specifically, the flaws in the waiver executed by Kudos Metal were as follows: (a) there was no notarized written authority in favor of the signatory for the company; (b) there is no stated date of acceptance by the Commissioner or his representative; and (c) the fact of the receipt of the copy was not indicated in the original waivers.

Neither can it be said that by merely executing the waiver the taxpayer is already estopped from disputing an action by the CIR beyond the statutory 3-year period since the exception under the Suyoc case (i.e., when the delays were due to taxpayers acts) does not apply.

Note: Requisites of a valid waiver: (i) acceptance date; (ii) expiry date; (iii) signed by authorized officer of taxpayer and BIR; (iv) notarized; (v) fact of receipt must be indicated in the copies

CIR v. AICHI FORGING COMPANY OF ASIA, INC.G.R. No. 184823 October 6, 2010Del Castillo, J.By: Irish MombayDoctrine: The CIR has 120 days, from the date of the submission of the complete documents within which to grant or deny the claim for refund/credit of input vat. In case of full or partial denial by the CIR, the taxpayers recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days. A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return of taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only his entitlement to a refund but also his compliance with the procedural due process. As between the Civil Code and the Administrative Code of 1987, it is the latter that must prevail being the more recent law, following the legal maxim, Lex posteriori derogat priori. The phrase within two (2) years x x x apply for the issuance of a tax credit certificate or refund under Subsection (A) of Section 112 of the NIRC refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA.Facts:Petitioner filed a claim of refund/credit of input vat in relation to its zero-rated sales from July 1, 2002 to September 30, 2002. The CTA 2nd Division partially granted respondents claim for refund/credit.Petitioner filed a Motion for Partial Reconsideration, insisting that the administrative and the judicial claims were filed beyond the two-year period to claim a tax refund/credit provided for under Sections 112(A) and 229 of the NIRC. He reasoned that since the year 2004 was a leap year, the filing of the claim for tax refund/credit on September 30, 2004 was beyond the two-year period, which expired on September 29, 2004. He cited as basis Article 13 of the Civil Code, which provides that when the law speaks of a year, it is equivalent to 365 days. In addition, petitioner argued that the simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and 229 of the NIRC. According to the petitioner, a prior filing of an administrative claim is a condition precedent before a judicial claim can be filed.The CTA denied the MPR thus the case was elevated to the CTA En Banc for review. The decision was affirmed. Thus the case was elevated to the Supreme Court.Respondent contends that the non-observance of the 120-day period given to the CIR to act on the claim for tax refund/credit in Section 112(D) is not fatal because what is important is that both claims are filed within the two-year prescriptive period. In support thereof, respondent cited Commissioner of Internal Revenue v. Victorias Milling Co., Inc. [130 Phil 12 (1968)] where it was ruled that if the CIR takes time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the CTA before the end of the two-year period without awaiting the decision of the CIR.Issues:1. Whether or not the claim for refund was filed within the prescribed period2. Whether or not the simultaneous filing of the administrative and the judicial claims contravenes Section 229 of the NIRC, which requires the prior filing of an administrative claim, and violates the doctrine of exhaustion of administrative remediesHeld:1. Yes. As ruled in the case of Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (G.R. No. 172129, September 12, 2008), the two-year period should be reckoned from the close of the taxable quarter when the sales were made.In Commissioner of Internal Revenue v. Primetown Property Group, Inc (G.R. No. 162155, August 28, 2007, 531 SCRA 436), we said that as between the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative Code of 1987, which states that a year is composed of 12 calendar months, it is the latter that must prevail being the more recent law, following the legal maxim, Lex posteriori derogat priori.Thus, applying this to the present case, the two-year period to file a claim for tax refund/credit for the period July 1, 2002 to September 30, 2002 expired on September 30, 2004. Hence, respondents administrative claim was timely filed.2. Yes. We find the filing of the judicial claim with the CTA premature.Section 112(D) of the NIRC clearly provides that the CIR has 120 days, from the date of the submission of the complete documents in support of the application [for tax refund/credit], within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayers recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days.Subsection (A) of Section 112 of the NIRC states that any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two 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. The phrase within two (2) years x x x apply for the issuance of a tax credit certificate or refund refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA.The case of Commissioner of Internal Revenue v. Victorias Milling, Co., Inc. is inapplicable as the tax provision involved in that case is Section 306, now Section 229 of the NIRC. Section 229 does not apply to refunds/credits of input VAT.The premature filing of respondents claim for refund/credit of input VAT before the CTA warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.