Court Oft Ax Appeals: Third Division
Court Oft Ax Appeals: Third Division
Court Oft Ax Appeals: Third Division
Third Division
DECISION
BAUTISTA, J:
The Case
1 Rule 4, Sec. 3. Cases within the jurisdiction of the Court in Divisions. - (a) Exclusive original or
appellate jurisdiction to review by appeal the following: (1) Decisions of the Commissioner of
Internal Revenue 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 Bureau of Internal Revenue.
2 Sec. ?.Jurisdiction.- The Court of Tax Appeals shall exercise: (a) Exclusive appellate jurisdiction
to review by appeal, as herein provided. (1) Decisions of the Commissioner of Internal Revenue 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 Bureau of Internal Revenue. l
DECISION
CT A CASE NO. 8569
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No. 1125,3 as amended by RA No. 92824 and RA No. 9503,5 which seeks
for the Court to declare as null and void respondent's Final Decision
dated September 17, 2012, and to render judgment declaring petitioner
to be free from any liability for internal revenue tax deficiency for
taxable year 2008.6
The Parties
The Facts
Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for
the Purpose Certain Sections of Republic Act No. 1125, as amended, Otherwise Known as the Law
Creating the Court of Tax Appeals, and for Other Purposes.
s An Act Enlarging the Organizational Structure of the Court of Tax Appeals, Amending for the J
Purpose Certain Sections of the Law Creating the Court of Tax Appeals, and for Other Purposes.
6 Records, pp. 6-119, with Annexes
7 Id., Joint Stipulation of Facts and Issues ("JSFI"), p. 302
1,091,560.00
Total 1,153,542.00
Less: Excess tax credits carried over to 73,854.75 1,079,697.25
succeeding period
Deficiency Income Tax p 13,202,685.12
Add: 20% Interest p.a. (04.16.09 to 02.13.12) 7,480,316.41
TOTAL AMOUNT DUE p 20,683,002.53
*Please note that the interest and the total amount due will have to be adjusted if paid beyond February 13, 2012.
I
On January 19, 2012, respondent received petitioner's Protest to
the 2008 PAN- Strawberry Foods Corporation (SFC)32 dated January
18,2012.
10. Finally, settled [is] the rule that the tax assessments by
tax examiners are presumed correct and made in good ,/
faith (Cagayan Robina Sugar Milling Co. vs. Court of /
'-
42 Id., p. 140
43 Id., pp. 129-131
DECISION
CTA CASE NO. 8569
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The Issues 75
Petitioner's Arguments
Respondent's Counter-Arguments
74 Id., p. 684
7s Id., JSFI, p. 308
DECISION
CTA CASE NO. 8569
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are all stated in the FLD and attached details of discrepancies; that tax
assessments by tax examiners are presumed correct and made in good
faith; that it is the taxpayer and not the BIR who has the duty of
proving otherwise; and that in the absence of proof of any irregularity
in the performance of official duties, an assessment will not be
disturbed.
Petitioner argues that its right to due process was violated when
the FAN with FLD were issued before its protest to the PAN could be
resolved, hence, respondent violated the principle that no FAN and
Demand Letter shall be issued unless the issues raised in the protest
against the PAN are resolved.
On January 11, 2012, or seven days after the issuance of the PAN
and before the lapse of the fifteen (15)-day period to reply to the said J-
76 Id., JSFI, Exhibit "P-3," pp. 462-465; BIR Records, Exhibit "R-8," pp. 158-160
DECISION
CTA CASE NO. 8569
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77 Id., JSFI, Exhibit "P-22," pp. 528-529; BIR Records, Exhibit "R-8," pp. 161-166
78 Id., JSFI, Exhibit "P-22," pp. 530-532
79 Implementing the Provisions of the National Internal Revenue Code of 1997 Governing the Rules
on Assessment of National Internal Revenue Taxes, Civil Penalties and Interest and the Extra-
Judicial Settlement of a Taxpayer's Criminal Violation of the Code Through Payment of a
Suggested Compromise Penalty, dated September 6,1999, signed by Secretary of Finance Edgardo
j
B. Espiritu
DECISION
CT A CASE NO. 8569
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Basic is the rule in statutory construction that the use of the word
"shall" connotes a mandatory order. Its use in a statute denotes an
imperative obligation and is inconsistent with the idea of discretion.
Where the law is clear and unambiguous, it must be taken to mean
exactly what it says, and courts have no choice but to see to it that the
82Amendment of Revenue Memorandum Order No. 37-90 Prescribing Revised Policy Guidelines ~}
for Examination of Returns and Issuance of Letters of Authority to Audit, Dated September 20, f
1990
DECISION
CTA CASE NO. 8569
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mandate is obeyed.83 Hence, the use of the word osha[[" in RMC No. 43-
90 can only mean that the issuance of a new LOA in cases of
reassignment is mandatory.
ANTONIO F. MONTEMAYOR
Regional Director
83 Bataan Governor Enrique T. Garcia, Jr. v. Han. Eduardo R. Ermita, et al., G.R. No. 168730. September
1, 2005, 469 SCRA 10
(
•
84 BIR Records, Exhibit "R-2," p. 44
DECISION
CT A CASE NO. 8569
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The LOA is the proof that the person/ s named therein is/ are
authorized to conduct the necessary investigation/ audit, it is an
express grant of authority. Thus, absent the necessary issuance of a
new LOA specifically naming the person to whom the case will be
reassigned with the corresponding annotation per RMO No. 43-90,
./
/
ss G.R. No. 178697, November 17, 2010, 635 SCRA 234
DECISION
CT A CASE NO. 8569
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SO ORDERED.
LOVELL ~TISTA
Associate Justice
WE CONCUR:
'
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ATTESTATION
LOVELL~~
/
BAUTISTA
Associate Justice
Chairperson
CERTIFICATION
Presiding Justice