Selected Rulings in Taxation (2014-2015)

JBR Page 1 of 4
In real property tax cases, an appeal to the Board of Assessment Appeals is
not necessary before a party may file a Petition for Review before the CTA.
(National Power Corporation vs. Municipal Government of Navotas,
Sangguniang Bayan of Navotas and Manuel T. Enriquez, in his capacity as
Municipal Treasurer of Navotas, G.R. No. 192300, November 24,2014.)

Even if the first portion of the provision includes the phrase "in lieu of all
taxes" in favor of NGCP, the second portion provides an exception to the
same by expressly stating that NGCP shall be liable to pay taxes on its real
estate, buildings and personal property, as other corporations are now or
hereby may be required by law to pay. Evidently, NGCP is liable to pay taxes
on its real estate, buildings and personal property. (Mun. of Labrador,
Pangasinan vs. National Grid Corporation Phils. CTA AC No. 123, Jun. 24,
2015)

Estimations are not absolutely disallowed by law. What it is disallowed is

when the estimation is arrived at arbitrarily and capriciously. (TS Tech Phils
vs. CIR, CTA Case No. 8178, Aug. 12, 2015)

Void FDDA does not necessarily result to a void assessment, considering that
the FAN/FLD was validly issued. (AB Capital and Investment Corp vs. CIR, CTA
Case No. 8411, June 20, 2015)

The sale of goods and properties by Freeport Zone registered enterprises to a

buyer from the customs territory shall be treated as a technical importation
made by the buyer in the customs territory. The buyer shall be treated as the
importer and shall be imposed the corresponding import taxes and duties
(which includes VAT) prior to release of the goods or merchandise from
Customs custody. (Contex Corp vs. CIR, CTA Case No. 8493, June 30, 2015)

In the absence of such Letter of Authority, any assessment issued is a nullity.

It has been consistently held that a void assessment bears no valid fruit.
(Cebu Mitsumi Inc. vs. CIR, CTA Case No. 8531, Aug 05, 2015)

Refund of Input Tax; the judicial recourse in the event of a denial of the claim
for refund or tax credit by the CIR as well as inaction on his part, i.e., if after
the 120-day period the CIR fails to act on the application for refund or tax
credit, the remedy of the taxpayer is to appeal the inaction of the CIR to this
Court within 30 days. (Philex Mining Corp vs. CIR, CTA Case Nos. 8553 &
8562, June 24, 2015)

As regards the liability of taxpayer’s head, chief accountants or other person

holding similar position officially designated as such by the head of office,
Section 251 of the NIRC of 1997, as amended, provides that the person
required to withhold, account for, and remit any tax imposed by the Tax Code
 Selected Rulings in Taxation (2014-2015)

JBR Page 2 of 4
who willfully fails to do so, or aids or abets in any manner to evade any such
tax or the payment thereof, shall be liable upon conviction to a penalty equal
to the total amount of the tax not withheld, or not accounted for and
remitted.

Clearly, a conviction is necessary in order for the said persons to be liable for
the penalty prescribed under Section 251 of the NIRC of 1997, as amended.
(SSS vs. Misajon, CTA Case No. 8564, June 24, 2015)

Waiver of Statute of Limitations; The waiver must be signed by the taxpayer

himself or his duly authorized representative. In the case of a corporation,
the waiver must be signed by any of its responsible officials. In case the
authority is delegated by the taxpayer to a representative, such delegation
should be in writing and duly notarized. The date of such acceptance by the
BIR should be indicated. Both the date of execution by the taxpayer and date
of acceptance by the Bureau should be before the expiration of the period of
prescription or before the lapse of the period agreed upon in case a
subsequent agreement is executed. (Total (Phils.) Corp vs. CIR, CTA Case No.
8608, July 13, 2015)

the corporate taxpayer's excess tax credits or overpaid income tax in a given
taxable year may either be refunded in the form of cash or tax credit
certificate or carried over applied to the succeeding taxable years. However,
once the carry-over option has been chosen, it is irrevocable for that taxable
period and no application for a tax refund or issuance of a tax credit
certificate shall be allowed. (Citadel Holdings vs. CIR, CTA Case No. 8631,
September 28, 2015)

The inaction which shall be considered as a denial of the protest is an

inaction where the NIRC provides a specific period for action, such as Section
228 of the NIRC of 1997.

Section 228 of the NIRC of 1997, as amended, provides a specific period of

180 days from submission of documents for the CIR to act on the protest and
that if the protest is not acted upon within the said period, the taxpayer
adversely affected by the inaction may appeal to the CTA within thirty (30)
days from the lapse of the 180-day period.

Perusal of the Petition for Review shows that petitioner tried to invoke the
above remedy, which is to appeal the inaction of the CIR on the protest of
the assessment, in order to have the assessment issued against him
cancelled and to obtain a tax clearance. However, petitioner failed to prove
that he actually filed a protest on the FAN/FLD. Hence, the 180- day period
cannot commence to run. (Alexander Crisostomo vs. CIR, CTA Case No. 8672,
Aug. 18, 2015)
 Selected Rulings in Taxation (2014-2015)

JBR Page 3 of 4

Despite the Court having no jurisdiction over the determination of the

validity and correctness of the tax assessment issued against petitioner, still,
the Court finds that it may resolve the issue concerning petitioner's
availment of the tax amnesty program considering that the same is covered
within the meaning of "other matters arising under the National Internal
Revenue Code or other laws administered by the Bureau of Internal Revenue"
provided in Section 7(a)(1) of RA No. 1125, as amended, quoted earlier.
(Alexander Crisostomo vs. CIR, CTA Case No. 8672, Aug. 18, 2015)

As held by the Court En Banc in CIR vs. Philippine Aluminum Wheels, Inc., the
finality of an assessment does not disqualify the taxpayer from availment of
amnesty under the Tax Amnesty Law of 2007. (Alexander Crisostomo vs. CIR,
CTA Case No. 8672, Aug. 18, 2015)

For VAT purposes, petitioner's obligation to pay the VAT accrues from the
time it received payments from its services, and not before the receipt of
payment from the credit card companies. (Global Quickservice Restaurant
vs. CIR, CTA Case No. 8704, Aug. 11, 2015)

In the case of Barcelon, Roxas Securities, Inc. (now known as UBP Securities,
Inc.) vs. Commissioner of Internal Revenue, the Supreme Court held that a
direct denial of the receipt of the mail shifts the burden upon the party
favored by the presumption to prove that the mailed letter was indeed
received by the addressee.

Mere presentation of the Registry Return Receipt is not enough to prove that
the subject notices were indeed served. Receipts for registered letters and
return receipts do not prove themselves; they must be properly
authenticated in order to serve as proof of receipt of the letters. It must be
stressed that the Registry Return Receipt itself provides that "[a] registered
article must not be delivered to anyone but the addressee, or upon the
addressee's written order, in which case the authorized agent must write the
addressee's name on the proper space and then affix legibly his own
signature below it." (Raeken Marketing Co. Inc., vs. CIR, CTA Case No. 8759,
June 24, 2015)

A comparison of Section 249 (B) and 249 (C) (3) of the NIRC reveals that the
deficiency interest on any deficiency tax is assessed "from the date
prescribed for its payment until the full payment thereof" while the
delinquency interest, which is imposed for failure to pay a deficiency tax or
any surcharge or interest thereon, is assessed starting "on the due date
appearing in the notice and demand of the Commissioner . . . until the
amount is fully paid". Clearly, the law allows the imposition of these two
 Selected Rulings in Taxation (2014-2015)

JBR Page 4 of 4
kinds of interest simultaneously. (Aces Phils. Cellular Satellite Corp. vs. CIR,
CTA Case No. 8567, Oct. 15, 2014)

For an expense to be deductible, it must be substantiated by official receipts

or adequate records; that generally, the BIR only accepts the original copy of
the receipt/s, which a taxpayer presents to substantiate deductible expense;
nevertheless, the absence of original receipts or records does not prevent a
taxpayer from proving by other evidence that the claimed deduction was
really paid or incurred.

It bears to stress that "the requirement on the submission of all the relevant
supporting documents within the 60-day period from filing protest is merely
directory." Also, it is well to remember that "where the taxpayer failed to
submit relevant supporting documents within the sixty (60) day period from
filing of the protest, and in case of inaction by the respondent and the
taxpayer chooses to appeal to the Court of Tax Appeals, the same must be
made within thirty (30) days from the lapse of the one-hundred eighty (180)
day period, the one-hundred eighty (180) day period must be reckoned from
the date the protest was filed. The sixty (60) day period shall not be added to
the computation of the one-hundred eighty (180) days because from the
wordings of the law, in case the taxpayer fails to submit relevant supporting
documents, the assessment becomes final. The one hundred eighty (180)
day period, therefore, commenced to run from the date protest was filed..."
(Village Green Hog Farm vs. CIR, CTA Case No. 8375, August 1, 2014)

Inasmuch as a representative office is not allowed to derive income from

sources within the Philippines and is fully subsidized by its head office, it is
not subject to Philippine income tax. (Shinko Electric Industries Co. Ltd., vs.
CIR, CTA Case No. 8213, February 10, 2014)