Chaguile, Michelle

Liria, Carmel
Masacayan, Earl Louie
Introduction
The Philippine Court of Tax Appeals (CTA) is the
special court of limited jurisdiction, and has the same
level with the Court of Appeals. The court consists of
8 Associate Justices and 1 Presiding Justice.
It is located at Agham Road, National Government
Center, Diliman, Quezon City in Metro Manila.
It is created under R.A. 1125, the CTA is highly
specialized body which reviews tax cases.
The proceedings are judicial in nature but it is not
bound by technical rules of evidence (Perez vs.
Araneta, 103 Phil. 1167).
Vision
A specialized tax court that is impartial, competent,
transparent, and worthy of public trust and
confidence, ensuring faithful compliance with tax
laws.
Mission
To achieve its vision, the court is guided by the following
goals:
1. (1) to ensure the fair collection of taxes by the
Government;
2. (2) to provide adequate judicial remedies to taxpayers
against unreasonable and unjustified tax assessments and
through the refund of excess taxes paid;
3. (3) promotion of the common good through the proper
interpretation of tax statutes;
4. (4) adherence to the independence of the judiciary; and
5. (5) enhancement of the public trust and confidence in the
judiciary.
The Justices
History
It was originally created by virtue of Republic Act.
No. 1125 which was enacted on June 16, 1954 and was
recently amended by Republic Act. No. 9282 on
March 30, 2004, which took effect on April 23, 2004.
Under Section 1 of the new law, the Court is headed
by a Presiding Justice and assisted by five Associate
Justices.
Gloria Macapagal-Arroyo on June 12, 2008 signed into
law Republic Act 9503, which added 3 more members
to the Court.
History
The new law was enacted "to expedite disposition of
tax-evasion cases and increase revenues for
government to fund social services, food, oil and
education subsidies and infrastructure.
Previously, only decision, judgment, ruling or inaction
of the Commissioner of Internal Revenue, the
Commissioner of Customs, the Secretary of Finance,
the Secretary of Trade and Industry, or the Secretary of
Agriculture, involving the National Internal Revenue
Code and the Tariff and Customs Code on civil matters
are appeallable to the Court of Tax Appeals.
Construction
The Rules shall be liberally construed in order to
promote their objective of securing a just, speedy, and
inexpensive determination of every action and
proceeding before the Court. 
The Rules of Court in the Philippines shall apply
suppletorily to these Rules.
Jurisdiction of the Court
The Court shall exercise exclusive original jurisdiction
over or appellate jurisdiction to review by appeal the
cases specified in Republic Act No. 1125, Section 7, as
amended by Republic Act No. 9282, Section 7.
Expanded Jurisdiction
Exclusive jurisdiction over criminal cases arising from
violations of NIRC or the Tariff and Customs Code
and other laws administered by BIR and the BOC
where the principal amount of taxes and penalties
involved is P1 million or more and appellate
jurisdiction in lieu of CA over decisions of RTC where
the amount is less than P1 million;
Expanded Jurisdiction
Exclusive original Jurisdiction over tax collection
cases where the principal amount of taxes and
penalties involved P1 million or more and the
appellate jurisdiction over decisions of RTC where the
amount is less than P1 million;
Appellate jurisdiction over decisions of RTC in local
tax cases.
Appellate jurisdiction over decisions of the Central
board of Assessment Appeals over cases involving
assessment of taxation of real property.
Exclusive appellate jurisdiction to
review by appeal
Decisions of the BIR 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 NIRC or other laws administered
by BIR (via Rule 42).
Inaction by the BIR 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 NIRC or other laws administered
by BIR, where NIRC provides a specific period for action, in
which the inaction shall be deemed a denial (via Rule 42).
Exclusive appellate jurisdiction to
review by appeal
Decisions, orders or resolutions of the RTC in local
taxes originally decided or resolved by them in the
exercise of their original or appellate jurisdiction (via
Rule 43).
Decisions of the Commissioner of Customs in cases
involving liability of customs duties, fees or other
money charges, seizure, detention or release of
property affected, fines, forfeitures or other penalties
in relation thereto, or other matters arising under the
Customs Law or other laws administered by BOC (via
Rule 42).
Exclusive appellate jurisdiction to
review by appeal
Decisions of the Central Board of Assessment Appeals
in the exercise of its Appellate jurisdiction over cases
involving the assessment and taxation of real property
originally decided by the provincial or city board of
assessment appeals (via Rule 43).
Decision of Secretary of Finance on customs cases
elevated to them automatically for review from
decisions of Commissioner of Customs which are
adverse to the government under Section 2315 of the
Tariff and Customs Code (via Rule 42).
Exclusive appellate jurisdiction to
review by appeal
Decisions of the DTI Secretary in cases of non
agricultural product, commodity or article, and the
DA Secretary in cases of agricultural product,
commodity or article involving dumping and
countervailing duties under section 301 and 302,
respectively, of the Tarrif and Customs Code, and
safeguard measures under R.A. 8808, where either
party may appeal the decision to impose or not to
impose said duties (via Rule 42).
Criminal and Civil Cases
The criminal action and the corresponding civil
action for the recovery of civil liability for taxes and
penalties shall at all times be simultaneously
instituted jointly determined in the proceeding before
the CTA.
The filing of the criminal action being deemed
necessarily carry with it the filling of the civil action,
no right to reserve the filing of such civil action
separately from the criminal action be recognized.
Exclusive Original Jurisdiction on
Criminal Offenses
violations of NIRC, Tarrif and Customs Code and
other laws administered by the BIR or the BOC,
where the principal amount of taxes and fees,
exclusive of charges and penalties claimed is P1
million and above.
Exclusive Appellate Jurisdiction on
Criminal Offenses
violations of NIRC, Tariff and Customs Code and
other laws administered by the BIR and the BOC
originally decided by the regular courts where the
principal amount of taxes and fees is less than P1
million or no specified amount claimed.
Judgements, resolutions or orders of the RTC in tax
cases originally decided by them.
Judgements, resolutions or orders of the RTC in the
exercise of their appellate jurisdiction over tax cases
originally decided by the first level courts via a
petition for review.
Exclusive Appellate Jurisdiction on
Criminal Offenses
Tax collection cases:
 From judgements, resolutions or orders of the RTC
originally decided by them via an ordinary appeal.
 From judgments, resolutions or orders of the RTC in
exercise of its appellate jurisdiction in tax collection
cases originally decided by first level courts via a
petition for review.
Modes of Appeal to CTA
Appeal may be made by filing a petition for review under a
procedure analogous to that provided for under Rule 42
within 30 days from the receipt of the decision or ruling or
from expiration of the period fixed by law for the official
concerned to act, in cases of inaction, before the CTA. A
Division of the CTA shall hear the appeal.
Appeals with respect to decisions and rulings of the
Central Board of Assessment Appeals and the RTC in
exercise of their appellate jurisdiction, may be made by
filing a petition for review under a procedure analogous to
that provided for under Rule 43 with the CTA which shall
hear the case en banc.
Power to Administer Oaths; Issue
Subpoena; Punish for Contempt.
The Court shall have the power to administer oaths,
receive evidence, summon witnesses by subpoena
duces tecum, subject in all respects to the same
restrictions and qualifications as applied in judicial
proceedings of a similar nature.
The Court shall, in accordance with Rule 71, have the
power to punish for contempt for the same causes,
under the same procedure and with the same
penalties provided therein.
Suspension of Collection of Tax
No appeal taken to the Court shall suspend the payment,
levy, distraint, or sale of any property of the taxpayer for
the satisfaction of his tax liability as provided under
existing laws, except as hereinafter prescribed.
Where the collection of the amount of the taxpayer’s
liability, sought by means of a demand for payment, by
levy, distraint or sale of any property of the taxpayer, or by
whatever means, as provided under existing laws, may
jeopardized the interest of the Government or the
taxpayer, an interested party may file a motion for the
suspension of the collection of the tax liability.
Suspension of Collection of Tax
The motion for the suspension of the collection of the
tax may be filed together with the petition for review
or with the answer, or in a separate motion filed by
the interested party at any stage of the proceedings.
Unless a shorter period is fixed by the Court because
of the urgency of the motion, the adverse party shall,
within five days after receipt of a copy of the motion,
file an opposition thereto, if any, which shall state
clearly and distinctly the facts and the grounds relied
upon in support of the opposition.
Pre-Trial
In civil cases, the Clerk of Court shall set the case for
pre-trial on the first available date immediately
following the tenth day after the filing of the answer.
In criminal cases, the Clerk of Court shall set the case
for pre-trial not later than ten days after arraignment,
if the accused is detained, nor later than thirty days if
the accused is on bail.
Disqualification of Justices
Mandatory. – No justice or other officer or employee of
the Court shall intervene, directly or indirectly, in the
management or control of any private enterprise which in
any way may be affected by the functions of the Court.
Justices of the Court shall be disqualified from sitting in
any case on the same grounds provided under the first
paragraph, Section 1, Rule 137 of the Rules of Court.
No person who has once served in the Court either as
presiding justice or as associate justice shall be qualified to
practice as counsel before the Court for a period of one
year from his retirement or resignation as such.
Disqualification of Justices
Disclosure and consent of parties and lawyers. – A justice
disqualified under the first paragraph, Section 1 of Rule 137
of the Rules of Court, may, instead of withdrawing from a
case or proceeding, disclose on the records the basis of his
disqualification. If, based on such disclosure, the parties
and lawyers, independently of the justice’s participation,
all agree in writing that the reason for the inhibition is
immaterial or unsubstantial, the justice may participate in
the action or proceeding.
The agreement, signed by all parties and lawyers, shall be
incorporated in the record of the action or proceeding.
Disqualification of Justices
Voluntary. – A justice of the Court may, in the
exercise of his sound discretion, disqualify himself
from sitting in a case or proceeding, for just or valid
reasons other than those mentioned above. 
Inhibition
A justice of the Court who inhibits himself from
sitting in a case or proceeding shall immediately
notify in writing the presiding justice and the
members of his Division
When a motion for inhibition of a justice is filed, the
Court, en banc or in Division, shall act upon the
motion. However, if the motion for inhibition is based
on a discretionary ground, the Court shall refer the
motion to the justice involved for his appropriate
action. 
Trial
The Court shall conduct the trial in accordance with
Rule 30 of the Rules of Court in civil cases and Rule 119
thereof in criminal cases. 
The Court may receive evidence in the following cases:
In all cases falling within the original jurisdiction of the
Court in Division pursuant to Section 3, Rule 4 of these
Rules; and
In appeals in both civil and criminal cases where the
Court grants a new trial pursuant to Section 2, Rule 53
and Section 12, Rule 124 of the Rules of Court.
Trial by a Commissioner
A party desiring to present voluminous documents in
evidence before the Court may secure the services of
an independent certified Public Accountant (CPA) at
its own expense. The Court shall commission the
latter as an officer of the Court solely for the purpose
of performing such audit functions as the Court may
direct.
Duties of independent CPA
Examination and verification of receipts, invoices,
vouchers and other long accounts;
Reproduction of, and comparison of such
reproduction with, and certification that the same are
faithful copies of original documents, and pre-
marking of documentary exhibits consisting of
voluminous documents;
Preparation of schedules or summaries containing a
chronological listing of the numbers, dates and
amounts covered by receipts or invoices or other
relevant documents and the amount(s) of taxes paid;
Duties of independent CPA
Making findings as to compliance with substantiation
requirements under pertinent tax laws, regulations
and jurisprudence;
Submission of a formal report with certification of
authenticity and veracity of findings and conclusions
in the performance of the audit;
Testifying on such formal report; and
Performing such other functions as the Court may
direct.
Findings of an Independent CPA
The submission by the independent CPA of pre-
marked documentary exhibits shall be subject to
verification and comparison with the original
documents, the availability of which shall be the
primary responsibility of the party possessing such
documents and, secondarily, by the independent CPA.
 The findings and conclusions of the independent CPA
may be challenged by the parties and shall not be
conclusive upon the Court, which may, in whole or in
part, adopt such findings and conclusions subject to
verification.
The Court in Divisions; quorum and
voting
The chairman of the Division or, in his absence, its
senior member shall preside over the sessions of the
Court in Divisions.
The attendance of at least two justices of the Court
shall be necessary to constitute a quorum for its
sessions in Divisions.
The presence at the deliberation and the affirmative
vote of at least two justices shall be required for the
pronouncement of a judgment or final resolution of
the Court in Divisions.
Court en banc; quorum and voting.
The presiding justice or, in his absence, the most
senior justice in attendance shall preside over the
sessions of the Court en banc.
The attendance of four justices of the Court shall
constitute a quorum for its sessions en banc.
The presence at the deliberation and the affirmative
vote of four justices of the Court en banc shall be
necessary for the rendition of a decision or resolution
on any case or matter submitted for its consideration.
Court en banc; quorum and voting.
Where the necessary majority vote cannot be had, the
petition shall be dismissed; in appealed cases, the
judgment or order appealed from shall stand
affirmed; and on all incidental matters, the petition or
motion shall be denied.
No decision of a Division of the Court may be
reversed or modified except by the affirmative vote of
four justices of the Court en banc acting on the case.
Interlocutory orders or resolutions shall be acted
upon by majority vote of the justices present
constituting a quorum.
Distraint of Personal Property/
Levy on Real Property
Upon issuance of any ruling, order or decision of by
the CTA favorable to the national government, the
CTA shall issue an order authorizing the BIR, through
the Commissioner to seize and distraint any goods, or
chattels and / or levy the real property of such
persons to satisfy the tax or charge together with any
increment thereto incident to delinquency.
This remedy shall not be exclusive and shall not
preclude the Court from availing other means under
the Rules of Court.
Appeal of CTA Decisions
Decisions of CTA are no longer appealable to CA.
A party adversely affected by a ruling, order or
decision of a division may file a MR or new trial before
the same division.
The decision of a division may be appealed to CTA en
banc. A party adversely affected by a resolution of a
Division on a MR or new trial may file a petition for
review with the en banc.
The en banc decision may in turn be directly
appealed to SC only on a question of law via Rule 45.
Jurisprudence
Final notice before seizure constitutes as a decision
on a disputed or protested assessment, hence,
appealable to CA (Commissioner of Internal Revenue
vs. Isabella Cultural Corporation, 361 SCRA 71).
The letter of demand constitutes the final action
taken by the Commissioner on the petitioner’s several
requests for reconsideration and recomputation
(Surogao Electric Co., Inc. Vs CTA, 57 SCRA 523).
Jurisprudence
The BIR should always indicate to the taxpayer, in
clear and equivocal language, what constitutes final
action on a disputed assessment (CIR vs. Union
Shipping, 185 SCRA 547).
A demand letter for tax deficiency assessments issued
and signed by the Chief of BIR Accounts Receivable
and Billing Division is deemed final and executor and
subject to an appeal to CTA (Oceanic Wireless
Network, Inc., vs. CIR, 477 SCRA 205, 212).
Jurisprudence
The jurisdiction of CTA has been expanded to include
not only decisions or rulings but inaction as well of
the BIR Commissioner (Rizal Commercial Banking
Corporation vs. CIR, 522 SCRA 144).
The CTA has no jurisdiction over dispute between
PNB and BIR relative to deficiency withholding tax
assessment (Philippine National Oil Company vs. CA,
457 SCRA 32).