Case Digest (G.R. No. 230861)
Facts:
Asian Transmission Corporation v. Commissioner of Internal Revenue, G.R. No. 230861, September 19, 2018, Supreme Court First Division, Bersamin, J., writing for the Court.Petitioner Asian Transmission Corporation (ATC) is a manufacturer duly organized under Philippine law; respondent Commissioner of Internal Revenue (CIR) is head of the Bureau of Internal Revenue (BIR). During a BIR audit of ATC’s taxable year 2002, ATC (through its vice-president) executed a series of eight documents captioned “Waiver of the Defense of Prescription Under the Statute of Limitations of the National Internal Revenue Code,” each extending the period for assessment on specified future dates between 2004 and 2008.
On July 15, 2008 the CIR issued a Formal Letter of Demand for deficiency withholding taxes for CY 2002 (aggregate assessment Php75,696,616.75). ATC filed a protest and the CIR issued a Final Decision on Disputed Assessment on April 14, 2009; ATC asked for reconsideration, which was denied in a decision dated November 15, 2011. ATC then filed a Petition for Review with the Court of Tax Appeals (CTA) on April 23, 2012.
The CTA Second Division (CTA in Division) rendered judgment on November 28, 2014 granting ATC’s petition: it found the waivers invalid for multiple defects (noncompliant notarization, lack of BIR acceptance date, absence of CIR signature or proper revenue officer signature, and failure to specify tax types and amounts) and held they did not extend the three-year prescription; the deficiencies were cancelled. The CTA in Division denied the CIR’s motion for reconsideration on March 13, 2015.
The CIR filed a petition for review with the CTA En Banc. On August 9, 2016 the CTA En Banc reversed and set aside the Division’s decision, finding the waivers valid and that the CIR’s right to assess had not prescribed; it remanded the case to the Division to rule on the merits of the assessment. ATC’s motions for reconsideration before the CTA En Banc were denied. ATC then filed a petition for review on certiorari with the Supreme Court (Rule 45), assailing the CTA En...(Pro-only)
Issues:
- Did the Court of Tax Appeals En Banc act in excess of jurisdiction or commit grave abuse of discretion in applying the equitable doctrines announced in Commissioner of Internal Revenue v. Next Mobile Inc. to uphold defective waivers?
- Were the waivers executed by ATC valid to extend the prescriptive period to assess deficiency withholding taxes for taxable year 2002 under the governing administrative issuances (RMO No. 20-90 and RDAO 05-...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
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Doctrine:
- (Pro-only)