Case Digest (G.R. No. 197515)
Facts:
Commissioner of Internal Revenue, G.R. No. 197515, July 02, 2014, Supreme Court Third Division, Peralta, J., writing for the Court. The petitioner is the Commissioner of Internal Revenue; the respondent is United Salvage and Towage (Phils.), Inc. (USTP).USTP performed subcontracting services for petroleum operations and, for taxable years 1992, 1994, 1997 and 1998, was assessed by the BIR for deficiency income tax, withholding tax on compensation (WTC), expanded withholding tax (EWT), value-added tax and documentary stamp tax. The BIR issued assessment notices and demand letters including Assessment Nos. 25-1-000545-92 (WTC, 1992, P50,429.18), 25-1-000546-92 (EWT, 1992, P14,079.45), 034-14-000029-94 (EWT, 1994, P48,461.76) and 034-1-000080-98 (EWT, 1998, P22,437.01). USTP administratively protested the 1994 and 1998 EWT assessments on January 29, 1998 and October 24, 2001, respectively.
On February 21, 2003 USTP filed a Petition for Review with the Court of Tax Appeals (CTA) (later raffled to the CTA-Special First Division), contending among others that the notices of assessment lacked statement of law and facts and were void, and that the right to assess and collect had prescribed. During the proceedings USTP moved to withdraw as it availed of tax amnesty under R.A. No. 9480; the CTA-Special First Division partially granted the withdrawal (closing income tax, VAT and DST issues) and proceeded to resolve the remaining EWT and WTC issues for 1992, 1994 and 1998.
The CTA-Special First Division found that the Preliminary Assessment Notices (PANs) for 1994 and 1998 were not formally offered and thus could not be considered under Section 34, Rule 132; it further held the Final Assessment Notices (FANs) for 1994 and 1998 failed to state the law and facts and were void under Section 228 of the 1997 National Internal Revenue Code (NIRC), leaving only the 1992 assessment. The Special First Division nevertheless ruled that the CIR’s right to collect the 1992 EWT and WTC had prescribed under the applicable statute of limitations and cancelled the 1992 assessment notices in a March 12, 2010 decision; its denial of reconsideration followed in a July 15, 2010 resolution.
Petitioner elevated the matter to the CTA En Banc by petition dated August 18, 2010. The CTA En Banc, in a June 27, 2011 decision, affirmed with modification the Special First Division: it upheld cancellation of the 1994 assessment, sustained the invalidity of the 1992 collection because of prescription, but found the 1998 EWT FAN valid and ordered USTP to pay the 1998 EWT deficiency with surcharge and interest. The Commission...(Subscriber-Only)
Issues:
- Is the Court of Tax Appeals strictly bound by the technical rules of evidence so that documents not formally offered may not be considered?
- Were the EWT assessment(s) issued against USTP for taxable year 1994 void for lack of factual and legal basis as required by law?
- Has the Commissioner’s right to collect the assessed EWT and WTC for ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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