Case Digest (G.R. No. 212825)
Facts:
Commissioner of Internal Revenue v. Next Mobile, Inc., G.R. No. 212825, December 07, 2015, Supreme Court Third Division, Velasco Jr., J., writing for the Court.
The petitioner is the Commissioner of Internal Revenue (CIR); the respondent is Next Mobile, Inc. (formerly Nextel Communications Phils., Inc.), the taxpayer whose 2001 tax liabilities are in dispute. Next Mobile filed its Annual Income Tax Return for the year ending December 31, 2001 on April 15, 2002, and filed the related monthly withholding returns for that year.
On September 8, 2003 the BIR issued a Letter of Authority authorizing examination of Next Mobile's books for 2001. Next Mobile’s Director of Finance, Ma. Lida Sarmiento, executed five waivers of the statute of limitations extending the period to assess taxes for 2001; the waivers bear various execution and acknowledgment dates and, as presented in the record, contain irregularities concerning notarized board authority, dates of BIR acceptance, and receipt notations. A Preliminary Assessment Notice dated September 16, 2005 and a Formal Letter of Demand and Assessment Notices dated October 17, 2005 followed, demanding over P313 million.
Next Mobile protested the assessments on November 23, 2005; the BIR denied the protest on July 28, 2009. Next Mobile then filed a Petition for Review with the Court of Tax Appeals (CTA) on August 27, 2009 (CTA Case No. 7965). The CTA First Division on December 11, 2012 granted the petition and cancelled the FLD and assessment notices as issued beyond the three-year prescriptive period of Section 203 of the NIRC; it also found the five waivers defective under Revenue Memorandum Order No. 20-90 (RMO 20-90) and Revenue Delegation Authority Order No. 05-01 (RDAO 05-01), and held that the CIR failed to prove fraud to invoke the ten-year exception of Section 222(a). The CTA denied petitioner’s motion for reconsideration on March 14, 2013.
The CIR elevated the case to the CTA En Banc, which on May 28, 2014 denied the CIR’s petition for review and affirmed...(Subscriber-Only)
Issues:
- Has the CIR’s right to assess respondent’s 2001 deficiency taxes prescribed under Section 203 of the NIRC?
- Were the five waivers executed by Next Mobile valid to extend the prescriptive period under Section 222(b) of the NIRC, RMO 20-90, and RDAO 05-01?
- Did the ten-year exception in Section 222(a) apply because Next Mobile filed ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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