A.M. No. 18-07-142-RTC - Re: Reports on the eRaffle Procedure in the Regional Trial Court, Manila

On July 9, 2010, petitioner Himlayang Pilipino Plans, Inc. received Letter of Authority (LOA) No. 2009-00031349 dated June 24, 2010, accompanied by a First Notice for Presentation of Records and Checklist Requirements.
On September 29, 2010, an electronic LOA SN: eLA201000017400 LOA-039-2010-00000072, signed by Jonas Amora (Officer-In-Charge Regional Director of Quezon City), authorized the examination of petitioner’s books of accounts and other accounting records for all internal revenue taxes covering January 1 to December 31, 2009. Petitioner received this LOA on October 12, 2010.
Petitioner submitted documents relevant to the examination throughout the audit period.

The revenue officers conducting the examination found deficiency taxes for taxable year 2009.
On December 14, 2012, the Commissioner of Internal Revenue (CIR) issued a Preliminary Assessment Notice (PAN) with Details of Discrepancies, which petitioner received on the same date.
Petitioner contested the PAN on December 28, 2012.
Subsequently, on January 14, 2013, the CIR issued a Formal Letter of Demand (FLD) dated January 4, 2013, with Final Assessment Notices (FAN) and Details of Discrepancies also dated January 14, 2013, which petitioner received on the same day.
Petitioner administratively protested the FAN on February 14, 2013, and submitted supporting documents on April 12, 2013.

Alleging inaction on its protest, petitioner filed a Petition for Review before the Court of Tax Appeals (CTA) on November 7, 2013.
The CIR filed its Answer on December 16, 2013, arguing that the assessment had become final, executory, and demandable, thereby divesting the CTA of jurisdiction. CIR also stressed that tax assessments carry a presumption of correctness and good faith.
Pre-trial and trial followed, with Enrico T. Pizarro commissioned as Independent Certified Public Accountant. Petitioner’s witnesses were Leah Laxamana and Enrico T. Pizarro; CIR’s witnesses were Bernard R. Bugauisan and Bacolor D. Yambing.
After submission of memoranda, the case was declared submitted for decision on July 20, 2015.

The CTA Second Division, on July 1, 2016, dismissed the petition for lack of jurisdiction, ruling that petitioner’s protest against the FAN and FLD was filed after the 30-day reglementary period (filed 31 days late). Therefore, the assessment became final and demandable.
Petitioner’s motion for reconsideration was denied on August 22, 2016.
Petitioner elevated the case to the CTA En Banc.
On February 12, 2018, the CTA En Banc affirmed the dismissal, holding that since there was no timely protest, there was no “disputed assessment” subject to CTA appellate jurisdiction.
Presiding Justice Roman G. Del Rosario dissented, opining that the FLD and assessment notices were void due to the lack of valid LOA authorizing the revenue officers who conducted the audit.
Petitioner moved for reconsideration, raising for the first time the alleged invalidity of the LOA and authority of the revenue officers, but the motion was denied on July 24, 2018, with the Court ruling that petitioner’s belated raising of the issue was fatal.

Petitioner filed a Petition for Review on Certiorari before the Supreme Court pursuant to Rule 45, reiterating that the assessment was null and void because revenue officer Bernard Bagauisan, who conducted the audit, was not authorized under a valid LOA.
Petitioner argued that although the original LOA named revenue officer Ruby Cacdac as authorized examiner, the audit was instead conducted by Bagauisan pursuant to a memorandum of assignment by revenue district officer Clavelina Nacar.
Petitioner maintained that any reassignment of cases requires issuance of a new LOA, without which the assessment is void ab initio.
The CIR, through the Office of the Solicitor General, countered that the assessments were valid and binding.

Whether the tax assessments issued against petitioner Himlayang Pilipino Plans, Inc. are null and void due to the absence of a valid Letter of Authority (LOA) authorizing the revenue officer who conducted the audit.