Case Digest (G.R. No. 214933)
Facts:
This is Republic of the Philippines, represented by the Bureau of Internal Revenue v. First Gas Power Corporation, G.R. No. 214933, February 15, 2022, First Division, Lopez, J., writing for the Court. Petitioner is the Bureau of Internal Revenue (BIR); respondent is First Gas Power Corporation (First Gas).On October 24, 2002, the BIR issued a Letter of Authority authorizing audit of First Gas for revenue taxes covering taxable years 2000 and 2001. After an informal conference scheduled for October 15, 2003, First Gas received Preliminary Assessment Notices dated December 15, 2003 and January 28, 2004 assessing large deficiency income taxes and penalties for those years. First Gas filed preliminary replies; on September 6, 2004 it received Final Assessment Notices (FANs) and Formal Letters of Demand dated July 19, 2004. The assessments alleged, among others, unreported pre–income-tax-holiday sales and various interest and compensation items (taxable year 2000) and disallowed interest and compensation expenses plus late-payment penalties (taxable year 2001).
Between April and August 2004 the parties executed three Waivers of the Defense of Prescription (April 12, June 14, and August 13, 2004), each extending assessment periods purportedly up to October 15, 2004; the copies show the waivers were signed by BIR representative Celia C. King but did not indicate the date of acceptance by the BIR. First Gas filed a letter of protest that went unacted; it then filed a petition with the Court of Tax Appeals (CTA) on June 30, 2005 to annul the FANs and demands.
The CTA Third Division, in a September 24, 2012 decision, granted First Gas’s petition and cancelled the FANs and Formal Letters of Demand for 2000 and 2001. The CTA En Banc denied the BIR’s petition for review and affirmed t...(Pro-only)
Issues:
- Were the Final Assessment Notice and Formal Letter of Demand for taxable year 2000 valid, or had the three‑year period to assess prescribed because the waivers did not validly extend prescription?
- Were the Final Assessment Notice and Formal Letter of Demand for taxable year 2001 valid despite the absence of a definite due date f...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)