Case Digest (G.R. No. 193100)
Facts:
Samar-I Electric Cooperative, Inc. (SAMELCO-I), an electric cooperative with principal office in Calbayog City, was registered under Presidential Decree No. 269 in 1974 and granted provisional registration under Republic Act No. 6938 in 1993. On July 13, 1999 and April 17, 2000, it filed its 1998 and 1999 income tax returns, and it submitted its 1997, 1998, and 1999 Annual Information Returns of Income Tax Withheld on Compensation on February 17, 1998, February 1, 1999, and February 4, 2000, respectively. On November 13, 2000, the Commissioner of Internal Revenue (CIR) issued a Letter of Authority for an audit covering taxable years 1997–1999, which SAMELCO-I received on November 14, 2000. After auditing, the CIR sent a Notice for Informal Conference on October 19, 2001 and a Preliminary Assessment Notice (PAN) on February 28, 2002. SAMELCO-I protested the PAN on April 18, 2002, executed a waiver of prescription valid until March 29, 2002, and requested detailed computations. OnCase Digest (G.R. No. 193100)
Facts:
- Parties and Background
- Petitioner Samar-I Electric Cooperative, Inc. (SAMELCO-I)
- Electric cooperative with principal office in Calbayog City.
- Registered under PD 269 (1974) and RA 6938 (1993).
- Respondent Commissioner of Internal Revenue (CIR)
- Authorized under the National Internal Revenue Code (NIRC) to examine taxpayers, issue assessments, and decide protests.
- Audit and Administrative Proceedings
- Filing of Returns
- Income tax returns for 1998 and 1999 (filed July 13, 1999 and April 17, 2000).
- Annual Information Returns of Income Tax Withheld on Compensation for 1997–1999 (filed February 17, 1998; February 1, 1999; February 4, 2000).
- Revenue Officers’ Actions
- LOA issued November 13, 2000 covering 1997–1999 audit; SAMELCO-I cooperated.
- Notice for Informal Conference October 19, 2001; summary of findings attached.
- Waiver of Prescription executed December 13, 2001 (valid until March 29, 2002).
- Preliminary Assessment Notice (PAN) issued February 28, 2002 (received April 9, 2002); protested April 18, 2002.
- Final Assessment Notices (FAN) and demand letter issued September 15, 2002 for P4,200,771.40 total deficiency; protested October 14 and November 4, 2002.
- Final Decision on Disputed Assessment April 10, 2003 sustaining deficiencies.
- Judicial Proceedings
- CTA First Division
- Petition for review filed May 29, 2003.
- Decision May 27, 2008 and Amended Decision January 19, 2009 partially granting SAMELCO-I.
- CTA En Banc
- Consolidated Cases C.T.A. EB No. 460 (CIR petition) and No. 462 (SAMELCO-I petition).
- Decision March 11, 2010 and Resolution July 28, 2010 denying petitions and affirming First Division.
- Supreme Court
- Petition for review on certiorari filed by SAMELCO-I.
Issues:
- Prescription of Assessment
- Whether the 1997 and 1998 deficiency withholding tax assessments prescribed under Section 203, NIRC (3-year period).
- Whether Section 222(a), NIRC (10-year exception for false or fraudulent returns) applies.
- Due Process in Assessment
- Whether the formal Letter of Demand and FAN complied with Section 228, NIRC and Section 3.1.4, RR No. 12-99 by stating the law and facts on which the assessments are based.
- Whether omission of Annex “A-1” (Details of Discrepancies) invalidates the assessments.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)