Case Summary (G.R. No. 211449)
Key Dates
– May 30, 2007: Issuance of Final Assessment Notices (FANs) covering FY July 1, 2001–June 30, 2002
– June 5, 2007: Protest filed by respondent with the BIR
– August 28, 2007: Receipt of First Collection Letter
– December 20, 2007 (served Jan 17, 2008): Final Notice Before Seizure
– February 29, 2008: Availment of Tax Amnesty under R.A. 9480
– April 23, 2008: Amnesty‐related payment of P2,000 for compromise penalties
– July 10, 2008: BIR Letter relying on RMC 19-2008 disqualifying respondent
– September 8, 2008: Issuance of Warrant of Distraint and/or Levy (WDAL)
– February 28, 2012: CTA First Division Amended Decision
– May 14, 2012: CTA First Division Resolution denying reconsideration
– August 5, 2013: CTA En Banc Decision affirming Amended Decision
– February 19, 2014: CTA En Banc Resolution denying reconsideration
– January 16, 2019: Supreme Court Decision
Applicable Law
– 1987 Philippine Constitution (post-1990 decision)
– National Internal Revenue Code of 1997 (NIRC)
– Republic Act No. 9480 (Tax Amnesty for taxable year 2005 and prior)
– Revenue Memorandum Circular No. 19-2008 (BIR implementation circular)
– DOF Department Order No. 29-07 (implementing rules for R.A. 9480)
Factual Background
Transfield Philippines was assessed P563,168,996.70 in deficiency income tax, EWT, VAT and penalties for FY 2001–2002 via four FANs. After filing a protest, the BIR issued collection letters, a Final Notice Before Seizure, and ultimately a WDAL. Before enforcement, Transfield availed itself of the 2005-and-prior tax amnesty under R.A. 9480 by filing the required forms (Notice of Availment, Tax Amnesty Return, SALN, Payment Form) and paying P112,500 in amnesty tax. The BIR then claimed disqualification under RMC 19-2008 and proceeded with distraint.
Tax Amnesty Under R.A. 9480
Section 1 authorizes a general amnesty covering national internal revenue taxes for 2005 and prior years unpaid as of December 31, 2005. Section 6 grants immunity from tax liabilities—including assessments, interests, penalties, and related civil/criminal/admin sanctions—upon full compliance. DO 29-07 prescribes the method of availment: filing Notice of Availment, SALN as of December 31, 2005, Tax Amnesty Return, and paying the amnesty tax, after which immunity is deemed effective.
Proceedings Before the Court of Tax Appeals
CTA First Division Ruling
On February 28, 2012, the CTA First Division held that it had jurisdiction over R.A. 9480 issues and declared the WDAL null and void. It found that Transfield had complied with all amnesty requirements, thereby extinguishing the underlying liabilities. The Division rejected the BIR’s reliance on RMC 19-2008 as exceeding the statute’s exceptions enumerated in Section 8. Reconsideration was denied on May 14, 2012.
CTA En Banc Ruling
On August 5, 2013, the CTA En Banc affirmed the First Division. It maintained that jurisdiction existed to review the validity of the WDAL and the amnesty immunity. It reiterated that Transfield properly availed itself and that RMC 19-2008 could not expand exceptions beyond those in R.A. 9480. Reconsideration was denied on February 19, 2014.
Issues on Review
- Whether the CTA erred in assuming jurisdiction over the petition.
- Whether Transfield was entitled to immunity under R.A. 9480 despite the BIR’s reliance on RMC 19-2008.
Supreme Court’s Analysis
I. Nature and Effect of Tax Amnesty
A tax amnesty is a sovereign pardon extinguishing liabilities, to be strictly construed against taxpayers but liberally in favor of the revenue authority. Under R.A. 9480, full compliance with filing and payment requirements triggers immediate immunity from all covered national internal revenue taxes and related penalties for years up to 2005.
II. Invalidity of RMC 19-2008 Exception
The CIR argued that RMC 19-2008 disqua
...continue readingCase Syllabus (G.R. No. 211449)
Antecedents and Assessments
- On May 30, 2007, Transfield Philippines, Inc. (Respondent) received Final Assessment Notices Nos. LTDO-122-IT-2002-00014, LTDO-122-WE-2002-00011, LTDO-122-VT-2002-00012, and LTDO-122-PEN-2002-00002, assessing P563,168,996.70 for deficiency income tax, Expanded Withholding Tax (EWT), Value-Added Tax (VAT), interest, and compromise penalties for FY July 1, 2001 to June 30, 2002.
- Breakdown of assessments:
- Income Tax: Basic P291,320,169.28; Interest P271,335,605.67; Compromise P25,000; Total P562,680,774.95
- EWT: Basic P66,497.56; Interest P69,996.28; Compromise P14,000; Total P150,493.84
- VAT: Basic P147,156.30; Interest P164,071.61; Compromise P24,500; Total P335,727.91
- VAT Penalty: P2,000
- On June 5, 2007, Respondent timely filed a protest with the BIR. No action was taken by the BIR before issuing:
- First Collection Letter (Aug 3, 2007; received Aug 28, 2007)
- Final Notice Before Seizure (dated Dec 20, 2007; constructively served Jan 17, 2008)
Tax Amnesty Availment
- On February 29, 2008, Respondent availed itself of R.A. No. 9480 (Tax Amnesty Law) by filing with DBP (BIR agent bank):
- Notice of Availment of Tax Amnesty
- Tax Amnesty Return (BIR Form No. 2116)
- Statement of Assets, Liabilities and Net Worth (SALN) as of December 31, 2005
- Tax Amnesty Payment Form (BIR Form No. 0617)
- Payment of P112,500 amnesty tax
- On April 23, 2008, Respondent paid P2,000 compromise penalty on FAN No. …00002.
- On May 5, 2008, Respondent formally notified BIR LTDO Makati of its amnesty availment (letter dated April 28, 2008; received same day).
BIR’s Disqualification and Distraint
- July 10, 2008: BIR issued a letter invoking Revenue Memorandum Circular No. 19-2008 to disqualify Respondent from amnesty, citing “delinquent accounts/assets rece