Case Summary (G.R. No. 201665)
Factual Antecedents
On February 2, 2004, EBCC received a Formal Letter of Demand from the CIR, assessing EBCC for a total of P84,868,390.16 in various taxes, including income tax, Value Added Tax (VAT), withholding tax on compensation, Expanded Withholding Tax (EWT), and Final Withholding Tax (FWT) for the taxable year 2000. Following the CIR's issuance, EBCC filed a letter-protest on March 3, 2004, which prompted the elevation of the case to the CTA due to CIR's inaction. EBCC later availed itself of the Tax Amnesty Program under Republic Act No. 9480, leading to a resolution that partially dismissed the deficiency income tax and VAT assessments.
Ruling of the Court of Tax Appeals - Former Second Division
On November 30, 2010, the CTA Former Second Division issued a ruling that partly granted EBCC's petition. The Court found EBCC had paid the correct amounts of EWT and withholding tax on compensation and annulled the assessments regarding those taxes. However, for FWT, EBCC was held liable for a reduced amount of P2,232,146.91 after determining that it was not liable for the larger assessment of P7,707,504.96 related to interest payments on loans, as those obligations became due and demandable only on June 1, 2002.
Ruling of the Court of Tax Appeals En Banc
The CTA En Banc upheld the findings of the Former Second Division on January 30, 2012. It ruled that the assessments against EBCC’s FWT on interest payments were without basis. According to Revenue Regulation No. 02-98, the obligation to withhold taxes arises only when income becomes due or is legally enforceable, which in this case did not occur until June 1, 2002. The En Banc also noted that EBCC's failure to prove remittance of payments on some transactions upheld their initial calculation.
Issues Raised
The consolidated petitions for review raised several issues regarding whether the CTA En Banc erred in disregarding the CIR's alleged judicial admissions and if EBCC’s claims were predominately questions of fact not suitable for review under Rule 45. EBCC asserted it had already paid part of its tax dues, while the CIR countered that EBCC failed to meet the burden of proof regarding these payments.
Arguments of EBCC
EBCC contended that it was not liable for additional taxes since it already remitted P2,842,630.20 of FWT for 2000. EBCC argued that some assessments were invalid due to CIR's supposed reduction of an assessment figure and viewed the matter as the CIR's failure to present sufficient evidence.
Arguments of the CIR
The CIR argued there was no judicial admission regarding EBCC’s payment. It maintained that EBCC bore the burden of proving payment and highlighted that the question of whether EBCC had provided sufficient evidence to discount the assessments was indeed factual. Furthermore, the CIR advocated for the application of Revenue Regulation No. 12-01 retroactively, asserting that it was applicable given EBCC's alleged failure to disclose pertinent facts.
Our Ruling
The Supreme Court found the petitions to be without merit, indicating that the CTA's findings were extensivel
...continue readingCase Syllabus (G.R. No. 201665)
Case Overview
- Case Reference: G.R. No. 201665 and G.R. No. 201668
- Date of Decision: August 30, 2017
- Court: Supreme Court of the Philippines, First Division
- Parties Involved:
- Petitioner: Edison (Bataan) Cogeneration Corporation (EBCC)
- Respondent: Commissioner of Internal Revenue (CIR)
Procedural Background
- The case involves consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court.
- The petitions contest the Court of Tax Appeals (CTA) decisions dated January 30, 2012, and April 17, 2012, in CTA EB Case Nos. 766 and 769.
- The Supreme Court reviews the findings and conclusions of the tax court, which hold considerable weight due to the court's expertise in tax matters.
Factual Antecedents
- On February 2, 2004, EBCC received a Formal Letter of Demand and Final Assessment Notice from the CIR for deficiency taxes totaling P84,868,390.16 for the taxable year 2000.
- Breakdown of Deficiency Amount:
- Income Tax: P65,571,268.01
- Value-Added Tax (VAT): P168,866.15
- Withholding Tax on Compensation: P128,087.84
- Expanded Withholding Tax (EWT): P79,066.13
- Final Withholding Tax (FWT): P18,921,102.03
- Breakdown of Deficiency Amount:
- EBCC filed a letter-protest on March 3, 2004, and subsequently elevated the matter to the CTA due to the CIR's inaction.
- EBCC availed itself of the Tax Amnesty Program under Republic Act No. 9480, leading to a resolution on November 7, 2008, which closed the case regarding the deficiency income tax and VAT.
Ruling of the Court of Tax Appeals
- On November 30, 2010, the CTA Former Second Division found that EBCC had paid the correct amount of EWT and withholding tax on employee compensation, canceling