Creation of Court of Tax Appeals

Qualifications, rank, compensation, tenure

The Presiding Judge must have the same qualifications, rank, category, and privileges as the Presiding Judge of the Court of Industrial Relations.
The Presiding Judge receives PHP 13,000 per annum in compensation.
Each Associate Judge must have the same qualifications, rank, category, and privileges as a member of the Court of Industrial Relations.
Each Associate Judge receives PHP 12,000 per annum in compensation.

Quorum, temporary vacancy designation

Any two Judges of the Court of Tax Appeals constitute a quorum.
Two judges’ concurrence is required to promulgate any decision.
If a judge is temporarily unable to act due to temporary vacancy, disability, or disqualification, the President, upon request of the Presiding Judge, may designate any Judge of First Instance to act in his place.
The designated Judge of First Instance must be duly qualified to act.

Clerk and subordinate personnel

The Court has a Clerk of Court appointed by the President with the consent of the Commission on Appointments.
No person may be appointed Clerk of Court unless authorized to practice law in the Philippines.
The Clerk of Court exercises the same powers and performs the same duties as clerk(s) of court of First Instance, as applicable, and acts under the direction of the Court.
The Clerk of Court receives PHP 6,000 per annum in compensation.
The Court appoints necessary personnel under Civil Service Law, sets their salaries, and prescribes their duties.

Disqualifications and counsel bar

No judge or other officer or employee of the Court may intervene, directly or indirectly, in the management or control of any private enterprise affected by the Court’s functions.
Judges are disqualified from sitting in any case on the same grounds as judicial officers under Rule one hundred twenty-six of the Rules of Court.
Any person who previously served in the Court in a permanent capacity as Presiding Judge or Associate Judge is barred from practicing as counsel before the Court for one year from separation for any cause.

Place of office and hearing arrangements

The Court’s office is in the City of Manila.
The Court holds hearings at times and places designated by written order.
Hearing schedules must assure taxpayers a reasonable opportunity to appear with as little inconvenience and expense as practicable.

Exclusive appellate jurisdiction

The Court exercises exclusive appellate jurisdiction to review decisions by appeal, as provided in the Act, covering:
- Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law administered by the Bureau of Internal Revenue.
- Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties imposed in relation thereto, or other matters arising under the Customs Law or other law administered by the Bureau of Customs.
- Decisions of provincial or city Boards of Assessment Appeals in cases involving the assessment and taxation of real property or other matters arising under the Assessment Law, including rules and regulations relative thereto.
The Court provides review by appeal only under the Act’s procedure and limits.

Court as a court of record

The Court is a court of record with a seal judicially noticed.
The Court prescribes the form of its writs and other processes.
The Court promulgates rules and regulations for conduct of business and for uniformity of decisions within its jurisdiction.
Proceedings are not governed strictly by technical rules of evidence.

Fees, oaths, subpoenas, contempt

The Court fixes reasonable fees for:
- filing an appeal,
- certified copies of any transcript of record, entry, or other document,
- and other authorized services rendered by the Court or its personnel.
The Court may:
- administer oaths,
- receive evidence,
- summon witnesses by subpoena,
- require production of papers or documents by subpoena duces tecum.
These powers operate subject to the same restrictions and qualifications as in judicial proceedings of a similar nature.
The Court may punish for contempt under Rule sixty-four of the Rules of Court, for the same causes, using the same procedure and penalties provided therein.

Who may appeal; timelines; effect of appeal

Any person, association, or corporation adversely affected by a decision or ruling of:
- the Collector of Internal Revenue,
- the Collector of Customs, or
- any provincial or city Board of Assessment Appeals
  may file an appeal to the Court of Tax Appeals within thirty days after receipt of the decision or ruling.
An appeal from a decision of the Collector of Internal Revenue or the Collector of Customs does not suspend:
- payment,
- levy,
- distraint,
- and/or sale of property of the taxpayer
  for satisfaction of tax liability under existing law.
The Court may suspend collection and require security when the Court finds collection may jeopardize:
- the interest of the Government and/or the taxpayer.
The required security is either:
- a deposit of the amount claimed, or
- a surety bond for not more than double the amount with the Court.
Suspension and security may be ordered at any stage of the proceeding, in the Court’s opinion.

Taking of evidence before a judge

The Court may direct assignment of a case or issue to a member for taking of evidence when determining a question of fact arises upon motion or otherwise in any stage, or when:
- determination requires examination of a long account, or
- taking an account is necessary.
The hearing before the assigned member proceeds as if held before the Court.
After the hearing, the assigned member submits a written report with findings and conclusions.
The Court then renders its decision by adopting, modifying, or rejecting the report in whole or in part, or may recommit with instructions, or receive further evidence.

Decisions: deadlines, form, publication, certifications

Cases are decided within thirty days after submission for decision.
Decisions must be in writing, stating clearly and distinctly the facts and the law on which they are based.
Decisions must be signed by the judges concurring therein.
The Court provides publication of its decisions in the Official Gazette in a form and manner best adopted for public information and use.
Each judge certifies on applications for leave and on salary vouchers/payrolls that all proceedings, petitions, and motions submitted for decision for thirty days or more have been determined or decided on or before the certificate date.
No leave is granted and no salary is paid without the required certification.

Effect of limitations bar on tax deficiency

If assessment or collection is barred by a statute of limitations, the Court’s decision is considered its decision that there is no deficiency with respect to such tax.

Publicity and inspection; withdrawal of records

Decisions of the Court, all evidence received, and transcripts of stenographic reports are public records open for inspection by the public.
After a decision becomes final, the Court may, upon motion of the taxpayer or the Government, permit withdrawal of originals of books, documents and records, and of models, diagrams, and other exhibits introduced in evidence before the Court or any division.
The Court may also, on its own motion, make other disposition it deems advisable.
The Court again provides publication of decisions in the Official Gazette for public information and use.

Damages for frivolous appeals and delay

If an appeal is frivolous or proceedings are instituted merely for delay, the Court may assess damages against the appellant in an amount not exceeding PHP 500.
The Court collects damages in the same manner as fines or other penalties authorized by law.

Referral when crime or law violation appears

When, in performance of its functions, the Court discovers a crime or other violation of law or reasonable grounds that an official, employee, or private person committed a crime, offense, or violation, it refers the matter to the proper department, bureau, or office for investigation or for institution of criminal or administrative action, as warranted by the case facts and circumstances.

Appeals to the Supreme Court and timing

No judicial proceeding against the Government involving matters arising under the National Internal Revenue Code, Customs Law, or Assessment Law may be maintained unless an appeal has first been filed with and disposed of by the Court of Tax Appeals under the Act.
A party adversely affected by a ruling, order, or decision of the Court of Tax Appeals may appeal to the Supreme Court by filing:
- a notice of appeal with the Supreme Court, and
- a petition for review with the Supreme Court
  within thirty days from receipt of notice of the Court of Tax Appeals ruling, order, or decision.
Failure to perfect the appeal within the thirty-day period makes the ruling, order, or decision final and conclusive against the appealing party.
If no decision is rendered within thirty days from submission for decision, the aggrieved party may file a notice of intention to appeal to the Supreme Court with the Court of Tax Appeals.
If, within thirty days from filing the notice of intention, no decision is rendered, the aggrieved party may appeal directly to the Supreme Court.
When the Court of Tax Appeals ruling is adverse to the Government (including the Collector of Internal Revenue, Commissioner of Customs, or a provincial or city Board of Assessment Appeals), these may appeal to the Supreme Court within the same period and in the same manner as for private parties.
Any proceeding directly affecting a Court of Tax Appeals ruling, order, or decision has preference over all other civil proceedings except:
- habeas corpus,
- workmen’s compensation, and
- election cases.

Supreme Court review by certiorari

Any ruling, order, or decision of the Court of Tax Appeals may be reviewed by the Supreme Court upon a writ of certiorari in proper cases.
Supreme Court proceedings upon certiorari or a petition for review follow the Rules of Court or such rules the Supreme Court prescribes.

Appropriation for operation

PHP 70,000 is appropriated out of any funds in the National Treasury not otherwise appropriated for:
- salaries, and
- purchase of supplies and equipment
  necessary for operating the Court during the current fiscal year.
Thereafter, the funds necessary for operation are included in the regular Appropriation Act.

General provisions, abolition, transfer, repeal

Any use of the words “Board of Tax Appeals” in Commonwealth Act No. 470 (the Assessment Law) or related laws, rules, and regulations is read as “Board of Assessment Appeals.”
The Central Board of Tax Appeals created under Section 2 of Commonwealth Act No. 530 is abolished.
Executive Order No. 401-A, dated January 5, 1951, is repealed, and the Board of Tax Appeals created therein is abolished.
Cases heretofore decided by the abolished Board of Tax Appeals and appealed to the Supreme Court under Executive Order No. 401-A are decided by the Supreme Court on the merits as if the executive order had been duly enacted by Congress.
All cases pending in the said Board of Tax Appeals are transferred to the Court of Tax Appeals and heard and decided as if originally filed therein.
Any law or part of law, or any executive order, rule, or regulation, or part thereof, inconsistent with the Act is repealed.

Pending cases remanded from First Instance

All cases involving disputed assessment of Internal Revenue taxes or customs duties pending before the Court of First Instance must be certified and remanded by the respective clerk of court to the Court of Tax Appeals for final disposition.

Separability and effectivity

If any clause, sentence, paragraph, or part of Republic Act No. 1125 is adjudged invalid, the remaining portions remain valid and enforceable, confined in operation to the portion directly involved in the controversy.
The Act takes effect upon approval.
Approved: June 16, 1954.