THE Court of Tax Appeals (CTA) has affirmed its division’s 2019 decision to cancel and set aside the tax payment of PGA Sompo Insurance Corp. amounting to P101.03 million due to the Bureau of Internal Revenue’s (BIR) void tax assessment.

In its decision promulgated Sept. 15, the CTA reiterated that “only the CIR (Commissioner of Internal Revenue) or his duly authorized representatives can authorize the audit examination of taxpayers for purposes of assessment of any deficiency taxes.”

For this case, however, the BIR Large Taxpayers Service’s officer-in-charge issued a letter of authority to examine PGA’s taxes, and being unauthorized to do so, the tax court held the assessment invalid.

The CTA Special First Division on Aug. 8, 2019 canceled and set aside the P101.03-million assessment of the BIR for PGA’s “deficiency income tax, documentary stamp tax, value-added tax, and administrative penalties” for taxable year 2009 for the same reason.

The invalid letter of authority, however, was not raised during the trial for the said case, hence the petition of the BIR for review of the 2019 decision arguing that the CTA division had “no authority to rule” on the earlier case.

With this, the CTA held that under Section 1, Rule 14 of the court’s revised rules, the tax court is not limited to the issues raised by the parties involved in a case and “may also rule upon related issues necessary to achieve an orderly disposition of the case.” — Bianca Angelica D. Añago