THE Court of Tax Appeals granted the appeal of a cargo transportation company to set aside its deficiency taxes for the calendar year 2009.
In a 33-page resolution dated March 14, the court ruled that the formal demand letter of the commissioner of the Bureau of Internal Revenue (BIR) was void. The appellate court also directed the BIR to refrain from further action related to the collection of the said taxes.
Executive International Movers, Inc., the petitioner, is a domestic company engaged in the general business of cargo and freight forwarding.
The court said the appeal filed by the company was timely submitted, giving it jurisdiction to decide over the case.
“The revenue officers who continued to audit investigation of petitioner were not authorized by a valid Letter of Authority; hence, the resulting tax assessments are void,” the court said in its ruling.
The revenue officers initially in charge of assessing the accounting books of the company were authorized by a letter of authority by a BIR regional director.
However, the revenue officers who were assigned to continue the examination of the company’s books of accounting were only ordered through a memorandum of assignment without a letter of authority.
The tax court cited the country’s tax code, which provides that to grant a revenue officer authority to conduct tax collections and assessments, a letter of authority issued by regional directors and commissioners of the BIR is required.
“The Reassignment or Transfer of a Revenue Officer requires the issuance of a new or amended Letter of Authority for the Substitute or Replacement Revenue Officer to continue audit or Investigation,” the court said. — John Victor D. Ordoñez