THE Court of Tax Appeals (CTA) has denied the appeal of the commissioner of the Bureau of Internal Revenue (BIR) to reverse a prior ruling to set aside Agusan Del Norte Electric Cooperative, Inc.’s deficiency tax assessment of P11.5 million.
In a resolution on March 22, the court found no reason to reverse its previous decision as the petitioner’s arguments lack merit.
“After a careful and thorough review of the issues raised by petitioner, these issues are but a mere rehash of the grounds already evaluated and passed upon the court a quo, thus, the Court finds no cogent reason to reverse the appealed decision,” it said in the ruling written by CTA Associate Justice Juanito C. Castañeda.
The petitioner is the commissioner of the BIR, who has the authority to decide disputed assessments and cancel tax liabilities in line with the country’s tax code.
The respondent is a nonstock, nonprofit electric cooperative based in Butuan City, Agusan Del Norte. It has a franchise to operate electric services in municipalities within the province until 2054.
The BIR commissioner argued that the tax court made an error in ruling that it had jurisdiction to decide on the case and the electric cooperative was not liable to pay its deficiency income taxes.
Under the new CTA law, it has the authority to review appeal decisions of the commissioner in cases involving disputed assessments.
The CTA reiterated that the entity engaged in the generation and distribution of electricity is exempt from payment of income tax as provided by the country’s tax code.
The tax court said it is “undisputed” that the petitioner is organized and existing pursuant to Presidential Decree 269, the law that created the National Electrification Administration, and was granted a franchise.
“Section 39 of PD 269 provides for the exemption from taxes,” it said. — John Victor D. Ordoñez
