THE Court of Tax Appeals (CTA) has granted the appeal of the internal revenue commissioner to review a previous decision partially granting New Farmer’s Plaza, Inc.’s alleged tax liabilities amounting to P142.6 million of deficiency taxes for the calendar year 2007, inclusive of penalties.
In a 20-page resolution dated May 6, the CTA full court ruled that its first division’s decision made an error in canceling the tax assessment since the company did not file any protest against the tax assessment conducted by the revenue bureau.
“In this present case, it was never disputed and, in fact, respondent (New Farmer’s Plaza) readily admitted in its petition for review that when it received the letter of demand dated 2011, it did not file any protest thereto,” according to a copy of the ruling written by CTA Associate Justice Maria Belen M. Ringpis-Liban.
The petitioner is the commissioner of internal revenue, who leads the government agency responsible for collecting all national internal revenue taxes.
The respondent is a domestic corporation engaged in the business of buying and selling realty in a shopping complex located in Quezon City.
Under the country’s revenue code, taxpayers must file administrative protests or requests for reconsideration within 30 days of receiving the assessment, which the company did not do, the tax court noted.
The CTA added that due to the company not filing the necessary protests or motions, the commissioner’s prior assessment becomes final, executory, and demandable.
“Respondent’s failure to comply with the 30-day statutory period barred the appeal and deprive this Court of its jurisdiction to entertain and determine the correctness and/or validity of the assessment,” the tax tribunal said.
The law requires an assessment to first be disputed by the taxpayer for the tax court to have jurisdiction over the issue.
Under the country’s revenue code, the CTA’s judicial authority is defined as “administrative adjudicatory power or quasi-judicial function in adjudicating the rights and liabilities of persons under the tax code.”
The case was remanded to the court in the division to reassess the company’s tax liabilities. — John Victor D. Ordoñez
