THE Court of Tax Appeals (CTA) denied for lack of merit a motion for reconsideration filed by the Bureau of Internal Revenue (BIR) over a cancelled P29-million tax deficiency assessment against Ayala Land International Sales, Inc.
In a resolution dated Feb. 4, the CTA special third division upheld its Sept. 28, 2018 decision which cancelled the tax deficiency assessment against Ayala Land International for 2009 due to the defective waiver that supposedly extended the period to assess the company.
“Wherefore, there being no ground to reverse, much less modify the assailed Decision of Sept. 28, 2018, respondent’s Motion for Reconsideration dated Oct. 18, 2018 is denied, for lack of merit,” the CTA ruled.
In its motion for reconsideration, the BIR said that the first waiver dated Feb. 6, 2012 which would extend the assessment period was in compliance with the Tax Code and the failure of the Notary Public to state the name of the affiant and other details “did not render the notarization defective since it is presumed that the affiant appeared before the Notary Public.”
It also said that the signing of an officer of the Ayala Land in the waivers binds the company to the agreement.
However, the CTA found that under the Tax Code, the government is given three years from the filing of tax returns to assess a taxpayer of its deficiencies although the assessment period could be extended through the agreement of both parties. Ayala Land International only received the assessment for 2009 on April 15, 2014.
Waivers, meanwhile, must be notarized and signed by the authorized person assigned by a company’s board of directors.
On the other hand, the CTA said the first waiver was not acknowledged by a Notary Public due to the absence of the name of persons who appeared before it. There was nothing in the records scrutinized by the court which showed that the signatory in the five waivers was authorized by Ayala Land’s board of directors.
“To conclude, the BIR has the onus of ensuring compliance with the requirements of RMO (Revenue Memorandum Order) No. 20-90, as they have the burden of securing the right of the government to assess and collect tax deficiencies. This right would prescribe, absent any showing of a valid extension of the period set by the law,” it said.
The resolution was written by Associate Justice Esperanza R. Fabon-Victorino and concurred in by Associate Justice Ma. Belen M. Ringpis-Liban. — Vann Marlo M. Villegas