By Vann Marlo M. Villegas
THE Court of Tax Appeals (CTA) denied for lack of jurisdiction the petition of JG Summit Holdings, Inc. to cancel the P1.3 billion tax liabilities assessed by the Bureau of Internal Revenue (BIR).
In a 17-page petition on March 12, the court’s second division said the time for the filing of an appeal against its assessment to the court has already lapsed.
Section 228 of the Tax Code states that if a protest before the BIR is denied in whole or in part or not acted upon 180 days from submission of documents, a taxpayer may appeal to the CTA within 30 days.
Revenue Regulation 12-99 says that if a protest is denied, the taxpayer may appeal to the court within 30 days upon receipt of the decision or the assessment will become final. If the taxpayer raised the assessment to the BIR commissioner in 30 days upon receipt of the decision by the BIR authorized representative, this is to be decided by the commissioner.
The court said that the commissioner denied the petition of JG Summit through a final decision on disputed assessment (FDDA) received on Dec. 5, 2014. The holding firm filed a motion for reconsideration with the commissioner instead of filing a protest to the court.
The BIR maintained the denial of the protest of JG Summit through a revised FDDA dated Aug. 20, 2015, which was then raised to the court.
“With the procedure of appeal already clearly laid down, a resort to a request for reconsideration (with the CIR) did not then toll the running of the reglementary period within which petitioner’s appeal must be elevated to this Court,” the court decision penned by Associate Justice Jean Marie A. Bacorro-Villena read.
The court noted that more than nine months have lapsed from the petitioner’s receipt of the FDDA before it was brought on appeal to the CTA.
It also said that in the FDDA, the holding firm was already notified by the BIR of its available remedies, which is to appeal before the CTA or through a motion for reconsideration to the commissioner.
“Petitioner made its choice and could not now avoid the consequences of such choice,” the court said.
JG Summit was assessed for liabilities of P6.55 billion under its FDDA. When appealed, the BIR issued the revised FDDA, which was protested before the court, for deficiency income tax of P581.9 million, value-added tax of P202.6 million, and documentary stamp tax (DST) of P555.3 million as it paid its other deficiencies.
It was also assessed for improperly accumulated income earnings tax (IAET), 50% surcharge, 20% deficiency and delinquency interest pursuant to the Tax Code.
The holding company claimed that it had timely filed the petition, the right to assess it had already prescribed, and the findings of the BIR were erroneous.
It said that the BIR wrongfully disallowed its interest expense, its interest income from loans to its affiliates are not subject to VAT as it is not a lending institution, the revised FDDA disallowed excess tax credits carried to succeeding years, there is no legal basis in finding it liable to DST, and is not subject to IAET as it is a publicly held corporation.