SECOND DIVISION
G.R. No. 215957, November 09, 2016
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. FITNESS BY DESIGN, INC., Respondent.
D E C I S I O N
LEONEN, J.:
To avail of the extraordinary period of assessment in Section 222(a) of the National Internal Revenue Code, the Commissioner of Internal Revenue should show that the facts upon which the fraud is based is communicated to the taxpayer. The burden of proving that the facts exist in any subsequent proceeding is with the Commissioner. Furthermore, the Final Assessment Notice is not valid if it does not contain a definite due date for payment by the taxpayer.
This resolves a Petition for Review on Certiorari1 filed by the Commissioner of Internal Revenue, which assails the Decision2 dated July 14, 2014 and Resolution3 dated December 16, 2014 of the Court of Tax Appeals. The Court of Tax Appeals En Banc affirmed the Decision of the First Division, which declared the assessment issued against Fitness by Design, Inc. (Fitness) as invalid.4
On April 11, 1996, Fitness filed its Annul Income Tax Return for the taxable year of 1995.5 According to Fitness, it was still in its pre-operating stage during the covered period.6
On June 9, 2004, Fitness received a copy of the Final Assessment Notice dated March 17, 2004.7 The Final Assessment Notice was issued under Letter of Authority No. 00002953.8 The Final Assessment Notice assessed that Fitness had a tax deficiency in the amount of P10,647,529.69.9 It provides:
chanRoblesvirtualLawlibrary
Fitness filed a protest to the Final Assessment Notice on June 25, 2004. According to Fitness, the Commissioner's period to assess had already prescribed. Further, the assessment was without basis since the company was only incorporated on May 30, 1995.11FINAL ASSESSMENT NOTICE March 17, 2004
FITNESS BY DESIGN, INC
169 Aguirre St., BF Homes,
Paranaque City
Gentlemen:
Please be informed that after investigation of your Internal revenue Tax Liabilities for the year 1995 pursuant to Letter of Authority No. 000029353 dated May 13, 2002, there has been found due deficiency taxes as shown hereunder:
Assessment No. __________
Income Tax
Taxable Income per return PAdd: Unreported Sales 7, 156,336.08Taxable Income per audit 7, 156,336.08Tax Due (35%) 2,504,717.63Add: Surcharge (50%) P 1,252,358.81Interest (20%/ annum) until 4-15-04 4,508,491.73 5,760,850.54Deficiency Income Tax P 8,265,568.17
Value Added Tax
Unreported Sales 7, 156,336.08Output Tax (10%) 715,633.61Add: Surcharge (50%) P 357,816.80Interest (20%/ annum) until 4-15-04 1,303,823.60 1,661,640.41Deficiency VAT P 2,377,274.02Documentary Stamp Tax Subscribe Capital Stock P 375,000.00DST due (2/200) 3,750.00Add: Surcharge (25%) 937.50Deficiency DST P 4,687.50Total Deficiency Taxes P 10,647,529.69
The complete details covering the aforementioned discrepancies established during the investigation of this case are shown in the accompanying Annex 1 of this Notice. The 50% surcharge and 20% interest have been imposed pursuant to Sections 248 and 249(B) of the [National Internal Revenue Code], as amended. Please note, however, that the interest and the total amount due will have to be adjusted if paid prior or beyond April 15, 2004.
In view thereof, you are requested to pay your aforesaid deficiency internal revenue taxes liabilities through the duly authorized agent bank in which you are enrolled within the time shown in the enclosed assessment notice.10 (Emphasis in the original)ChanRoblesVirtualawlibrary
WHEREFORE, the Petition for Review dated February 24, 2005 filed by petitioner Fitness by Design, Inc., is hereby GRANTED. Accordingly, the Final Assessment Notice dated March 17, 2004, finding petitioner liable for deficiency income tax, documentary stamp tax and value-added tax for taxable year 1995 in the total amount of P10,647,529.69 is hereby CANCELLED and SET ASIDE. The Warrant of Distraint and Levy dated February 1, 2005 is likewise CANCELLED and SET ASIDE.The Commissioner's Motion for Reconsideration and its Supplemental Motion for Reconsideration were denied by the Court of Tax Appeals First Division.32
SO ORDERED.31 (Emphasis in the original)ChanRoblesVirtualawlibrary
WHEREFORE, the instant Petition for Review is DENIED for lack of merit. Accordingly, both the Decision and Resolution in CTA Case No. 7160 dated July 10, 2012 and November 21, 2012 respectively are AFFIRMED in toto.38 (Emphasis in the original)ChanRoblesVirtualawlibraryThe Commissioner's Motion for Reconsideration was denied by the Court of Tax Appeals En Banc in the Resolution39 dated December 16, 2014.
The complete details covering the aforementioned discrepancies established during the investigation of this case are shown in the accompanying Annex 1 of this Notice. The 50% surcharge and 20% interest have been imposed pursuant to Sections 248 and 249(B) of the [National Internal Revenue Code], as amended. Please note, however, that the interest and the total amount due will have to be adjusted if paid prior or beyond April 15, 2004.45 (Emphasis supplied)ChanRoblesVirtualawlibraryThis Court, through the Resolution46 dated July 22, 2015, required respondent to comment on the Petition for Review.
In the present case, a mere perusal of the [Final Assessment Notice] for the deficiency EWT for taxable year 1994 will show that other than a tabulation of the alleged deficiency taxes due, no further detail regarding the assessment was provided by petitioner. Only the resulting interest, surcharge and penalty were anchored with legal basis. Petitioner should have at least attached a detailed notice of discrepancy or stated an explanation why the amount of P48,461.76 is collectible against respondent and how the same was arrived at.92ChanRoblesVirtualawlibraryAny deficiency to the mandated content of the assessment or its process will not be tolerated.93 In Commissioner of Internal Revenue v. Enron,94 an advice of tax deficiency from the Commissioner of Internal Revenue to an employee of Enron, including the preliminary five (5)-day letter, were not considered valid substitutes for the mandatory written notice of the legal and factual basis of the assessment.95 The required issuance of deficiency tax assessment notice to the taxpayer is different from the required contents of the notice.96 Thus:
The law requires that the legal and factual bases of the assessment be stated in the forma letter of demand and assessment notice. Thus, such cannot be presumed. Otherwise, the express provisions of Article 228 of the [National Internal Revenue Code] and [Revenue Regulations] No. 12-99 would be rendered nugatory. The alleged "factual bases" in the advice, preliminary letter and "audit working papers" did not suffice. There was no going around the mandate of the law that the legal and factual bases of the assessment be stated in writinin the formal letter of demand accompanying the assessment notice.97 (Emphasis supplied)ChanRoblesVirtualawlibraryHowever, the mandate of giving the taxpayer a notice of the facts and laws on which the assessments are based should not be mechanically applied.98 To emphasize, the purpose of this requirement is to sufficiently inform the taxpayer of the bases for the assessment to enable him or her to make an intelligent protest.99
Although the [Final Assessment Notice] and demand letter issued to petitioner were not accompanied by a written explanation of the legal and factual bases of the deficiency taxes assessed against the petitioner, the records showed that respondent in its letter dated April 10, 2003 responded to petitioner's October 14, 2002 letter-protest, explaining at length the factual and legal bases of the deficiency tax assessments and denying the protest.A final assessment notice provides for the amount of tax due with a demand for payment.103 This is to determine the amount of tax due to a taxpayer.104 However, due process requires that taxpayers be informed in writing of the facts and law on which the assessment is based in order to aid the taxpayer in making a reasonable protest.105 To immediately ensue with tax collection without initially substantiating a valid assessment contravenes the principle in administrative investigations "that tax ayers should be able to present their case and adduce supporting evidence."106
Considering the foregoing exchange of correspondence and documents between the parties, we find that the requirement of Section 228 was substantially complied with. Respondent had fully informed petitioner in writing of the factual and legal bases of the deficiency taxes assessment, which enabled the latter to file an "effective" protest, much unlike the taxpayer's situation in Enron. Petitioner's right to due process was thus not violated.102ChanRoblesVirtualawlibrary
Section 222. Exceptions as to Period of Limitation of Assessment and Collection of Taxes. -In Aznar v. Court of Tax Appeals,111 this Court interpreted Section 332112 (now Section 222[a] of the National Internal Revenue Code) by dividing it in three (3) different cases: first, in case of false return; second, in case of a fraudulent return with intent to evade; and third, in case of failure to file a return.113 Thus:
(a) In the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be filed without assessment, at any time within ten (10) years after the discovery of the falsity, fraud or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof. (Emphasis supplied)ChanRoblesVirtualawlibrary
Our stand that the law should be interpreted to mean a separation of the three different situations of false return, fraudulent return with intent to evade tax and failure to file a return is strengthened immeasurably by the last portion of the provision which aggregates the situations into three different classes, namely "falsity", "fraud" and "omission."114ChanRoblesVirtualawlibraryThis Court held that there is a difference between "false return" and a "fraudulent return."115 A false return simply involves a "deviation from the truth, whether intentional or not" while a fraudulent return "implies intentional or deceitful entry with intent to evade the taxes due."116
More than three (3) years from the time petitioner filed its 1995 annual income tax return on April 11, 1996, respondent issued to petitioner a [Final Assessment Notice] dated March 17, 2004 for the year 1995, pursuant to the Letter of Authority No. 00002953 dated May 13, 2002. The attached Details of discrepancy containing the assessment for income tax (IT), value-added tax (VAT) and documentary stamp tax (DST) as well as the Audit Result/Assessment Notice do not impute fraud on the part of petitioner. Moreover, it was obtained on information and documents illegally obtained by a [Bureau of Internal Revenue] informant from petitioner's accountant Elnora Carpio in 1996.122 (Emphasis supplied)ChanRoblesVirtualawlibraryPetitioner did not refute respondent's allegations. For its defense, it presented Socrates Regala (Regala), the Group Supervisor of the team, who examined respondent's tax liabilities.123 Regala confirmed that the investigation was prompted by a tip from an informant who provided them with respondent's list of sales.124 He admitted125 that the gathered information did not show that respondent deliberately failed to reflect its true income in 1995.126chanroblesvirtuallawlibrary
The complete details covering the aforementioned discrepancies established during the investigation of this case are shown in the accompanying Annex 1 of this Notice. The 50% surcharge and 20% interest have been imposed pursuant to Sections 248 and 249 (B) of the [National Internal Revenue Code], as amended. Please note, however, that the interest and the total amount due will have to be adjusted if prior or beyond April 15, 2004.137 (Emphasis Supplied)ChanRoblesVirtualawlibrarySecond, there are no due dates in the Final Assessment Notice. This negates petitioner's demand for payment.138 Petitioner's contention that April 15, 2004 should be regarded as the actual due date cannot be accepted. The last paragraph of the Final Assessment Notice states that the due dates for payment were supposedly reflected in the attached assessment:
In view thereof, you are requested to pay your aforesaid deficiency internal revenue tax liabilities through the duly authorized agent bank in which ou are enrolled within the time shown in the enclosed assessment notice.139 (Emphasis in the original)ChanRoblesVirtualawlibraryHowever, based on the findings of the Court of Tax Appeals First Division, the enclosed assessment pertained to remained unaccomplished.140
Endnotes:
1 The Petition was filed under Rule 45 of the Rules of Court.
2Rollo, pp. 32-49. The Decision was penned by Associate Justice Juanito Castañeda, Jr. and concurred in by Associate Justices Roman G. Del Rosario, Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla, Amelia R. Cotangco-Manalastas, and Ma. Belen M. Ringpis-Liban.
3 Id. at 53-57. The Resolution was penned by Associate Justice Juanito Castañeda, Jr. and concurred in by Associate Justices Roman G. Del Rosario, Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla, Amelia R. Cotangco-Manalastas, and Ma. Belen M. Ringpis-Liban.
4 Id. at 48, Court of Tax Appeals En Banc Decision.
5 Id. at 33.
6 Id.
7 Id. at 34.
8 Id. at 36.
9 Id. at 34.
10 Id. at 12-13, Petition for Review. The Annex referred to in the Final Assessment Notice was not attached to the records of the case. However, based on the testimony of Fitness' President, Domingo C. Juan, "[t]he attached details of discrepancy containing the assessment for income tax (IT), valueadded tax (VAT) and documentary stamp tax (DST) as well as, the Audit Result/Assessment Notices do not impute fraud on the part of petitioner" (Id. at 37, Court of Tax Appeals En Banc Decision).
11 Id.
12 Id.
13 Id.
14 Id.
15 Id.
16 TAX CODE, sec. 222(a) provides:
Section 222. Exceptions as to Period of Limitation of Assessment and Collection of Taxes.
(a) In the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be filed without assessment, at any time within ten (10) years after the discovery of the falsity, fraud or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof.
17Rollo, p. 35, Court of Tax Appeals En Banc Decision.
18 Id.
19 Id.
20 Id.
21 Id.
22 Id.
23 Id. at 39.
24 Id. at 35.
25cralawred Id. at 38.
26 Id. at 39.
27 Id.
28 Id. at 67, Petition for Review of the Commissioner of Internal Revenue before the Court of Tax Appeals En Banc.
29 Id. at 40, Court of Tax Appeals En Banc Decision.
30 TAX CODE, sec. 228 provides:
Section 228. Protesting of Assessment. - When the Commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his findings: Provided, however, That a pre assessment notice shall not be required in the following cases:
(a) When the finding for any deficiency tax is the result of mathematical error in the computation of the tax as appearing on the face of the return; or (b) When a discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent; or (c) When a taxpayer who opted to claim a refund or tax credit of excess creditable withholding tax for a taxable period was determined to have carried over and automatically applied the same amount claimed against the estimated tax liabilities for the taxable quarter or quarters of the succeeding taxable year; or (d) When the excise tax due on excisable articles has not been paid; or (e) When an article locally purchased or imported by an exempt person, such as, but not limited to, vehicles, capital equipment, machineries and spare parts, has been sold, traded or transferred to non-exempt persons.
The taxpayers shall be informed in writing of the law and he facts on which the assessment is made; otherwise, the assessment shall be void.
Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an assessment based on his findings.
Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules and regulations. Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been submitted; otherwise, the assessment shall become final.
If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable.
31Rollo, pp. 32-33, Court of Tax Appeals En Banc Decision.
32 Id. at 40.
33 Id.
34 Id. at 41.
35 Id.
36 Id.
37 Id.
38 Id. at 48.
39 Id. at 53-57.
40 Implementing the Provisions of the National Internal Revenue Code of 1997 Governing the Rules on Assessment of National Internal Revenue Taxes, Civil Penalties and Interest and the Extra-Judicial Settlement of a Taxpayer's Criminal Violation of the Code Through Payment of a Suggested Compromise Penalty (1999).
BIR Revenue Reg. No. 12-99, sec. 3.1.4 provides:
SECTION 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment
....
3.1.4 Formal Letter of Demand and Assessment Notice. - The formal letter of demand and assessment notice shall be issued by the Commissioner or his duly authorized representative. The letter of demand calling for payment of the taxpayer's deficiency tax or taxes shall state the facts, the law, rules and regulations, or jurisprudence on which the assessment is based, otherwise, the forma/letter of demand and assessment notice shall be void (Emphasis supplied).
41Rollo, p. 16, Petition for Review.
42 Id. at 18.
43 Id.
44 Id. at 20.
45 Id. at 13.
46 Id. at 87.
47 Id. at 90-101.
48 Id. at 91.
49 Id.
50 Id.
51 Id.
52 Id.
53 Id. at 92.
54 Id. at 97.
55SMI-ED Phil. Technology, Inc. v. Commissioner of Internal Revenue, G.R. No. 175410, November 12, 2014 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/november2014/175410.pdf> 5 [Per J. Leonen, Second Division]
56 Id.
57 TAX CODE, sec. 56(A) provides:
Section 56. Payment and Assessment of Income Tax for Individuals and Corporations.
A) Payment of Tax. -
(1) In General. - The total amount of tax imposed by this Title shall be paid by the person subject thereto at the time the return is filed. In the case of tramp vessels, the shipping agents and/or the husbanding agents, and in their absence, the captains thereof are required to file the return herein provided and pay the tax due thereon before their departure. Upon failure of the said agents or captains to file the return and pay the tax, the Bureau of Customs is hereby authorized to hold the vessel and prevent its departure until proof of payment of the tax is presented or a sufficient bond is filed to answer for the tax due. (2) Installment Payment. - When the tax due is in excess of Two thousand pesos (P2,000), the taxpayer other than a corporation may elect to pay the tax in two (2) equal installments in which case, the first installment shall be paid at the time the return is filed and the second installment, on or before July 15 following the close of the calendar year. If any installment is not paid on or before the date fixed for its payment, the whole amount of the tax unpaid becomes due and payable, together with the delinquency penalties. (3) Payment of Capital Gains Tax. - The total amount of tax imposed and prescribed under Sections 24(C), 24(D), 27(E)(2), 28(A)(8)(c) and 28(B)(5)(c) shall be paid on the date the return prescribed therefor is filed by the person liable thereto: Provided, That if the seller submits proof of his intention to avail himself of the benefit of exemption of capital gains under existing special laws, no such payments shall be required: Provided, further, That in case of failure to qualify for exemption under such special laws and implementing rules and regulations, the tax due on the gains realized from the original transaction shall immediately become due and payable, and subject to the penalties prescribed under applicable provisions of this Code: Provided, finally, That if the seller, having paid the tax, submits such proof of intent within six (6) months from the registration of the document transferring the real property, he shall be entitled to a refund of such tax upon verification of his compliance with the requirements for such exemption. In case the taxpayer elects and is qualified to report the gain by installments under Section 49 of this Code, the tax due from each installment payment shall be paid within thirty (30) days from the receipt of such payments. No registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner or his duly authorized representative has certified that such transfer has been reported, and the tax herein imposed, if any, has been paid.
58SMI-ED Phil. Technology, Inc. v. Commissioner of Internal Revenue, G.R. No. 175410, November 12, 2014 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/november2014/175410.pdf> 8 [Per J. Leonen, Second Division]
59 Id.
60 Id.
61 TAX CODE, sec. 6(A).
62 TAX CODE, sec. 6(A).
63 TAX CODE, sec. 5(A).
64Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/april2016/215534.pdf> 7 [Per J. Mendoza, Second Division]
65 Id.
66 On November 28, 2013, Revenue Regulations No. 18-2013 was enacted amending Certain Sections of Revenue Regulations No. 12-99 relative to the Due Process Requirement in the Issuance of a Deficiency Tax Assessment. The scope of the law provides that under the provisions of Section 244, in relation to Section 245 of the National Internal Revenue Code, as amended, these Regulations are promulgated to amend provisions of Revenue Regulations No. 12-99.
BIR Revenue Reg. No. 18-2013, sec. 2 provides:
Section 2. Amendment. Section 3 of RR 12-99 is hereby amended by deleting Section 3.1.1 thereof which provides for the preparation of a Notice of Informal Conference, thereby renumbering other provisions thereof, and prescribing other provisions for the assessment of tax liabilities.
67 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
68 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
69 BIR Revenue Reg. No. 12-99, sec. 3.1.1 provides that either the Revenue District Office or the Special Investigation Division, as the case may be (in the case of Revenue Regional Offices) or the Chief of Division concerned (in the case of the BIR National Office) may inform the taxpayer of his or her discrepancies.
70 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
71 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
72 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
73 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
74 Revenue Reg. No. 12-99, sec. 3.1.1 provides that in case of default, the "Revenue District Officer or the Chief of the Special Investigation Division of the Revenue Regional Office, or the Chief of Division in the National Office" shall endorse the case to the Assessment Division.
75 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
76 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
77 BIR Revenue Reg. No. 12-99, sec. 3.1.2.
78 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
79 BIR Revenue Reg. No. 12-99, sec. 3.1.1.
80 BIR Revenue Reg. No. 12-99, sec. 3.1.4.
81 BIR Revenue Reg. No. 12-99, sec. 3.1.4.
82Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/apri12016/215534.pdf> [Per J. Mendoza, Second Division]; Commissioner of Internal Revenue v. Enron Subic Power Corp., 596 Phil. 229 (2009) [Per J. Corona, First Division]; Commissioner of Internal Revenue v. United Salvage and Towage (Phils), Inc., 738 Phil. 335 (2014) [Per J. Peralta, Third Division].
83Commissioner of Internal Revenue v. Enron Subic Power Corp., 596 Phil. 229, 235 (2009) [Per J. Corona, First Division].
84 Id.
85 Id.
86Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/april2016/215534.pdf> 14 [Per J. Mendoza, Second Division]
87 Id.
88Commissioner of Internal Revenue v. Metro Star Superama, Inc., 652 Phil. 172, 187 (2010) [Per J. Mendoza, Second Division].
89Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/april2016/215534.pdf> 12 [Per J. Mendoza, Second Division]
90 Id., citing Commissioner of Internal Revenue v. Reyes, 516 Phil. 176, 186-190 (2006) [Per C.J. Panganiban, First Division].
91 738 Phil. 335 (2014) [Per J. Peralta, Third Division]
92 Id. at 349-350.
93Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/apri12016/215534.pdf> [Per J. Mendoza, Second Division], citing Commissioner of Internal Revenue v. United Salvage and Towage (Phils), Inc., 738 Phil. 335 (2014) [Per J. Peralta, Third Division], in turn citing Commissioner of Internal Revenue v. Enron Subic Power Corp., 596 Phil. 229 (2009) [Per J. Corona, First Division].
94 596 Phil. 229 (2009) [Per J. Corona, First Division].
95 Id. at 235-236.
96 Id. at 236.
97 Id.
98Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/april2016/215534.pdf> 14-15 [Per J. Mendoza, Second Division]
99 Id.
100 G.R. No. 193100, December 10, 2014 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/december2014/193100.pdf> [Per J. Villarama, Jr., Third Division].
101 Id. at 12.
102 Id.
103Commissioner of Internal Revenue v. Menguito, 587 Phil. 234, 256 (2008) [Per J. Austria-Martinez, Third Division].
104Tupaz v. Ulep, 374 Phil. 474, 484 (1999) [Per J. Pardo, First Division].
105Commissioner of Internal Revenue v. Liquigaz Philippines Corp., G.R. Nos. 215534 & 215557, April 18, 2016 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2016/april2016/215534.pdf> 15 [Per J. Mendoza, Second Division]
106Commissioner of Internal Revenue v. Reyes, 516 Phil. 176, 190 (2006) [Per C.J. Panganiban, First Division]
107Rollo, p. 33.
108 Id. at 34.
109 TAX CODE, sec. 222(a).
110 TAX CODE, sec. 203 provides:
Section 203. Period of Limitation Upon Assessment and Collection. - Except as provided in Section 222, internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided, That in a case where a return is filed beyond the period prescribed by law, the three (3)-year period shall be counted from the day the return was filed. For purposes ofthis Section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day.
111 157 Phil. 510 (1974) [Per J. Esguerra, First Division].
112 TAX CODE, sec. 222(a) provides:
(a) In the case of a false or fraudulent return with intent to evade tax or of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten years after the discovery of the falsity, fraud or omission.
113Aznar v. Court of Tax Appeals, 157 Phil. 510 (1974) [Per J. Esguerra, First Division].
114 Id. at 523.
115 Id. at 523.
116 Id.
117Commissioner of Internal Revenue v. Ayala Securities Corp., 162 Phil. 287, 296 (1976) [Per J. Esguerra, First Division].
118Commissioner of Internal Revenue v. Air India, 241 Phil. 689, 698 (1988) [Per J. Gancayco, First Division].
119Rollo, p. 37, Court of Tax Appeals En Banc Decision.
120 Id.
121 Id.
122 Id.
123 Id. at 38.
124 Id. at 39.
125 Id. Regala admitted that "[i]n their memorandum report, they recommended the filing of a civil case for the collection of petitioner's tax liabilities and a criminal case, for its failure to declare in its ITR for the year 1995 the income derived from its cited sales. Thus, the BIR's filing of a criminal case against petitioner with the Department of Justice (DOJ). The witness confirmed that the gathered information did not indicate that petitioner's failure to state in its ITR its income and sales for the year 1995 was deliberate. The instant case was precipitated by the issuance of the Letter of Authority on May 13, 2002." (Emphasis supplied)
126 Id.
127Commissioner of Internal Revenue v. Menguito, 581 Phil. 234, 256 (2008) [Per J. Austria-Martinez, Third Division].
128Commissioner of Internal Revenue v. Pascor Realty and Development Corporation, 368 Phil. 714, 722 (1999) [Per J. Panganiban, Third Division].
129Tupaz v. Ulep, 314 Phil. 474, 484 (1999) [Per J. Pardo, First Division]; Commissioner of Internal Revenue v. Menguito, 587 Phil. 234, 256 (2008) [Per J. Austria-Martinez, Third Division].
130Tupaz v. Ulep, 314 Phil. 474, 484 (1999) [Per J. Pardo, First Division].
131Commissioner of Internal Revenue v. Menguito, 581 Phil. 234, 256 (2008) [Per J. Austria-Martinez, Third Division].
132 Id.
133 Id.
134 Id.
135Commissioner of Internal Revenue v. Pascor Realty and Development Corporation, 368 Phil. 714, 722 (1999) (Per J. Panganiban, Third Division].
136Adamson v. Court of Appeals, 606 Phil. 27, 44 (2009) [Per C.J. Puno, First Division].
137Rollo, p. 13, Petition for Review.
138 Id. at 45, Court of Tax Appeals En Banc Decision.
139 Id.
140 Id. at 46.
141Commissioner of Internal Revenue v. BASF Coating + Inks Phils., Inc., G.R. No. 198677, November 26, 2014 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/november2014/198677.pdf> 9 [Per Justice Peralta, Third Division]
142 Id.
143 Id.
144Rollo, p. 47, Court of Tax Appeals En Banc Decision.
145Commissioner of Internal Revenue v. BASF Coating + Inks Phils., Inc., G.R. No. 198677, November 26, 2014 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/november2014/198677.pdf> 9 [Per Justice Peralta, Third Division]
146 Id. at 9-10, Petition for Review, citing Commissioner of Internal Revenue v. Algue, Inc., 241 Phil. 829 (1988) [Per J. Cruz, First Division].
147 Id.