FIRST DIVISION
G.R. No. 201530, April 19, 2017
ASIATRUST DEVELOPMENT BANK, INC., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
G.R. Nos. 201680-81
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. ASIATRUST DEVELOPMENT BANK, INC., Respondent.
D E C I S I O N
DEL CASTILLO, J.:
An application for tax abatement is deemed approved only upon the issuance of a termination letter by the Bureau of Internal Revenue (BIR).
These consolidated Petitions for Review on Certiorari1 under Ru1e 45 of the Rules of Court assail the November 16, 2011 Decision2 and the April 16, 2012 Resolution3 of the Court of Tax Appeals (CTA) En Banc in CTA EB Case Nos. 614 and 677.
Factual Antecedents
On separate dates in February 2000, Asiatrust Development Bank, Inc. (Asiatrust) received from the Commissioner of Internal Revenue (CIR) three Formal Letters of Demand (FLD) with Assessment Notices4 for deficiency internal revenue taxes in the amounts of P131,909,161.85, P83,012,265.78, and P144,012,918.42 for fiscal years ending June 30, 1996, 1997, and 1998, respectively.5
On March 17, 2000, Asiatrust timely protested the assessment notices.6
Due to the inaction of the CIR on the protest, Asiatrust filed before the CTA a Petition for Review7 docketed as CTA Case No. 6209 praying for the cancellation of the tax assessments for deficiency income tax, documentary stamp tax (DST) - regular, DST - industry issue, final withholding tax, expanded withholding tax, and fringe benefits tax issued against it by the CIR.
On December 28, 2001, the CIR issued against Asiatrust new Assessment Notices for deficiency taxes in the amounts of P112,816,258.73, P53,314,512.72, and P133,013,458.73, covering the fiscal years ending June 30, 1996, 1997, and 1998, respectively.8
On the same day, Asiatrust partially paid said deficiency tax assessments thus leaving the following balances:
On April 19, 2005, the CIR approved Asiatrust's Offer of Compromise of DST - regular assessments for the fiscal years ending June 30, 1996, 1997, and 1998.10
Fiscal Year 1996 Documentary Stamp Tax P 13,497,227.80Final Withholding Tax - Trust 8,770,265.07Documentary Stamp Tax - Industry Issue 88,584,931.39TOTAL P 110,852,424.26Fiscal Year 1997 Documentary Stamp Tax P 10,156,408.63Documentary Stamp Tax - Industry Issue 39,163,539.57TOTAL P 49,319,948.20Fiscal year 1998 Documentary Stamp Tax P 20,425,770.07Final Withholding Tax - Trust 10,183,367.80Documentary Stamp Tax - Industry Issue 93,430,878.54TOTAL P 124,040,016.419
WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, Assessment Notices issued against [Asiatrust] for deficiency documentary stamp, final withholding, expanded withholding, and fringe benefits tax assessments for the fiscal year ended June 30, 1996 are VOID for being [issued] beyond the prescriptive period allowed by law.Asiatrust filed a Motion for Reconsideration17 attaching photocopies of its Application for Abatement Program, BIR Payment Form, BIR Tax Payment Deposit Slip, Improved Voluntary Assessment Program Application Forms, Tax Amnesty Return, Tax Amnesty Payment Form, Notice of Availment of Tax Amnesty and Statement of Assets and Liabilities and Networth (SALN) as of June 30, 2005.
The Assessment Notices issued by [CIR] against [Asiatrust] for deficiency income, documentary stamp - regular, documentary stamp - trust, and fringe benefits tax assessments for the fiscal years ended June 30, 1997 & 1998 are hereby ordered CANCELLED and WITHDRAWN. Moreover, [Asiatrust's] deficiency documentary stamp tax IBCL assessment for the fiscal year ended June 30, 1997 is ordered CANCELLED and WITHDRAWN.
However, [Asiatrust's] deficiency documentary stamp tax - Special Savings Account assessments for the fiscal years ended June 30, 1997 & 1998, and deficiency documentary stamp tax - IBCL and deficiency final withholding tax - trust assessments for the fiscal year ended June 30, 1998, in the aggregate amount of P142,777,785.91 are hereby AFFIRMED. The said amount is broken down as follows:SO ORDERED.16
Fiscal Year 1997 Documentary Stamp Tax - Industry Issue P 39,163,539.57Fiscal Year 1998 Final Withholding Tax - Trust 10,183,367.80Documentary Stamp Tax - Industry Issue 93,430,878.54Total Deficiency Tax P 142,777,785.91
WHEREFORE, premises considered, [Asiatrust's] Motion for Reconsideration is hereby PARTIALLY GRANTED and this Court's Decision dated January 20, 2009 is hereby MODIFIED. Accordingly, the above captioned case as regards [Asiatrust's] liability for deficiency documentary stamp tax is CLOSED and TERMINATED, subject to the provisions of R.A. No. 9480. However, [Asiatrust's] liability for deficiency final withholding tax assessment for fiscal year ended June 30, 1998, subject of this litigation, in the amount of P10,183,367.80, is hereby REAFFIRMED.Still unsatisfied, Asiatrust moved for partial reconsideration31 insisting that the Certification issued by the BIR is sufficient proof of its availment of the Tax Abatement Program considering that the CIR, despite Asiatrust's request, has not yet issued a termination letter. Asiatrust attached to the motion photocopies of its letter32 dated March 17, 2009. requesting the BIR to issue a termination letter, Payment Form33 BIR Tax Payment Deposit Slips,34 Improved Voluntary Assessment Program (IVAP) Payment Form,35 and a letter36 dated October 17, 2007 issued by Revenue District Officer (RDO) Ms. Clavelina S. Nacar.
SO ORDERED.30
G.R. No. 201530G.R. No. 201530I.
WHETHER X X X THE [CTA] EN BANC ERRED IN FINDING THAT [ASIATRUST] IS LIABLE FOR DEFICIENCY FINAL WITHHOLDING TAX FOR FISCAL YEAR ENDING JUNE 30, 1998.II.
WHETIIER X X X THE ORDER OF THE [CTA] EN BANC FOR PETITIONER TO PAY AGAIN THE FINAL WITHHOLDING TAX FOR FISCAL YEAR ENDING JUNE 30, 1998 WOULD AMOUNT TO DOUBLE TAXATION.III.
WHETHER X X X THE [CTA] EN BANC ERRED IN RESOLVING THE ISSUE OF ALLEGED DEFICIENCY FINAL WITHHOLDING TAX FOR FISCAL YEAR ENDING JUNE 30, 1998 BASED ON MERE TECHNICALITIES.46
G.R. Nos. 201680-81I.
WHETHER X X X THE [CTA] EN BANC COMMITTED REVERSIBLE ERROR WHEN IT DISMISSED [THE CIR'S] PETITION FOR REVIEW ON THE GROUND THAT THE LATTER ALLEGEDLY FAILED TO COMPLY WITH SECTION 1, RULE 8 OF THE REVISED RULES OF THE [CTA].II.
WHETHER X X X THE [CTA] EN BANC COMMITTED REVERSIBLE ERROR WHEN IT SUSTAINED THE AMENDED DECISION DATED 16 MARCH 2010 OF THE FIRST DIVISION DECLARING CLOSED AND TERMINATED RESPONDENT'S LIABILITY FOR DEFICIENCY DOCUMENTARY STAMP TAX FOR TAXABLE YEARS 1997 AND 1998.47
SECTION 4. Who May Avail. - Any person/taxpayer, natural or juridical, may settle thru this abatement program any delinquent account or assessment which has been released as of June 30, 2006, by paying an amount equal to One Hundred Percent (100%) of the Basic Tax assessed with the Accredited Agent Bank (AAB) of the Revenue District Office (RDO)/Large Taxpayers Service (LTS)/Large Taxpayers District Office (LTDO) that has jurisdiction over the taxpayer. In the absence of an AAB, payment may be made with the Revenue Collection Officer/Deputized Treasurer of the RDO that has jurisdiction over the taxpayer. After payment of the basic tax, the assessment for penalties/surcharge and interest shall be cancelled by the concerned BIR Office following existing rules and procedures. Thereafter, the docket of the case shall be fmwarded to the Office of the Commissioner, thru the Deputy Commissioner for Operations Group, for issuance of Termination Letter.Based on the guidelines, the last step in the tax abatement process is the issuance of the termination letter. The presentation of the termination letter is essential as it proves that the taxpayer's application for tax abatement has been approved. Thus, without a termination letter, a tax assessment cannot be considered closed and terminated.
SECTION 1. Review of cases in the Court en banc. - In cases falling under the exclusive appellate jurisdiction of the Court en banc, the petition for review of a decision or resolution of the Court in Division must be preceded by the filing of a timely motion for reconsideration or new trial With the pivision.Thus, in order for the CTA En Banc to take cognizance of an appeal via a petition for review, a timely motion for reconsideration or new trial must first be filed with the CTA Division that issued the assailed decision or resolution. Failure to do so is a ground for the dismissal of the appeal as the word "must" indicates that the filing of a prior motion is mandatory, and not merely directory.64
Endnotes:
1Rollo (G.R. No. 201530), pp. 3-23 and rollo (G.R. Nos. 201680-81), pp. 122-148.
2 Id. (G.R. No. 201530), pp. 24-51; penned by Associate Justice Esperanza R. Fabon-Victorino and concurred in by Presiding Justice Ernesto D. Acosta and Associate Justices Olga Palanca-Enriquez and Cielito N. Mindaro-Grulla; Associate Justice Juanito C. Castañeda with Concurring and Dissenting Opinion, id. at 52-54; Associate Justice Lovell R. Bautista, Jr. with Separate Opinion, id. at 55-63; Associate Justices Erlinda P. Uy and Caesar A. Casanova concur with the Separate Opinion of Associate Justice Lovell R. Bautista, Jr.; Justice Amelia R. Cotangco-Manalastas on Official Business.
3 Id. at 66-75.
4 CTA Division rollo, Vol. I. pp. 211-292.
5 Id. Vol. II, pp. 737-738.
6 Id.
7 Id. Vol. I, pp. 1-21.
8 Id. Vol. II, p. 741.
9 Id. at 741-742.
10 Id. at 742.
11 Id. Vol. I, pp. 482 and 690 and Vol. II, pp. 742-743 and 754.
12 Id. at Vol. I, pp. 702-703 and Vol. II, p. 756.
13 Id. at Vol. II, pp. 736-758; penned by Associate Justice Caesar A. Casanova and concurred in by Presiding Justice Ernesto D. Acosta and Associate Justice Lovell R. Bautista.
14 Id. at 747-749.
15 Id. at 754-756.
16 Id. at 756-757.
17 Id. at 778-796.
18 Id. at 759-777.
19 Id. at 817-822.
20 Id. at 821.
21 Id. at 821-822.
22 Id. at 1048-1081.
23 Id. at 1084-1097; penned by Associate Justice Erlinda P. Uy and concurred in by Presiding Justice Ernesto D. Acosta, Associate Justices Juanito C. Castañeda, Lovell R. Bautista, and Olga Palanca-Enriquez; Associate Justice Caesar A. Casanova on leave.
Note: The CIR elevated the case to the Supreme Court via a Petition for Review on Certiorari under Rule 45 of the Rules of Court, docketed as G.R. No. 193209. On October 13, 2010, the Supreme Court denied the petition for failure to show any reversible error in the assailed judgment. The CIR moved for reconsideration but the Supreme Court denied the same On February 11, 2011, the Supreme Court issued an Entry of Judgment. (rollo (G.R. No. 201530), pp. 363.)
24 CTA Division rollo, Vol. II, pp. 962-964.
25 Id. at 975 (Exhibit "J").
26 Implementing a One-Time Administrative Abatement of all Penalties/Surcharges and Interest on Delinquent Accountand Assessments (Preliminary or Final, Disputed or Not) as of June 30, 2006. Revenue Regulations No. 15-06. (August 18, 2006).
27 CTA Division rollo, Vol. II, pp. 981-986.
28 Id. at 984-985.
29 Id. at 984 and 986.
30 Id. at 986.
31 Id. at 1001-1008.
32 Id. at 1009-1010.
33 Id. at 1015.
34 Id. at 1013-1014.
35 Id. at 1016.
36 Id. at 1012.
Note: The letter informed Asiatrust that it is not qualified to avail of IVAP. However, the payments it made qualified it for the One-Time Administrative Abatement of all penalties/surcharge and interest. Accordingly, Asiatrust was advised to file the correct set of Payment and Application Form.
37 Id. at 1132-1136.
38 Id. at 1133-1135.
39 Id. at 1135.
40Rollo (G.R. No. 201530), pp. 43-45.
41 Id. at 50.
42 Id. at 49-50.
43 Id. at 46.
44 Id. at 46-47.
45 Id. at 74.
46 Id. at 10.
47Rollo (G.R. Nos. 201680-81), pp. 132-133.
48 Id. (G.R. No. 201530), pp. 365-375.
49 Id. at 370-372.
50 Id. at 366-370.
51 Id. at 372-374.
52 Id. at 419-420.
53 Id. at 423-427.
54 Id. at 409.
55 Id. at 411-414.
56 Id. at 414-419.
57 Id. at 379-383.
58 Id. at 383-384.
59 Id. at 390.
60 Id. at 386-387.
61 Id. at 388-390.
62 Id.
63 SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. - x x x
(B) Abate or cancel a tax liability, when:
(1) The tax or any portion thereof appears to be unjustly or excessively assessed; or
(2) The administration and collection costs involved do not justify the collection of the amount due.
All criminal violations may be compromised except: (a) those already filed in court, or (b) those involving fraud.
x x x x
64Commissioner of Customs v. Marina Sales, Inc., 650 Phil. 143, 151-152 (2010).
65 G.R. Nos. 200841-42, August 26, 2015, 768 SCRA 269, 275.
66Commissioner of Customs v. Marina Sales, Inc., supra at 152.