NIRC REMEDIES.docx

7/25/2019 NIRC REMEDIES.docx

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NIRC REMEDIES1. CIR VS. PERF REALTY CORP.G.R. No. 163345 July 4, 2!

2. CIR "#. MENG$ITOG.R. No.16%56 S&'(&)*&+ %, 2!

3. CIR VS. ENRON S$IC PO-ER CORPORATION

G.R. No. 1663!%, J/u+y 10, 20

4. L$CAS ADAMSON, ET AL. VS. CA ET AL.G.R. NO. 12035 / G.R. NO. 12455%, My 21, 20

5. SILAIR SINGAPORE PTE. LTD. VS. CIRG.R. NO. 1%13!3 / 1%23%0, No". 14, 2!

6. CIR "#. FIRST EPRESS PA-NSOP COMPANY INC.G.R. No#. 1%245746, Ju/& 16, 20

%. CIR VS. GON8ALE8!. RI8AL COMMERCIAL ANING CORPORATION VS. CIR

COMMISSIONER OF G.R. No. 163345INTERNAL REVEN$E,Petitioner,Present:

YNARES-SANTIAGO,J.,Chairperson,

AUSTRIA-MARTINEZ,- versus -CHICO-NAZARIO,

NACHURA, andREYES,JJ.

Prom!"ated:PERF REALTY CORPORATION,

Res#ondent. $!% &, '(()* - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - *

D E C I S I O N

REYES, R.T.,J.9

+OR Or reie on certiorariis te /e0ision123o4 te Cort o4 A##ea!s 5CA6 "rantin" te 0!aim 4or

re4nd o4 res#ondent PER+ Rea!t% Cor#oration 5PER+6 4or 0redita7!e ito!din" ta* 4or te %ear 2889.

F:(#

Petitioner Commissioner is te ead o4 te rea o4 Interna! Reene 5IR6 ose #rin0i#a! dt% is

to assess and 0o!!e0t interna! reene ta*es. Res#ondent PER+ is a domesti0 0or#oration en"a"ed in te

7siness o4 !easin" #ro#erties to arios 0!ients in0!din" te Pi!i##ine Ameri0an ;i4e and Genera

Insran0e Com#an% 5Pi!am!i4e6 and Read-Rite Pi!i##ines 5Read-Rite6.
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On A#ri! 2&, 288), PER+ ,?>2,2'?.((.

A4ter ded0tin" 0redita7!e ito!din" ta*es in te tota! amont o4 P>,?>2,2'?.(( 4rom its tota

in0ome ta* de o4 P','?(,='2.((, PER+ soed in its 2889 ITR an oer#a%ment o4 in0ome ta*es in te

amont o4 P2,')(,?(&.((.

On Noem7er >, 2888, PER+

re4nd o4 oer#aid in0ome ta*es in te amont o4 P2,')(,?(&.((.

On /e0em7er >, 2888, de to te ina0tion o4 te IR, PER+

insB0ien0% o4 eiden0e. Te CTA noted tat PER+ did not indi0ate in its 2889 ITR te o#tion to eiter

0!aim te e*0ess in0ome ta* as a re4nd or ta* 0redit #rsant to Se0tion =81'35no 9=6 o4 te Nationa

Interna! Reene Code 5NIRC6

+rter, te CTA !ieise 4ond tat PER+ 4ai!ed to #resent in eiden0e its 288) anna! ITR. It e!d

tat te 4ai!re o4 PER+ to si"ni4% its o#tion on eter to 0!aim 4or re4nd or o#t 4or an atomati0 ta*

0redit and to #resent its 288) ITR !e4t te Cort it no a% to determine it 0ertaint% eter or

not PER+ as a##!ied or 0redited te re4nda7!e amont so"t 4or in its administratie and di0ia! 0!aims

4or re4nd.

PER+ moed 4or re0onsideration atta0in" to its motion its 288) ITR. Te motion as, oeer, denied 7%

te CTA in its Reso!tion dated Mar0 '=, '(('.

A""rieed 7% te de0ision o4 te CTA, PER+ o4

te R!es o4 Cort.

CA D;#'o#;(;o/

In a /e0ision dated $!% 2), '((>, te CA r!ed in 4aor o4 PER+, dis#osin" as 4o!!os:


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DHERE+ORE, te #etition is ere7% GRANTE/. Te assai!ed /e0ision dated Noem7er '(,'((2, and Reso!tion o4 Mar0 '=, '((' o4 te Cort o4 Ta* A##ea!s are SET ASI/E. TeCommissioner o4 Interna! Reene is ordered to RE+UN/ to te #etitioner te amonto4 P2,')(,?(&.(( as 0redita7!e ito!din" ta* 4or te %ear 2889.SO OR/ERE/.1>3

A00ordin" to te a##e!!ate 0ort, een i4 te ta*#a%er as indi0ated its o#tion 4or re4nd or ta*

0redit in its ITR, it does not mean tat it i!! atomati0a!!% 7e entit!ed to eiter o#tion sin0e te

Commissioner o4 Interna! Reene 5CIR6 mst 7e "ien te o##ortnit% to inesti"ate and 0on

As to te 4ai!re o4 PER+ to #resent its 288) ITR, te CA o7sered tat tere is no need to r!e on its

admissi7i!it% sin0e te CTA a!read% e!d tat PER+ ad 0om#!ied it te re@isites 4or a##!%in" 4or a ta*

re4nd. Te so!e #r#ose o4 re@irin" te #resentation o4 PER+s 288) ITR is to eri4% eter o

not PER+ ad 0arried oer te 2889 e*0ess in0ome ta* 0!aimed 4or re4nd to te %ear 288). Te

eria##ea! to Us nder R!e &?.

I##u

Petitioner s7mits te 4o!!oin" assi"nment:

I

THE COURT O+ APPEA;S ERRE/ IN GRANTING RESPON/ENTS TAF RE+UN/ CONSI/ERINGTHE ;ATTERS +AI;URE TO SUSTANTIA;;Y ESTA;ISH ITS C;AIM +OR RE+UN/.

IITHE COURT O+ APPEA;S ERRE/ IN CONSI/ERING RESPON/ENTS ANNUA; CORPORATEINCOME TAF RETURN +OR 288) NOTDITHSTAN/ING THAT IT DAS NOT +ORMA;;Y O++ERE/IN EI/ENCE.1&35Unders0orin" s##!ied6

Ou+ Rul;/.26

d!% issed 7% te #a%or 5ito!din" a"ent6 to te #a%ee, soin" te amont #aidand te amont o4 ta* ite!d tere4rom.1=3

De

2888 and /e0em7er >, 2888, res#e0tie!%, i0 are itin te to-%ear #res0ri#tie #eriod nder Se0tion

'>( 5no ''86 o4 te Nationa! Interna! Ta* Code.

Te CTA noted tat 7ased on te re0ords, PER+ #resented 0erti,(9',(9=.)2, PER+ is 0!aimin" on!% te amont

o4 P>,?>2,2'?.(( #ertainin" to a renta! in0ome o4 P9(,)2>,(98.((. Te amont o4 P>,?>2,2'?.(( !ess te

in0ome ta* de o4 PER+ o4 P','?(,='2.(( !eaes te re4nda7!e amont o4 P2,')(,?(&.((.

It is sett!ed tat


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Te #roision on te . +ina!!%, a4ter 7ein"renm7ered and red0ed to te 0a o4 a "rain, Se0tion =8 as re#ea!ed 7% EO >9.

S7se@ent!%, Se0tion =8 rea##eared in te NIRC 5or Ta* Code6 o4 2889 as Se0tion

9=, i0 reads:

Se0tion 9=. 'inal "d(ust$ent Return. Eer% 0or#oration !ia7!e to ta*nder Se0tion '& sa!!


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maes a 0oi0e e*#resses 0ertaint% or #re4eren0e and ts demonstrates 0!eardi!i"en0e. Conerse!%, a ta*#a%er tat maes no 0oi0e e*#resses n0ertaint% or !a0 o4#re4eren0e and en0e sos sim#!e ne"!i"en0e or #!ain oersi"t.

* * * *

+hird, tere is no atomati0 "rant o4 a ta* refund. As a matter o4 #ro0edre,te IR so!d 7e "ien te o##ortnit% to inesti"ate and 0on

Si*th, te Ta* Code a!!os te re4nd o4 ta*es to a ta*#a%er tat 0!aims it in ritin"

itin to %ears a4ter #a%ment o4 te ta*es erroneos!% re0eied 7% te IR. /es#ite te4ai!re o4 #etitioner to mae te a##ro#riate marin" in te IR 4orm, te

ta*#a%ers e*0ess 0redita7!e ta*es, des#ite te e*#ress de0!aration in te +AR to a##!% tee*0ess to te s00eedin" %ear. Den 0ir0mstan0es so tat a 0oi0e o4 ta* 0redit as

7een made, it so!d 7e res#e0ted. t en ind7ita7!e 0ir0mstan0es 0!ear!% so tatanoter 0oi0e a ta* re4nd is in order, it so!d 7e "ranted. Te0ni0a!ities and !e"a!isms,oeer e*a!ted, so!d not 7e missed 7% te "oernment to ee# mone% not 7e!on"in" toit and tere7% enri0 itse!4 at te e*#ense o4 its !a-a7idin" 0itiJens.

In te #resent 0ase, a!to" #etitioner did not mar te re4nd 7o* in its 2889 +AR,neiter did it #er4orm an% a0t indi0atin" tat it 0ose a ta* 0redit. On te 0ontrar%, it

III. The failure of respondent to present in evidence the

1998 ITR is not fatal to its claim for refund.


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Te CIR taes te ie tat te CA erred in 0onsiderin" te 288) ITR o4 PER+. It as not 4orma!!% oered in

eiden0e. Se0tion >&, R!e 2>' o4 te Reised R!es o4 Cort states tat te 0ort sa!! 0onsider no

eiden0e i0 as not 7een 4orma!!% oered.

Te reasonin" is s#e0ios.

PER+ atta0ed its 288) ITR to its motion 4or re0onsideration. Te 288) ITR is a #art o4 te re0ords o4 te

0ase and 0!ear!% soed tat in0ome ta*es in te amont o4P2,')(,?(&.(( ere not 0!aimed as ta*

0redit in 288).

In 'ilinvest evelop$ent Corporation v. Co$$issioner of &nternal Revenue,1223te Cort e!d tat te 2889

ITR atta0ed to te motion 4or re0onsideration is #art o4 te re0ords o4 tat 0ase and 0annot 7e sim#!%

i"nored 7% te CTA. Moreoer, te0ni0a!ities so!d not 7e sed to de4eat s7stantie ri"ts, es#e0ia!!%tose tat ae 7een e!d as a matter o4 ri"t. De @ote:

In te #ro0eedin"s 7e4ore te CTA, #etitioner #resented in eiden0e its !etter o4 0!aim

4or re4nd 7e4ore te IR to so tat it as made itin te to-%ear re"!ementar% #eriodits In0ome Ta* Retrns 4or te %ears 288? and 288= to #roe its tota! 0redita7!e ito!din"ta* and te 4a0t tat te amonts ere de0!ared as #art o4 its "ross in0ome and seera!0erti


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State mst !ieise dea! it ta*#a%ers it 4airness and onest%. Te ars #oer o4ta*ation mst 7e tem#ered it eenandedness. Hen0e, nder te #rin0i#!e o4 solutioindebiti, te Goernment as to restore to #etitioner te sms re#resentin" erroneos#a%ments o4 ta*es.12'3

+rter, De sstain te CA tat tere is no need to r!e on te isse o4 te admissi7i!it% o4 te 288)

ITR sin0e te CTA r!ed tat PER+ a!read% 0om#!ied it te re@isites o4 a##!%in" 4or a ta* re4nd. Te

eri2, '((?

/e0ision123o4 te Cort o4 A##ea!s 5CA6 i0 reersed and set aside te Cort o4 Ta* A##ea!s 5CTA6 A#ri! ', '(('

/e0ision1'3and O0to7er 2(, '((' Reso!tion1>3orderin" /ominador Men"ito 5res#ondent6 to #a% te Commissioner o

Interna! Reene 5#etitioner6 de>, CTA re0ords6.
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* * * *ubsequently! "IR "a#uio received information that $etitioner %herein respondent& hasundeclared income from Texas Instruments and 'lub John (ay! promptin# the "IR toconduct another investi#ation. Throu#h a letter dated July )8! 199*! pouses +ominador,en#uito and Jeanne ,en#uito -pouses ,en#uito were informed by the /ssessment+ivision of the said o0ce that they have underdeclared sales totalin# $8!*)1!222.93-4xhibit 11! p. 85! "IR records. This was followed by a $reliminary Ten -16 +ay 7etterdated /u#ust 11! 199*! informin# $etitioner %herein respondent& that in the investi#ationof his 1991! 199) and 1995 income! business and withholdin# tax case! it was found outthat there is still due from him the total sum of $5!195!61.22 as deciency income and

percenta#e tax.n eptember )! 199*! the assessment notices sub:ect of the instant petition wereissued. These were protested by ,s. Jeanne ,en#uito! throu#h a letter dated eptember)8! 199* -4xhibit 1! p. 11)! "IR Records! on the #round that the 6; deduction allowedon their computed #ross revenue! is unrealistic. ,s. Jeanne ,en#uito requested for a

period of thirty -56 days within which to coordinate with the "IR re#ardin# the contestedassessment.On O0to7er 2(, 2889, IR a"io re#!ied, in4ormin" te S#oses Men"ito tat te sor0e o4assessment as not tro" te disa!!oan0e o4 0!aimed e*#enses 7t on data re0eied 4rom C!7

$on Ha% and Te*as Instrments Pi!s., In0. Said !etter "ae te s#oses ten 52(6 da%s to #resenteiden0e 5E*i7it 2?, #. 22(, IR Re0ords6.In an e11! "IR Records.On A#ri! 2', 2888, IR a"io rote a !etter to S#oses Men"ito, in4ormin" te !atter tat areinesti"ation or re0onsideration 0annot 7e "ien de 0orse 7% te mere s7mission o4 ann0erti(6 da%s 4rom re0ei#t o4 te said !etter as seasona7!%


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Res#ondent 1#etitioner3 , #etitioner1res#ondent3

sti


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Tro" a Petition 4or Reie1)3

main!% on te "rond tat Co##er Lett!e Caterin" Seri0es, In0. 5CLCS, In0.6 as a se#arate and distin0t entit% 4rom

Co##er Lett!e Ca4eteria S#e0ia!ist 5CLCS6 te sa!es and reenes o4 CLCS, In0. 0o!d not 7e as0ri7ed to CLCS neiter

ma% te ta*es de 4rom one, 0ar"ed to te oter nor te noti0es to 7e sered on te 4ormer, 0orsed tro" te

!atter.183Res#ondent 0ited te $oint Sti#!ation in i0 #etitioner a0no!ed"ed tat its 5res#ondents6 7siness as

0a!!ed Co##er Lett!e Ca4eteria S#e0ia!ist, not Co##er Lett!e Caterin" Seri0es, In0.12(3

ased on te nre4ted1223CTA smmar%, te CA rendered te /e0ision assai!ed erein, te dis#ositie #ortion

o4 i0 reads:DHERE+ORE, te instant #etition is GRANTE/. Reersin" te assai!ed /e0ision dated A#ri! ', '((' andReso!tion dated O0to7er 2(, '((', te de>>,'>>.8& and P',?9>,=??.)' 4or ta*a7!e%ears 2882, 288' and 288> #!s te '( de!in@en0% interest tereon are ann!!ed.

SO OR/ERE/.12'3

Petitioner 3

Hen0e, erein re0orse to te Cort 4or te reersa! o4 te CA de0ision and reso!tion on te 4o!!oin" "ronds:

ITe Cort o4 A##ea!s erred in reersin" te de0ision o4 te Cort o4 Ta* A##ea!s and in o!din" tatCo##er Lett!e Ca4eteria S#e0ia!ist oned 7% res#ondent and Co##er Lett!e Caterin" Seri0es, In0.oned and mana"ed 7% res#ondents i4e are not one and te same.

II

Te Cort o4 A##ea!s erred in o!din" tat res#ondent as denied de #ro0ess 4or 4ai!re o4 #etitionerto a!id!% sere res#ondent it te #ost-re#ortin" and #re-assessment noti0es as re@ired 7% !a.

On te


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S#e0ia!ist and Co##er Lett!e Caterin" Seri0es, In0. are one and te same, res#ondent 0an NOT a!id!%im#te a!!e"ed nderde0!ared sa!es in0ome earned 7% Co##er Lett!e Caterin" Seri0es, In0. as sa!esin0ome o4 Co##er Lett!e Ca4eteria S#e0ia!ist.12?35Em#asis s##!ied6

Res#ondent is adamant tat te CA is 0orre0t. Man% times in te #ast, te IR ad treated CLCS se#arate!% 4rom

CLCS, In0.: 4rom Ma% 288& to $ne 288?, te IR sent adit teams to e*amine te 7oos o4 a00ont and oter

a00ontin" re0ords o4 CLCS, and 7ased on said adits, res#ondent as e!d !ia7!e 4or de3and tat te

CA so!d ae sstained te CTA.1'&3

In ee0t, #etitioner o!d ae te Cort reso!e a #re!% 4a0ta! isse1'?3o4 eter or not tere is s7stantia

eiden0e tat CLCS, In0. and CLCS are one and te same ta*a7!e entit%.

As a "enera! r!e, te Cort does not entre into a tria! o4 4a0ts in #ro0eedin"s nder R!e &? o4 te R!es o4

Corts, 4or its on!% 4n0tion is to reie errors o4 !a.1'=3Te Cort de0!ines to in@ire into errors in te 4a0ta

assessment o4 te CA, 4or te !atters


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CTA.1'93t en te CA 0ontradi0ts te 4a0ta! (3

or en te #ro#erties or #rod0ts o4 one are a!! so!d to te oter, i0 in trn immediate!%se!!s tem to te #7!i0,1>23as s7stantia! eiden0e in s##ort o4 te >3And ten in E*i7it 21>&34or #etitioner, a $!% 2), 288& !etter sent 7% $eanne

Men"ito to IR, a"io Cit%, se stated ts:

in 0onne0tion it te inesti"ation o4 'opper =ettle 'afeteria pecialisti0 is !o0ated at28tTee C!7 $on Ha%, a"io Cit% nder !etter o4 atorit% nos. (>8')89, (>8')8), and (>8'=8(dated Ma% 2=, 288&, inesti"atin" )yin0ome, 7siness, and ito!din" ta*es 4or te %ears 2882,288', and 288>.1>?35Em#asis s##!ied6

$eanne Men"ito si"ned te !etter as #ro#rietor o4 Co##er Lett!e Ca4eteria S#e0ia!ist.1>=3

Re!ated to E*i7it 2 is #etitioners E*i7it 2&, i0 is anoter !etter dated Se#tem7er '), 2889, in i0

$eanne Men"ito #rotested te Se#tem7er ', 2889 assessment noti0es dire0ted at Co##er Lett!e Ca4eteria S#e0ia!is

and re4erred to te !atter as or 7siness at 28tTee C!7 $on Ha% and at Te*as Instrments.1>93Taen a!on" it te

$oint Sti#!ation, E*i7its A tro" C and te A"st >, 288> Certi


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Moreoer, in E*i7its A to A-2,1>)3E*i7its to -21>83and E*i7its C to C-21&(3i0 are !ists o4 0on0essionaires

tat o#erated in C!7 $on Ha% in 288', 288> and 2882, res#e0tie!%, 1&23it a##ears tat tere is no ot!et it te

name Co##er Lett!e Ca4eteria S#e0ia!ist as 0!aimed 7% res#ondent. Te name tat a##ears in te !ists is 28 tTEE

CA+ETERIA 5Co##er Lett!e, In0.6. Hoeer, in te !i"t o4 te e*#ress admission o4 res#ondent tat in 2882, 288' and

288>, e o#erated a 7ran0 0a!!ed Co##er Lett!e Ca4eteria S#e0ia!ist in C!7 $on Ha%, te entries in E*i7its A tro"

C 0o!d on!% mean tat said 7ran0 re4ers to 28tTee Ca4eteria 5Co##er Lett!e, In0.6. Tere is no eiden0e #resented

7% res#ondent tat 0ontradi0ts tis 0on0!sion.

In addition, te A"st 8, 288> Certi, res#ondent, to"eter it is

s#ose $eanne Men"ito, oned and o#erated ot!ets in C!7 $on Ha% and Te*as Instrments nder te names

Co##er Lett!e Ca4eteria S#e0ia!ist or CLCS and Co##er Lett!e Caterin" Seri0es or Co##er Lett!e Caterin" Seri0es, In0.

Trnin" no to te se0ond isse.

In res#ondents Petition 4or Reie it te CTA, e @estioned te a!idit% o4 te Assessment Noti0es, 1&83a!! dated

Se#tem7er ', 2889, issed 7% IR, a"io Cit% a"ainst im on te 4o!!oin" "ronds:

2. Te assessment noti0es, 7ased on in0ome and #er0enta"e ta* retrns o4 te Ta* Code1?(3
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'. Te assessment noti0es ere addressed to Co##er Lett!e S#e0ia!ist, C!7 $on Ha%, a"io Cit%

des#ite noti0e to #etitioner tat res#ondents #rin0i#a! #!a0e o4 7siness as at te CCP

Com#!e*, Pasa% Cit%.1?23

>. Te assessment noti0es ere issed in io!ation o4 te re@irement o4 Reene Re"!ations No

2'-)?, dated Noem7er '9, 28)?, tat te ta*#a%er 7e issed a #ost-re#ortin" noti0e and #re

assessment noti0e 7e4ore te #re!iminar% on!% on +e7rar% 28, 2889. 1??3Moreoer,in a00ordan0e

it Se0tion ' o4 Reene Re"!ation No. 2'-)?, i0 re@ires tat assessment noti0es 7e sent to te address

indi0ated in te ta*#a%ers retrn, n!ess te !atter "ies a noti0e o4 0an"e o4 address, te assessment noti0es in te

#resent 0ase ere sent 7% #etitioner to Cam# $on Ha%, 4or tis as te address res#ondent indi0ated in is ta*

retrns.1?=3

As to eter said assessment noti0es ere a0ta!!% re0eied, te CTA 0orre0t!% e!d tat sin0e res#ondentdid not testi4% tat e did not re0eie said noti0es, it 0an 7e #resmed tat te same ere a0ta!!% sent to and

re0eied 7% te !atter. Te Cort a"rees it te CTA in 0onsiderin" as earsa% te testimon% o4 Na!da ta

res#ondent did not re0eie te noti0es, 7e0ase Na!da as not 0om#etent to testi4% on te matter, as se as

em#!o%ed 7% res#ondent on!% in $ne 288), ereas te assessment noti0es ere sent on Se#tem7er ', 2889.1?93

Anent 0om#!ian0e it te re@irements o4 Reene Re"!ation No. 2'-)?, te CTA e!d:

IR re0ords so tat on $!% '), 2889, a !etter as issed 7% IR a"io to S#oses Men"ito,in4ormin" te !atter o4 teir s##osed nderde0!aration o4 sa!es tota!in" P&),9'2,???.8= and "iin"

tem ? da%s to 0ommni0ate an% o7e0tion to te res!ts o4 te inesti"ation 5E*i7it 22, #. )>, IRRe0ords6. Re0ords !ieise reea! te issan0e o4 a Pre!iminar% Ten 52(6 /a% ;etter on A"st 22, 2889,in4ormin" Petitioner 1res#ondent erein3 tat te sm o4 P>&,28>,(&2.?? is de 4rom im as de


16/70

5'(6 da%s, tere as 0om#!ian0e it Reene Re"!ations No. 2'-)? and te !atter as am#!% "ieno##ortnit% to #resent is side * * *.1?)3

Te CTA 4rter e!d tat res#ondent as esto##ed 4rom raisin" #ro0edra! isses a"ainst te assessmen

noti0es, 7e0ase tese ere not 0ited in te Se#tem7er '), 2889 !etter-#rotest i0 is s#ose

$eanne Men"ito

On a##ea! 7% res#ondent,1=(3te CA reso!ed te isse, ts:

,oreover! if the taxpayer denies ever havin# received an assessment from the "IR! it isincumbent upon the latter to prove by competent evidence that such notice was indeedreceived by the addressee.Here, res#ondent 1#etitioner erein3 mere!% a!!e"ed tat it 4orardedte assessment noti0es to #etitioner 1res#ondent erein3. Te res#ondent did not so an% #roo4 o4mai!in", re"istr% re0ei#t or a0no!ed"ment re0ei#t si"ned 7% te #etitioner 1res#ondenterein3. ince respondent %petitioner herein& has not adduced su0cient evidence that

petitioner %respondent herein& had in fact received the pre>assessment notice and post>reportin# notice required by law! it cannot be assumed that petitioner %respondentherein& had been served said notices.1=23

No oter "rond as 0ited 7% te CA 4or te reersa! o4 te * * *

1='3In teir Se#tem7er '), 2889 #rotest to te Se#tem7er ', 2889 assessment noti0es, res#ondent, tro" is

s#oses $eanne Men"ito, a0no!ed"ed tat 1te%3 are in receipto4 te assessment noti0e %o ae sent s

dated Se#tem7er ', 2889 * * *.1=>3

Res#ondent is tere4ore esto##ed 4rom den%in" a0ta! re0ei#t o4 te Se#tem7er ', 2889 assessment noti0es

notitstandin" te denia! o4 is itness Na!da.

As to te address indi0ated on te assessment noti0es, res#ondent 0annot @estion te same 4or it is te said address

i0 a##ears in its #er0enta"e ta* retrns. 1=&3Di!e res#ondent 0!aims tat e ad ear!ier noti


17/70

#on 0om#!etion o4 te inesti"ation, it noti0e 4or te !atter to

!etter. E*i7it 2>1=93o4 #etitioner is a!so a mere #oto0o#% o4 an A"st 22, 2889 Pre!iminar% Ten 52(6 /a% ;etter to

res#ondent, in4ormin" im tat e ad 7een 4ond to 7e !ia7!e 4or de

-EREFORE, te #etition is GRANTED. Te Mar0 >2, '((? /e0isiono4 te Cort o4 A##ea!s

is REVERSEDand SETASIDEand te A#ri! ', '((' /e0ision and O0to7er 2(, '((' Reso!tion

o4 te Cort o4 Ta*A##ea!s are REINSTATED.

SO ORDERED.COMMISSIONER OF INTERNAL G.R. No. 2==>)9REVEN$E,

P&(;(;o/&+,Present:

PUNO, C.J., Chairperson,CARPIO,7 " & + # u # 7CORONA,

AZCUNA and;EONAR/O-/E CASTRO,JJ.
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ENRON S$IC PO-ERCORPORATION,R'o/&/(. Prom!"ated:

$anar% 28, '((8

7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7

R E S O L $ T I O N

CORONA,J.9

In tis #etition 4or reie on 0ertiorari nder R!e &? o4 te R!es o4 Cort, #etitioner Commissioner o4

Interna! Reene 5CIR6 assai!s te Noem7er '&, '((& de0ision123o4 te Cort o4 A##ea!s 5CA6 ann!!in" te

4orma! assessment noti0e issed 7% te CIR a"ainst res#ondent Enron S7i0 Poer Cor#oration 5Enron6 4o

4ai!re to state te !e"a! and 4a0ta! 7ases 4or s0 assessment.

Enron, a domesti0 0or#oration re"istered it te S7i0 a% Metro#o!itan Atorit% as a 4ree#ort

enter#rise,1'3

ta* assessment.193

/e to te non-reso!tion o4 its #rotest itin te 2)(-da% #eriod, Enron

te Cort o4 Ta* A##ea!s 5CTA6. It ar"ed tat te de


19/70

te NIRC and RR No. 2'-88. Te CIRs motion 4or re0onsideration o4 te CTA de0ision as denied in a

reso!tion dated Noem7er 2', '((2.

Te CIR a##ea!ed te CTA de0ision to te CA 7t te CA aBrmed it. Te CA e!d tat te adit

orin" #a#ers did not s7stantia!!% 0om#!% it Se0tion '') o4 te NIRC and RR No. 2'-88 7e0ase te%

4ai!ed to so te a##!i0a7i!it% o4 te 0ited !a to te 4a0ts o4 te assessment. Te CIR

re0onsideration 7t tis as deemed a7andoned en e

reie in tis Cort.

Te CIR no ar"es tat res#ondent as in4ormed o4 te !e"a! and 4a0ta! 7ases o4 te de.2.&. 'or$al /etter of e$and and "ssess$ent !otice.Te 4orma! !etter o4 demandand assessment noti0e sa!! 7e issed 7% te Commissioner or is d!% atoriJed
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20/70

re#resentatie.T=& l&((&+ o> &)/ :ll;/< >o+ 'y)&/( o> (=& ('y&+# &:;&/:y( o+ ( #=ll #((& (=& >:(#, (=& l@, +ul / +&


21/70

Te !a re@ires tat te !e"a! and 4a0ta! 7ases o4 te assessment 7e stated in te 4orma! !etter o4

demand and assessment noti0e. Ts, s0 0annot 7e #resmed. Oterise, te e*#ress #roisions o4

Arti0!e '') o4 te NIRC and RR No. 2'-88 o!d 7e rendered n"ator%. Te a!!e"ed 4a0ta! 7ases in te

adi0e, #re!iminar% !etter and adit orin" #a#ers did not sB0e. Tere as no "oin" arond te

mandate o4 te !a tat te !e"a! and 4a0ta! 7ases o4 te assessment 7e stated in ritin" in te 4orma!

!etter o4 demand a00om#an%in" te assessment noti0e.

De note tat te o!d !a mere!% re@ired tat te ta*#a%er 7e noti


22/70

-erss- PUNO, C.J., Cair#erson,

CARPIO,

CORONA,

CO$RT OF APPEALS, CO$RT ;EONAR/O-/E CASTRO, and

OF TA APPEALS, ADAMSON ERSAMIN,JJ.

MANAGEMENT CORPORATION,

L$CAS G. ADAMSON, TERESE

J$NE D. ADAMSON, / SARA Prom!"ated:

S. DE LOS REYES,Res#ondents.My 21, 20

* - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - *

D E C I S I O N

P$NO, '.J.9

e4ore te Cort are te 0onso!idated 0ases o4 G.R. No. 12035and G.R. No. 12455%.

G.R. No. 12035ino!es a #etition 4or reie on 0ertiorari

A/AMSON, THERESE $UNE /. A/AMSON, and SARA S. /E ;OS REYES 5#riate res#ondents6, in teir

res#e0tie 0a#a0ities as #resident, treasrer and se0retar% o4 Adamson Mana"ement Cor#oration 5AMC6

a"ainst ten Commissioner o4 Interna! Reene ;ia%a% inJons-Cato 5COMMISSIONER6, nder R!e

&? o4 te Reised R!es o4 Cort. Te% see to reie and reerse te /e0ision #rom!"ated onMar0

'2, 288? and Reso!tion issed on $!% =, 288? o4 te Cort o4 A##ea!s in CA-G.R. SP No. >?&))

5;ia%a% inJons-Cato, et a!. . Hon. $d"e Erna +a!!oran-A!i#osa, et a!.6.

G.R. No. 12455%is a #etition 4or reie on 0ertiorari

Terese $ne /. Adamson and Sara S. de !os Re%es. In te said /e0ision, te Cort o4 A##ea!s #e!d

te Reso!tion #rom!"ated on Se#tem7er 28, 288& 7% te Cort o4 Ta* A##ea!s 5CTA6 in C.T.A. Case

No. ?(9? 5Adamson Mana"ement Cor#oration, ;0as G. Adamson, Terese Adamson and Sara de !os

Re%es . Commissioner o4 Interna! Reene6.

Te 4a0ts, as 0!!ed 4rom te =>.'2 as #aid as 0a#ita! "ains ta* 4or te transa0tion.
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23/70

On O0to7er 2', 288(, AMC so!d to APAC Pi!i##ines, In0. anoter ''8,)9( 0ommon sares o4

sto0 in AAI 4or P29,92),>=(.((. AMC #aid te 0a#ita! "ains ta* o4P>?','&'.8=.

On O0to7er 2?, 288>, te Commissioner issed a Noti0e o4 Ta*#a%er to AMC, ;0as G. Adamson

Terese $ne /. Adamson and Sara S. de !os Re%es, in4ormin" tem o4 de

io!ation o4 Se0tions &? 5a6 and 5d61>3, and 22(1&3,in re!ation to Se0tion 2((1?3, as #ena!iJed nder Se0tion

'??,1=3and 4or io!ation o4 Se0tion '?>193, in re!ation to Se0tion '?' 576 and 5d6 o4 te Nationa! Interna

Reene Code 5NIRC6.1)3

AMC, ;0as G. Adamson, Terese $ne /. Adamson and Sara S. de !os Re%es

motion to ss#end #ro0eedin"s on te "rond o4 #redi0ia! @estion, #enden0% o4 a 0ii! 0ase it te

S#reme Cort, and #enden0% o4 teir !etter-re@est 4or re-inesti"ation it te Commissioner. A4te

te #re!iminar% inesti"ation, State Prose0tor A!4redo P. A"0aoi!i 4ond #ro7a7!e 0ase. Te Motion 4o

Re0onsideration a"ainst te

Cort and CTA 0ases. Initia!!%, te tria! 0ort denied te motion. A Motion 4or Re0onsideration a

oeer

ta* !ia7i!ities o4 ;0as G. Adamson, Terese $ne /. Adamson and Sara S. de !os Re%es, and a##ea!a7!e

to te CTA. It 4rter e!d tat te said 0ases 0annot #ro0eed inde#endent!% o4 te assessment 0ase

#endin" 7e4ore te CTA, i0 as risdi0tion to determine te 0ii! and 0rimina! ta* !ia7i!it% o4 te

res#ondents terein.

On O0to7er 2(, 288&, te Commissioner

assai!in" te tria! 0orts dismissa! o4 te 0rimina! 0ases. Se aerred tat it as not a 0ondition
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#rere@isite tat a 4orma! assessment so!d

On Mar0 '2, 288?, te Cort o4 A##ea!s reersed te tria! 0orts de0ision and reinstated te

0rimina! 0om#!aints. Te a##e!!ate 0ort e!d tat, ;/ :+;);/l '+o#&:u(;o/ >o+ ( &"#;o/,

###)&/( o> ( &:;&/:y ;# /o( +&u;+& *&:u#& (=& o&/#& o> ( &"#;o/ ;# :o)'l&(&

o+ :o/#u))(& @=&/ (=& o&/&+ =# ?/o@;/ully l& >+uul&/( +&(u+/

@;(= ;/(&/( (o &"& (=& (.0I( +ul& (=( '+;"(& +'o/&/(# l& >l#& / >+uul&/(

+&(u+/# @;(= ;/(&/( (o &"& (, / :(;/< (=&+&u'o/, '&(;(;o/&+ l& / AH";( o>

Co)'l;/( @;(= (=& D&'+()&/( o> Ju#(;:&, @;(=ou( / ::o)'/y;/< ###)&/( o> (=& (

&:;&/:y o> '+;"(& +'o/&/(#, ;/ o+&+ (o :o))&/:& :+;);/l :(;o/ o+ ( &"#;o/.12(3

Priate res#ondents

on $!% =, 288?. Ts, te%

2. DHETHER OR NOT THE RESPON/ENT HONORA;E COURT O+ APPEA;S ERRE/

IN APP;YING THE /OCTRINE IN UNGA . CUSI 5Nos. ;-&2828-'&, Ma% >(, 28)(, 89

SCRA )996 TO THE CASE AT AR.

'. DHETHER OR NOT AN ASSESSMENT IS REUIRE/ UN/ER THE SECON/

CATEGORY O+ THE O++ENSE IN SECTION '?> O+ THE NIRC.

>. DHETHER OR NOT THERE DAS A A;I/ ASSESSMENT MA/E Y THECOMMISSIONER IN THE CASE AT AR.

&. DHETHER OR NOT THE +I;ING O+ A CRIMINA; COMP;AINT SERES AS AN

IMP;IE/ ASSESSMENT ON THE TAF ;IAI;ITY O+ THE TAFPAYER.

?. DHETHER OR NOT THE +I;ING O+ THE CRIMINA; IN+ORMATION +OR TAF

EASION IN THE TRIA; COURT IS PREMATURE ECAUSE THERE IS YET NO ASIS +OR

THE CRIMINA; CHARGE O+ DI;;+U;; INTENT TO EA/E THE PAYMENT O+ A TAF.

=. DHETHER OR NOT THE /OCTRINES ;AI/ /ODN IN THE CASES O+ YAES .

+;O$O 5No. ;-&=8?&, $!% '(, 28)', 22? SCRA ')=6 AN/ CIR . UNION SHIPPING CORP.5G.R. No. ==2=(, Ma% '2, 288(, 2)? SCRA ?&96 ARE APP;ICA;E TO THE CASE AT

AR.

9. DHETHER OR NOT THE COURT O+ TAF APPEA;S HAS $URIS/ICTION OER THE

/ISPUTE ON DHAT CONSTITUTES THE PROPER TAFES /UE +ROM THE TAFPAYER.

In #ara!!e! 0ir0mstan0es, te 4o!!oin" eents #re0eded G.R. No. 12455%:
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25/70

On /e0em7er 2, 288>, AMC, ;0as G. Adamson, Terese $ne /. Adamson and Sara S. de !os

Re%es

issed 7% te rea o4 Interna! Reene 5IR6, i0 #ointed ot te ta* deCTA. Te% assai!ed te Commissioners

#etitioners #rotest re"ardin" te ta* de

CAN PROCEE/ DITHOUT AN ASSESSMENT

>. DHETHER OR NOT THE COMP;AINT +I;E/ DITH THE /EPARTMENT O+ $USTICE

CAN E CONSTRUE/ AS AN IMP;IE/ ASSESSMENT and

&. DHETHER OR NOT THE COURT O+ TAF APPEA;S HAS $URIS/ICTION TO ACT ON

PRIATE RESPON/ENTS PETITION +OR REIED +I;E/ DITH THE SAI/ COURT.

Te isses in G.R. No. 12455% / G.R. No. 12035 0an 7e 0om#ressed into tree9

1. -ETER TE COMMISSIONER AS ALREADY RENDERED AN

ASSESSMENT FORMAL OR OTER-ISE OF TE TA LIAILITY OF AMC,


26/70

L$CAS G. ADAMSON, TERESE J$NE D. ADAMSON AND SARA S. DE LOS

REYES

2. -ETER TERE IS ASIS FOR TE CRIMINAL CASES FOR TA

EVASION TO PROCEED AGAINST AMC, L$CAS G. ADAMSON, TERESE J$NE D.

ADAMSON AND SARA S. DE LOS REYES /

3. -ETER TE CO$RT OF TA APPEALS AS J$RISDICTION TO TAE

COGNI8ANCE OF OT TE CIVIL AND TE CRIMINAL ASPECTS OF TE TALIAILITY OF AMC, L$CAS G. ADAMSON, TERESE J$NE D.

ADAMSON AND SARA S. DE LOS REYES.

Te 0ase o4 CIR ". P#:o+ R&l(y, &( l.1223is re!eant. In tis 0ase, ten IR Commissioner $ose U.

On" atoriJed reene oB0ers to e*amine te 7oos o4 a00onts and oter a00ontin" re0ords o4 Pas0or

Rea!t% and /ee!o#ment Cor#oration 5PR/C6 4or 28)=, 28)9 and 28)). Tis res!ted in a re0ommendation

4or te issan0e o4 an assessment in te amonts o4 P9,&8),&>&.=? and P>,(2?,'>=.>? 4or te %ears 28)=

and 28)9, res#e0tie!%.

On Mar0 2, 288?, te Commissioner

Te Commissioner denied te r"ent re@est 4or re0onsiderationKreinesti"ation 7e0ase se ad

not %et issed a 4orma! assessment.

Priate res#ondents ten e!eated te /e0ision o4 te Commissioner to te CTA on a #etition 4or

reie. Te Commissioner

te #etitioners. Te CTA denied te said motion to dismiss and ordered te Commissioner to

itin tirt% 5>(6 da%s. Te Commissioner did not

reso!tion.Instead, te Commissioner

A##ea!s. Te Cort o4 A##ea!s #e!d te CTA order. Hoeer, tis Cort reersed te Cort o4 A##ea!s

de0ision and te CTA order, and ordered te dismissa! o4 te #etition. De e!d:

An assessment 0ontains not on!% a 0om#tation o4 ta* !ia7i!ities, 7t a!so a demand 4or

#a%ment itin a #res0ri7ed #eriod. It a!so si"na!s te time en #ena!ties and interests

7e"in to a00re a"ainst te ta*#a%er. To ena7!e te ta*#a%er to determine is remedies

tereon, de #ro0ess re@ires tat it mst 7e sered on and re0eied 7% te
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27/70

ta*#a%er. A00ordin"!%, an aBdait, i0 as e*e0ted 7% reene oB0ers statin" te ta*

!ia7i!ities o4 a ta*#a%er and atta0ed to a 0rimina! 0om#!aint 4or ta* easion, 0annot 7e

deemed an assessment tat 0an 7e @estioned 7e4ore te Cort o4 Ta* A##ea!s.

Neiter te NIRC nor te reene re"!ations "oernin" te #rotest o4

assessments12'3#roide a s#e0i3

Te issan0e o4 an assessment is ita! in determinin" te #eriod o4 !imitation re"ardin"

its #ro#er issan0e and te #eriod itin i0 to #rotest it. Se0tion '(>12&3o4 te NIRC

#roides tat interna! reene ta*es mst 7e assessed itin tree %ears 4rom te !ast da%

itin i0 to


28/70

4or ta* easion. C!ear!%, it as not meant to 7e a noti0e o4 te ta* de and a demand to te

#riate res#ondents 4or #a%ment tereo4.

Te 4a0t tat te Com#!aint itse!4 as s#e0i

Priate res#ondents maintain tat te

assess$ent. +rtermore, Se0tion '(? o4 te same Code 0!ear!% mandates tat te 0ii! and

0rimina! as#e0ts o4 te 0ase ma% 7e #rsed sim!taneos!%. In 2ngab v. Cusi,1'(3#etitioner

terein so"t te dismissa! o4 te 0rimina! Com#!aints 4or 7ein" #rematre, sin0e is

#rotest to te CTA ad not %et 7een reso!ed. Te Cort e!d tat s0 #rotests 0o!d not

sto# or ss#end te 0rimina! a0tion i0 as inde#endent o4 te reso!tion o4 te #rotest in

te CTA. Tis as 7e0ase te 0ommissioner o4 interna! reene ad, in s0 ta* easion0ases, dis0retion on eter to isse an assessment or to


29/70

In te 0onte*t in i0 it is sed in te NIRC, an assessment is a ritten noti0e and demand

made 7% te IR on te ta*#a%er 4or te sett!ement o4 a de ta* !ia7i!it% tat is tere de. Te !etter as neer mai!ed or sent to te ta*#a%ers 7% te Commissioner.

In

7e"n itot assessment, at an% time itin ten %ears a4ter te dis0oer% o4 te 4a!sit%,

4rad or omission: Proided, Tat in a 4rad assessment i0 as 7e0ome

ae de0!ared de tere4rom. U#on inesti"ation o4 te e*aminers o4 te IR, tere as a #re!iminar%


30/70

AT ad not 7een #aid 4or AT-!ia7!e sa!e o4 seri0es 4or te tird and 4ort @arters o4 288(. Ar"a7!%

te "ross dis#arit% in te ta*es de and te amonts a0ta!!% de0!ared 7% te #riate res#ondents

0onstittes 7ad"es o4 4rad.

Ts, te a##!i0a7i!it% o4 $/

Se0. ??A.(?, #. '2, ts:

An assessment o4 a de

#rom#t!% to assess as no 0onne0tions it te 0ommission o4 te 0rime.

Tis oar% #rin0i#!e sti!! nder!ies Se0tion '=8 and re!ated #roisions o4 te #resent Ta* Code.

De no "o to te isse o4 eter te CTA as no risdi0tion to tae 0o"niJan0e o4 7ot te

0rimina! and 0ii! 0ases ere at 7ar.

Under Re#7!i0 A0t No. 22'? 5An A0t Creatin" te Cort o4 Ta* A##ea!s6 as amended, te r!in"s

o4 te Commissioner are a##ea!a7!e to te CTA, ts:

SEC. 9.Jurisdiction.Te Cort o4 Ta* A##ea!s sa!! e*er0ise e*0!sie a##e!!ate

risdi0tion to reie 7% a##ea!, as erein #roided -

526 /e0isions o4 te Commissioner o4 Interna! Reene in 0ases ino!in"

dis#ted assessments, re4nds o4 interna! reene ta*es, 4ees or oter

0ar"es, #ena!ties im#osed in re!ation tereto, or oter matters arisin" nder

te Nationa! Interna! Reene Code or oter !as or #art o4 !a administered

7% te rea o4 Interna! Reene

Re#7!i0 A0t No. )&'&, tit!ed An A0t Amendin" te Nationa! Interna! Reene Code, As Amended,

And +or Oter Pr#oses, !ater e*#anded te risdi0tion o4 te Commissioner and, 0orres#ondin"!%, tat o4

te CTA, ts:

SEC. &. #oer of the Co$$issioner to &nterpret +a* /as and to ecide +a* Cases. Te

#oer to inter#ret te #roisions o4 tis Code and oter ta* !as sa!! 7e nder te e*0!sie

and ori"ina! risdi0tion o4 te Commissioner, s7e0t to reie 7% te Se0retar% o4 +inan0e.


31/70

Te #oer to de0ide dis#ted assessments, re4nds o4 interna! reene ta*es, 4ees or

oter 0ar"es, #ena!ties im#osed in re!ation tereto, or oter matters arisin" nder tis

Code or oter !as or #ortions tereo4 administered 7% te rea o4 Interna! Reene is

ested in te Commissioner, s7e0t to te e*0!sie a##e!!ate risdi0tion

o4 te Cort o4 Ta* A##ea!s.

Te !atest statte dea!in" it te risdi0tion o4 te CTA is Re#7!i0 A0t No. 8')'.1'=3It #roides:

SEC. 9. Se0tion 9 o4 te same A0t is ere7% amended to read as 4o!!os:

Se0. 9.Jurisdiction. Te CTA sa!! e*er0ise:

5a6 E*0!sie a##e!!ate risdi0tion to reie 7% a##ea!, as erein #roided:

526 /e0isions o4 te Commissioner o4 Interna! Reene in 0ases ino!in"

dis#ted assessments, re4nds o4 interna! reene ta*es, 4ees or oter 0ar"es,

#ena!ties in re!ation tereto, or oter matters arisin" nder te Nationa! Interna!

Reene or oter !as administered 7% te rea o4 Interna! Reene

5'6 Ina0tion 7% te Commissioner o4 Interna! Reene in 0ases ino!in"

dis#ted assessments, re4nds o4 interna! reene ta*es, 4ees or oter 0ar"es,

#ena!ties in re!ation tereto, or oter matters arisin" nder te Nationa! Interna!

Reene Code or oter !as administered 7% te rea o4 Interna! Reene,

ere te Nationa! Interna! Reene Code #roides a s#e0i6 /e0isions, orders or reso!tions o4 te Re"iona! Tria! Corts in !o0a! ta*

0ases ori"ina!!% de0ided or reso!ed 7% tem in te e*er0ise o4 teir ori"ina! or

a##e!!ate risdi0tion

* * *

576 $risdi0tion oer 0ases ino!in" 0rimina! oenses as erein #roided:

526 E*0!sie ori"ina! risdi0tion oer a!! 0rimina! oenses arisin" 4rom

io!ations o4 te Nationa! Interna! Reene Code or Tari and Cstoms Code and

oter !as administered 7% te rea o4 Interna! Reene or te rea o4

Cstoms: #rovided, hoever, Tat oenses or 4e!onies mentioned in tis

#ara"ra# ere te #rin0i#a! amont o4 ta*es and 4ees, e*0!sie o4 0ar"es

and #ena!ties, 0!aimed is !ess tan One mi!!ion #esos 5P2,(((,(((.((6 or ere

tere is no s#e0ine0essari!% 0arr% it it te

5'6 E*0!sie a##e!!ate risdi0tion in 0rimina! oenses:

5a6 Oer a##ea!s 4rom te d"ments, reso!tions or orders o4 te

Re"iona! Tria! Corts in ta* 0ases ori"ina!!% de0ided 7% tem, in teir

res#e0ted territoria! risdi0tion.


32/70

576 Oer #etitions 4or reie o4 te d"ments, reso!tions or orders

o4 te Re"iona! Tria! Corts in te e*er0ise o4 teir a##e!!ate risdi0tion

oer ta* 0ases ori"ina!!% de0ided 7% te Metro#o!itan Tria! Corts,

Mni0i#a! Tria! Corts and Mni0i#a! Cir0it Tria! Corts in teir

res#e0tie risdi0tion.

506 $risdi0tion oer ta* 0o!!e0tion 0ases as erein #roided:

526 E*0!sie ori"ina! risdi0tion in ta* 0o!!e0tion 0ases ino!in"

2. In G.R. No. 2'(8>?, A++IRMING te CA de0ision dated Mar0 '2, 288?, i0 set

aside te Re"iona! Tria! Corts Order dated A"st ), 288&, and REINSTATING

Crimina! Case Nos. 8&-2)&' to 8&-2)&= 4or 4rter #ro0eedin"s 7e4ore te tria! 0ort

and

'. In G.R. No. 2'&??9, REERSING and SETTING ASI/E te /e0ision o4 te Cort o4

A##ea!s dated Mar0 '8, 288=, and OR/ERING te dismissa! o4 C.T.A. Case No. ?(9?.


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No 0osts.

SO ORDERED.

FIRST DIVISION

SILAIR SINGAPORE PTE.

LTD.,

Petitioner,

- erss -

COMMISSIONER OF INTERNAL

REVEN$E,

Res#ondent.

G.R. No#. 1%13!3 1%23%0

Present:

CARPIO,J.,

A0tin" Cair#erson,

AUSTRIA-MARTINEZ,

CORONA,

CARPIO MORA;ES,and

;EONAR/O-/E CASTRO,JJ.

Prom!"ated:

No"&)*&+ 14, 2!

* - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - *

D E C I S I O N

CARPIO,J.9

T=& C#&
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C.R. Ao. 1*1585

Si!air 5Sin"a#ore6 Pte. ;td. 5#etitioner6

/e0ision1'3dated '( O0to7er '((? in C.T.A. Case No. ='29 as e!! as te Reso!tion dated > +e7rar% '((=

den%in" te Motion 4or Re0onsideration. In te assai!ed de0ision, te Cort o4 Ta* A##ea!s 3n )ancdenied

#etitioners 0!aim 4or re4nd or issan0e o4 a ta* 0redit 0erti() as e!! as te Reso!tion dated 2) A#ri! '((= den%in" te Motion 4or

Re0onsideration. In te assai!ed de0ision, te Cort o4 Ta* A##ea!s 3n )ancdenied #etitioners 0!aim 4or

re4nd or issan0e o4 a ta* 0redit 0erti2,''&.9(, re#resentin" e*0ise ta*es #aid on

#etitioners #r0ase o4 aiation et 4e! 4rom Petron 4or te #eriod 4rom 2 $!% 2888 to >2 /e0em7er 2888.

On ' A"st '((=, tis Cort issed a reso!tion to 0onso!idate 7ot 0ases sin0e te% ino!e te same

#arties and te same isse, eter #etitioner is entit!ed to a re4nd o4 te e*0ise ta*es #aid on its

#r0ases o4 aiation et 4e! 4rom Petron.

T=& F:(#

Petitioner is a 4orei"n 0or#oration or"aniJed nder te !as o4 Sin"a#ore it a Pi!i##ine re#resentatie

oB0e in Ce7 Cit%. It is en"a"ed in 7siness as an on-!ine internationa! 0arrier, o#eratin" te Sin"a#ore-

Ce7-Sin"a#ore, Sin"a#ore-/aao-Ce7-Sin"a#ore, and Sin"a#ore-Ce7-/aao-Sin"a#ore rotes.1?3

+rom 2 $anar% 2888 to >2 /e0em7er 2888, #etitioner #r0ased aiation et 4e! 4rom Petron 4or se on

#etitioners internationa! i"ts.1=3ased on te Aiation /e!ier% Re0ei#ts and Inoi0es #resented, P>.=9

#er !iter as e*0ise 5s#e0i


35/70

Petitioner 0!aims tat it is e*em#t 4rom te #a%ment o4 e*0ise ta* nder te 2889 Nationa! Interna

Reene Code 5NIRC6, s#e0i?, and nder Arti0!e & o4 te Air Trans#ort A"reement 7eteen

te Goernments o4 te Re#7!i0 o4 te Pi!i##ines and te Re#7!i0 o4 Sin"a#ore 5Air A"reement6. 12(3

Se0tion 2>? o4 te NIRC #roides:

SEC. 2>?.P&(+ol&u) P+ou:(# Sol (o I/(&+/(;o/l C++;&+# / E&)'( E/(;(; o+

A


36/70

Petitioner 0ontends tat in rea!it%, it #aid te e*0ise ta*es de on te transa0tions and Petron mere!%

remitted te #a%ment to te rea o4 Interna! Reene 5IR6. Petitioner ar"es tat to adere to te ie

tat Petron is te !e"a! 0!aimant o4 te re4nd i!! mae #etitioners ri"t to re0oer te erroneos!% #aid

ta*es de#endent so!e!% on Petrons a0tion oer i0 #etitioner as no 0ontro!. I4 Petron 4ai!s to a0t or a0ts

7e!ated!%, #etitioners 0!aim i!! 7e 7arred, de#riin" #etitioner o4 its #riate #ro#ert%.

12>3

Petitioner a!so maintains tat to o!d tat on!% Petron 0an !e"a!!% 0!aim te re4nd i!! ne"ate te ta*

e*em#tion e*#ress!% "ranted to #etitioner nder te NIRC and te Air A"reement.12&3Petitioner ar"es tat

a ta* e*em#tion is a #ersona! #rii!e"e o4 te "rantee, i0 is #etitioner in tis 0ase. Petitioner 4rter

ar"es tat a ta* e*em#tion "ranted to te 7%er 0annot 7e aai!ed o4 7% te se!!er en0e, in te #resent

0ase, Petron as se!!er 0annot !e"a!!% 0!aim te re4nd. On te oter and, i4 on!% te entit% tat #aid te ta*

Petron in tis 0ase 0an 0!aim te re4nd, ten #etitioner as te "rantee o4 te ta* e*em#tion 0annot eno%

its ta* e*em#tion. In sort, neiter #etitioner nor Petron 0an 0!aim te re4nd, renderin" te ta* e*em#tion

se!ess. Petitioner s7mits tat tis is 0ontrar% to te !an"a"e and intent o4 te NIRC and te AirA"reement.12?3

Petitioner a!so 0ites tis Corts Reso!tion in %aceda v. %acaraig, Jr.,12=3@otin" te o#inion o4 te

Se0retar% o4 $sti0e i0 states, ts:

Te ie i0 re4ses to a00ord te e*em#tion 7e0ase te ta* is ? o4 te NIRC a!so in0!des its entit!ement to a

re4nd 4rom te IR in an% 0ase o4 erroneos #a%ment o4 e*0ise ta*.12)3

Res#ondent 0!aims tat as e*#!ained in #hilippine "cetlene Co., &nc. v. Co$$issioner of &nternal Revenue

1283te natre o4 an indire0t ta* a!!os te ta* to 7e #assed on to te #r0aser as #art o4 te 0ommodit%s

#r0ase #ri0e. Hoeer, an indire0t ta* remains a ta* on te se!!er. Hen0e, i4 te 7%er a##ens to 7e ta*

e*em#t, te se!!er is nonete!ess !ia7!e 4or te #a%ment o4 te ta* as te same is a ta* not on te 7%er

7t on te se!!er.1'(3
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Res#ondent insists tat in indire0t ta*ation, te man4a0trer or se!!er as te o#tion to si4t te 7rden o4

te ta* to te #r0aser. I4 and en si4ted, te amont added 7% te man4a0trer or se!!er 7e0omes

#art o4 te #r0ase #ri0e o4 te "oods. Ts, te #r0aser does not rea!!% #a% te ta* 7t on!% te #ri0e

o4 te 0ommodit% and te !ia7i!it% 4or te #a%ment o4 te indire0t ta* remains it te man4a0trer or

se!!er.1'23Sin0e te !ia7i!it% 4or te e*0ise ta* #a%ment is im#osed 7% !a on Petron as te man4a0trer o4

te #etro!em #rod0ts, an% 0!aim 4or re4nd so!d on!% 7e made 7% Petron as te stattor% ta*#a%er.1''3

T=& Rul;/< o> (=& Cou+( o> T A''&l#

C.R. Ao. 1*1585

On '( O0to7er '((?, te Cort o4 Ta* A##ea!s 3n )anc5CTA6 r!ed tat te e*0ise ta* im#osed on te

remoa! o4 #etro!em #rod0ts 7% te oi! 0om#anies is an indire0t ta*.

1'>3

A!to" te 7rden to #a% anindire0t ta* 0an 7e #assed on to te #r0aser o4 te "oods, te !ia7i!it% to #a% te indire0t ta* remains

it te man4a0trer or se!!er.1'&3Den te man4a0trer or se!!er de0ides to si4t te 7rden o4 te

indire0t ta* to te #r0aser, te ta* 7e0omes a #art o4 te #ri0e tere4ore, te #r0aser does not rea!!%

#a% te ta*per se7t on!% te #ri0e o4 te 0ommodit%.1'?3

Te CTA #ointed ot tat Se0tion 2>(5A65'61'=3o4 te NIRC #roides tat te !ia7i!it% 4or te #a%ment o4

e*0ise ta*es is im#osed #on te man4a0trer or #rod0er o4 te #etro!em #rod0ts. Under te !a, te

man4a0trer or #rod0er is te ta*#a%er. Te CTA stated tat it is on!% te ta*#a%er tat ma% as 4or a

re4nd in 0ase o4 erroneos #a%ment o4 ta*es. Citin" Cebu #ortland Ce$ent Co. v. Collector of &nternalRevenue,1'93te CTA r!ed tat te #rod0er o4 te "oods is te one entit!ed to 0!aim 4or a re4nd o4 indire0t

ta*es.1')3Te CTA e!d tat sin0e te !ia7i!it% 4or te e*0ise ta*es as #!a0ed on Petron as te man4a0trer

o4 te #etro!em #rod0ts and it as son in te E*0ise Ta* Retrns 1'83tat te e*0ise ta*es ere #aid 7%

Petron, an% 0!aim 4or re4nd o4 te e*0ise ta*es so!d on!% 7e made 7% Petron as te ta*#a%er. Tis is in

0onsonan0e it te r!e on strictissi$i (urisit res#e0t to ta* e*em#tions. Petitioner 0annot 7e

0onsidered te ta*#a%er 7e0ase at as trans4erred to #etitioner as on!% te 7rden and not te

!ia7i!it% to #a% te e*0ise ta* on #etro!em #rod0ts.1>(3

Te CTA a!so 0onsidered te Aiation +e! S##!% A"reement 7eteen #etitioner and Petron, i0 states:

%er sa!! #a% an% ta*es, 4ees or oter 0ar"es im#osed 7% an% nationa!, !o0a! or air#ort

atorit% on te de!ier%, sa!e, ins#e0tion, stora"e and se o4 4e!, e*0e#t 4or ta*es on

Se!!ers in0ome and ta*es on ra materia!. To te e*tent a!!oed, Se!!er sa!! so tese

ta*es, 4ees and oter 0ar"es as se#arate items on te inoi0e 4or te a00ont o4 te %er.1>23
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Hoeer, te CTA e!d tat een it tis #roision, te !ia7i!it% 4or te e*0ise ta* remained it Petron as

man4a0trer or #rod0er o4 te aiation et 4e!. Te si4tin" o4 te 7rden o4 te e*0ise ta* to #etitioner

did not trans4orm #etitioner into a ta*#a%er. Hen0e, Petron is te #ro#er #art% tat 0an 0!aim 4or re4nd o4

an% erroneos e*0ise ta* #a%ments.1>'3

C.R. Ao. 1*)5*9

Te CTA 3n )ance!d tat e*0ise ta*es on domesti0 #rod0ts are #aid 7% te man4a0trer or #rod0er

7e4ore remoa! o4 te #rod0ts 4rom te #!a0e o4 #rod0tion. Te #a%ment o4 an e*0ise ta*, 7ein" an

indire0t ta*, 0an 7e si4ted to te #r0aser o4 "oods 7t te stattor% !ia7i!it% 4or s0 #a%ment is sti!

it te se!!er or man4a0trer.1>>3Te CTA 0ited %aceda v. %acaraig, Jr.:1>&3

It ma% 7e se4! to mae a distin0tion, 4or te #r#ose o4 tis dis#osition, 7eteen a dire0t

ta* and an indire0t ta*. A dire0t ta* is a ta* 4or i0 a ta*#a%er is dire0t!% !ia7!e on te

transa0tion or 7siness it is en"a"ed in. E*am#!es are 0stom dties and ad valore$ta*es

#aid 7% te oi! 0om#anies to te rea o4 Cstoms 4or teir im#ortation o4 0rde oi!, and

te s#e0i=3and Conte*

Corporation v. 4on. Co$$issioner of &nternal Revenue1>93and 0on0!ded tat te ta* so"t to 7e re4nded

is an e*0ise ta* on #etro!em #rod0ts, #artain" o4 te natre o4 an indire0t ta*.1>)3

Te CTA 4rter r!ed tat i!e it is 0o"niJant o4 te e*em#t stats o4 #etitioner nder te NIRC and te

Air A"reement, it is a!so aare tat te ri"t to 0!aim 4or re4nd o4 ta*es erroneos!% #aid !ies it te

#erson stattori!% !ia7!e to #a% te ta* in a00ordan0e it Se0tion '(& o4 te NIRC.1>83Te CTA a!so

s""ested tat #etitioner so!d inoe its ta* e*em#tion to Petron 7e4ore 7%in" te #etro!em #rod0ts

1&(3Te CTA 0on0!ded tat te ri"t to 0!aim 4or te re4nd o4 te e*0ise ta*es #aid on te #etro!em

#rod0ts !ies it Petron i0 #aid and remitted te e*0ise ta*es to te IR.
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T=& I##u&

Petitioner s7mits tis so!e isse 4or or 0onsideration: eter #etitioner is te #ro#er #art% to 0!aim a

re4nd 4or te e*0ise ta*es #aid.1&23

T=& Rul;/< o> (=& Cou+(

Te isse #resented is not noe!. In a simi!ar 0ase ino!in" te same #arties, tis Cort as 0ate"ori0a!!%

r!ed tat te #ro#er #art% to @estion, or see a re4nd o4 an indire0t ta* is te stattor% ta*#a%er, te

#erson on om te ta* is im#osed 7% !a and o #aid te same een i4 e si4ts te 7rden tereo4 to

anoter.1&'3Te Cort added tat een i4 Petron Cor#oration #assed on to Si!air te 7rden o4 te ta*, te

additiona! amont 7i!!ed to Si!air 4or et 4e! is not a ta* 7t #art o4 te #ri0e i0 Si!air ad to #a% as a#r0aser.1&>3

/n excise tax is an indirect tax where the tax burden

can be shifted to the consumer but the tax liability remains with the

manufacturer or producer.

Se0tion 2'8 o4 te NIRC #roides tat e*0ise ta*es re4er to ta*es im#osed on s#e0i


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In Co$$issioner of &nternal Revenue v. #hilippine /ong istance Co$pan,1&93te Cort e*#!ained te

dieren0e 7eteen a dire0t ta* and an indire0t ta*:

ased on te #ossi7i!it% o4 si4tin" te in0iden0e o4 ta*ation, or as to o sa!! 7ear te

7rden o4 ta*ation, ta*es ma% 7e 0!assi

&nternal Revenue:
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It ma% indeed 7e tat te e0onomi0 7rden o4 te ta*

oer#a%ment sa!! 7e 0onsidered as a ritten 0!aim 4or 0redit or re4nd. 5Em#asis and

nders0orin" s##!ied6

Te #erson entit!ed to 0!aim a ta* re4nd is te stattor% ta*#a%er. Se0tion ''5N6 o4 te NIRC de


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Te e*0ise ta* is de 4rom te man4a0trers o4 te #etro!em #rod0ts and is #aid #on remoa! o4 te

#rod0ts 4rom teir re-'(()6 #roides tat s7e0t to te s7se@ent 3Te /e#artment o4 +inan0e and te IR re0o"niJe te ta*

e*em#tion "ranted to internationa! 0arriers 7t te% 0onsistent!% adere to te ie tat man4a0trers o

arti0!es s7e0t to e*0ise ta* are te stattor% ta*#a%ers tat are !ia7!e to #a% te ta*, ts, te #ro#er

#art% to 0!aim an% ta* re4nds.
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-EREFORE, e DENYte #etition. De AFFIRMte assai!ed /e0isions dated '( O0to7er '((? and ?

$anar% '((= and te Reso!tions dated > +e7rar% '((= and 2) A#ri! '((= o4 te Cort o4 Ta* A##ea!s in

C.T.A. Case Nos. ='29 and =>(), res#e0tie!%.

COMMISSIONER OF INTERNAL

REVEN$E,

Petitioner,

- erss -

FIRST EPRESS PA-NSOP

COMPANY, INC.,

Res#ondent.

G.R. No#. 1%245746

Present:

PUNO, C.J., Cair#erson,

CARPIO,

CORONA,

;EONAR/O-/E CASTRO, and

ERSAMIN,JJ.

Prom!"ated:

Ju/& 16, 20

* - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - *

D E C I S I O N

CARPIO,J.9

T=& C#&

Te Commissioner o4 Interna! Reene 5#etitioner6

Ta* A##ea!s /e0ision1'3dated '& Mar0 '((= in te 0onso!idated 0ases o4 C.T.A. E Nos. =( and ='. In te
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assai!ed de0ision, te Cort o4 Ta* A##ea!s 5CTA6 En an0 #artia!!% re0onsidered te CTA +irst /iisions

/e0ision1>3dated '& Se#tem7er '((&.

T=& F:(#

On ') /e0em7er '((2, #etitioner, tro" A0tin" Re"iona! /ire0tor R#erto P. Somera o4 Reene Re"ion

= Mani!a, issed te 4o!!oin" assessment noti0es a"ainst +irst E*#ress Panso# Com#an%, In0

5res#ondent6:

a. Assessment No. >2-2-8)1&34or de,(((

7. Assessment No. >2-2&-((((?>-8)1?34or de2-2&-((((?>-8)1=34or de

and donations i0 res!ted in te de


45/70

On 2 $!% '((>, res#ondent #aid P'9,9&&.)) as de2-2-((((?>-8) 4or de2-2&-

((((?>-8) is ere7%AFFIRMEDe*0e#t te im#osition o4 0om#romise #ena!t% in te

a7sen0e o4 soin" tat #etitioner 0onsented tereto 72S+ vs. Collector, 10 SCR" 1069:

3*;uisite #anshop Jeelr, &nc. vs. Jai$e ). Santiago, et al., supramerit. Terea4ter, 7ot #arties

No. 8')' 5RA 8')'6 it te CTA En an0.12)3

On '& Mar0 '((=, te CTA En an0 #rom!"ated a /e0ision aBrmin" res#ondents !ia7i!it% to #a% te AT

and orderin" it to #a% /ST on its #anso# ti0ets. Hoeer, te CTA En an0 4ond tat res#ondents

de#osit on s7s0ri#tion as not s7e0t to /ST.1283
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A""rieed 7% te CTA En an0s /e0ision i0 r!ed tat res#ondents de#osit on s7s0ri#tion as not

s7e0t to /ST, #etitioner e!eated te 0ase 7e4ore tis Cort.

T=& Rul;/< o> (=& Cou+( o> T A''&l#

On te ta*a7i!it% o4 de#osit on s7s0ri#tion, te CTA, 0itin" 'irst Southern #hilippines 3nterprises, &nc. v.

Co$$issioner of &nternal Revenue,1'(3#ointed ot tat de#osit on s7s0ri#tion is not s7e0t to /ST in te

a7sen0e o4 #roo4 tat an e@ia!ent amont o4 sares as s7s0ri7ed or issed in 0onsideration 4or te

de#osit. E*#ressed oterise, de#osit on sto0 s7s0ri#tion is not s7e0t to /ST i4: 526 tere is no

a"reement to s7s0ri7e 5'6 tere are no sares issed or an% additiona! s7s0ri#tion in te restr0trin"

#!an and 5>6 tere is no #roo4 tat te issed sares 0an 7e 0onsidered as issed 0erti3

Te CTA e!d tat in tis 0ase, tere as no s7s0ri#tion or an% 0ontra0t 4or te a0@isition o4 nissed

sto0 4or P)((,((( in te ta*a7!e %ear assessed. Te Genera! In4ormation Seet 5GIS6 o4 res#onden

soed on!% a 0a#ita! str0tre o4 P?((,((( as S7s0ri7ed Ca#ita! Sto0 and P'?(,((( as Paid-# Ca#ita

Sto0 and did not in0!de te assessed amont. Mere re!ian0e on te #resm#tion tat te assessment

as 0orre0t and done in "ood 4ait as naai!in" is--is te eiden0e #resented 7% res#ondent. Ts,

te CTA r!ed tat te assessment 4or de


47/70

#etitioner raises te isse on eter res#ondent is !ia7!e to #a% P2',>').&? as /ST on de#osit on

s7s0ri#tion o4 0a#ita! sto0.

T=& Rul;/< o> (=& Cou+(

Petitioner 0ontends tat te CTA erred in disre"ardin" te r!e on te

4rom te

tereon ts, teir

Res#ondent 0!aims tat #etitioner re@ested 4or additiona! do0ments in #etitioners !etter dated 2' Mar0

'((', to it: 526 !oan a"reement 4rom !ender 7ans 5'6 oB0ia! re0ei#ts o4 interest #a%ments issed to

res#ondent 5>6 do0mentar% eiden0e to s7stantiate donations 0!aimed and 5&6 #roo4 o4 #a%ment o4 /ST

on s7s0ri#tion.1>(3It mst 7e noted tat te on!% do0ment re@ested in 0onne0tion it res#ondents /ST

assessment on de#osit on s7s0ri#tion is #roo4 o4 /ST #a%ment. Hoeer, res#ondent 0o!d not #rod0e

an% #roo4 o4 /ST #a%ment 7e0ase it as not re@ired to #a% te same nder te !a 0onsiderin" tat te

de#osit on s7s0ri#tion as an adan0e made 7% its sto0o!ders 4or 4tre s7s0ri#tion, and no sto0

0erti23Res#ondent insists tat #etitioner 0o!d ae issed a s7#oena re@irin"

res#ondent to s7mit oter do0ments to determine i4 te !atter is !ia7!e 4or /ST on de#osit on

s7s0ri#tion #rsant to Se0tion ?506 o4 te Ta* Code.1>'3
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Res#ondent ar"es tat de#osit on 4tre s7s0ri#tion is not s7e0t to /ST nder Se0tion 29? o4 te Ta*

Code. Res#ondent e*#!ains:

It mst 7e noted tat de#osits on s7s0ri#tion re#resent adan0es made 7% te sto0o!ders

and are in te natre o4 !ia7i!ities 4or i0 sto0s ma% 7e issed in te 4tre. A7sent an%

e*#ress a"reement 7eteen te sto0o!ders and #etitioner to 0onert said

adan0esKde#osits to 0a#ita! sto0, eiter tro" a s7s0ri#tion a"reement or an% oter

do0ment, tese de#osits remain as !ia7i!ities oed 7% res#ondent to its sto0o!ders. +or

tese de#osits to 7e s7e0t to /ST, it is ne0essar% tat a 0onersionKs7s0ri#tion

a"reement 7e made 7% +irst E*#ress and its sto0o!ders. A7sent s0 0onersion, no /ST

0an 7e im#osed on said de#osits nder Se0tion 29? o4 te Ta* Code. 1>>35Unders0orin" in te

ori"ina!6

Res#ondent 0ontends tat 7% #resentin" its GIS and =3/ST is a!so !eied on te

e*er0ise 7% #ersons o4 0ertain #rii!e"es 0on4erred 7% !a 4or te 0reation, reision, or termination o4

s#e0i


49/70

further, Tat in te 0ase o4 sto0 diidends, on te a0ta! a!e re#resented 7% ea0 sare.1>)3

Se0tion 29=. Sta$p +a* on Sales, "gree$ents to Sell, %e$oranda of Sales, eliveries or

+ransfer of ue-bills, Certi>cates of =bligation, or Shares or Certi>cates of Stoc. - On a!!

sa!es, or a"reements to se!!, or memoranda o4 sa!es, or de!ieries, or trans4er o4 de-7i!!s,

0erti

* * *

Ordinari!%, en a 0or#oration isses a 0erti


50/70

o4 eter or not it is in te a0ta! or 0onstr0tie #ossession o4 te sto0o!der, is

0onsidered issed 7e0ase it is it a!e and en0e te do0mentar% stam# ta* mst 7e

#aid as im#osed 7% Se0tion '2' o4 te Nationa! Interna! Reene Code, as amended.

In Se0tion 29= o4 te Ta* Code, /ST is im#osed on te sa!es, a"reements to se!!, memoranda o4 sa!es,

de!ieries or trans4er o4 sares or 0erti

Cor#orate Sto0 /ST /e0!aration, to"eter it te /ST Retrn, i4 a##!i0a7!e @=&/ DST

;# u& o/ #u*#:+;'(;o/# )& >(&+ (=& u(=o+;K(;o/,on or 7e4ore te tent da% o4

te mont 4o!!oin" te date o4 atoriJation. 5o!d4a0in" s##!ied6

RMO ()-8), reiteratin" Reene Memorandm Cir0!ar No. &9-89 5RMC &9-896, a!so states tat at is7ein" ta*ed is te #rii!e"e o4 issin" sares o4 sto0, and, tere4ore, te ta*es a00re at te time te

sares are issed. RMC &9-89 a!so de


51/70

a0@isition o4 nissed sto0s in an e*istin" 0or#oration or a 0or#oration sti!! to 7e 4ormed.1&>3A sto0

s7s0ri#tion is a 0ontra0t 7% i0 te s7s0ri7er a"rees to tae a 0ertain nm7er o4 sares o4 te 0a#ita

sto0 o4 a 0or#oration, #a%in" 4or te same or e*#ress!% or im#!ied!% #romisin" to #a% 4or te same.1&&3

In tis 0ase, res#ondents Sto0o!ders E@it% se0tion o4 its a!an0e Seet as o4 >2 /e0em7e

288)1&?3sos:

STOCLHO;/ERS EUITY 288) 2889

AtoriJed Ca#ita! Sto0 P ',(((,(((.(( P ',(((,(((.((

Paid-# Ca#ita! Sto0 '?(,(((.(( '?(,(((.((

/e#osit on S7s0ri#tion )((,(((.((

Retained Earnin"s =',)'(.>& '(8,=(9.'(

Net In0ome 5)?),&8).>)6 52&=,9)=.)=6

TOTA; P '?&,>'2.8= P >2',)'(.>&

Te GIS s7mitted to te Se0rities and E*0an"e Commission on >2 Mar0 2888 sos te 4o!!oin"

Ca#ita! Str0tre:1&=3

. +inan0ia! Pro

2. Ca#ita! Str0tre :

AUTHORIZE/ - P',(((,(((.((

SUSCRIE/ - ?((,(((.((

PAI/-UP - '?(,(((.((
http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn46


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Tese entries ere e*#!ained 7% Mi"e! Rosario, $r. 5Rosario6, res#ondents e*terna! aditor, drin" te

earin" 7e4ore te CTA on 22 $ne '((>. Rosario testi P! (=ou#/ +&'+&/(# (=& :#&


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Att%. Na#iJa

. Do!d %o no, Mr. Rosario, o m0 is te S7s0ri7ed Ca#ita! o4 +irst E*#ress

Panso#Q

Mr. Rosario $r.

A. Te S7s0ri7ed Ca#ita! o4 +irst E*#ress Panso# Com#an%, In0. 4or te %ear 288) is P?((tosand.

Att%. Na#iJa

. Ho a7ot te Paid U# Ca#ita!Q

Mr. Rosario $r.

A. Te Paid U# Ca#ita! is P'?( tosand.

Att%. Na#iJa

. Are 5si06 a!! tose o+ (=&;+ o@/&+#.5o!d4a0in" s##!ied6
http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2009/june2009/172045-46.htm#_ftn48


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C!ear!%, te de#osit on sto0 s7s0ri#tion as ree0ted in res#ondents a!an0e Seet as o4 288) is not a

s7s0ri#tion a"reement s7e0t to te #a%ment o4 /ST. Tere is noP)((,((( ort o4 s7s0ri7ed 0a#ita

sto0 tat is ree0ted in res#ondents GIS. Te de#osit on sto0 s7s0ri#tion is mere!% an amont o4 mone%

re0eied 7% a 0or#oration it a ie o4 a##!%in" te same as #a%ment 4or additiona! issan0e o4 sares in

te 4tre, an eent i0 ma% or ma% not a##en. Te #erson main" a de#osit on sto0 s7s0ri#tion

does not ae te standin" o4 a sto0o!der and e is not entit!ed to diidends, otin" ri"ts or ote

#rero"aties and attri7tes o4 a sto0o!der. Hen0e, res#ondent is not !ia7!e 4or te #a%ment o4 /ST on it

de#osit on s7s0ri#tion 4or te reason tat tere is %et no s7s0ri#tion tat 0reates ri"ts and o7!i"ations

7eteen te s7s0ri7er and te 0or#oration.

n the Dinality of /ssessment as $rescribed

under ection ))8 of the Tax 'ode

Se0tion '') o4 te Ta* Code #roides:

SEC. ''). P+o((;/< o> A###)&/(. - Den te Commissioner or is d!% atoriJed

re#resentatie


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Te ta*#a%er sa!! 7e in4ormed in ritin" o4 te !a and te 4a0ts on i0 te

assessment is made oterise, te assessment sa!! 7e oid.

Ditin a #eriod to 7e #res0ri7ed 7% im#!ementin" r!es and re"!ations, te ta*#a%er sa!!

7e re@ired to res#ond to said noti0e. I4 te ta*#a%er 4ai!s to res#ond, te Commissioner

or is d!% atoriJed re#resentatie sa!! isse an assessment 7ased on is

or reinesti"ation itin tirt% 5>(6 da%s 4rom re0ei#t o4 te assessment in s0 4orm and

manner as ma% 7e #res0ri7ed 7% im#!ementin" r!es and re"!ations. -;(=;/ #;(y 6

y# >+o) l;/< o> (=& '+o((, ll +&l&"/( #u''o+(;/< o:u)&/(# #=ll ="&

*&&/ #u*);((& o(=&+@;#&, (=& ###)&/( #=ll *&:o)& /l.

I4 te #rotest is denied in o!e or in #art, or is not a0ted #on itin one ndred ei"t%

52)(6 da%s 4rom s7mission o4 do0ments, te ta*#a%er aderse!% ae0ted 7% te

de0ision or ina0tion ma% a##ea! to te Cort o4 Ta* A##ea!s itin tirt% 5>(6 da%s 4romre0ei#t o4 te said de0ision, or 4rom te !a#se o4 te one ndred ei"t% 52)(6-da% #eriod

oterise, te de0ision sa!! 7e0ome

reinesti"ation itin >( da%s 4rom re0ei#t o4 te assessment 7% te ta*#a%er. Ditin =( da%s 4rom

7e0ome $anar% '((' and it ad nti! ' +e7rar% '(('

to s7mit its #rotest. On 2 +e7rar% '((', res#ondent s7mitted its #rotest and atta0ed te GIS and

a!an0e Seet as o4 >2 /e0em7er 288). Res#ondent e*#!ained tat it re0eied P)((,((( as a de#osit itte #ossi7i!it% o4 a##!%in" te same as #a%ment 4or te 4tre issan0e o4 0a#ita! sto0.

Ditin =( da%s 4rom te


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In a !etter dated 2' Mar0 '((', #etitioner re@ested res#ondent to #resent #roo4 o4 #a%ment o4 /ST on

s7s0ri#tion. In a !etter-re#!%, res#ondent stated tat it 0o!d not #rod0e an% #roo4 o4 /ST #a%ment

7e0ase it as not re@ired to #a% /ST nder te !a 0onsiderin" tat te de#osit on s7s0ri#tion as an

adan0e made 7% its sto0o!ders 4or 4tre s7s0ri#tion, and no sto0 0erti( da%s 4rom te !a#se o4 te

2)(-da% #eriod. Res#ondent, ain" s7mitted its s##ortin" do0ments on te same da% te #rotest as

2 $!% '((' to ait 4or #etitioners re#!% to its #rotest. On ') A"st '((' or itin >( da%s

a4ter te !a#se o4 te 2)(-da% #eriod 0onted 4rom te

Res#ondent as 0om#!ied it te re@isites in dis#tin" an assessment #rsant to Se0tion '') o4 te

Ta* Code. Hen0e, te ta* assessment 0annot 7e 0onsidered as


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-EREFORE, e DENYte #etition. De AFFIRMte Cort o4 Ta* A##ea!s /e0ision dated '& Mar0 '((=

in te 0onso!idated 0ases o4 C.T.A. E Nos. =( and ='.

SO ORDERED.

EN ANC

G.R. No. L710405 No"&)*&+ 24, 1066

COMMISSIONER OF INTERNAL REVEN$E,#etitioner,s.LILIA Y$SAY GON8ALES / TE CO$RT OF TA APPEALS,res#ondents.

=?ce of the Solicitor eneral for the petitioner.Ra$on ". onales for respondent /ilia @usa onales.

ENG8ON, J.P.,J.E

Matias Ysa%, a resident o4 Pototan, I!oi!o, died intestate on Ma% 2>, 28&), !eain" to eirs, name!%, $oseS. Ysa%, a !e"itimate 0i!d, and ;i!ia Ysa% GonJa!es, an a0no!ed"ed natra! 0i!d. Intestate #ro0eedin"s4or te sett!ement o4 is estate ere institted in te Cort o4 +irst Instan0e o4 I!oi!o 5S#e0ia! Pro0eedin"sNo. &?86. $ose S. Ysa% as terein a##ointed administrator.

On Ma% 22, 28&8 $ose S. Ysa%

Persona! #ro#erties

Pa!a%Cara7aos

P=,&&&.((2,(((.(( P9,&&&.((

Rea! #ro#erties:Ca#ita!, 9& #ar0e!s 6

Con"a! 28 #ar0e!s6 assessedat P298,9=(.((

Tota! "ross estateP2)9,'(&.(

(

Te retrn mentioned no eir.


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U#on inesti"ation oeer te rea o4 Interna! Reene 4ond te 4o!!oin" #ro#erties:

Persona! #ro#erties:

Pa!a%

Cara7aosPa0ard Atomo7i!e' A#aradors

P=,&&&.((

2,?((.((',(((.((?((.(( P2(,&&&.((

Rea! #ro#erties:Ca#ita!, '? #ar0e!s assessedat P)9,92?.>'

2K' o4 Con"a!, 2>( #ar0e!s

assessed at P2'2,&'?.(( P'(8,2&(.>'

Tota! P'28,?)&.>'

Te 4air maret a!e o4 te rea! #ro#erties as 0om#ted 7% in0reasin" te assessed a!e 7% 4ort%#er0ent.

ased on te a7oe


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Persona! #ro#erties:

i0 SedanPa0ard 0arA#aradorsCas in an 5PN6Pa!a%Cara7aos

P),2((.((',(((.((

?((.((),)?).&==,&&&.((

2,?((.(( P'9,&('.&=

Rea! #ro#erties:

;and, 29& #ar0e!sassessed ati!din"s

P>'&,989.'2 &,?((.((

P>'8,'89.'2

Tota! P>?=,=88.=9

More tan a %ear !ater, #arti0!ar!% on $!% 2', 28?9, an a"ent o4 te rea o4 Interna! Reene a##risedte Commissioner o4 Interna! Reene o4 te e*isten0e o4 said reamended #roe0t o4 #artition. Dere#on,te Interna! Reene Commissioner 0ased te estate o4 Matias Ysa% to 7e reinesti"ated 4or estate andineritan0e ta* !ia7i!it%. A00ordin"!%, on +e7rar% 2>, 28?) e issed te 4o!!oin" assessment:

Estate ta* P2=,'&=.(&

? sr0ar"e &22.'8

/e!in@en0% interest 22,)=).8(

Com#romiseNo noti0e o4 deat;ate #a%ment

P2?.((&(.(( ??.((

Tota! P'),?)2.'>


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Ineritan0e Ta* P>),29).2'

? sr0ar"e 2,2(?.)=

/e!in@en0% interest '),)().9?

Com#romise 4or !ate #a%ment ?(.((

Tota! P=8,2&'.9>

Tota! estate and ineritan0e ta*es P89,9'>.8=

;ie in #reios assessments, te 4air maret a!e o4 te rea! #ro#erties as arried at 7% addin" &( tote assessed a!e.

In ie o4 te demise o4 $ose S. Ysa%, said assessment as sent to is ido, Mrs. +!oren0ia Pi00io da. deYsa%, o s00eeded im in te administration o4 te estate o4 Matias Ysa%.

No #a%ment ain" 7een made des#ite re#eated demands, te Commissioner o4 Interna! Reene

0ort in otin" #riorit% o4 !ien #rsant to Se0tion >2? o4 te Ta* Code.

On $ne 2, 28?8, ;i!ia Ysa%, tro" er 0onse!, Ramon GonJa!es, , 28?), te e*isten0e o4 to administrators, name!%+!oren0ia Pi00io da. de Ysa% o administered to-tirds o4 te estate, and ;i!ia Ysa%, o administeredte remainin" one-tird, and er i!!in"ness to #a% te ta*es 0orres#ondin" to er sare, and #ra%in" 4orde4erment o4 te reso!tion on te motion 4or te #a%ment o4 ta*es nti! a4ter a ne assessment0orres#ondin" to er sare as issed.

On Noem7er 29, 28?8 ;i!ia Ysa% dis#ted te !e"a!it% o4 te assessment dated +e7rar% 2>, 28?). Se0!aimed tat te ri"t to mae te same ad #res0ri7ed inasm0 as more tan


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0ommen0ement o4 te rnnin" o4 te statte o4 !imitations. He raised te #oint o4 4rad 4or te

+rad is a @estion o4 4a0t.)Te 0ir0mstan0es 0onstittin" it mst 7e a!!e"ed and #roed in te 0ort7e!o.8And te

Para"ra# 5a6 o4 Se0tion 8> o4 te Ta* Code !ists te re@irements o4 a a!id retrn. It states:

5a6 Re;uire$ents.In a!! 0ases o4 ineritan0e or trans4ers s7e0t to eiter te estate ta* or teineritan0e ta*, or 7ot, or ere, to" e*em#t 4rom 7ot ta*es, te "ross a!e o4 te estatee*0eeds tree tosand #esos, te e*e0tor, administrator, or an%one o4 te eirs, as te 0ase ma%7e, sa!! 6 en it 0ontains in4ormation as to te arios items o4in0ome, ded0tion and 0redit it s0 de+irst, it as in0om#!ete. It de0!ared on!% ninet%-tree #ar0e!s o4 !and re#resentin" a7ot &(( e0tares and

!e4t ot ninet%-to #ar0e!s 0oerin" ?(> e0tares. Said "e nder de0!aration 0o!d not ae 7een teres!t o4 an oer-si"t or mistae. As 4ond in ;-22>9), supra note 9, $ose S. Ysa% er% e!! ne o4 tee*isten0e o4 te ommited #ro#erties. Pera#s is motie in nder de0!arin" te inentor% o4 #ro#ertiesatta0ed to te retrn as to de#rie ;i!ia Ysa% 4rom ineritin" er !e"a! sare in te ereditar% estate,7t 0ertain!% not 7e0ase e onest!% 7e!ieed tat te% did not 4orm #art o4 te "ross estate.

Se0ond, te retrn mentioned no eir. Ts, no ineritan0e ta* 0o!d 7e assessed. As a matter o4 !a, onte 7asis o4 te retrn, tere o!d 7e no o00asion 4or te im#osition o4 estate and ineritan0e ta*es.Den tere is no eir - te retrn soed none - te intestate estate is es0eated to te State.2'Te Stateta*es not itse!4.

In a 0ase ere te retrn as made on te ron" 4orm, te S#reme Cort o4 te United States e!d tatte Te reason is tat te retrn

s7mitted did not 0ontain te ne0essar% in4ormation re@ired in te 0orre0t 4orm. In tis risdi0tion,oeer, te S#reme Cort re4rained 4rom a##!%in" te said r!in" o4 te United States S#reme Cortin Collector of &nternal Revenue v. Central "ucarera de +arlac, ;-229=(-=2, $!% >2, 28?), on te "rondtat te retrn as 0om#!ete in itse!4 a!to" ina00rate. To or mind, it o!d not mae m0 dieren0eere a retrn is made on te 0orre0t 4orm #res0ri7ed 7% te rea o4 Interna! Reene i4 te dataterein re@ired are not s##!ied 7% te ta*#a%er. $st te same, te ne0essar% in4ormation 4or teassessment o4 te ta* o!d 7e missin".

Te retrn o4 te Ta* Code.


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Te !a im#oses #on te ta*#a%er te 7rden o4 s##!%in" 7% te retrn te in4ormation #on i0 anassessment o!d 7e 7ased.2&His dt% 0om#!ied it, te ta*#a%er is not 7ond to do an%tin" more tanto ait 4or te Commissioner to assess te ta*. Hoeer, e is not re@ired to ait 4oreer. Se0tion >>2 o4te Ta* Code "ies te Commissioner >' o4 te same Code "rants teCommissioner a !on"er #eriod. Non-o7seran0e 0onsists in

A00ordin"!%, 4or #r#oses o4 determinin" eter or not te Commissioners assessment o4 +e7rar% 2>,

28?) is 7arred 7% #res0ri#tion, Se0tion >>'5a6 i0 is an e*0e#tion to Se0tion >>2 o4 te Ta* Code >'5a6:

SEC. >>'. 3*ceptions as to period of li$itation of assess$ent and collection of ta*es. 5a6 In te0ase o4 a 4a!se or 4rad!ent retrn it intent to eade ta* or o4 a 4ai!re to

As stated, te Commissioner 0ame to no o4 te identit% o4 te eirs on Se#tem7er '&, 28?> and te"e nderde0!aration in te "ross estate on $!% 2', 28?9. +rom te !atter date, Se0tion 8& o4 te Ta*Code o7!i"ated im to mae a retrn or amend one a!read%

Te rnnin" o4 te #eriod o4 !imitations nder Se0tion >>'5a6 o4 te Ta* Code so!d tere4ore 7e re0oned

4rom said date 4or, as a4oresaid, it is 4r

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