THE COURT of Tax Appeals (CTA) has stood by its decision to set aside Misamis Oriental II Rural Electric Service Cooperative, Inc.’s deficiency tax liabilities worth P24.7 million and penalties worth P87,000 for 2013.
In a 16-page decision dated Aug. 2, the CTA full court said revenue officers who audited the cooperative had not been authorized by law.
The Bureau of Internal Revenue (BIR) alleged the firm had withholding, minimum corporate income and value-added tax deficiencies.
“To protect a taxpayer’s due process rights in a tax assessment, the Bureau of Internal Revenue must first ensure that the agents tasked with investigating the taxpayer are properly authorized to do the same,” according to the ruling written by Associate Justice Jean Marie A. Bacorro-Villena.
Under the Tax Code, only the Internal Revenue commissioner or his representative can authorize an examination of a taxpayer’s tax liabilities.
Revenue officers can only perform audits through a letter of authority issued by the commissioner, the court said. — John Victor D. Ordoñez