THE Court of Tax Appeals (CTA) granted the appeal of First Philippine Industrial Park, Inc. to set aside the deficiency tax liabilities of P13.7 million for the calendar year 2009.
In a resolution on March 18, the court prohibited the commissioner of the Bureau of Internal Revenue (BIR) from collecting the amount from the company.
“Such being the case, the subject tax assessments issued against the petitioner for the taxable year 2009 are void, for lack of authority of the revenue officers to examine the petitioner’s books,” The court ruling written by CTA Associate Justice Maria Belen M. Ringpis-Liban said. “Being a void assessment, the same bears no fruit, hence the subject tax assessments cannot be legally enforced against the petitioner.”
The petitioner is a domestic corporation engaged in the business of acquiring, developing, and managing industrial estates. The company is also registered with the Philippine Economic Zone Authority as the owner of First Philippine Industrial Park, a special economic zone.
The respondent is the BIR commissioner who has the authority to decide disputed assessments, refunds of internal revenue taxes, and penalties imposed in relation to provisions under the country’s tax code.
The company argued that the tax assessment issued by the commissioner should be considered void for a lack of a valid letter of authority (LOA).
On the other hand, the respondent claimed that the assessment was issued within the period prescribed by law, and the company was not deprived of its right to due process.
The CTA affirmed the petitioners’ claim that the revenue officers who conducted the audit were not authorized by the required letter.
“In cases where the BIR conducts an audit without a valid LOA, or in excess of the authority duly provided therefore, the resulting assessment shall be void and ineffectual,” the court said citing previous jurisprudence. — John Victor D. Ordoñez