THE Court of Tax Appeals (CTA) denied for lack of merit the motion for reconsideration of JG Summit Holdings, Inc. over the denial of its alleged tax liabilities of P1.3 billion for 2009.
In a 22-page decision dated Dec. 11, the court’s second division affirmed its previous ruling.
The court in March denied for lack of jurisdiction the petition of JG Summit, saying the time for it to appeal the Final Decision on Disputed Assessment (FDDA) of the BIR had already lapsed for nine months.
The company argued in its appeal that the revised FDDA “superseded” the FDDA and that the final decision of the BIR was appealable to the court.
The court cited Section 228 of the Tax Code, which said that if a protest is denied in part or in whole or is not acted upon within 180 days from submission of documents, this should be raised to the CTA within 30 days from the receipt of the decision or lapse of the prescribed period.
“It is undisputed that a party adversely affected by a decision of the CIR (Commissioner of Internal Revenue) may file an appeal with this Court within thirty (30) days after the receipt of such decision,” the decision read.
The court said that the FDDA issued contains a statement that read “this is our final decision,” which only means that it is appealable to the court.
It also cited provisions of revenue regulations that said a decision may be appealed within 30 days from the receipt of the decision.
The court said that while the petitioner may file a motion for reconsideration on the assessment, “the same shall not toll the 30-day period to appeal to this Court.”
“Simply stated, while petitioner is not prevented from filing a request for reconsideration with respondent, the resort to this Court within the 30-day period is mandatory and indispensable in order to prevent such decision from becoming final, executory, and demandable,” the ruling read.
The CTA also said the claim of JG Summit that the same wordings of the FDDA appeared in the revised document meant that it is intended to replace the first one issued is “likewise bereft of merit.”
The court said that even if it would assume jurisdiction, it still finds no reason to invalidate the assessment based on the grounds raised in the appeal.
The court said that the absence of an electronic letter of authority (LoA) does not invalidate the assessment, contrary to the claim of the company.
It noted that while Revenue Memorandum Order No. 69-2010 requires that manual LoAs be retrieved and be replaced with an electronic LoA (eLA), it does not state that the conduct of the audit pursuant to a previously issued manual LoA would be invalidated if the electronic is not issued.
“Neither does it provide a blanket revocation of the manual LoA if the said manual LoA is not replaced with an eLA,” it said. “As it is, the manual LoA still validly clothed the examiners the authority needed to conduct an examination or assessment in accordance with Sections 10 and 13 of the NIRC of 1997.”
The court also said the period to assess the company had not prescribed as the second waiver executed to extend the assessment period showed that it received the accepted waiver based on record, contrary to the claim of the company.
The court also said that even if the waiver is defective, the two parties continued to deal with each other.
JG Summit claimed that the formal letter of demand (FLD) was not accompanied by assessment notices. But the CTA said records show that the subject assessment notices were received by the company.
The court said the BIR “properly served” the FLD with the final assessment notice to the company, which contained the due date for payment.
It also ruled that the absence of a fixed date for payment in the FDDA and the revised FDDA (RFDDA) does not render the assessment void.
“Even if we are to rule that FDDA and RFDDA are invalid and defective for lack of fixed date prescribed for the payment of the deficiency taxes, the assessment against petitioner would remain valid as the invalidity of one does not necessarily result to the invalidity of the other,” it said.
JG Summit was assessed for liabilities of P6.55 billion under its FDDA. When appealed, the BIR issued the RFDDA, which protested before the court, for deficiency income tax of P581.9 million, value-added tax of P202.6 million, and documentary stamp tax of P555.3 million as it paid its other deficiencies. — Vann Marlo M. Villegas