Silkair Singapore LTD vs CIR Amirah CIR v Aegis People Support Inc Aneka CIR vsKeichin-EverettForwarding Co Inc Ben

San Roquevs CIR SAN ROQUE V. CIR Facts: San Roque is a corporation engaged in operating power-generating plants and under contract with the Govt. of the Phils. It allegedly had unutilized input VAT credits in 2007. On May 28, 2008, it filed an administrative claim for refund of unutilized input VAT for the 1st and 2nd quarters of 2007 (first claim), and another admin claim for unutilized VAT credit for the 3rd and 4th quarters on March 30, 2009 (second claim) with the CIR. In view of CIRs inaction and to suspend the running of 2-year prescriptive period, it filed a judicial claim with the CTA on March 13, 2009 for the first claim and on June 26, 2009 for the second claim. Held The 30-day period within which to file an appeal with the CTA as provided in Sec 112 of NIRC is jurisdictional and failure to comply therewith would bar the appeal and deprive the CTA of its jurisdiction. Such period is not merely directory but mandatory and it is beyond the power of the courts to extend the same. This rule applies to cases of tax refund or issuance of tax credit certificate where the taxpayer may, within 30 days upon receipt of decision denying the claim or after expiration of 120 days, appeal the decision or the unacted claim with the CTA. Both administrative claims were filed on time. However, the judicial claim for the first claim was filed out of time or 140 days after the filing of admin claim beyond the 120-day period. On the other hand, the second judicial claim was prematurely filed, or on ly after 88 days from filing of the administrative claim.

SEA LION FISHING CORPORATION VS. PEOPLE OF THE PHILIPPINES Facts: The Captain, crew and fishermen aboard F/V Sea Lion were arrested for illegal fishing in Mangsee Island in Balabac, Palawan. Various charges were filed against them but the Provincial Prosecutor found probable cause only against the Chinese fishermen and recommended the vessel and all the fishing gadgets, paraphernalia and equipment (which were previously confiscated) released upon proper showing of evidence of its ownership of the aforesaid vessel by Sea Lion Fishing Corp (which claims to be its owner). The RTC found the fishermen guilty and the confiscated vessel and equipment were placed under the [temporary] custody of the Philippine Coast Guard. Sea Lions Motion for Reconsideration was denied. It then filed a petition for Certiorari and Mandamus with the CA, but the same was also denied. Thus, Sea Lion filed a Petition for Review on Certiorari with the SC raising the sole issue of whether the confiscation of F/V Sea Lion was valid. Held: The confiscation of the vessel and equipment allegedly used in the commission of the crime can be confiscated, regardless of ownership. When these are claimed by a third-party not liable to the offense, such third-party must first establish its ownership over the same. On Remedy: Petitioner pursued an incorrect remedy when it sought recourse before the CA. The filing of a Petition for Certiorari under Rule 65 of the Rules of Court before the CA is limited only to the correction of errors of jurisdiction or grave abuse of discretion on the part of the trial court. The CA did not find either lack or error of jurisdiction or grave abuse of discretion. There was no jurisdictional error because based on the Informations, the offenses were committed within the territorial jurisdiction of the trial court. The penalties imposable under the law were also within its jurisdiction. As a necessary consequence, the trial court had the authority to determine how the subject fishing vessel should be disposed of. Likewise, no grave abuse of discretion attended the issuance of the trial court's order to confiscate F/V Sea Lion considering the absence of evidence showing that said vessel is owned by a third party. Evidently, the remedial relief pursued by the petitioner was infirm and improper. We also agree with the CA's observation that the trial court impliedly recognized petitioner's right to intervene when it pronounced that

petitioner failed to exercise its right to claim ownership of the F/V Sea Lion. This being the case, petitioner should have filed an appeal instead of a petition for certiorari before the CA. Under Rule 65 of the Rules of Court, certiorari is unavailing when an appeal is the plain, speedy, and adequate remedy CIR vs PL Management

CIR v. PL Management 2011 Facts: 1. PL earned P24M in 1997 from UMPC, where UMPC withheld P1.2M. In 1998 PL filed a lost for its 1997 earnings and signified that it had a creditable withholding tax of P1,200,000.00 for 1997 to be as tax credit in 1998. 2. In 1999 filed for a loss of P2.7M so it as not able to claim the P1.2M credit. 3. On April 12, 2000, the respondent filed with CIR a claim for the refund of the P1.2M refund. 4. CIR did not act so PL filed cases with CTA, which later denied claim of PL saying the refund claim was filed out of time. Tax payment on nApril 13, 1998, claim of refund is on April 14, 2000, beyond the two year allowed. 5. Appeal with the CA was for PL, the CA saying that the prescriptive period Is not jurisdictional and might be suspended for reasons of equity. Issue: Whether the two-yr prescriptive period for tax claim is non-jurisdictional and can be suspended for equity Held: No. PL already chose to carry over the excess, refund cant be availed. The Court of Appeals mistakenly understood the phrase "for that taxable period" as a prescriptive period for the irrevocability rule. There is a misplaced application of the CIR v. BPI case. The evident intent of the legislature, in adding the last sentence to Section 76 of the NIRC of 1997, is to keep the taxpayer from flipflopping on its options, and avoid confusion and complication as regards said taxpayer's excess tax credit. The interpretation of the Court of Appeals only delays the flip-flopping to the end of each succeeding taxable period. The irrevocability rule: Section 76 of the NIRC of 1997 provides: Section 76. Final Adjustment Return. - Every corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year the corporation shall either: (A) Pay the balance of tax still due; or (B) Carry over the excess credit; or (C) Be credited or refunded with the excess amount paid, as the case may be.

In case the corporation is entitled to a refund of the excess estimated quarterly income taxes paid, the refundable amount shown on its final adjustment return may be credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for tax refund or issuance of a tax credit certificate shall be allowed therefor. The options are alternative. The amount being claimed as a refund would remain in the account of the taxpayer until utilized in succeeding taxable years, as provided in Section 76 of the NIRC of 1997. It is worthy to note that unlike the option for refund of excess income tax, which prescribes after two years from the filing of the FAR, there is no prescriptive period for the carrying over of the same. PL already chose to carry over the excess tax paid, refund cant be availed. Commissioner of Internal Revenue v. Asiatrust Development Bank, Inc., CTA EB No. 614; Asiatrust DevelopmentBank v. Commissioner of Internal Revenue, CTA EB No. 677, November 18, 2011) Facts: Taxpayer filed a Petition for Review before the CTA in Division for failure of the CIR to act on its protest within the prescribed period. Both the CIR and the taxpayer filed Motions for Partial Reconsideration assailing the decision of the Court in Division partially granting the petition. The Court in Division denied the Commissioner of Internal Revenues plea for reconsideration for lack of merit, while it partially granted that of the taxpayer. The Court in Division substantially modified its former decision prompting the taxpayer to file another Motion for Partial Reconsideration of the amended decision which was denied by the Court. The CIR did not file the same motion but instead filed a Petition for Review before the Court of Tax Appeals En Banc. Issue: W/N the appeal may be filed with the CTA en banc. Held: Before an appeal may be filed with the Court of Tax Appeals (CTA) En Banc by aggrieved party, it must be preceded by the filing of a motion for reconsideration or new trial with the Division that rendered the questioned decision. CIR VS Mirant

CIR v. Mirant GR No. 176165 15 June 2011 Facts: Mirant entered into Operating and Management Agreements with Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.) and Mirant Sual Corporation (formerly Southern Energy Pangasinan, Inc.) to provide these companies with maintenance and management services in connection with the operation, construction and commissioning of coal-fired power stations situated in Pagbilao, Quezon, and Sual, Pangasinan respectively. On September 20, 2001, Mirant wrote the BIR a letter claiming a refund of 87,345,116.00 representing overpaid income tax. CTA 1st Division: Partially granted Mirants claim for refund but the amount was reduced to P38 million which constitutes the duly substantiated unutilized creditable withholding taxes. Issue: WON Mirant is entitled to a tax refund or to the issuance of a tax credit certificate and, if it is, then what is the amount to which it is entitled. YES but it the refund is limited to the substantiated claim. Ratio: 1. Once a corporation exercises the option to carry-over and apply the excess quarterly income tax against the tax due for the taxable quarters of the succeeding taxable years, such option is irrevocable for that taxable period. Having chosen to carry-over the excess quarterly income tax, the corporation cannot thereafter choose to apply for a cash refund or for the issuance of a tax credit certificate for the amount representing such overpayment. 2. Mirant complied with all the requirements for the refund of its unutilized creditable withholding taxes for taxable year 2000. The requisites for claiming a tax credit or a refund of creditable withholding tax: 1) The claim must be filed with the CIR within the two-year period from the date of payment of the tax; 2) It must be shown on the return that the income received was declared as part of the gross income; and

3) The fact of withholding must be established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld. Held: Mirant complied with all the legal requirements and it is entitled, as it opted, to a refund of its excess creditable withholding tax for the taxable year 2000 in the amount of 38,620,427.00. Manila North TollwaysCorp v CIR elie CIR VS FarEastBank CIR v. Far East, March 2010. Facts: 1. Far East filed Corporate Annual Income Tax Return for 1994 for Corporate Banking Unit and Foreign Currency Deposit Unit with reflected refundable income tax of P12M. 2. The P12M refund was carried over and applied for the 1995 income tax return. 3. In 1995, Far East claimed that it overpaid tax payments by P17M. P13M is being sought for refund and chose that the remaining will be carried over. 4. Far East then claimed for the refund of the P13.6M, which the CIR did not act upon. 5. Far East filed a claim for refund. CTA denied claim for refund. 6. CA reversed the CTA ruling that Far East duly proved that the income derived from rentals and sale of real property upon which the taxes were withheld were included in the return as part of the gross income. Issue: W/N respondent is entitled to the refund. Held: NO. The burden of proof for the claim is with the claimant which it failed to establish. A taxpayer claiming for a tax credit or refund of creditable withholding tax must comply with the following requisites:

1) The claim must be filed with the CIR within the two-year period from the date of payment of the tax; 2) It must be shown on the return that the income received was declared as part of the gross income; and 3) The fact of withholding must be established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld. Moreover, the fact that the petitioner failed to present any evidence or to refute the evidence presented by respondent does not ipso facto entitle the respondent to a tax refund. It is not the duty of the government to disprove a taxpayers claim for refund. Rather, the burden of establishing the factual basis of a claim for a refund rests on the taxpayer. And while the petitioner has the power to make an examination of the returns and to assess the correct amount of tax, his failure to exercise such powers does not create a presumption in favor of the correctness of the returns. The taxpayer must still present substantial evidence to prove his claim for refund. As we have said, there is no automatic grant of a tax refund. Mermac Inc v CIR Mermac Inc v CIR (June 28, 2010) Facts: MERMAC wanted to avail of the refund or issuance of tax credit certificate of excess or unapplied creditable withholding tax (CWT) under Section 204 of the Tax Code. Section 2.58.3 (B) of the RR 2-98 requires that such taxpayer claiming refund of excess CWT must show on the return that the income payment subjected to withholding tax was declared part of its gross income, and establish fact of withholding by submitting a copy of the withholding tax statement (BIR Form 2307) issued by the payor/buyer. In the instant case, the payee/seller took charge of deducting the amount of withholding tax from the payment received, remitting the same to the BIR. To prove fact of withholding of CWT, the taxpayer/refund claimant (MERMAC) presented BIR Form 1606 (withholding tax remittance return), which it filed relative to the sale of its real property. Due to CIRs inaction on its claim for refund amounting to 2,010,452.00, it filed a Petition for Review w/ the CTA 2nd Division, which partially

granted MERMACs claim for refund but only as to the amount of 92, 899.80 . It filed a Petition for Review with the CTA En Banc. Issue: WON BIR Form 1606 suffices to establish fact of withholding Held: No. It does not suffice because it did not emanate from the payor. A claim for refund of excess creditable withholding taxes in accordance with settled jurisprudence, must comply w/ the following requisites: 1) Claim for refund filed within 2-year prescriptive period under Sec. 204 (C) in relation to Section 229 of the NIRC 2) It is shown on the return of the recipient that the income payment received was declared as part of gross income 3) Fact of withholding established by a copy of a statement duly issued by payor (withholding agent) to the payee, showing the amount paid and amount of tax withheld Petitioner complied with the first two requisites, but failed to comply with the third. It is the BIR Form No. 2307 issued by the income payor, the duly constituted withholding agent, which establishes the fact of withholding. The BIR Form 1606 (withholding tax remittance form) should come from the payor and not the payee since the payor is in a better position to state that the withholding of tax was in fact made, being the duly constituted withholding agent. To be entitled to a refund or issuance of tax credit certificate of excess/unapplied creditable withholding tax, the fact of withholding, among others, must be established. The document, which may be accepted as evidence to establish fact of withholding, must (1) emanate from the payor itself, and not merely from the payee, and must (2) indicate the name of the payor, the (3) income payment basis of the tax withheld, the (4) amount of tax withheld, and the (5) nature of the tax paid. Hence, for purposes of entitlement to refund or excess creditable withholding tax, the only acceptable evidence is BIR Form No. 2307 to establish fact of withholding. The provisions of the law must be applied accordingly, and industry practice, i.e. for real estate companies to remit on behalf of clients (mostly individual buyers) the creditable withholding tax due on its income from the sale of property, does not justify non-compliance with the law. Dispositive: petition denied

(C) Be credited or refunded with the excess amount paid. Maunsell v Phils Inc v CIR Maunsell claims that in 2006, it accumulated creditable withholding taxes amounting to P3,839,671.31. In its AMENDED income tax return for 2006, it chose the option "To be issued a Tax Credit Certificate" for its overpaid taxes. On July 13, 2007 it filed on administrative claim for the issuance of a tax credit certificate with the BIR. Since, BIR did not act on the claim, the company filed a petition before the CTA on January 15, 2009. Issue : Whether or not Petitioner's right to claim for issuance of tax credit certificate of the overpaid income taxes for FY 2006 is substantiated with supporting documents? No Thus, if petitioner has originally chosen the option "to be carried-over as tax credit next year/quarter", it will be precluded from claiming the issuance of a tax credit certificate for the said excess payment. CIR v PNB FACTS: PNB submitted its Annual ITR (covering the year 2003) before the CIR in April 2004 where it reflected the amount of P33M, representing its unused and unutilized income tax. PNBs ITR was amended on October 25, 2004, where the amount was increased to P 40.114M, and on November 8, 2004, where the amount was again increased to P 40.165M. On February 17, 2005, petitioner filed its administrative claim for refund. However, on March 29, 2005, PNB again filed its amended Annual ITR which showed the amount of P 45.456M as overpayment. On the same date, PNB filed its amended administrative claim for refund or issuance of tax credit certificate, thus superseding its earlier administrative claim for refund of its alleged unutilized creditable withholding taxes for the taxable year 2003 in the amount of P40.25 M, claiming that it carried over the amount of P 4.93 M as prior years credit. As respondent has not acted on petitioners claim, PNB filed a Petition for Review before the CTA for the refund or issuance of tax credit certificate representing its unused and unutilized creditable withholding taxes for the calendar year 2003 pursuant to Sec. 76 and 229 of the NIRC. The CTA Division granted PNBs petition, but only to the extent of P39.3M.Both appealed. PNB wanted to have a refund amounting to P 40.25M. CIR, in its petition, raised the argument that PNB is not entitled to the refund of its excess creditable withholding tax credits because it failed to sufficiently prove that it did not carry-over and apply its 2003 excess tax credits against its quarterly income tax liabilities for the succeeding years. CIR alleged that PNB's failure to formally offer as evidence its quarterly income tax returns for the taxable year 2004 is fatal to its claim for refund. ISSUES: 1. W/N The presentation of the quarterly income tax returns is a legal requisite for the claim for refund of excess creditable withholding tax credits.

1.

Maunsell failed to offer evidence of its filing of ORIGINAL income tax return for 2006. Sec. 229 provides that in any case no such suit or proceeding shall be filed after the expiration of 2 years from the date of payment of the tax or penalty regardless of any supervening cause. In PAL vs. CIR, it was held that the counting should be made from the date of filing of the original final adjustment return and not from the date of filing of the amended return. The original return is important in order for CTA to ascertain whether the filing of the administrative and judicial claims for refund or issuance of a tax credit certificate were made within the two-year reglementary period. Absent such document, it has no way of determining whether the claim was timely filed.

2.

Moreover, the original return is necessary for the CTA to verify if petitioner's original option was to be issued a tax credit certificate for the unapplied creditable taxes withheld since once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period. Under Section 76, if quarterly tax payments made during the said taxable year is not equal to the total tax due the corporation has an option to (A) Pay the balance of tax still due; or (B) Carry-over the excess credit; or

HELD: NO. The presentation of the quarterly income tax returns of PNB for the first, second and third quarters of the taxable year 2004 is not a legal requisite for the claim for refund of excess creditable withholding tax credits for the taxable year 2003. The NIRC of 1997 did not require the presentation of the quarterly income tax returns to prove the claim for refund of creditable withholding taxes. According to Sec. 76, a corporate taxpayer who is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid has two options: (1) to carry-over the excess credits to the succeeding taxable years; (2) to apply for the issuance of a tax credit certificate or to claim a cash refund. Furthermore, Section 2.58 of BIR Revenue Regulations No. 2-98, as amended, set forth the requisites for the entitlement to a refund of excess creditable withholding tax credits: 1. That the claim for refund was filed within the two-year prescriptive period as provided under Section 204 (c) in relation to Section 229 of the NIRC of 1997; 2. That the fact of withholding is established by a copy of a statement duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom ; and 3. That the income upon which the taxes were withheld were included in the return of the recipient. Nowhere in the law or in its implementing rules and regulations is it indicated that the presentation of quarterly tax returns for the succeeding taxable years is a requisite to establish the entitlement to the refund of excess creditable withholding tax credits. As regards PNBs claim, the CTA found that PNB failed to prove and substantiate each and every component of the Total Tax Credits/ Payments reflected on its final adjustment return. In order to establish the factual basis of its claim for refund, petitioner must substantiate its prior year's excess tax credits to overcome the burden of proof required. StablewoodPhils v CIR Facts: Stablewood is the successor-in-interest of Orca Plant which was dissolved by operation of law by virtue of its merger with Rolls-Royce Power Ventures (Philippines), Inc. and Orca Energy, Inc. In 2006, Orca Plant filed its 2005 Annual ITR through the Electronic Payment and Filing System (EFPS) indicating that its creditable withholding tax (CWT) is to be

refunded. On that same year, a claim for refund was filed by Orca through SGV & Co. Due to the inaction of the BIR, a Petition for Review was filed with the CTA. CTA denied the refund claim because Orca carried-over its excess tax credits of 2005 inclusive of the claimed amount as Prior years Excess Credits in its Quarterly ITRs for the first three quarters of taxable year 2006. Orcas original option to refund the said amount was thus negated by its very act of carrying over said excess amount to the succeeding taxable quarters of 2006. Orca filed a petition for review with the CTA En Banc. It argued that the CTA has no basis to conclude that it exercised its option to carry-over because the quarterly tax returns were not final. Ruling of the CTA En Banc : Sec. 76 of the NIRC Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years had been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefore. St. Paul College of San Rafael vs CIR maybel CIR v KepcoIlijanCorp ACTS: Kepco Ilijan Corporation (Petitioner) is a domestic corporation engaged in the production and sale of electricity as an Independent Power Producer (IPP), whose produced electricity is sold solely to NPC. For the first three quarters of taxable year 2005 and for October 2005, petitioner filed its Quarterly and Monthly VAT Returns showing that it incurred expenses representing importation and domestic purchases of goods and services, for which petitioner also incurred input VAT. Petitioner filed an administrative claim for refund with the BIR representing input VAT allegedly incurred by petitioner from importations and domestic purchases of capital goods/equipment and services preparatory to its production and eventual sale of electricity to NPC.

Due to respondent's inaction and in order to suspend the running of the two-year prescriptive period under the National Internal Revenue Code (NIRC), petitioner filed the present Petition for Review on April 24, 2007. HELD: The administrative claim for refund or issuance of tax credit certificate of unutilized input VAT attributable to zero-rated sales is governed by Section 112 (A) of the 1997 NIRC. Based on Section 112 (A) the application for refund of unutilized input VAT attributable to zerorated sales may be made only within two (2) years after the close of the taxable quarter when the sales were made. This period, however, refers solely to applications for refund/credit filed with the Commissioner of Internal Revenue (CIR) and not to appeals made to the CTA. The period within which to file judicial claims is found under Section 112 (0)10 of the 1997 NIRC. Accordingly, judicial claim for refund should be filed within thirty (30) days from receipt of the decision of the CIR or upon the expiration of the one hundred twenty (120) days in case of inaction of the CIR. The observance of these periods is mandatory and non-compliance therewith would result in the denial of the claim. Applying the same to the present case, the administrative claim for refund filed by respondent covering the first to third quarters of 2005 was filed on October 28. 2005 and for the month of October 2005, the administrative claim was filed on December 7, 2005. It is clear that the administrative claims were filed within the two-year prescriptive period. However, despite the timely filing of the administrative claims, this Court is constrained to deny respondent's refund claim on the ground that its judicial claim was filed out of time. Records show that respondent filed its Petition for Review on April 24, 2007, way beyond the 30day period from the lapse of the 120-day period for the CIR to decide the claim. RP rep by COC v NPC Alliance Republic of the Philippines v. NPC Alliance Corporation, CTA EB No. 679, October 25, 2011 Decision or order which is appealable to the Court of Tax Appeals En Banc is that which has resolved the case with finality, and which, in effect, terminates or finally disposes of a case, as it leaves nothing to be done by the court as the case has finally been decided on the merits. The Commissioner of Customs filed a Petition for Review before the Court of Tax Appeals En Banc assailing the Resolution of a division of the

Court denying the Bureau of Customs Motion for Reconsideration, which allowed the posting of a bond. The Court held that the petition was prematurely filed before the Court of Tax Appeals En Banc for being interlocutory as it still leaves something to be done by the court a quo and the same may not be subject of review under the Revised Rules of the Court of Tax Appeals. In fact, Section 1, Rule 41 of the 1997 Rules of Civil Procedure, as amended, which applies suppletorily to proceeding before the Court of Tax Appeals, expressly provides that no appeal may be taken from an interlocutory order. The proper procedure that petitioner should have taken in this case was to await for the final termination of the proceedings before the Court in Division, prior to the filing of the instant petition for review, because it is a well-settled rule that only final orders or judgments on the merits may be the subject of appeal. City of Makati v CIR tope Festo Holdings Inc v CIR Amirah

PNB v CIR Aneka DNATA V CIR Dnata was issued a formal assessment notice on sept 12, 2007 for P8.3 million in deficiency income tax, value-added tax, withholding tax on compensation, and expanded withholding tax for 2003. On Oct 18 2007, Dnata filed a letter of protest assailing the validity of the FAN, and praying for its cancellation and withdrawal. On March 18, 2008, the CIR issued a final decision denying Dnata's protest, on the ground that it failed to submit proof/documents necessary for the cancellation and

withdrawal of the FAN within the 60 days reglementary period from the filing of the protest. Dnata then filed a petition for review with the CTA through registered mail. Dnata raised the issue of the BIR's failure to inform them of the need for additional supporting documents. Issue: Whether or not the petition was perfected on time Held: NO Ratio: Dnata filed the petition through registered mail on the next working day after the deadline, which was a Saturday. But it did not pay the docket fees through postal money order; instead, it paid the docket fees on the day the registered mail was received by the Court, or May 5, 2008. While petitioner was deemed to have filed its petition for review on time, it failed to perfect its appeal for non-payment of the corresponding docket and other lawful fees at the same time that it filed its initiatory pleading as required in Sec 1, Rule 42 of the Rules of Civil Procedure. Basic is the rule that docket and other lawful fees must be paid within the period for taking an appeal, and that where the filing of the initiatory pleading is not accompanied by payment of the docket fees, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. The payment of the docket fees within the prescribed period is mandatory for the perfection of the appeal. Without payment, the appellate court does not acquire jurisdiction on the subject matter of the action and the decision sought to be appealed from becomes final and executory. In the case of Villena v Rupisan, the Supreme Court went further to say that the appellate court acquires jurisdiction on the subject matter of the action only upon payment of the correct amount of docket fees regardless of the date of filing of the case. While it is true that petitioner subsequent to the filing of its petition for review paid the required docket and other fees, the same did not cure the defect as the payment was effected beyond the reglementary period for perfecting an appeal. The payment of appellate docket fees is not a mere technicality of law or procedure but an essential requirement for the perfection of an appeal. It is jurisdictional, an issue that may be raised even for the first time on appeal. The lack of it will render the proceedings conducted null and void. The strict application of the jurisdictional nature of the rule on payment of appellate docket fees may be mitigated under exceptional and meritorious circumstances to

better serve the interest of justice. However, there is no showing of any satisfactory reason to justify relaxation of what otherwise should be a stringent application of the rule. For failure to pay the corresponding docket fees on time, petitioner also failed to seasonably perfect its appeal, divesting the CTA of jurisdiction or authority to take cognizance of the instant Petition for Review. As provided in Section 228 of the NIRC, for failure to perfect an appeal on time, the decision rendered by CIR has become final, executory and demandable Sea Lion Fishing Corp v People bles CIR v AsiatrustDevt Bank Facts: Taxpayer filed a Petition for Review before the CTA in Division for failure of the CIR to act on its protest within the prescribed period. Both the CIR and the taxpayer filed Motions for Partial Reconsideration assailing the decision of the Court in Division partially granting the petition. The Court in Division denied the Commissioner of Internal Revenues plea for reconsideration for lack of merit, while it partially granted that of the taxpayer. The Court in Division substantially modified its former decision prompting the taxpayer to file another Motion for Partial Reconsideration of the amended decision which was denied by the Court. The CIR did not file the same motion but instead filed a Petition for Review before the Court of Tax Appeals En Banc. Issue: W/N the appeal may be filed with the CTA en banc. Held: Before an appeal may be filed with the Court of Tax Appeals (CTA) En Banc by aggrieved party, it must be preceded by the filing of a motion for reconsideration or new trial with the Division that rendered the questioned decision. LuzonHydroCorp v CIR

Luzon Hydro Corporation (LHC) v. CIR CTA Case No. 7810 January 6, 2012 Facts: LHC is duly registered as a VAT taxpayer. A Power Purchase Agreement (PPA) with the Napocor was entered into by The Consortium of Northern Mini Hydro Corp.; Ever Electrical Manufacturing Inc.; Aboitiz Equity Ventures Inc; Pacific Hydro Limited. The PPP was for the development of Bakun hydroelectric facilities. LHC filed administrative claim with BIR for refund of its unutilized VAT from June to September 2006 in the amount of P4,151,852.39. CTA 3rd Division: Dismissed the claim for having been filed beyond the 30-day period for claiming refund. Issue: WON the administrative and judicial claim were filed within the reglementary period allowed by law. The administrative claim was filed within the reglementary period of 2 years from the close of the taxable quarter, the judicial claim was filed beyond the period mandated under Section 112 (C). Note: This case only discussed procedural issues as regards the mandatory period for the filing of a motion for reconsideration which is 15 days. When a judgment becomes final and executory, it becomes immutable and unalterable and any amendment or alteration which substantially affects a final and executor judgment, is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. Held: The assailed decision was received by LHC on November 26, 2010 and petitioner had 15 days or until December 11, 2010 to file its Motion for Reconsideration. However, petitioner filed its motion only on December 22, 2010 or nine days after the lapse of the prescribed period. Note: The more detailed discussion is in the 2008 case of CIR v. Mirant.

The claim for refund of creditable Value Added Tax input taxes in the amount of Php4,151,852.39 for the months of June to September 2006 must be strictly construed and petitioner has the burden of proving that the requirements were met or complied with especially the requirement that petitioner's administrative and judicial claims for tax refund was filed within two (2) years after the close of the taxable quarter when the sales were made in accordance with Sections 112 (A) and (D). Take note that the reckoning of the 2-year period for filing/claiming refund or issuance of TCC is from the close of the quarter when such sales were made and compliance with the "120-30 day period" under Section 112 (C) is crucial in filing a judicial claim. When petitioner filed its administrative claim for tax refund on 30 April 2007, respondent had 120 days within which to decide on petitioner's claim for tax refund. And in case of full or partial denial of the claim or failure of respondent to act on the application within the 120 day period, petitioner has 30 days to appeal the decision or inaction with the Court of Tax Appeals. Thus, respondent had to render a decision within 120 days from 30 April 2007 or until 27 August 2007. However, petitioner filed the instant petition for review with the Court of Tax Appeals only on 18 July 2008, almost a year after the lapse of the period allowed by law to file the judicial claim for tax refund with the Court of Tax Appeals. Clearly, the instant petition for review was filed out of time. Under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can be shifted or passed on to the buyer, transferee, or lessee of the goods, properties, or services of the taxpayer. The fact that the subsequent sale or transaction involves a wholly-tax exempt client, resulting in a zero-rated or effectively zero-rated transaction, does not, standing alone, deprive the taxpayer of its right to a refund for any unutilized creditable input VAT, albeit the erroneous, illegal, or wrongful payment angle does not enter the equation. Held: While the administrative claim was filed within the reglementary period of 2 years from the close of the taxable quarter, the judicial claim was filed beyond the period mandated under Section 112 (C) thus, the Court is constrained to DENY the petitioner's claim for refund or issuance of TCC. UnionCementCorp v CIR

CIR v. Mirant Pagbilao Corporation (MPC) 12 September 2008 GR No. 172129 SC Decision:

elie La FlorDelaIsabela v CTA

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Facts: La Flor is a domestic corporation. In 2000 the letter of authority for assessment for taxable year 1999 was issued by the BIR. From 2002 to 2005, La Flor executed five Waivers to extend BIRs period to assess the taxes. The Formal Letter of Demand (FDL) for the tax deficiency was received by La Flor before the expiration of the 5th waiver in 2005. La Flor immediately filed a protest against the FDL. It also filed a supplemental protest less than two weeks after. After 2 years, June 2007, La Flor received a Final Decision on Disputed Assessments (FDDA) indicating its deficiency taxes in the total amount of P10,460,217.23. On October 2007, petitioner filed an application for tax amnesty. Ten days later it also filed an application for compromise agreement pursuant to Section 204 of the Tax Code. La Flor received an undated Warrant of Distraint and/or Levy (WDL) issued by BIR. Issue: WON La Flor can still validly assail the assessment. Held: NO. If a protest is not acted upon by respondent within 180 days from submission of supporting documents, the taxpayer adversely affected by such inaction may appeal to the CTA within 30 days from the lapse of the 180-day period. La Flor should have appealed to the CTA when it did not receive action on its protest immediately. To reiterate, the failure of a taxpayer to file a petition for review with the Court of Tax Appeals within the statutory period rendered the disputed assessment final, executory and demandable, thereby precluding the said taxpayer from interposing the defenses of legality or validity of the assessment and prescription of the Government's right to assess. Indeed, any objection against the assessment should have been pursued following the avenue paved in Section 229 (now Section 228) of the NIRC on protests on assessments of internal revenue taxes. Fax N Parcel v CIR

Notice (FAN), prompting petitioner to file a Protest Letter in July, which the CIR failed to act on, hence this petition for review. Issue: WON the assessment for alleged undeclared income from petitioners unreported sales for the 4th quarter of 2002 based on the BIRs computergenerated Quarterly Report on third party Information on Purchases is valid Held: No. When served with subpoena duces tecum and ad tesfificandum, 11 of the 15 alleged purchasers of petitioner, through their duly authorized officers or representatives, either controverted or denied respondents allegations. The quarterly report of the BIR also showed considerable discrepancies. As admitted by the respondents own witness, the summary lists of purchases received by the BIR were not verified with other externally sourced data to check the integrity of the information gathered. The Integrated Tax System of the BIR can only check or validate the format and possible viruses in the computer program, not the content or substance of the encoded summary lists of purchases. While assessments have the presumption of correctness and regularity in its favor, it is also equally true that assessments should not be based on mere presumptions, no matter how reasonable or logical the presumption might be (citing CIR v. Hantex Trading, March 31, 2005). Assessments lack sufficiency in evidence when it is based on the BIRs computer-generated third party information which was not verified with other externally sourced data; esp. when third parties controvert the allegations. Finally, imputation of fraud against petitioner adding 50% surcharge to its alleged income and VAT liabilities is erroneous since the claimed fraudulent intent was merely deduced from the fact that there was an under-declaration of sales/income for the 4thquarter of 2002, which respondent failed to establish. Fraud cannot be presumed but must be proved. Dispositive: petition granted

Fax N Parcel v CIR (Nov. 22, 2011) Facts: Fax N Parcel is contesting the assessments issued by the CIR for deficiency income tax and VAT for the 4th quarter of 2002. In March 2005, the CIR had issued against petitioner a Preliminary Assessment Notice (PAN), with attached details of discrepancies for unreported income from understatement of sales during the 4th quarter of 2002. In April, the CIR issued a Formal Assessment

Hermano (San) Miguel .... VS CIR

Hermano (San Miguel) vs. CIR (C.T.A. CASE NO. 8194 January 9, 2012) Hermano is seeking the cancellation of Final Assessment Notice (FAN) issued by the BIR for VAT deficiency amounting to P2,607,933.07, arising from its

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sale of pharmacy items to its in-patients, in line with its rendering of hospital services. 1. 2. Ruling: Hermano grounds are: The FAN is void for they merely showed a mathematical computation of petitioner's tax liability without stating the factual and legal bases of the same CIR failed to take into consideration that its sales of pharmacy items to its in-patients are exempt from VAT pursuant to Section 109(L).

Laurence Lee v LuangvsSixtoEsquivias Petitioner owned a Unioil gas station. He sent a letter dated June 21, 2005 to the BIR to inform said office that his business operations would cease by the middle of the year 2005 and that taxes were to be incurred only up to June 30, 2005. Said letter was also meant to inform the BIR of the cessation of reportorial requirements that must be complied with by the taxpayer pursuant to the operation of a business entity. Petitioner filed his second (2nd) quarter VAT return on July 26, 2005. Petitioner received a copy of a Formal Letter of Demand and a FAN on November 5, 2008 for alleged deficiency VAT, deficiency income tax, and compromise penalties for the year 2005 amounting to P 7.7M. Petitioner filed a Protest to the FAN, but there was no response from the CIR. Petitioner thus filed a Petition for Review before the CTA, claiming that after the issuance of the Letter Notice (LN) dated April 30, 2007, there is no evidence that a Preliminary Assessment Notice (PAN) was served upon petitioner pursuant to RR No. 12-99 and as such, petitioner believes that the deficiency VAT and income tax assessments issued against him must be considered void for being violative of the due process. On the other hand, respondent argues that the absence of a PAN may not invalidate the assessment, and that what is essential is that petitioner was able to file his protest to the FAN/Formal Letter of Demand within thirty (30) days from receipt of the same. W/N the absence of a Preliminary Assessment Notice violates invalidates an assessment. HELD: YES. Section 228 of the Tax Code requires that the taxpayer must first be informed that he is liable for deficiency taxes through the sending of a PAN. He must be informed of the facts and the law upon which the assessment is made. The law imposes a substantive, not merely a formal, requirement. The sending of a PAN to taxpayer to inform him of the assessment made is but part of the 'due process requirement in the issuance of a deficiency tax assessment,' the absence of which renders nugatory any assessment made by the tax authorities. The use of the word 'shall' in subsection 3.1.2 of Revenue Regulations 12-99 describes the mandatory nature of the service of a PAN. The persuasiveness of the right to due process reaches both substantial and procedural rights and the failure of the CIR to strictly comply with the requirements laid down by law and its own rules is a denial of petitioner's right to due process. Cargill Phils v CIR Facts:

3. FAN is not void based in the first ground.

Section 228 provides that in the assessment, The taxpayers shall be informed in writing of the law and the facts on which the assessment is made; otherwise, the assessment shall be void to ensure that taxpayers are duly apprised of the basis of the tax assessments against them. Here, in the "Details of Discrepancies", attached to the assessment, the details contained therein showed that the factual basis for assessing petitioner for deficiency VAT was the discrepancy from RELIEF and Third-Party Matching. In a long line of cases, the SC has ruled that the requirement of the law to inform the taxpayer of the basis of the assessment does not necessarily mean that it be a full narration of the facts and laws on which the assessment is based. Here, Hermano was able to intelligently make its protest by stating that its sales of pharmaceutical items in favor of its in-patients are exempt from VAT. This circumstance proves that petitioner was sufficiently informed of the facts and the law as to why the assessment has been issued against it.

4. However, the assessment of VAT deficiency was incorrect.

As held in Perpetual Succour Hospital vs. CIR and St. Luke's Medical Center v. CTA & CIR, hospital services includes not only the services of the doctors, nurses and allied medical personnel, but also the necessary laboratory services, and making available the medicines, drugs and pharmaceutical items that are necessary in the diagnosis, treatment and care of patients. Sale of drugs or pharmaceutical items to inpatients of the hospital are, therefore, considered part of the hospital services covered by Section 109 (/)of theNIRC of 1997, as amended.

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In Sept 9, 2008, Cargill received a Preliminary Assessment Notice (PAN) assessing deficiency VAT and compromise penalty for the period covering Sept 2005 to Aug 2005. Soon after, Cargill also received a Final Assessment Notice (FAN) together with an Audit Result / Assessment Notice. It was found liable of VAT in the amount of Php5.4M++. Cargill filed a protest but the same was not acted upon. Thus, it filed a Petition for Review with the CTA. Cargill argues that it was denied due process and that the assessment period has lapsed. In its answer, the CIR said that Cargill the assessment was proper because it failed to respond to the PAN with the 15-day allowable period. Ruling of the CTA: 1. The CIR has substantially complied with the requirements of due process because Cargill was given the opportunity to refute the PAN and was able to exercise its option to protest the FAN. 2. However, the period to assess has prescribed assessments should be served to the taxpayer within a three-years period counted from the day the return was filed. Therefore, the assessments served on Sept 9, 2008 for the periods of Sept 2004 to May 2005 is barred by prescription. (See table below)

RCBC v CIR maybel Edison Cogeneration Corp v CIR neil International Exchange Bank v CIR Petitioner, a banking institution duly organized and existing under the laws of the Philippines, was on April 13, 1999 served Letter of Authority by the Commissioner of Internal Revenue directing the examination by a "Special Team created pursuant to RSO 797-98" of petitioners books of accounts and other accounting records for the year 1997 and "unverified prior years." An examination of said documents was in fact conducted.

Petitioner subsequently received on November 16, 1999 a "Notice to Taxpayer" from the Assistant Commissioner, Enforcement Service of the Bureau of Internal Revenue, notifying it of the results of the examination conducted by the Special Team regarding its tax liabilities, which amounted to P465,158,118.31 for 1996 and P17,033,311,974.23 for 1997, and requesting it to appear for an informal conference to present its side. On January 6, 2000, petitioner was personally served with an undated Pre-Assessment Notice (PAN) assessing it of deficiency on its purchases of securities from the Bangko Sentral ng Pilipinas or Government Securities Purchased-Reverse Repurchase Agreement (RRPA) and its FSD for the taxable years 1996 and 1997. On January 12, 2000, petitioner received a Formal Assessment Notice (FAN) for deficiency DST on its RRPA and FSD, including surcharges, in the amounts of P25,180,492.15 for 1996 and P75,383,751.55 for 1997, and an accompanying demand letter requesting payment thereof within 30 days. Acting on the FAN, petitioner filed on February 11, 2000 a protest letter alleging that the assessments should be reconsidered on the grounds that: (1) the assessments are null and void for having been issued without any authority and due process, and were made beyond the prescribed period for making assessments; (2) there is no law imposing DST on RRPA, and assuming that DST was payable, it is the Bangko Sentral ng Pilipinas which is liable therefor; (3) there is no law imposing DST on its FSD; and (4) assuming the deficiency assessments for DST were proper, the imposition of surcharges was patently without legal authority. Petitioner argued that its FSD is not subject to DST since it was not one of the documents enumerated either under the 1977 Tax Code (Tax Code) or the 1997 National Internal Revenue Code (NIRC). Respondent on the other hand argued that petitioner should be liable not only for DST on its FSD but also on its RRPA. The First Division of the CTA and the CTA En Banc upheld the propriety of the DST. ISSUE: WON a Savings Account-Fixed Savings Deposit (FSD) evidenced by a passbook issued by petitioner subject to documentary stamp tax (DST) for the years 1996 and 1997 HELD: NO RATIO: The applicable provision is Section 180 of the Tax Code, as amended by R.A. 7660, which reads: Sec. 180. Stamp tax on all loan agreements, promissory notes, bills of exchange, drafts, instruments and securities issued by the government

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or any of its instrumentalities, certificates of deposit bearing interest and others not payable on sight or demand. - On all loan agreements signed abroad wherein the object of the contract is located or used in the Philippines; bills of exchange (between points within the Philippines), drafts, instruments and securities issued by the Government or any of its instrumentalities or certificates of deposits drawing interest,or orders for the payment of any sum of money otherwise than at sight or on demand, or on all promissory notes, whether negotiable or nonnegotiable, except bank notes issued for circulation, and on each renewal of any such note, there shall be collected a documentary stamp tax of Thirty centavos (P0.30) on each two hundred pesos, or fractional part thereof, of the face value of any such agreement, bill of exchange, draft, certificate of deposit, or note: Provided, That only one documentary stamp tax shall be imposed on either loan agreement, or promissory notes issued to secure such loan, whichever will yield a higher tax: Provided, however, That loan agreements or promissory notes the aggregate of which does not exceed Two hundred fifty thousand pesos (P250,000) executed by an individual for his purchase on installment for his personal use or that of his family and not for business, resale, barter or hire of a house, lot, motor vehicle, appliance or furniture shall be exempt from the payment of the documentary stamp tax provided under this section. As correctly found by the CTA En Banc, a passbook representing an interest earning deposit account issued by a bank qualifies as a certificate of deposit drawing interest. A document to be deemed a certificate of deposit requires no specific form as long as there is some written memorandum that the bank accepted a deposit of a sum of money from a depositor. What is important and controlling is the nature or meaning conveyed by the passbook and not the particular label or nomenclature attached to it, inasmuch as substance, not form, is paramount. Contrary to petitioners claim, not all certificates of deposit are negotiable. A certificate of deposit may or may not be negotiable as gathered from the use of the conjunction or, instead of and, in its definition. A certificate of deposit may be payable to the depositor, to the order of the depositor, or to some other person or his order. In any event, the negotiable character of any and all documents under Section 180 is immaterial for purposes of imposing DST. Orders for the payment of sum of money payable at sight or on demand are of course explicitly exempted from the payment of DST. Thus, a regular savings account with a passbook which is withdrawable at any

time is not subject to DST, unlike a time deposit which is payable on a fixed maturity date. As for petitioners argument that its FSD is similar to a regular savings deposit because it is evidenced by a passbook, and that based on the legislative deliberations on the bill which was to become R.A. 9243 which amended Section 180 of the NIRC (which is to a large extent the same as Section 180 of the Tax Code, as amended by R.A. 7660), Congress admitted that deposits evidenced by passbooks which have features akin to time deposits are not subject to DST, the same does not lie. The FSD, like a time deposit, provides for a higher interest rate when the deposit is not withdrawn within the required fixed period; otherwise, it earns interest pertaining to a regular savings deposit. Having a fixed term and the reduction of interest rates in case of pre-termination are essential features of a time deposit. People v Katherine M Lim

tope People v Gloria Kintanar Aneka

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