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SUMMARY OF SIGNIFICANT CTA DECISIONS (July 2011)

1.
Petition for review filed with the CTA beyond 30 days from the end of 180 days
is considered filed out of time.
On July 24, 2008, taxpayer filed an administrative protest against the assessment of the BIR.
On March 11, 2009, taxpayer filed its Petition for Review before the Court of Tax Appeals.
Citing Section 228 of the Tax Code, the Court ruled that the Petition for Review was not
timely filed. In accordance with said section, the BIR had 180 days from the filing of the
protest or until July 22, 2008 to act on the protest. After the expiration of the 180-day period
but without action on the protest, the taxpayer had 30 days or until August 21, 2008 to assail
the non-determination of its protest. Thus, the Petition for Review filed on March 11, 2009
was filed way beyond the reglementary period to appeal. (Philippine Amusement and
Gaming Corporation vs. The Bureau of Internal Revenue, CTA Case No. 7880, July 06,
2011)

2.
Petition for review (refund of input tax) filed with the CTA is premature if made
before the lapse of 120 days from the filing of the administrative claim.
Taxpayer filed the administrative claim with the BIR on June 26, 2007 for the refund of input
taxes for the 2nd quarter of 2005 until the 1st quarter of taxable year 2007. Taxpayer then
filed its petition for review with the Court of Tax Appeals (CTA) on July 24, 2007. The CTA
ruled that from June 26, 2007, the Commissioner had 120 days or until October 24, 2007
within which to decide the administrative claim. Within 30 days from the lapse of the 120-day
period, or until November 23, 2007, the taxpayer may elevate its claim for refund with the
Court of Tax Appeals. However, since the judicial claim was filed on July 24, 2007 or barely
28 days after it filed its administrative claim, the judicial claim was prematurely filed.
(Institutional Shareholder Services, Inc. Philippine ROHQ vs. Commissioner of
Internal Revenue, C.T.A. EB No. 700, July 08, 20111)

3.
Filing of a petition for review beyond the 150-day period from the filing of
administrative claim for refund of input tax would result in the denial of the claim.

The same decision was made in UCPB Properties, Inc. vs. Commissioner of Internal Revenue, C.T.A. EB No.
645, July 18, 2011 (Note that in this case, the Court said that the premature filing rendered the Court without
jurisdiction); Commissioner of Internal Revenue vs. CBK Power Company Limited, CTA EB Case No. 639, July 20,
2011 ( Note that in these 2 cases, Justices Acosta and Victorino issued concurring and dissenting opinion this
is only violation of exhaustion of administrative remedies which is not jurisdictional which can be waived.
Likewise, Justice Bautista issued his dissenting opinion based on his usual position that the 120-day period is
not mandatory)

Taxpayer filed its VAT return for the 3rd quarter of 2003 on October 27, 2003 and filed its 4th
quarterly VAT return on January 26, 2004. On December 23, 2004, taxpayer filed an
administrative claim for refund of unutilized input VAT for the 4 quarters of 2003. It then filed
a Petition for Review on October 26, 2005 for the 3rd quarter of 2003 and subsequently filed
a second Petition for Review on January 18, 2006 for the 4th quarter of 2003. As ruled by the
Court, the Commissioner had 120 days from the filing of the administrative claims on
December 23, 2004 or until April 22, 2005. Thereafter, taxpayer had 30 days or until May 22,
2005 to file its judicial claim. Having filed the claim before the Court on October 26, 2005 for
the 3rd quarter and on January 18, 2006 for the 4th quarter, both were filed beyond the 30day period and the Court no longer had jurisdiction to entertain the claims. (Toledo Power
Company vs. Commissioner of Internal Revenue, CTA EB Case No. 590, July 7, 20112)

4.
In a claim for refund for excess withholding tax, taxpayer need not present tax
return of the subsequent year.
Taxpayer filed a claim for refund of unused creditable withholding taxes for the year 2003. It
is the contention of the BIR that the taxpayer is not entitled to the refund of its excess
creditable withholding tax because it failed to prove that it did not carry-over and apply its
2003 excess tax credits against its quarterly income tax liabilities for the succeeding years.
The BIR alleged that the taxpayers failure to formally offer in evidence its quarterly income
tax returns for the taxable year 2004 is fatal to its claim. In ruling against the contention of
the BIR, the Court ruled that the presentation of the quarterly income tax returns of the
subsequent year is not a legal requisite for the claim for refund of excess creditable
withholding tax credits. Nowhere in the law or in its implementing regulations is it indicated
that the presentation of quarterly tax returns of the succeeding taxable years is a requisite to
establish the entitlement to the refund of excess creditable withholding tax credits.
(Commissioner of Internal Revenue vs. Philippine National Bank, CTA EB Case No.
577, July 13, 2011)

5.
Docket and other lawful fees must be paid within the period for taking an
appeal.
On March 27, 2008, taxpayer received final decision of the Commissioner denying its protest
on the assessment issued by the Commissioner. Taxpayer then filed its Petition for Review
via registered mail on April 2008, 2008. The Court received its copy of the registered mail on
May 5, 2008 and on the same date, the taxpayer paid the docket fees and other lawful fees.
The Court ruled that the taxpayer had 30 days from receipt of the denial of its protest within
which to appeal to the CTA, or until April 28, 2008. The 30-day period within which to appeal
is jurisdictional and failure to comply bars the appeal and deprives the Court of jurisdiction to
entertain the correctness of the assailed assessment. The filing of appeal and the payment
of the docket and other lawful fees on time must concur as they are twin requirements for the
2

The same decision was made in Toledo Power Company vs. Commissioner of Internal Revenue, CTA EB
No.708, July 07, 2011; Telus International Phil., Inc. vs. Commissioner of Internal Revenue, CTA Case Nos. 7745,
7797 & 7834, July 08, 2011

Court to acquire competence to rule on the case. Where the filing of the initiatory pleading is
not accompanied by payment of the docket fee, the Court may allow the payment of the fee
within a reasonable time but in no case beyond the applicable reglementary period. Since
the taxpayer filed the Petition for Review on the last day for filing the initiatory pleading, it
should have also paid the docket fees on the same date. But it waited until the pleading
reached the Court on May 5, 2008. In the meantime, the period to perfect an appeal had
already lapsed. (DNATA, Inc. vs. Commissioner of Internal Revenue, CTA Case No.
7780, July 18, 2011)

6.
An assessment notice issued before the lapse of the period given to the
taxpayer to respond to the preliminary assessment notice is not defective.
Taxpayer received the preliminary assessment notice (PAN) on January 28, 2003, giving it
15 days from receipt within which to comment. On February 5, 2003, or 8 days after the
service of the PAN, taxpayer received formal letter of demand and assessment notice.
Taxpayer questioned the validity of the assessment on the ground that it was issued before
the lapse of the period given to the taxpayer to comment on the PAN. The Court ruled
against the contention of the taxpayer. The Court said that protest against a PAN, unlike the
protest against the FAN, is not indispensable. In fact, a PAN may or may not even be
protested by the taxpayer and the fact of non-protest shall not in any way make the
preliminary assessment notice final and unappealable. (Keppel Fels Energy, Inc. vs.
Commissioner of Internal Revenue, CTA Case No. 6826, July 21, 2011 Note that in this
case, the assessment was cancelled on some other grounds)

7.
A taxpayer with pending case before the DOJ and not with the Court when he
availed of the amnesty under RA 9480 was not exempted from the coverage of said
amnesty law.
The accused availed of the amnesty law by filing Notice of Availment of Amnesty and other
documents on February 21, 2008, while her case was pending with the Department of
Justice for investigation. She then argued that she is immuned from any prosecution,
whether civil or criminal, or administrative arising from failure to pay internal revenue taxes.
The prosecution argued that notwithstanding her availment of the amnesty, her criminal
liability had not been extinguished considering that the Rules and Regulations to implement
R.A. 9480 specifically disqualified persons with criminal cases pending before the Courts or
DOJ from enjoying the immunities and privileges provided by law. The Court ruled that the
law is clear only those with pending criminal cases for tax evasion and other criminal
offenses are precluded from availing the tax amnesty. There was yet no criminal case to
speak of when she availed of the amnesty as she was merely a respondent in a criminal
complaint filed against her before the DOJ. She was not yet subject of any indictment to
preclude her from enjoying the benefit of the law. (People of the Philippines vs. Gloria
Tuyay, CTA Crim. Case No. O-155, July 21, 2011)

8.
The prosecution has the primordial duty not only to prove that a tax is due, but
also to establish that the accused willfully fails to pay the tax due.
A responsible or accountable officer of a corporation may be held criminally liable for the
failure of the corporation to pay the tax due and demandable from it. However, to convict the
employee as the person supposedly responsible for the failure or omission to pay the
required taxes, it must be shown that he did so knowingly, intentionally and with the specific
intent not to pay the said tax liability. He must be aware of the obligation to pay the tax
liability but nevertheless, voluntarily, knowingly and intentionally fails, neglects or refuses to
pay the subject tax liabilities. And to be able to impute knowledge of the corporate obligation
to pay the tax to the employee, there must be a clear showing that he was duly notified of
the assessments properly issued against the corporation. In this case, the prosecution was
not able to prove that the accused employee or any of the corporations authorized
representatives was duly notified of the taxes assessed against the corporation. Thus, there
can be no willful failure to pay tax on the part of the accused. (People of the Philippines vs.
Ruperto P. Rodriguez, C.T.A. Crim. No. O-028, July 12, 2011)