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TAX REVIEWER: LAW OF BASIC TAXATION IN THE PHILIPPINES BY: Benjamin B. Aban JUICY NOTES (PROF.

CABANEIRO) A2011 1
4. To punish for contempt
Chapter 9: COURT TAX APPEALS 5. To prescribe the form of writs and other processes
6. To promulgate rules and regulations for the conduct of its
Law creating the CTA business
Republic Act No. 1125, JUNE 16, 1954
Jurisdiction of the CTA
Why was the CTA created? CTA shall exercise exclusive appellate jurisdiction to review by
1. To have a centralized body well versed in tax matters a regular appeal the following:
court forming part of the judicial system which could exclusively hear 1. Decisions of the Commissioner of Internal Revenue,
and determine tax cases. involving disputed assessments; refunds of internal revenue
2. To prevent delay in the disposition of tax cases in view of the taxes, fees or other charges; penalties imposed in relation
backlog of civil and criminal cases in the regular courts. [Ursal v. thereto; or other matters arising under the NIRC or other
Court of Appeals 101 Phil 209] law or part of law administered by the BIR.
2. Decisions of the Commissioner of Customs in cases involving
Nature of the CTA liability for customs duties, fees or other money charges;
1. It is a judicial and not an administrative body. seizure, detention or release of property affected; fines,
2. It is a court of special jurisdiction, and as such can only take forfeitures, or other penalties imposed in relation thereto; or
cognizance of such matters as are clearly within its jurisdiction. other matters arising under the Customs law or other law or
3. It is not governed strictly by the technical rules of evidence. part of law administered by the Bureau of Customs.
3. Decision of the Sec. of Finance, on an assessment which the
Organization, quorum, and disposition of cases by the CTA Commissioner of Customs decided in favor of the taxpayer.
The CTA is composed of a Presiding Judge and two Associate (Decisions of the Commissioner of Customs which are
Judges, each of whom is appointed by the President form a list of adverse to the government, may be raised on appeal to the
nominees prepared by the Judicial and Bar Council. Such Sec. of Finance, whose decision is appealable to the CTA).
appointments need no confirmation. Jurisdiction over decisions of the Local Board of Assessment Appeals
Any two judges of the CTA shall constitute a quorum and the is now lodged with the Central Board of Assessment Appeals.
concurrence of two judges shall be necessary to promulgate any
decision thereof. [Sec. 1 and 2, RA 1125] Necessity of decisions in order to vest the CTA with jurisdiction
Cases brought before the CTA shall be decided within 30 days after Decisions of either the Commissioner or Internal Revenue or the
the submission thereof for decision, which shall be in writing, stating Commissioner of Customs is of the essence in appeal of cases to the
clearly and distinctly the facts and the law on which they are based, CTA for it is axiomatic in taxation that mere assessments of the
and signed by the judges who concurred therewith. [Sec. 12, RA Commissioner are not appealable to the CTA. It is settled that
1125]. This requirement, however, is merely directory. assessments are not decisions of the Commissioner.
In a case, the Supreme Court held that the word decision in Sec. 7
Powers of the CTA of RA 1125 means decisions of the Commissioner on the protest of
1. To administer oaths the taxpayer against the assessments. Definitely, the word does not
2. To receive evidence signify the assessment itself. [Commissioner v. Villa, Jan. 20,
3. To summon witnesses by subpoena and subpoena duces 1968]
tecum
Chapter 9: COURT OF TAX APPEALS. Page 1 of 3
TAX REVIEWER: LAW OF BASIC TAXATION IN THE PHILIPPINES BY: Benjamin B. Aban JUICY NOTES (PROF. CABANEIRO) A2011 2
Compromise penalties and the CTA Prescription of assessment and action
Compromise Penalties are amounts collected by the BIR in lieu of The defense of prescription of assessment should be raised while the
CRIMINAL PROSECUTION for violations committed by taxpayers, the case is pending with the BIR, whereas, the defense of prescription of
payment of which is based on a compromise agreement validly action may be raised for the first time, even on appeal to the CTA,
entered into between the taxpayer and the Commissioner. but not for the first time in an appeal with the SC.
Collection of compromise penalties comes within the scope of Sec. 7
of RA 1125 which speaks of penalties imposed in relation thereto Who may appeal to the CTA?
and that therefore follows that the CTA has jurisdiction thereon. [US Any person, association or corporation affected by a decision of the
Life Insurance Co. v. Commissioner CTA Case No. 1267 Dec. Commissioner of Internal Revenue or the Collector of Customs.
29, 1964]
Collection case in RTC while appeal is pending in the CTA
What decision is appealable? If the Bureau of Internal Revenue, during the pendency of an appeal
When it constitutes the final action taken by him, or his authorized in the CTA, files a civil action in the RTC, for the collection of the tax
deputies with respect to the taxpayers liability. liability, the taxpayer may file a motion in the RTC for the dismissal
The appealable decision is that letter of denial where the of the case on the ground that there is no basis for collecting the tax
Commissioner not only demanded payment of the tax but wherein due where the assessment thereof is still under dispute in the CTA.
he also gave the warning that in the event that the taxpayer fails to
pay the same, the Commissioner would be constrained to enforce Tax collection not suspended during appeal
the collection thereof by means of the remedies prescribed by law. An appeal to the CTA from a decision of the Commissioner shall not
[Surigao Electric Co. v. Commissioner 85 SCRA 547] suspend the collection of the payment or collection of the tax liability
However, the filing of a judicial action for collection, i.e., criminal of the taxpayer, unless a motion to the effect, shall have been
and civil action during the pendency of an administrative protest, presented to the CTA and granted by it on the ground that such
constitutes a denial of the protest. [Commissioner v. Union collection jeopardizes the interest of the government and/or the
Shipping ]. In such a situation, the taxpayer may file an appeal taxpayer.
with the Court of Tax Appeals.
No injunction to restrain tax collection
Whose decisions are appealable?? General rule: No court shall have the authority to grant an injunction
Decisions of the Commissioner of Internal Revenue are by statutory to restrain the collection of any national internal revenue tax, fee or
provision appealable to the CTA, but it appears that under Rev. REg. charge imposed by the NIRC, [Sec. 218, NIRC].
12-85, decisions of the Regional Director of a revenue region of the Exception: CTA may suspend or restrain the collection of the tax
BIR is also appealable. when, in its opinion, the collection of the tax may jeopardize the
There is a court ruling to the effect that the decisions of a Regional interest of the government and/or the taxpayer, [Sec. 11, RA1125]
Director may be appealable to the CTA, [Fortalez, Jr. v. Collector,
Resolution, CTA Case no. 1257, Dec. 22, 1964]
Appeals on customs cases seem to be limited only to decisions of the
Commissioner of Customs

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TAX REVIEWER: LAW OF BASIC TAXATION IN THE PHILIPPINES BY: Benjamin B. Aban JUICY NOTES (PROF. CABANEIRO) A2011 3
Requisites for injunction Appeals period is fifteen (15) days from receipt of the decisions or
1. That the collection of the tax may jeopardize the interest of the judgment. The Court of Appeals may grant an additional period of
government and/or the taxpayer. fifteen (15) days only within which to file the petition for review. No
2. That the taxpayer is willing to deposit the amount equal to the taxes further extension shall be granted except for the most compelling
assessed or to a bond amounting to not more than twice the value reasons and in no case to exceed fifteen (15) days. [Section 4, Rule
of the tax being assessed. 43, Rules of Court]
3. That the CTA may issue an injunction only in the exercise of its
appellate jurisdiction. Ancillary Jurisdiction of the CTA
The ancillary jurisdiction of the CTA such as the power to issue writs
The thirty-day prescriptive period of appeal of prohibition and injunction is only SUPPLEMENTARY to its appellate
The thirty-day prescriptive period starts to run from the date the jurisdiction. The power to issue writs exists only in cases appealed to
taxpayer receives the appealable decision of the Commissioner. it. There has to be a main action first pending before it.
The 30 day period is jurisdictional. The failure of the taxpayer to
appeal from a decision of the Commissioner on time renders the When decision of the CTA is adverse to the Government
assessment final, executory and demandable. The Solicitor General, being the chief legal officer of the
Requests or motions filed by the taxpayer with the BIR for the government, is aptly the officer who should appeal to the CA or SC.
reconsideration of the Commissioners decision operate to suspend
the running of the 30 day prescriptive period. Findings of fact of CTA not reviewable
However, mere reiterations of previous petitions for reconsideration Findings of fact of the CTA, when supported by substantial evidence,
do not suspend the running of the prescriptive period. Pro forma is final.
motions, which do not raise new issues, will not suspend the period.
Damages in CTA proceedings
Remedy if taxpayer fails to appeal within the 30 day period Section 16 of RA 1125 provides that where an appeal is found to be
None. Failure to appeal renders the assessment FINAL and frivolous or that proceedings have been instituted merely for delay,
EXECUTORY since the period to appeal is jurisdictional and non- the CTA may assess damages against the appellant in an amount
extendible . not exceeding P500 which shall be collected in the same manner as
fine or other penalties authorized by law.
Interlocutory orders
Interlocutory orders of the CTA are not appealable. Other Matters:
The tax court has no advisory jurisdiction. Hence, advisory opinions such as
Appeal from decisions of the CTA those relating to actions for declaratory relief are outside its jurisdiction. It
One motion for reconsideration may be allowed for decisions of the does NOT have criminal jurisdiction either.
CTA.
Pro Forma Request for Reconsideration one that is submitted only
for purposes of delay and will NOT interrupt the running of the
prescriptive period.
Decisions of the CTA are appealed to the Court of Appeals through a
verified petition for review. [Sections 1 and 5, Rule 43, Rules of
Court]
Chapter 9: COURT OF TAX APPEALS. Page 3 of 3