RUEL E. ORDUNA, DOING BUSINESS UNDER THE NAME AND STYLE, GRUPO ENTABLADO STAGE BUILDERS v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC RUEL E. ORDuNA, doing CTA EB NO. 2669 business under the name and (CTA Case No. 9619) style, GRUPO ENTABLADO Present: STAGE BUILDERS, Petitioner, DEL ROSARIO, P.J ., RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, -versus- REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, OCT 10 202~ Respondent. }(- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DECISION ANGELES, J.: Before the Court En Bane is a Petition for Review1 seeking the reversal of the Decision and Resolution, dated March 16, 2021 and May 2 5, 2022, respectively, which dismissed CTA Case No. 9619 for lack of jurisdiction; and, praying for the cancellation and setting aside of the assessments and Warrant of Distraint and/ or Levy (WDL), for ta}(able year 2012. FACTS The CTA 3 rd Division narrated the facts, as follows : Petitioner is formerly doing business under the name and style of Grupo Entablado Stage Builders, duly registered with the Bureau of Internal Revenue (BIR) since 1997 under TIN 131-971- 938-ooo, and with the Department of Trade and Industry until the cancellation of the said Business Name on September 5, 2016; and � EB Docket, pp. 25-37.

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) with principal address at No. 40 M.H. Del Pilar, Pinagbuhatan, Pasig City, Philippines. Respondent is the Commissioner of Internal Revenue (CIR), who is the head of the government agency officially responsible for the assessment and collection of all national internal revenue taxes, fees and charges and the enforcement of all forfeitures, penalties and fines connected with such taxes. On October 31, 2013, BIR Revenue Region No. 7 (RR 7), Revenue District No. 43B-West Pasig issued Letter of Authority No. 43B-2013-00000702 dated October 31, 2013, authorizing Revenue Officer (RO) Genaro Guevarra and Group Supervisor (GS) Onofre De Guzman to examine petitioner's books of accounts and other accounting records for all internal revenue taxes including documentary stamp tax (DST) and other taxes for the period January 1, 2012 to December 31, 2012. On December 21, 2015, respondent through Regional Director (RD) Alfredo V. Misajon of RR 7 issued the Preliminary Assessment Notice (PAN) with Details of Discrepancies on December 17, 2015, assessing petitioner for deficiency income tax, value-added tax (VAT) and expanded withholding tax (EWT), including increments forTY 2012 in the aggregate amount of P10,844,379.91. On January 11, 2016, respondent through RD Alfredo V. Misajon, issued the Formal Letter of Demand (FLD) with Assessment Notices (FAN) and Details of Discrepancies, assessing petitioner for deficiency income tax, VAT and EWT including increments forTY 2012 in the aggregate amount of P10,962,817-48, broken down as follows: Tax Type Total Income Tax p 9,274,250.88 Value-Added Tax Expanded Withholding Tax 1,244.768.52 443.798.08 p 10,962,814�48 On June 1, 2016, respondent through Chief of Collection Division, Alice S.A. Gonzales, issued the Final Notice Before Seizure (FNBS) against petitioner requesting the settlement of the following tax liabilities: Assessment# Basic Tax Due Interest Total I 043B-B073-12 IT p 5,924,223.96 P3,350,026.92 P9,274,250.88 043B-B073-12 vr 773.477-20 471,291.32 1,244.768.52 043B-B073-12 WE 274,832.54 !68,965.54 443,798.08 TOTAL P10,962,817,48 On August 10, 2016, petitioner filed a Reply Letter dated August 10, 2016, stating that he is not aware of any tax liability or tax audit for TY 2012; and denying the receipt of the Assessment/Demand Letter indicated in the FNBS. f

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) On November 7, 2016, respondent through Chief of Collection Division, Alice S.A. Gonzales, issued the subject WDL No. RR7-2016- 10-24-895 in view of petitioner's alleged failure and refusal to pay the subject deficiency taxes forTY 2012. On November 8, 2016, petitioner filed a Letter Reply, appealing for the immediate lifting and withdrawal of the WDL and reiterating that he did not receive the assessment notice covering deficiency taxes forTY 2012. 2 (citations omitted) On June 21, 2017, petitioner filed his Petition for Review (original Petition) with the CTA Division, which was subsequently docketed as CTA Case No. 9619, praying that the WDL and the assessments for taxable year 2012, in the amount ofPhp 10,962,817-48, be lifted and set aside. After trial, the CTA 3rct Division rendered the assailed Decision on March 16, 2021, as follows: WHEREFORE, in light ofthe foregoing considerations, the instant Petition for Review is hereby DISMISSED for lack of jurisdiction. SO ORDERED,3 The CTA 3rd Division found that petitioner failed to timely file an appeal of the WDL to CTA, thus, it did not acquire jurisdiction over the case. Petitioner's Motion for Reconsideration (Re: Decision promulgated on 16 March 2021) was denied for lack of merit in the Resolution dated May 25, 2022.4 Still aggrieved, petitioner filed the instant Petition for Review (instant Petition) on August 31, 2022, praying for the reversal of the Decision and Resolution of the CTA Division in CTA Case No. 9619; for the cancellation of the assessments against petitioner under Assessment/Demand Letter 043B-B073-12; and, for the lifting and cancellation ofthe WDL issued against petitioner. 2 Division Decision, dated March 16, 2021, EB Docket, pp. 51-53. ' Division Decision, Dated March 16, 2021, EB Docket, p. 62. 4 EB Docket, pp. 65-68.

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) Despite notice, s respondent failed to file a comment on the instant Petition. 6 The case was referred to mediation, 7 which was unsuccessful. s On November 7, 2023, the case was submitted for decision.9 ISSUES Petitioner submits that: THE HONORABLE THIRD DIVISION GRAVELY ERRED IN RULING THAT THE INSTANT PETITION FOR REVIEW OF THE PETITIONER WAS FILED OUT OF TIME, AND CONSEQUENTLY IT HAS NO JURISDICTION TO ENTERTAIN THE SAME.10 Petitioner states that the CTA Division erred in dismissing the case for lack of jurisdiction. Petitioner cites Manuel B. Palaganas v. Commissioner ofInternal Revenue" (Palaganas case) to argue that the pivotal issue to be resolved is whether petitioner received the assessment notices because if not, a void assessment bears no valid fruit. Petitioner reiterates that, similar to the Palaganas case, he did not receive any assessment or demand letter prior to the Final Notice Before Seizure (FNBS). Thus, there was a clear violation of his right to due process and he cannot be made liable for such void assessments. A void assessment bears no valid fruit. RULING OF THE COURT The Court En Bane finds the instant Petition bereft of merit. The instant Petition was timely filed. s EB Docket, pp. 100-101. s Records Verification dated November 4, 2022, EB Docket, p. 102. 'Resolution dated .Januarv 27. 202~. Ell Docket. pp. 104-10~. "Mediator's Report dated November 6, 2023, EB Docket, unpaginated. 9 Resolution dated November 7, 2023, EB Docket, pp. 116-117. w Petition for Review, EB Docket, p. 30. "CTA Case No. 8394, September 17, 2014. r

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) Petitioner received a copy of the assailed Resolution, dated May 25, 2022, on August 1, 2022.'2 Petitioner had fifteen (15) days from such receipt or until August 16, 2022 within which to file a Petition for Review, pursuant to the Revised Rules of the Court of Tax Appeals (RRCTA), Rule 8, Section 3Cb).'3 On August 12, 2022, petitioner filed a Motion for Extension of Time (Re: filing of Petition for Review), 14 praying for an additional fifteen (15) days from August 16, 2022, or until August 31, 2022, to file his Petition for Review. The extension was granted in the Minute Resolution, dated August 12, 2022.15 On August 31, 2022, petitioner timely filed the instant Petition. There is no compelling reason to reverse or modify the findings of the CTA Division. The CTA Division dismissed petitioner's original Petition on the ground of lack of jurisdiction, after finding that petitioner failed to timely file an appeal, or to file an appeal within thirty (30) days from receipt of the WDL. We affirm. The period for appealing to the CTA is set forth in Section 11 of Republic Act No. (RA 1125), as amended by RA 9282, which states: SEC. 11. Who May Appeal; Mode ofAppeal; Effect ofAppeal. -Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA "EB Docket, p. 64. '' Rule 8 Procedure in Civil Cases Sec. 3. Who may appeal; period to file petition. XXX XXX XXX (b) A party adversely affected by a decision or resolution of a Dhision of the Court on a motion for reconsideration or new trial may appeal to the Court by filing before it a petition for review �Nithin fifteen days from receipt of a copy of the questioned decision or resolution. Upon proper motion and the payment of the full amount of the docket and other lawful fees and deposit for costs hefore the expiration of the reglementarv periml herein fixed. the Court may grant an additional period not exceeding fifteen days from the expiration of the original period within which to file the petition for review. "EB Docket, pp. 1-4. '' EB Docket, p. g8.

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A Division of the CTA shall hear the appeal: Provided, however, That with respect to decisions or rulings of the Central Board of Assessment Appeals and the Regional Trial Court in the exercise of its appellate jurisdiction appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear the case en bane. xxx xxx xxx (Emphasis supplied) This is implemented in Section 3, Rule 8 of the Revised Rules of the CTA (RRCTA), which states: RULES PROCEDURE IN CIVIL CASES XXX XXX XXX SEC. 3. Who may appeal; period to file petition. - (a) A party adversely affected by a decision, ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claims for refund of internal revenue taxes, or by a decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secretary of Agriculture, or a Regional Trial Court in the exercise of its original jurisdiction may appeal to the Court by petition for review filed within thirty days after receipt of a copy of such decision or ruling, or expiration of the period fixed by law for the Commissioner of Internal Revenue to act on the disputed assessments. In case of inaction of the Commissioner of Internal Revenue on claims for refund of internal revenue taxes erroneously or illegally collected, the taxpayer must file a petition for review within the two-year period prescribed by law from payment or collection of the taxes. (Emphasis supplied) Thus, a taxpayer has thirty (30) days after receipt of a decision or ruling on disputed assessments within which to file an appeal with the CTA. The question that remains is whether the WDL is a subject matter that is within the jurisdiction of the CTA.

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) In Section 7(a)(1) of RA 1125, as amended, the CTA's jurisdiction is partly stated, as follows: SEC. 7. Jurisdiction. -The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (Emphasis supplied) The same is also stated in Section 3(a)(1), Rule 4 ofthe RRCTA: SEC. 3. Cases within the jurisdiction of the Court in Division.- The Court in Division shall exercise: (a) Exclusive original over or appellate jurisdiction to review by appeal the following: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (Emphasis supplied) Based on the foregoing, the jurisdiction of the CTA is not limited to decisions of the CIR involving disputed assessments, but also includes "other matters" arising under the NIRC or other laws administered by the BIR.16 In Philippine Journalists, Inc. v. Commissioner of Internal Revenue,17 the Supreme Court held that the appellate jurisdiction of the CTA encompasses the determination of whether the WDL issued by the BIR is valid, to wit: The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the Commissioner of Internal Revenue on matters relating to assessments or refunds. The second part ofthe provision covers other cases that arise out of the NIRC or related laws administered by the Bureau of Internal Revenue. The wording of the provision is clear and simple. It gives the CTA the jurisdiction to determine if the warrant of '6 Division Decision, EB Docket, p. 59. "G.R. 1\'o. 162852, December 16, 2004.

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619} distraint and levy issued by the BIR is valid and to rule if the Waiver of Statute of Limitations was validly effected. (Emphasis supplied) Thus, petitioner could appeal the WDL to the CTA, and the CTA has jurisdiction over such matter, subject to the timely filing of a petition for review, pursuant to Sec. 11 of RA 1125, as amended, and Section 3(a), Rule 8 of the RRCTA, both earlier quoted. Unfortunately, petitioner failed to timely file his original Petition with the CTA Division. The WDL in this case was served to petitioner on November 7, 2016.18 Petitioner had thirty (30) days therefrom or until December 7, 2016, to appeal to the CTA. However, petitioner filed the original Petition with the CTA Division only on June 21, 2017, or more than seven (7) months after his receipt ofthe subject WDL. Thus, the original Petition was clearly filed out of time. As petitioner failed to offer a plausible explanation or justifiable reason for its extreme delay in taking the proper action against the WDL, the Court En Bane finds no cogent reason to relax the applicable rules. The Court En Bane likewise finds no merit to petitioner's argument that the Court should apply the Palaganas case where the pivotal issue should be the validity of the assessment. The CTA Division correctly held that CTA decisions do not constitute binding precedents. 19 The WDL constitutes constructive and final denial of a protest, from which the 30-day period to appeal to the CTA should be reckoned. 20 Thus, due to petitioner's failure to timely appeal the WDL with the CTA Division, the CTA Division was bereft of jurisdiction and rightly dismissed the case. As often stated, the right to appeal is not a constitutional right but a mere statutory privilege. As such, anyone who seeks to invoke such privilege must comply with the applicable rules; otherwise, the right to appeal is forfeited. 21 �S Exhibit "P-6", Division Docket, p. 27. 19 Commissioner of Internal Revenue v. San Rnque Pnwer Cnrpnratinn, G. R. Nos. 18748.s. 19611~, and 197156, February 12, 2013. '� Commissioner of Internal Revenue v. South Entertainment Gallery, Inc., G.R. No. 225809, March 17, 2021. "Agravante v. Commission on Elections, eta/., G.R. No. 264029, August 8, 2023.

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) WHEREFORE, the instant Petition for Review is DENIED for lack of merit. The Decision and Resolution, dated March 16, 2021 and May 25, 2022, respectively, in CTA Case No. 9619 are AFFIRMED. SO ORDERED. HENRjlf.ANGELES Associate Justice WE CONCUR: (With due re ect, see � senting Opinion) ROMAN G. DEL ROSARIO Presiding Justice (/Jv,, ~ -7 '-- MA. BELENM. RINGPIS-LIBAN Associate Justice ~� 7. 4-:.a..........e.t--- CATHERINE T. MANAHAN Associate Justice .., PEDRO ~ ~ fr ~~Fat'~ MARIAN IV19F. REYES-FAJXRDO Associate Justice

DECISION CTA EB No. 2669 (C.T.A. Case No. 9619) Page 10 of 10 hu1A .I-fAtbt;;il LMfli[K_vcui-DAVID Associate Justice ORES CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. ROMAN G. DE ROSARIO Presiding Justice

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC RUEL E. ORDUNA, doing CTA EB NO. 2669 business under the name and (CTA Case No. 9619) style, GRUPO ENTABLADO STAGE BUILDERS, Present: Petitioner, -versus- DEL ROSARIO, P.J. , RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. OCT 10. ~ X------------------------------------ DISSENTING OPINION DEL ROSARIO, P.J.: With utmost respect, I submit that, by all means, in every instance and at all times, a void assessment should never be dignified by the Court nor be th~ subject of a lawful execution as in the present case. Government should not be allowed to benefit from a void assessment While there is no denying that petitioner failed to elevate the Warrant of Distraint and/or Levy (WDL) within the reglementary period of appeal to the Court of Tax Appeals (CTA), questions still remain: (i) Will such omission make a patently void assessment upo~

Dissenting Opinion Rue/ E. Orduna, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) which the WDL was issued, valid and enforceable? (ii) Should the Court allow the government to benefit from an assessment that is fraught with fatal infirmities? The disquisition in Rene H. Imperial et a/. vs. Han. Edgar L. Armes, Presiding Judge of Branch 4, Regional Trial Court, 51h Judicial Region, Legazpi City et a/. ("Imperia/'}, 1 on the effect of a void judgment is enlightening: "A void judgment is no judgment at all in legal contemplation. In Canero v. University of the Philippines we held that- x x x A void judgment is not entitled to the respect accorded to a valid judgment, but may be entirely disregarded or declared inoperative by any tribunal in which effect is sought to be given to it. It has no legal or binding effect or efficacy for any purpose or at any place. It cannot affect, impair or create rights. It is not entitled to enforcement and is, ordinarily, no protection to those who seek to enforce. In other words, a void judgment is regarded as a nullity, and the situation is the same as it would be if there was no judgment. x x x XXX Effects of a void judgment XXX Our ruling in Gonzales v. Solid Cement Corporation is more unequivocal. In this case, we found that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction, therefore acting outside the contemplation of law. Hence, even when the period to assail the CA decision had already lapsed, we ruled that it did not become final and immutable. A void judgment never becomes final. xxx" xxx, our ruling in Banco Espafloi-Filipino v. Palanca on the effects of a void judgment has reappeared consistently in jurisprudence touching upon the matter. In this case, we said that a void judgment is 'a lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.' In concrete terms, this means that a void judgment creates no rights and imposes no duties. Any act performed pursuant to it and any claim emanating from it have no legal effect. xxx (Boldfacing and underscoring supplied; citations omitted) Just like in Imperial, a seemingly "final" judgment that is intrinsically void can neither be given the status of finality nor 0'1 1 G.R. Nos. 178842 and 195509, January 30,2017

Dissenting Opinion Rue/ E. Orduiia, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) any binding effect, which scenario is no different from an assessment that is patently void. In lmaginet International, Inc. vs. Commissioner of Internal Revenue2 ("lmaginet"), the CTA ruled that it has no jurisdiction over lmaginet International, Inc.'s (/MI) Petition for Review as the Formal Assessment Notice (FAN) against it became final, executory, and demandable. The Supreme Court, however, overturned the CTA's ruling and held that the CTA is not precluded from taking cognizance of the case as the assessment against IMI was void, viz.: "Here, RO Lopez and GS Carcellar were merely clothed with authority to audit the books and accounts of Imagine! through a MOA that was issued by Teodoro G. Galicia, a revenue district officer of Revenue District Office (ROO) No. 49 - North Makati. The LOA was not amended or modified to include their names. Thus, the authority under which RO Lopez and GS Carcellar continued the audit or investigation was not pursuant to the statutory power of the CIR or his or her duly authorized representative. Considering the foregoing, discussion, the assessment issued against Imagine! is void. In this sense, it cannot be the subject of a lawful execution even if lmaginet filed its protest one day beyond the prescriptive period. This procedural lapse does not preclude this Court from ruling on the substantive issues raised in this case as these go into intrinsic validity of the assessment itself. Similar to a void judgment, a void assessment produces no legal effect and does not attain finality." (Boldfacing supplied) Note that irrespective of whether a protest was made one day late or one year late, the fact remains that the assessment has attained finality. Yet, the Supreme Court in lmaginet emphasized that a void assessment cannot be the subject of a lawful execution. In other words, the Commissioner of Internal Revenue (CIR) may not institute its collection remedies (such as the issuance of a WDL and a Warrant of Garnishment) based on a void assessment. Juxtaposed to the present case, it behooves the Court to first determine whether the assessment issued against petitioner is valid before ruling on the propriety of the issuance of the WDL. 1find that the documents submitted in evidence clearly disclose that the assessment issued by the CIR is null and void. Section 228 of the NIRC of 1997, as amended, provides the procedure in issuing and protesting an assessment: z G. R. No. 263245, November 20. 2023 (Resolution){)ll

Dissenting Opinion Rue/ E. Ordufia, doing business under the name and style, Grupe Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) "SEC. 228. Protesting of Assessment. - XXX XXX XXX 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. Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an assessment based on his findings." (Boldfacing and underscoring supplied) To implement the provisions of Section 228, supra, Section 3.1.3 of RR No. 12-99, as amended by RR No. 18-2013, states: "3.1.3 Formal Letter of Demand and Final Assessment Notice (FLO/FAN). - The Formal Letter of Demand and Final Assessment Notice (FLO/FAN) shall be issued by the Commissioner or his duly authorized representative. The FLO/FAN calling for payment of the taxpayer's deficiency tax or taxes shall state the facts, the law, rules and regulations, or jurisprudence on which the assessment is based; otherwise, the assessment shall be void (see illustration in ANNEX "B" hereof)." (Boldfacing supplied) A formal letter of demand AND an assessment notice are indispensable in the assessment of a taxpayer. The use of the word "shall" in Section 3.1.3 of RR No. 12-99, as amended by RR No. 18-2013, indicates the mandatory nature of the requirement. 3 A close perusal of the Formal Letter of Demand (FLD)4 and Assessment Notices5 reveals that both simply requested petitioner to pay his aforesaid deficiency tax liabilities in a duly authorized agent bank in which he is enrolled using the electronic BIR Payment Form (eBIR Form 0605) within the time as shown in the enclosed assessment notice, viz.: 3 Commissioner of Internal Revenue vs. Enron Subic Power Corporation, G.R. No. 166387, January 19, 2009. 4 Exhibit "R-12", BIR Records, pp. 342 to 343. s Exhibits "R-9", "R-10", and "R-11", BIR Records, pp. 346,345, and 344, respectively~

Dissenting Opinion Rue/ E. Ordufia, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) REPUBLIC OF THE PHILIPPiNES ~ 'r. /I DEPARH..lENT OF FINANCE _ '~- ;-12 BUREAU OF INTERNALII!l~E! l t";17 Revenue Region ~jo 7 . Out?Zon C11y ",._ ::�l'(�>': FORMAL LETTER OF DEM6@ Mr RUEL E. DRDUNA {GRUPO ENTABLADO STAGE BUILDERS) ~-;.., .)�i t...: !-� De� P1!;1r P~r~<lpbuh-1t<.n Sir: ;.::.;;;;.:..; t>: -ch>rmen tn;::1 af;er :f1v.;:st1ga11on rt~ere i12.s b~en i81;~d J:..:e iro111 ytL ueiiC!<;rC)' Income Tax. Value�Added Tox and Expanded Withholding Ta:i: lox P:e taxable year 2012 �o �::1; I. INCOME TAX p 511)-!32 (1:) 'rnd~t�11,!~!d P>V~~5.': i3<:i:r:tiuif 2) p H23.526 DO '. 'n~ir;-�pr:�r:�!c1 ,,~p;,:lS\: iSchedul 3) ;~%:,~':J"M�d t.>pf~il:'lt!S d.re io l�lon�'i'i:tr:m"jmg (Scf.e-iule 4! ::. ~)21 .-E:G ..\5 ;"ijtJ:'itJ !;~t,;il�ie lr t)J:l19 3.17:1 :-(\() J7 lrY.Y l�; T.r~ D:~>� 3.-13/.D.JG 54 18.362.tl~9-C��3 l.�.:~S 1ii"� t>�:rilt~ :Hr<1 P;Jyn�e;rrl::; per ITR'ITS ��c'}n't" ~-1' p.1j"llr?PiS p 18.873.281 .C:j Crr�� lltd~t,; !LJX \",lt!1!li:!d p ;)_il(�.! _.J.;:-1 ~~J r'i)t !' 2 17:.27 TOTAL AMOUNT DUE i 25 9.58.63 \28 '29 90 p 80 !iS ~J>l .:7 ;!(() 92 ~'02J 22-~ J�: 3 350 r:,;;:: JL: p 9,274.250.88 IL VALUE�ADDED J.AX �'- ~..,s::r't:! :~ pt;� : "iiJSI!~3!�:Jn p 52;! 146 91 ::::,-�,._�::.;;s �~;~t:T�15 ;;c� sut�jC:!ed 10 '._I::.T iScht~u!e Si :_.if;J:C:::�r�n'-oG ;;xr.ense i3chedl:le 21 5921 ..106 45 6.J.15 5~3 3ii :.,;:; �.:.:�1 �..'.JI::JI:I;~ S.~i'O:"' p 26.514 1 624~; �>i!J'�ti! T It Otlt~ {I ?:',.'r p 2.072 896 52 ;_.;ss Allr!'/,'B:: Ta~ :::rHJits1Fayrncnts 335.325 ~7 2AD8.222.:~::� lnm:tl<lx on .:urrc:nl ~n:rchases P F.i .:;u:1 :>ly:r.:nts ::.:rr:�ru '�Y \�iilrrt~�,:\:hi'~C T:1x ;( p 1.244}68.52 ,'.<J.,: i:H�':"''' !;�~;.,.I] :0 2'1 �, h:i TOTl\L AMOUNT DUE '(cbJ:/k 1'<'�(1. �.:: r Printed Na,mI e ('.�\, s~ �1gnature TOTAL AMOUNT DUE ,r�. ,, Designation p 443.798.08.. I� Ii it/

Dissenting Opinion Rue/ E. Orduiia, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) ., ,l!t� <!<;1h�''' ~Jt.t-p~, tJJ.�� :�nc; 111�! ,lk�r:-:,:r:n!:ur~vd :li~nt:p:mc:cs e~\i1bliS~l8d rL;:w;J i!�.-� Ul'if~sli:;al�� n :11 Hh~ r�:lw Jl�� ~�. � ,.., �, :�; :Ht'i' \; ANNEX�A �l! :11'" ~r:t\Pt �,:. :� ��r;-~;' �,q, :'�" r;�,FJ>:>!��:i 1:, i!3'f lh: olur~:mw,t,�Jnr:J (ief;�;!en:y :ax l,aiYi:::es !11 aduly authorized agent bank in v:hich you are enrolled using the electronic BlR Payment Form (eBIR Form 0605) ,\�:lh,r ~he T�me as shc.~r' rn :he;::~::�-.~-~-! ,,;,:~"''-:::~� ''CHi.: :.�t::��:;:-:rJs Slit ;r,� ~�rc��:;! c [\1'(111:11\ :r.:m::of ~0 :r::: Cff:":�:? c:: The Regi::'-!'2:1D!reccr ~n-~ Rt�;!�Jr: : 1:���l ,. ;~. :. ;;; ::�� .�:� . ":.._, .- �� ::::.,n~:.l;;:; C;rr~.:Gn C'iY fnr up:i(l\1110 d /0\~' :t;r;r;rds ?.nrj ca:'(i/:llr!t~ :/ :t�ic P�!'"' KIM S. JACINTO�HENARES CcmrnrSS!Or:er ot lnier�tJ! Rf.,':!:'ic:f. By Printed NaMe & Signature c t�r ~ 1: '1�. 1'f Drsigna tion I 1/ t{ Date

Dissenting Opinion Rue/ E. Orduna, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) The enclosed Assessment Notices, however, conspicuously left blank the space provided for that would have indicated the due date within which the tax deficiency should be paid, viz.: Assessment Notice for Income Tax 1708 ASSESSMENT NOTICE 0438�80)3.12 . '.','!��� 131-971-938 I JAN!l\ I 1016 2012 .'� RUEL E. ORDUNA ' (GRUPO ENTABLADO STAGE BUILDERS) No. 40 M.H del Pilar, Pinagbuhatan, Pasig City DETAILS OF ASSESSMENT CHECK KIND OFTAX PARTICULARS AMOUNT GIJ '''" []]t'''IT~�.:J.:r.:, p 5,924,223.96 [ I ] �........ rnt�;~--1-w��-; ~'2"~~,~-,'~C�~=�"t=,0~[1=~%=}----------4-----------------~ []]. FE\11 " 1016 i 3,350,026.92; [I].,.,.. [I] ... ! 9,274,250.88i ' io!v~;:�,_:~~~~~~;:~~~S~~~:;~H~~~T~~;:~,:~~~�~~;-~TA~,~~~1~f~!~~EC~~~~C~E~~~~~ER CUL'!A'"7~GR2ED;~,S~;~(~~~~~~~~;~-~~~~~;~.~~~:;~~~~~ I:;�;~:::.L:: C"\ ~:\ T!"E �>.::F .:.s;:ss�.1Et:: D:'l ~;m;_ 5:~ FLC>CR R~ =7. C:JEZV'~ CiTY ~ IMPORTANT , If YOU DISAGREE WITH THIS ASSESSMENT, FILE YOUR PROTEST IN WRITING IYil!.t:! FACTU.~ ~LEGAL BASES! WITH THE COMMISSIONER OF! i !INTERNAl REVENUE OR WITH THE AUTHORIZED BIR OFfiCIAl WITHIN THIRTY !3')) DAYS FROM RECEIPT HEREOF. OTHERWISE. THE SAME BECOMES FINAL AND! I IUI�IAPPEALASLE PURSUANT TO THE PERTINENT PROVISIOI<S OF THE NATIONAl INTERNAL REVEIIUE CODE OF 1997. AS AMENDED I ii I I s. KIM JACINTO�HENARES I cwJ 2A~LF;R'(!".~ V.;M~rI._,~ION!_ COMMISSIONEROFINTERNALREVENUE ~ I APPROVED _____ ANALYN S. CHU R,';~:.iJWl.C!i�Ltm 'You may fi/! yo~11 prarestin wnting/wrlh !ega/and factual bJm) to th~ Reg.ional Di .� r, 6/h Floor. BIR Buildmg. OtwzonAvenue car. Sa SontiJgo. Que:on CJty I'PI~JSPlltachpnatxopy()flhisMfiCestoyouprot~~lletfe.r \ "/1 1 J, .� 1� (~/ l:.� (�- " ' l ;: Designation ''l - !I I ( Date -'--:--: L __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -

Dissenting Opinion Rue/ E. Orduiia, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) Assessment Notice for VAT i<li'd-li:'~!.:,l'! IJ,�;.\�. 'EX!-\1~~!T j"__::l?"_' ,__..../. KAWANINAN NO RENTAS INTERNAS ... 1708 ASSESSMENT NOTICE .00 007J.12 ...... .... ,. ������� 131-971�938 JANo( 11016 2012 :�..�� ..... RUEL E. 1'\Rr I~A I I� I~RIIPI'l rA~I Ann STAGE ~II II n~R~\ : '''" No. 40 M.H del i , Pasig City I ,. CIJ .... ..,._!: I c::::o I ,. �����. '";.�,:.�. �o;:;. .�. I,, ,';, ~ O J o-:i"'� ' D I :: ;;_-,;;� .. CHECK KINO OFTAX I AMOUNT [JJ �. _.,_,, []J�oc� ...- -�.: . '"''�' 773,477.20 .,___.. ,,., 'IW:) [JJ ..... ' [JJ. ...,.,,.., [ill :!' ... . [ ] ]�..... ;�,'l!'l '" ..... FEW' 101~ 471,291.32 [ ] ] .,. :�,�r.:.: [ ] ]......... ""''''' '""�"' � ?Ad,.," Dl .,, oJ�.:��'"'" IC; '�i ,W ,\_'',[1�~\{.!� F p PU:~a: PRESEtH r..r;s t;or:cE ro Tc~E tJEi1REST RE'�/BI1JE DISTR c; OFFICE OR OTHER DULy AU1HORIZED ISSUI~iG OFFICE fCR TrE 1<:'' 1 ''r"' :'= Pi,v~}E~H FQRr,1 (E!R FORM NO OWS! :.ND PAY THE TOTAL AMOUNT PAYABlE ON OR BEFORE TO ANY ACCREDiTED ElP~K '1i'HERE YOt E~<ROLLED GR TO T"E CHIEF ;.ssESSt.lENT DIV �ION, 5ih fLOOR. RR ~ 7, QUEZON C:T�r IMeu""' If YOU DISAGREE WIHt TillS ASSESSMENT, FILE YOUR PROTEST 1N WRITING (W!TJ:! fACJl,IA~ ~ ~.EJiAL ~~S_E;l) WITH THE I !~.~~~~~~-REVENUE OR WITH THE AUTHORIZED B\R OFFICIAL WITHIN THIRTY 130] DAYS FROM RECEIPT HEREOF. OTHERWISE, TilE SAME BECOMES FtNAl AN[ TO THE PERTINENT PROV\5lON5 OF HIE NATIONAL INTERNAL Rf.VENUE COOf OF 19!17, AS AMENDED. ~ALiRE TO PAY THIS A:iSESSMENT Jfl Tlf.lS Will >IJRTHER S1.11i.IECT THE 101Al MiOU~l DUE 10 MJOIT!ONAL PENi-l TIES FCR Lf� TE P.W1.lEtH KIM S. JACINTO�HENARES COMMISSIONER OF INTERNAL REVENUE REC(?,1~.1E~JQI"'G ;.PPR0 1/Al APPFIOVEO ANAL~CHU Al~AJON � �recJor OiC�Ass~C~rei. Assessment D;>rsQ)::: 'You m<~yfile your protei/ in writing {withl�gal ar.d f~etual basil$) to th~ R~ioMI Direc!or, ~ Flr;r;r, BIR Building, Ou111011 Avenue cor. Set S.Jnti.Jgo. Ouezon Crly !�Pil!~=e a11ach pllotocopyol Ihis notkes to you protostlorter. , . /J") , L._ /.i[fi( .' \r ,, ,- Printed i{ainc & Signature c r!� i r~,_ }.,, II' Designation I f/ j f Date--

Dissenting Opinion Rue/ E. Orduiia, doing business under the name and style, Grupo Entabfado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) Assessment Notice for EWT 1708 131-971-938 I I~N<'i I 1fllh � 2012 RUELE.ORDUNA ~ (GRUPO ENTABLADO STAGE BUILDERS) No. 40 M.H del Pilar, Pina9buhatan, Pasig City ~ D I ,.,".'" .. CHECK KIND OFTAX OETAILS OF ASSESSMENT AMOUNT PARTICULARS []] ''"'" []J:�c�,s� ., ' 274,832.54[' [i];] '� ��;; :.., [JJ.����"'"'' I EW1 FE~ ' 1016 168,965.541 o::J., o::Jc�.;;�,";; LQ ""' 443,798.08 PLUSE PR:tSE~IT Tr-IS ~:OTICE TO TI!E tJEARESl RE:E~il:E DiSTR!CT OFFIC-E ;:;R DTHE~ CULY A.;THGR!ZED ISSu:r;() GFFICE FCR THE :S~UAt;CE o� P;:.YI.lENT :OR'.! (6!R FORr.l NO. 0605: AND PAY THE iQT;..L P.~DUfli P;..YA!!LE QN OR BEtcRE tNRC�~LED JR TO TH~ CHIEF. A.SSESSfi.ENT OIVIS!C!i. 5!h FLOOR, RR;. 7 OUEZO'i CITY IMPORTANT I~ YOU DISAGREE WITH THIS ASSESSMENT, FILE YOUR PROTEST I~ WRITING ('!YITH E!_CTUAL ~ ~.5\1~ BASES) WITH THE COMMISSIONER OF INTERNAL REVENUE OR WITH TH~ AUTHORIZED BIR OFFICIAL WITHIN THIRTY (liJ) DAYS FROM RECEIPT HEREOF. OTHERWISE, THE SAME BECOMES FINAl AND UNAPPEALABLE PURSUANT TO THE PERTif.lENl PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE OF 19!17, AS AMENDED. FAILU"lE TC� PAY TH;S ASSESSME!\T m; T!U!: \','ILL FURTHER SL!B.IECT THE 10~A~ f..MOJNT DUE TO ADDITIO.'/,\,l PENnTIES FO~ J,TE P,\YME~H KIM S. JACINTO�HENARES COMMISSIONER OF INTERNAL REVENUE RECOMMENDING APPROVAL APPROVED ~ ANALYN S. CHU OIC-Ass~ Chief..A.s~r:ssment D~<i~ 'Yov may file your pro!es/ in writing {Wilh /~if ~nd factual bases} !o tho Rel)ional Direc./or, I~ Floor, BIR B11ilrting, Quezon Avenue w. Set. Saflliagc, Qvezon City Ii'Piea$e al:!och photocopy oflhis notices to you prorestleller. '/ ;/ ' 0-,, 1_ f' ., f;f!llt �/ 1". c Designation 1- ,{�/t Date_.)

Dissenting Opinion Rue/ E. Orduiia, doing business under the name and style, Grupo Entabfado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) In Commissioner of Internal Revenue vs. Fitness by Design, lnc., 6 the Supreme Court invalidated an assessment after noting its failure to state the due date for the payment of the tax liabilities: XXX "The disputed Final Assessment Notice is not a valid assessment. XXX Second, there are no due dates in the Final Assessment Notice. This negates petitioner's demand for payment. Petitioner's contention that April 15, 2004 should be regarded as the actual due date cannot be accepted. The last paragraph of the Final Assessment Notice states that the due dates for payment were supposedly reflected in the attached assessment: In view thereof, you are requested to pay your aforesaid deficiency internal revenue tax liabilities through the duly authorized agent bank in which you are enrolled within the time shown in the enclosed assessment notice. (Emphasis in the original) However, based on the findings of the Court of Tax Appeals First Division, the enclosed assessment pertained to remained unaccomplished. Contrary to petitioner's view, April 15, 2004 was the reckoning date of accrual of penalties and surcharges and not the due date for payment of tax liabilities. The total amount depended upon when respondent decides to pay. The notice, therefore, did not contain a definite and actual demand to pay. Compliance with Section 228 of the National Internal Revenue Code is a substantative requirement. It is not a mere formality. Providing the taxpayer with the factual and legal bases for the assessment is crucial before proceeding with tax collection. Tax collection should be premised on a valid assessment, which would allow the taxpayer to present his or her case and produce evidence for substantiation." (Boldfacing and underscoring supplied) The requirement to indicate a fixed and definite period or a date certain within which a taxpayer must pay the assessed deficiency tax liabilities is indispensable to the validity of the assessment. Otherwise stated, an assessment sans a categorical demand for payment within a specific date or period is, in legal contemplation, void. Incidentally, while the following entry appears on the upper right hand corner of the FLD - "Due Date: February 10, 2016", said information appears too equivocal sans any statement that it is the due date for payment. Truth to tell, such entry may even refer to the s G.R. No. 215957, November 9, 2016.~

Dissenting Opinion Rue/ E. Orduiia, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) due date when the FLO and Assessment Notice should be released to the taxpayer. Besides, a close scrutiny of the FLO reveals that the interest was computed until February 11, 2016. It is certainly incongruous for the BIR to compute the interest until February 11, 2016 if February 11, 2016 refers to the due date for payment. The FLO and Assessment Notices in this case, being void, bear no fruif and may be slain at sight. In consequence, the issuance of the WOL may not be justified. Ex turpi causa non oritur action ("No action can arise from an illegal act"). An intrinsically void assessment may neither attain finality nor be the subject of a lawful execution. The validity of an assessment is indispensable in determining whether the government may enforce collection of alleged tax deficiencies based on such assessment. In the language of Commissioner of Internal Revenue vs. Pilipinas Shell Petroleum Corporation: 8 "In the normal course of tax administration and enforcement, the BIR must first make an assessment then enforce the collection of the amounts so assessed. 'An assessment is not an action or proceeding for the collection of taxes. x x x It is a step preliminary, but essential to warrant distraint, if still feasible, and, also, to establish a cause for judicial action.' The BIR may summarily enforce collection only when it has accorded the taxpayer administrative due process, which vitally includes the issuance of a valid assessment. A valid assessment sufficiently informs the taxpayer in writing of the legal and factual bases of the said assessment, thereby allowing the taxpayer to effectively protest the assessment and adduce supporting evidence in its behalf." (Additional boldfacing and underscoring supplied) Since the assessments involved in the present controversy are undisputedly fraught with fatal infirmities, the Court should not allow the government to benefit therefrom. Like a void judgment, a void assessment produces no legal effect; it never attains finality and - akin to an outlaw- it should be slain whenever or wherever it exhibits its head.9 Court has inherent power to do justice Court possesses certain inherent powers which is said to be implied from a general grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are such ' Metro Star Superama, Inc. vs. Commissioner of Internal Revenue, G.R. No. 185371, December 8, 2010. 8 G.R. No. 197945, July 9, 2018. s Supra Note 1. ~

Dissenting Opinion Rue/ E. Ordufla, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential to the existence, dignity and functions of the courts, as well as to the due administration of justice; or are directly appropriate, convenient and suitable to the execution of their granted powers; and include the power to maintain the court's jurisdiction and render it effective in behalf of the litigants. 10 In the exercise of said inherent powers, every regularly constituted court has the power to do all things that are reasonably necessary for the administration of justice within the scope of its jurisdiction. 11 On this basis, I submit that the Court may take cognizance of the present controversy and by doing so, this Court may exercise its power to do all things reasonably necessary to render justice. Truth to tell, the present case may be treated as an action based on law i.e., petitioner's enforcement of a right anchored on the provision of Section 228 of the National Internal Revenue Code of 1997, as amended, v1s-a-vis the Supreme Court's pronouncement in lmaginet and Pilipinas Shell which prescribes in ten (10) years under Article 144 of the Civil Code of the Philippines. Finally, I am aware that acts of the government are presumed to have been done lawfully and regularly. Yet, it is precisely the existence of this presumption which abusive and powerful officials may use as a weapon to initiate burdensome and baseless demands that exhaust a taxpayer's trust in the government and the rule of law. To allow execution of a void assessment is as mischievous as it is appalling. Illustratively, unscrupulous BIR officials may issue a Preliminary Assessment Notice and a Formal Assessment Notice and send them intentionally to a taxpayer's wrong address. Thereafter, a corresponding WDL is issued upon the taxpayer and sent to the latter's correct address. This scheme may conveniently be resorted to in situations where the period of assessment has already prescribed so much so that the only way to collect is through a WDL with a hidden aspiration that the taxpayer would be unable to go to court on time to assail such irregular procedure. Supposed the taxpayer failed to assail the WDL (which is patently void), will the taxpayer be left without any remedy and the Court powerless to provide any relief? ()1 10 The City of Manila vs. Han. Caridad H. Grecia-Cuerdo, G.R. No. 175723, February 4, 2014. 11 1d.

Dissenting Opinion Rue/ E. Ordufla, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue CTA EB No. 2669 (CTA Case No. 9619) On the other hand, should the taxpayer be able to invoke the Court's jurisdiction on time, the government would lose nothing as the assessment, having already prescribed, may not after all be collected. But what is worse is the potential for corrupt officials to engage in devious arrangement for the taxpayer to "come across" for possible compromise, knowing full well that the assessment is of doubtful validity. All told, I VOTE TO: 1. GRANT the present Petition for Review filed by petitioner; 2. REVERSE and SET ASIDE the assailed Decision and Resolution of the CTA Third Division, entitled "Rue/ E. Orduna, doing business under the name and style, Grupo Entablado Stage Builders. vs. Commissioner of Internal Revenue", docketed as CTA Case No. 9619; 3. CANCEL and SET ASIDE the Formal Letter of Demand and the Assessment Notices, all dated January 11, 2016; and, 4. ENJOIN the Commissioner of Internal Revenue or any person acting on his behalf from proceeding with the collection of the taxes subject of the present case. Presiding Justice