cta_decision CTA Case No. 1098810988 2026-03-12

DELICIOUS KAKANIN ENTERPRISES CORPORATION v. COMMISSIONER OF INTERNAL REVENUE AND REGIONAL DIRECTOR OF REVENUE REGION NO. 5, CALOOCAN CITY

CTA Form No.8 1111111111111111111111 1111111111 1111111111111111111111111 111111111111111 11111111 22-000467-0054 REPUBLIC OF THE PIDLIPPINES COURT OFTAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE NO. 10988 DELICIOUS KAKANIN ENTERPRISES CORPORATION, Petitioner, -versus- NOTICE OF DECISION COMMISSIONER OF INTERNAL REVENUE, AND REGIONAL DIRECTOR OF REVENUE REGION NO. 5, CALOOCAN CITY, Respondents. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. MERVIN JOHN P. MERCADO ATTY. CARLO LUIGI M. SORIANO Bureau of Internal Revenue -Revenue Region No. 5 Legal Division, 9th Floor, New BIR Building 140 Calaanan, EDSA, Caloocan City REGIONAL DIRECTOR OF REVENUE REGION NO. 5, CALOOCAN CITY BIR Regional Office, New BIR Building No. 140 Bo Kalaanan, EDSA, Caloocan City DELAROSA CASILLA & VINAS 3rd Floor, Power Realty Building 1012 Arnaiz Ave. San Lorenzo Makati City GREETINGS: You are hereby notified by these presents that on March 12, 2026, a Decision was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, March 17,2026. AttyE. xMecaurtiiaveJ~o~u.rtChIaInI -Te Page I of 1

.� REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION DELICIOUS I<AI<ANIN CTA CASE NO. 10988 ENTERPRISES Members: CORPORATION, Petitioner, BACORRO-VILLENA, Acting Chairperson, and CUI-DAVID,]]. -versus- COMMISSIONER OF INTERNAL REVENUE, AND REGIONAL DIRECTOR OF REVENUE REGION NO. 5, CALOOCAN CITY, Promulgated: tf:~oPif Respondents. MAR 1 2 2026 .: X----------------------------~ - ~ --------------- X DECISION BACORRO-VILLENA, L.: At bar is a Petition for Review1 filed by petitiOner Delicious oft Kakanin Enterprises Corporation (petitioner), pursuant to Section . 3(a),' Rule 8 in relation to Section 3(a)(1),' Rule 4 of the Revised Rules Filed on 27 September 2022, Division Docket, pp. 8-24. SEC. 3. Who may appeal; period to file petition. - (a) A party adversely affected by a decision, ruling or the inaction of the Comm issioner of Internal Revenue on disputed assessments or c laims for refund of interna l revenue taxes, or by a decision or ruling of the Comm issioner 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 fil ed within thirty days after receipt of a copy of such decision or rul ing, or expiration of the period fixed by law for the Commissioner of Internal Revenue to act on the disputed assessments. SEC. 3. Cases within the j urisdiction of the Court in Division. - The Court in Division shal l exercise:

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X the Court of Tax Appeals (RRCTA).4 Here, petitioner essentially prays for the cancellation of its alleged deficiency tax liabilities for calendar year (CY) 2018 amounting to P3,190,043�55, inclusive of surcharges and i n t e r e s t s .s PARTIES TO THE CASE Petitioner is a corporation duly organized and existing under the laws of the Philippines, with registered address at 13 Escanilla St., Concepcion, Malabon City.6 As � its name connotes, it is primarily engaged in the manufacturing of food products and beverages.? Petitioner is registered with the Bureau of Internal Revenue (BIR) with Taxpayer Identification Number (TIN) oo6-594-261-ooo under Revenue District Office (RDO) No. 26- Malabon-Navotas.8 Respondent, on the other hand, is the duly appointed Commissioner of Internal Revenue (respondent/CIR) vested with the authority to carry out the functions, duties, and responsibilities of the said office including, inter alia, the power to decide disputed assessments, refunds of internal revenue taxes, fees, other charges, and penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code (NIRC) of 1997, as amended, or other laws or portions thereof administered by the BIR. FACTS OF THE CASE On 03 October 2019, petitioner received Letter of Authority No. LOA-o26-2019-ooooo546 I eLA2o16ooo6o168 (First LOA) which authorized Revenue Officer (RO) Eunice Ann Libaton (Libaton) and . Group Supervisor (GS) Luisa Bersaba (Bersaba) to examine petitioner'st (a) Exclusive original over or appe llate jurisdiction to review by appeal the fo llowing: ( 1) Decisions of th e Comm iss ioner of Internal Revenue in cases invo lving disputed assessments, refunds of interna l 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[.] A.M. No. 05-11-07-CTA. See Fina l Decision on Disputed Assessment dated 03 November 202 1, Exhib it " R- 11 " , BIR Records, pp. 126-1 29. 6 See Articles of In corporation dated 19 December 2006, Exhibit " P-2", Di vision Docket, p. 352. Id., p. 35 1. See BIR Certificate of Reg istration dated 22 December 2006, Exhibit "P-4", id., p. 360.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -� - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X books of accounts and other accounting records for CY 2018.9 The LOA was accompanied by a Checklist of Requirements (Checklist) that petitioner was required to submit.10 After a supposed non-compliance from petitioner's end, respondent issued a First Request for Presentation of Records dated 15 October 2019 (First Notice) reiterating its request for documents.11 Still, with no documents forthcoming, respondent threatened petitioner that a Subpoena Duces Tecum (SDT) will be issued against it should it continuously fail to submit the requested documents (Second and Final Notice).12 Despite the warning, petitioner did not comply nor respond. Consequently, petitioner received an SDT on 03 March 202o.13 At this instance, petitioner finally sent respondent a request for the extension of the deadline of submission of the requested documents.14 Later, respondent conducted the audit and, thereafter, issued the Notice for Informal Conference (NIC) which petitioner received on 23 September 2020.1s In the NIC, respondent invited petitioner to an informal conference for the parties to discuss the initial assessment for CY 2018 amounting to P3,727,173�8o, composed of: Tax Type Basic Tax Interest Compromise Total Income Tax P2,176,017.67 P398,211. 23 P3 o ,o o o . o o P2,604,228.go 901,906.78 189,400-42 30,000.00 VAT 525.00 112.70 1,000.00 1,121,307.20 P587,724.35 1,637-70 EWT P3,o78,449�45 P 6t,OOO.OO Total P3,727,173�8o 9 See LOA dated 24 September 20 19, Exhibit " R-1 ", BIR Records, p. 2. 10 See Checklist of Requirements dated 25 September 201 9, id., p. I. II See First Request for Presentation of Records received by petitioner on 28 October 2019, Exhibit " R-2", id., p. 3. 12 See Second and Final Notice dated 15 Novembe r 2019 received by petitioner on 09 December 20 19, Exhibit " R-3", id ., p. 4. 13 See SDT No. RRS-3-2020-00042 dated 30 Jan uary 2020, id ., p. 27. See also Memorandum dated 03 March 2020, id., p. 29. 14 See Letter dated 04 March 2020, id., p. 30. 15 See Notice for Informal Conference, id., pp. 58-59.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION ' Page 4 of 35 X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X On 01 February 2021, respondent issued the Preliminary Assessment Notice6 (PAN) finding petitioner liable for deficiency taxes for CY 2018 amounting to P2,965,132.6o, computed as follows: Tax Type Basic Tax Surcharge lnte rest �7 Compromise Total Income Tax f>1 ,099.394�66 P- P237A69.25 f>40,000.00 P1.376,863.91 VAT 30,000.00 EWT 9�2.397�33 - 218,652.11 20,000.00 1,151,049-44 IAET 186,164�47 46,025�98 20,000.00 298.731�56 Total 86,135�96 46.541.12 10,817�73 Pu o,ooo.oo 138.487.69 f>2,274,092.42 21�533�99 P512,965.07 P68,o75.11 1'2,965,132.60 Subsequently, on 29 March 2021, respondent issued the Formal Letter of Demand (FLD) and Final Assessment Notices (FANs), reiterating the findings in the PAN.18 With the interest adjustment, petitioner was found liable for deficiency taxes for CY 2018 amounting to P2,986,o66.72, computed as follows : Tax Type Basic Tax Surcharge lnterest �9 Compromise Total Income Tax P- P247.589.70 VAT 1'>1,099.394�66 P- P1.)46.984�36 EWT 9�2.397�33 - 226,959�11 IAET 186,164�47 47.739�71 - 1,129.)56-44 Co m p rom ise 86,135�96 46.541.12 11,6!0.66 Total 21,533�99 - 280,445�29 - - - - 119,280.61 P2,274,092.42 P68,o75.1~ P533,899.18 110,000.00 110,000.00 P11o,ooo.oo P2,986,o66.72 In response to the FLD / FAN, petitioner filed a Protest (Request for Reinvestigation) on 20 April2021.20 In its Protest, petitioner claimed that t it did not receive any letter regarding the audit and manifested that it was willing to present its books of accounts and other records to substantiate its expenses and present records of its sales and purchases." 16 See Preliminary Assessment Notice with Details of Discrepancies received by petitioner on 04 February 202 1, Exhib it " R-4", id., pp. 84-87. See a lso Acknow ledgement of Receipt, Exhibit " R-5" , id., p. 83. 17 Computed up to 3 1 January 202 1. 18 See Form al Letter of Demand with Details of D iscrepancies received by petitio ner on 2 1 April 202 1, id ., pp. 94-97. See also Formal Assessment Notices likewise received by petitioner o n 2 1 April 2021, id ., pp. 93, 98-1 0 I. See further Acknowledgment of Receipt dated 12 April 202 1, Exhib it " R-7", p. 91. 19 Comp uted up to 28 February 202 1. 20 See Letter dated 16 April 2021 , Exhibit " R-8", id., p. I 05. 21 !d.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Intern al Revenue, and Regional ~ Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Respondent granted the Request for Reinvestigation and gave petitioner sixty (6o) days from the filing of the Protest to submit the necessary documents.22 In the meantime, on 29 July 2021, petitioner received LOA No. LOA-o26-2o21-ooooo274 I SN: eLA2017ooo97768 (Second LOA) replacing the First LOA.23 In the Second LOA, RO Restituto Magtoto (Magtoto) and GS Alile Jipus (Jipus) were authorized to continue the investigation of petitioner's books of accounts for CY 2018. Respondent then proceeded to reinvestigate but was constrained to reiterate the assessments in the FLD/ FAN because petitioner failed to submit any document within the prescribed period.24 Thus, 03 November 2021, respondent issued the Final Decision on Disputed Assessment (FDDA) reiterating the assessments in the FLD/ FAN.25 With the upward adjustment in the interest, petitioner was found liable for deficiency taxes amounting to P3,190,043�55� determined as follows : Tax Type Basic Tax Surcharge Interest Compromise Total Income Tax 1'1,099.394�66 P- 1'40,000.00 1'1,480,598.57 ~'341, 203 -91 30,000.00 VAT 902>397�33 - 20,000.00 1,236,196 .19 186 ,164-47 46.541.12 303,798.86 20,000.00 316,297-33 EWT 86,135�96 21,533�99 63.591.74 Puo,ooo.oo 156�951.46 IAET P2,274,092-42 1'68,075-11 29,281.51 Total 1'3,190,043�55 ~'737 , 876.02 On 29 April2022, respondent issued a Warrant of Distraint and/or Levy (WDL)) authorizing the distraint and levy of petitioner's real and personal properties to answer for the assessment in the FDDA.26 t Later, on 02 June 2022, respondent also issued seve~al Warrants of Garnishment (WOGs) addressed to petitioner's banks.'7 22 See Letter dated 06 May 2021, Exhibit " R�9", id., p. I06. 23 See LOA No. LOA-026-2021-00000274 I SN : eLA20 1700097768 dated 21 July 202 1, Exh ibit " R-1 0", id., p. 11 2. See also Letter dated 08 June 202 1, id., p. 110. 24 See Letter dated 20 September 202 1 and received by petitioner on 23 September 2021, id., p. 11 9. 25 See Final Decision on Disputed Assessment received by petitioner on 12 November 202 1, Exhibit " R-11 ", id., pp. 126-129. See also Acknowledgement of Receipt dated 12 November 2021, id., p. 125. 26 See Warrant of Distraint and/or Levy (WDL) No. RR5-WDL-04-26-22-2965(026) dated 29 April 2022, Exhibit "R- 13", p. 145. 27 See Warrants of Garnishment, Exhibit " R-1 5" to " R-15-22", id., pp. 147-1 57, 173-221.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Finally, on 16 August 2022, respondent wrote three (3) separate collection letters addressed to petitioner's incorporators, as follows: (1) Norma Castillo Peralta; (2) Denise Dianne David Tabije (Tabije); and (3) Elenita David Jacinto (Jacinto), Josefina David Sta. Ana, and Alfredo Sta. Ana.28 On 26 August 2022, Tabije, who also happened to be petitioner's Corporate Secretary, received the collection letter addressed to her (Collection Letter).29 This prompted petitioner to file the instant petition on 27 September 2022.J0 The case was docketed as CTA Case No. 10988 and raffled to the Court's First Division. PROCEEDINGS BEFORE THE COURT In its petition, petitioner sought the cancellation of the FLD /FAN, the WDL, and the Collection Letter on the grounds that (1) the PAN and the FLD/FAN were not personally served on petitioner; (2) the persons who received the PAN and the FLD /FAN were not duly authorized; (3) the Collection Letter was not served at petitioner's registered address; and (4) the FLD/FAN did not constitute a definite demand.31 Respondent timely filed his or her Answer with Motion to Dismiss on 04 April 2023Y In the Answer, respondent narrated how its personnel conducted the audit in full observance of petitioner's right to due process. Respondent adds that since the FDDA had become final and executory, the issuance of the WDL and the Collection Letter was only proper. On the other hand, respondent sought the dismissal of the petition for having been filed out of time. t Respondent then elevated the BIR records.33 28 See Collection Letters all dated 16 August 2022, id., pp. 225-227. 29 See Collection Letter dated 16 August 2022 addressed to Denise Dianne David Tabije , id ., p. 226. 30 See Petition for Review, supra at note I . 31 Id. 32 See (1) Answer with Motion to Dismiss, Div ision Docket, pp. 130-140; (2) Summons dated 01 February 2023, id ., p. 121 ; (3) Motion fo r Extension of T ime To File Answer to Petition for Review w ith Entry ofAppearance as Counsel tiled on 13 February 2023, id., pp. 124-126; and (4) Reso lution dated 27 February 2023 a llow in g responde nt to file his or her Answer until 04 April 2023 , id., pp. 128-129. 33 See Ex-Parte Mani festation and Compliance w ith Leave of Court, id. , pp. 199-200.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Petitioner opposed the Motion to Dismiss.34 Petitioner argued that the petition was filed on time since it was filed within 30 days from the receipt of the Collection Letter on 25 August 2022. The Court denied the Motion to Dismiss finding that the petition was indeed filed within 30 days from petitioner's receipt of the Collection Letter.35 Subsequently, the parties underwent mediation from 15 August 2023 to 14 October 2023 but failedto reach a compromise.36 Following the unsuccessful mediation, the Pre-Trial Conference was set on 28 February 2024.J7 After the parties filed their Pre-Trial Briefs,38 pre-trial proceeded as scheduled on 28 February 2024.39 With the filing of the parties' Joint Stipulation of Facts and Issue (JSFI) and the issuance of the Pre-Trial Order on 17 May 2024, the pre-trial stage of the proceedings was deemed terminated.40 In the trial that thereafter ensued, petitioner presented Tabije. On the witness stand, Tabije, petitioner's incorporator as well as its Corporate Secretary, testified that Marissa Gualberto (Gualberto), one of petitioner's several food handlers, received the PAN. In similar manner, the FLD/ FAN was served on another food handler, Charie Libao (Libao). Tabije explained that as food handlers, Gualberto and Libao are responsible for the preparation of the food that petitioner sells. They are also tasked to make sure that petitioner's food products t are of good quality. She added that the Collection Letter was served at No.1 Congressional Avenue Ext., Bah,ay Toro, Quezon City, which was not petitioner's registered address.�' 34 See Petitioner's Comment/Opposition filed on 08 May 2023, id., pp. 204-209. 35 See Resolution dated 26 May 2023, id., pp. 2 16-217. 36 See Mediation Schedule fi led on 08 August 2023, id., p. 220. See also Request fo r Extension filed on 05 September 2023 and Resolution dated 26 September 23 extend ing the med iation period until 14 October 2023, id. , pp. 223-226. See further the Mediator's report fil ed on 08 November 2023, id ., pp. 228-231. 37 See Notice of Pre-Trial Conference dated 17 November 2023, id., pp. 234-236. 38 See petitioner' s Pre-Trial brief filed on 21 February 2024, id., pp. 238-249. See also respondent's Pre-Trial Brief filed on 23 February 2024, id., pp. 25 1-254 . 39 See Order dated 28 February 2024, id., pp. 262-264. 40 See Joint Stipulation of Facts and Issues filed on 25 March 2024, id., pp. 279-289. See also Pre- Trial Order dated 17 May 2024, id., pp. 309-326. 41 See Judicial Affidavit (Denise Dianne David Tabije) subscribed on 23 September 2022, Exhi bit " P-13", id ., pp. I07-117; see TSN dated 28 May 2024.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X On cross-examination, Tabije testified that the food handler who received the First LOA had referred the same to petitioner's management but that was not the case for Gualberto and Libao who received the PAN and FLD/FAN, respectively.42 She stated that during the period of the audit, petitioner was operating with a skeletal workforce because of the pandemic.43 It was only upon petitioner's receipt of the WDL that they came to know of the PAN and FLD/FAN.44 When confronted with the Protest (Request for Reinvestigation) to the FLD/FAN, Tabije claimed that the she was not aware of the existence of the Protest.45 She also confirmed that Jacinto, the signatory of the Protest, was petitioner's President.46 No redirect examination was conducted.47 Upon clarificatory questions from the Court, Tabije testified that a staff received the Collection Letter at No. 1 Congressional Avenue, where she holds office for other businesses.48 She again denied knowledge of the Protest and surmised that it was probably Jacinto who asked petitioner's bookkeeper to file it.49 Further, she clarified that they did not object to the service ofthe First LOA because the particular food handler who received it was the team leader or in-charge.so Lastly, she stated that there were about six (6) food handlers working at petitioner's registered address and while its officers reported to the same office, the pandemic forced them to report to the office only once or twice a w e e k 1 5 With the presentation of its sole witness, petitioner proceeded to file its Formal Offer of Evidence (FOE), offering Exhibits "P-1" to 11P-13-1", inclusive of sub-markingsY Respondent interposed no t objections to the FOE.s3 After review and consideration, the Court admitted the offered exhibits.54 42 !d., TSN dated 2 8 May 2024, p. II. 43 !d., p. 12. 44 !d. p. 13. 45 !d., p. 16. 46 !d., p. 15. 47 !d., p. 17. 48 !d. , pp. 18-2 1. 49 !d., p. 26-28. 50 Id ., pp. 33-34 . 51 !d . pp. 32-33. 52 See petitioner's FOE filed on I 0 June 2024, Di visio n Docket, pp. 343-349 . 53 See Comm ent to the Form al Offer of Ev idence fil ed on 18 June 2024, id., pp. 418-422 54 See Resolution dated 12 July 2024, id., pp. 429-430.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Reg ion No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X When it was respondent's turn to present evidence, RO Libaton, RO Magtoto, GS Jipus, and RO Roberto Damian (Damian) were presented. RO Libaton took the witness stand first where she declared that she was authorized under the First LOA to examine petitioner's book of accounts for CY 2018. In such capacity, she conducted the audit from the issuance of the First Notice until the issuance of the respondent's Letter dated o6 May 2021 which granted the Protest (Request for Reinvestigation) to the FLD /FAN and allowed petitioner to submit supporting documents within 6o days from receipt thereof. Afterwards, the case was transferred to another RO. She, thus, identified among others, the First LOA, First Notice, Second and Final Notice, PAN, FLD /FAN, Protest, and respondent's Letter dated o6 May 2021.55 On cross-examination, RO Libaton confirmed that she personally served the PAN and the FLD / FAN on 04 February 2021 and 21 April 2021, respectively. As to the proof that the recipients thereof were duly authorized, she explained that when she went to petitioner's registered address, she asked for someone authorized by petitioner to receive the said documents.s6 On redirect examination, RO Libaton confirmed that the First LOA was served at petitioner's registered address at No. 13 Escanilla Street, Concepcion, District 1, Malabon City.57 Moreover, the person who received the First LOA indicated in the accompanying Checklist of Requirements that he/she was petitioner's HR Manager.58 No re-cross examination was conducted.59 Next to take the witness stand was RO Magtoto who, by virtue of the Second LOA, took over the audit petitioner's books for CY 2018 from. RO Libaton. By way of his Judicial Affidavit, he identified and testifiedt 55 See Judicial Affidavit of Eunice Ann Libaton subscribed on 31 March 2023, Exhi bit " R-1 6", id., pp. 15 1-1 58. 56 TSN dated 27 August 2024, pp. I0-27 . 57 Id., pp. 27-28. 58 Id., pp. 28-29. 59 Id., p. 30.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Reven ue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X on the issuance of the Second LOA and the subsequent issuance of the FDDA.60 On cross-examination, RO Magtoto testified that he personally went to petitioner's registered address to serve the Second LOA and the FDDA. He then saw Libao and informed her that there was a letter for petitioner. He added that he served the Second LOA and the FDAA on Libao without asking for further proof of authorization.61 Upon redirect examination, RO Magtoto identified the Protest (Request for Reinvestigation) to the FLD/FAN.62 On re-cross examination, he confirmed that in the Protest, petitioner manifested that it did not receive any letter regarding the audit and if given a chance, petitioner was willing to present its books of accounts and other pertinent records.63 GS Jipus, on the other hand, testified that together with RO Magtoto, she was authorized under the Second LOA to conduct petitioner's audit for CY 2018. By way of her Judicial Affidavit, she corroborated RO Magtoto's testimony regarding the issuance and service of the Second LOA and FDDA.64 On cross-examination, GS Jipus testified that she did not participate in the FDDA's preparation as well as the actual service of the Second LOA.65 However, upon redirect examination, she clarified that after the RO conducts his investigation, she reviews the RO 's report and then signs it for transmittal to the Assessment Division.66 On re-cross 't examination, she stated that in reyiewing assessments, she relies on the RO's findings and case records.6 60 See Judicial Affidav it of Restitute Magtoto subscribed on 3 1 March 2023, Exh ibit " R-1 7", Division Docket, pp. 146-1 50. 61 TSN dated 27 August 2024, pp. 41-43. 62 Id ., 46-47. 63 Id., pp. 54-55. 64 See Judi cial Affidavit of Alile Jipus subscribed on 31 March 2023, Exhibit " R- 18", Division Docket, pp. 14 1-145. 65 TSN dated 27 August 2024 , pp. 65-67. 66 Id., pp. 67-69. 67 Id., pp. 7 1-73.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Reg ional ~ Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Respondent then presented his or her last witness, RO Damian, who testified by way of his Judicial Affidavit. As the Seizure Agent assigned to enforce administrative collection remedies against petitioner, he testified that he caused the service of the WDL on petitioner and of the WOGs to various banks.68 During cross-examination, he testified that he attempted to personally serve the WDL on petitioner but was unable to find anyone at its registered address. Thus, on the very same day, he resorted to constructive service. He further served the WDL through accredited courier (i.e., LBC).69 As to the WOGs, he testified that he personally served the same upon the banks.7� On redirect examination, he stated that after the service of the WDL, petitioner's representative went to their office to inquire about and request copies of the case docket.71 No re-cross examination followed .72 Upon clarificatory questions from the Court, RO Damian explained that he served the WDL through an accredited couner, pursuant to then-prevailing regulationsJ3 Subsequently, on 25 November 2024, respondent filed his or her FOE offering Exhibits ~~R-1" to ~~ R-19-1", with sub-markings.74 Over petitioner's objections, the Court admitted the documents, except for Exhibits "R-15-Series",7s which were denied for not being found in the records of the case.76 t Finally, petitioner filed .its Memorandum on 20 February 2025 while respondent filed his or her Memorandum on 25 February 2025.77 The Court then submitted the case for decision on 12 March 8 2025." 68 See Jud icial Affidavit of Roberto G. Damian Jr., Exhibit " R-1 9", Division Docket, pp. 272-275. 69 TSN dated 12 November 2024, pp . 9-23. 70 Id., pp. 24-26. 71 !d., pp. 28-29. 72 l d., p. 29. 73 Id., p. 32. 74 See Formal Offer of Respondent' s Evidence/Exhibits, Division Docket, pp. 447-455 . 75 Exhibits "R-1 5-Series" refer to Warrants of Garn ishm ent (WOGs) upon various banks. 76 See Comments/Objections (To Respondent's Form al Offer of Evidence) filed on 26 November 2024, id., pp. 456-469. See also Resolution dated 21 January 2025, id., pp. 496-497. 77 See petitioner' s Memorandum, id., pp. 498-530. See also respondent's Memorandum, id ., pp. 533- 547. 78 See Notice of Resolution dated 12 March 2025, id., p. 549.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X negates the imperative nature of the assessment.81 Furthermore, petitioner argues that the FDDA had yet to become final, executory, and demandable because there is no evidence that it was received by petitioner's authorized representative. It is equally void without a valid assessment (i.e., PAN and FLD/PAN) to anchor on.82 Lastly, petitioner avers that the Collection Letter was served at No. 1 Congressional Avenue Ext., Bahay Taro Quezon City when its registered address is at 13 Escanilla Street, Concepcion, District 1, Malabon City. The former cannot be considered a known address since business activities are not conducted there. To make matters worse, respondent again, without justification, served the WDL and Collection Letter via substituted service.83 On the other hand, respondent points out that the First LOA was likewise served upon another food handler deployed at petitioner's registered address. However, petitioner did not assail the validity of the First LOA and even admitted that it was forwarded to its bookkeeper. Petitioner cannot now reject the PAN and FLD /FAN which were served in the same manner as the First LOA. In fact, petitioner's President was able to file a Protest (Request for Reinvestigation) to the FLD/FAN which respondent granted giving petitioner the opportunity to submit supporting documents.84 In addition, respondent claims that from inception of the audit (when it served the First LOA to a food handler) , petitioner never advised respondent that its food handlers were not authorized to receive communications from the BIR. On the contrary, petitioner proceeded to correspond with respondent.85 t Lastly, respondent avers that petitioner failed to present sufficient evidence to assail the substantive aspect of the PAN and FLD/FAN.. Therefore, the presumption of regularity of assessment must prevail.86 81 l d., pp. 519-520. 82 ld., pp. 520-522. 83 Id., pp. 522-526. 84 Respondent's Memorandum, supra at note 77, pp. 537-544. 85 !d., p. 544-545 . 86 !d., p. 545.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X RULING OF THE COURT At the outset, the Court stresses that, while it made a preliminary finding that the Court has jurisdiction over the case, after a second hard look at the records and the evidence presented in the course of the trial, it is constrained to dismiss the petition for lack of jurisdiction. Evidently, the instant petition was filed out of time. THE INSTANT PETITION WAS NOT FILED WITHIN 30 DAYS FROM PETITIONER'S RECEIPT OF THE FINAL DECISION ON DISPUTED ASSESSMENT (FDDA). The Court of Tax Appeals (CTA), being a court of special jurisdiction, can only take cognizance of matters which are clearly within its jurisdiction.87 In this connection, Section 11 of the Republic Act (RA) No. 1125,88 as amended by RA 9282,89 provides for the proper period during which a party may bring an appeal before the CTA, to wit: SEC. u . Who May Appeal; Mode ofAppeal; Effect of Appeal. - 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 within thirty (3o) days after the receipt of such decision or ruling or after the <JOt . expiration ofthe period fixed by law for action as referred to in Section ~(a)(2) herein. 87 Commissioner of Internal Revenue v. V. Y. Domingo Jewellers, Inc., G. R. No. 221780, 25 March 2019, c iting Commissioner of Internal Revenue v. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 19002 1, 22 October 2014 . 88 AN ACT CREATING THE COURT OF TAX APPEALS . 89 AN ACT EXPANDING TH E JU RJSDICTION OF T HE COURT OF TAX APPEALS (CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEG IAT E COU RT WITH SPECIAL JU RI SDICTION AND ENLARGING ITS MEM BERSHIP, AM EN DING FO R TH E PURPOSE CERTAIN SECTIONS OR REPUBLIC ACT NO. 11 25, AS AMENDED, OTHERWISE KNOWN AS T HE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTH ER PURPOSES. 90 Italics in the orig inal text.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Reg ional ~ Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Section 3(a), Rule 8 ofthe RRCTA implements the above provision in this wise: 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 ofsuch 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.9' On the other hand, Section 228 of the NIRC of 1997, as amended, outlines how a taxpayer may administratively protest an assessment issued by the CIR or his or her duly authorized representative and later on, if necessary, appeal the same to the CTA: Sec. 228. Protesting of Assessment. When the Commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his findings[.] ... 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. Such assessment may be protested administratively by filing a t request for reconsideration or reinvestigation within thirty (3o) days from receipt of the assessment in such form and manner as may be . prescribed by implementing rules and regulations. Within sixty (6o) 91 !tal ics in the original text.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional ~ Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X days from filing of the protest, all relevant supporting documents shall have been submitted; otherwise, the assessment shall become final. If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (18o) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court ofTax Appeals within thirty (3o) days from receipt of the said decision, or from the lapse of the one hundred eighty (18o)-day period; otherwise, the decision shall become final, executory and demandable. 9:z In turn, Section 228 of the NIRC of 1997, as amended is implemented by Revenue Regulations (RR) No. 12-99,93 as amended by RR No. 18-2013.94 Relevant portions of Section 3.1.4 of RR No. 12-99, as amended by RR No. 18-2013, provides the taxpayer's options on disputed assessments, to wit: Sec. 3� Due Process Requirement in the Issuance of a Deficiency Tax Assessment. - Sec. 3.1.4. Disputed Assessment. - The taxpayer or its authorized representative or tax agent may protest administratively against the aforesaid FLD /FAN within thirty (3o) days from date of receipt thereof. The taxpayer protesting an assessment may file a written request for reconsideration or reinvestigation defined as follows: (i) Reques t for reconsideration - refers to a plea of re-evaluation ofan assessment on the basis of existing records without need ofadditional evidence. It may involve both a question of fact or of law or both. (ii) Request for reinvestigation - refers to a plea of re-evaluation ofan assessment on the basis of newly discovered or additional evidence . that a taxpayer intends to present in t h e t ---------------------- 92 Italics in the original text. 93 Implementing the Provisions of the National Internal Revenue Code of 1997 Govern ing th e Rules o n Assessment of National Internal Revenue Taxes, Civil Penalties and Interest and the Extra- Ju dicial Settlement ofa Taxpayer's Criminal Violation of the Code Through Payment of a Suggested Compromise Penalty. 94 Amending Certain Sections of Revenue Regulation s No. 12-99 Relative to the Due Process Requirement in the Issuance of a Defic iency Tax Assessment.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Com missioner of Intern al Revenue, and Reg ional ~ Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X reinvestigation. It may also involve a question of fact or of law or both. For request for reinvestigation, the taxpayer shall submit all relevant supporting documents in support of his protest within sixty (6o) days from date of filing of his letter protest, otherwise, the assessment shall become final. The term "relevant supporting documents" refer to those documents necessary to support the legal and factual bases in disputing a tax assessment as determined by the taxpayer. ... If the protest is denied, in whole or in part, by the Commissioner's duly authorized representative, the taxpayer may either: (i) appeal to the Court of Tax Appeals (CTA) within thirty (3o) days from date of receipt of the said decision; or (ii) elevate his protest through request for reconsideration to the Commissioner within thirty (3o) days from date of receipt of the said decision. No request for reinvestigation shall be allowed in administrative appeal and only issues raised in the decision of the Commissioner's duly authorized representative shall be entertained by the Commissioner-95 In applying the foregoing rules, the Supreme Court, in Philippine Amusement and Gaming Corporation v. Bureau of Internal Revenue, et a/.96and later on in Commissioner ofInternal Revenue v. V. Y. Domingo jewellers, Inc.,97 explained that there are three (3) options by which a taxpayer may appeal the denial of its administrative protest, to wit: Following the verba legis doctrine, the law must be applied exactly as worded since it is clear, plain, and unequivocal. A textual reading of Section 3.1.5 gives a protesting taxpayer like PAGCOR only three options: 1. If the protest is wholly or partially denied by the CIR or his authorized representative, then the taxpayer may appeal to the CTA within 30 days from receipt of the whole or partial denial of the protest. t 95 Italics in the original text. 96 G.R. No. 20873 1, 27 January 20 16. 97 G.R. No. 22 1780 , 25 March 2019.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECI SIO N X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X 2. If the protest is wholly or partially denied by the CIR's authorized representative, then the taxpayer may appeal to the CIR within 30 days from receipt ofthe whole or partial denial ofthe protest. 3� If the CIR or his authorized representative failed to act upon the protest within 180 days from submission ofthe required supporting documents, then the taxpayer may appeal to the CTA within 30 days from the lapse of the 18o-day period.98 In this case, the following are the pertinent dates and events in determining the timeliness of the Petition for Review: Date Event 12 April 2021 Petitioner received respondent's FLO /FAN dated 20 April 2021 29 March 2021.99 o8 June 2021 Petitioner filed its Protest (Request for Reinvestigation).100 23 September 2021 Respondent informed petitioner that its Protest (Request for Reinvestigation) was granted giving petitioner 6o days 12 November 2021 therefrom to submit its supporting documents. 101 27 September 2022 Respondent informed petitioner that it will proceed with the issuance of the FDDA because of petitioner's failure to submit the supporting documents within the prescribed period.102 Petitioner received the FDDA.103 Petitioner filed the instant Petition for Review.104 As thoroughly discussed, if the protest is wholly or partially denied by the CIR or his authorized representative, the taxpayer may appeal to the CTA within 30 days from its receipt of the denial of the protest.t 98 Citation om itted, italics in the original text and emphasis supplied. 99 See Formal Letter of Demand with Details�of Discrepancies and Formal Assessment Notices, supra at note I. 100 See Letter dated 16 April 2021, Exhibit "R-8", supra at note 20. 10 1 See Letter dated 08 June 2021 , supra at note 23. 102 See Letter dated 20 September 2021, supra at note 24. IOJ See Final Decision on Disputed Assessment dated 03 November 2021, Exhibit " R- 11 ", and Acknowledgement of Receipt dated 12 November 202 1, supra at note 25. 104 See Petition for Review, supra at note I.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional ~ Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Here, petitioner received the FDDA issued by the CIR's authorized representative (i.e., the Regional Director of Revenue Region No. os) on 12 November 2021. In the FDDA, respondent reiterated the assessment in the FLD/FAN and emphasized that such was its ~~final decision" on the Protest. Thus, petitioner had 30 days from 12 November 2021 within which to appeal either to the CIR or the CTA. Petitioner did neither. Accordingly, the instant Petition which was filed ten (10) months later on 27 September 2022- was filed out of time. THE FORMAL LETTER OF DEMAND /FINAL ASSESSMENT NOTICE (FLO/ FAN) AND FINAL DECISION ON DISPUTED ASSESSMENT (FDDA) WERE VALIDLY SERVED UPON PETITIONER. RR No. 18-13, which amends RR No. 12-99/05 outlines the applicable modes of service of assessment notices: 3.1.6 Modes ofService.- The notice (PAN /FLD / FAN/ FDDA) to the taxpayer herein required may be served by the Commissioner or his duly authorized representative through the following modes: (i) The notice shall be served through personal service by delivering personally a copy thereof to the party at his registered or known address or wherever he may be found. A known address shall mean a place other than the registered address where business activities of the party are conducted or his place of residence. In case personal service is not practicable, the notice shall be served by substituted service or by mail. (ii) Substituted service can be resorted to when the party is not present at the registered or known address under the following circumstances: t � The notice may be left at the party's registered address, with s lerk or with a person having charge thereof. -------------------- 10 5 Supra at note 93.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Comm issioner of Internal Revenue, and Regional Director of Reven ue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X If the known address is a place where business activities of the party are conducted, the notice may be left with his clerk or with a person having charge thereof. If the known address is the place of residence, substituted service can be made by leaving the copy with a person of legal age residing therein.106 Here, the FLD /FAN and FDDA were both served on Libao, a food handler deployed at petitioner's registered address responsible for preparing and ensuring the quality of its food productS.107 While petitioner does not dispute that Libao received the FLD/ FAN and FDDA, it nevertheless argues that she is neither its clerk nor someone having charge ofits premises. In other words, since she had no authority to receive the FLD/FAN, the same did not bind petitioner.108 The records yield clearly that, indeed, it was Libao who received the FLD/FAN. In the Acknowledgement Receipt thereof, Libao indicated that she was the taxpayer's uStaff'.10 9 The same is true with the FDDA's Acknowledgement Receipt. �11 Further, it is not disputed the FLD/FAN and FDDA were served at petitioner's registered address at 13 Escanilla St., Concepcion, District I, Malabon City. While petitioner may argue that Libao was not in-charge of its premises and should not have any business receiving the BIR's correspondence or documents, an extensive evaluation of the parties' documentary and testimonial evidence, would nevertheless reveal that petitioner's actions before and after its receipt of the said documents are not aligned with its posturing_that Libao was not the proper recipient (and thus should not bind it).:r; 106 Italics in the original text and emphasis supp lied . 107 See Q&A No. 50, Judicial Affidav it (Deni se Dianne David Tabije) subscribed on 23 September 2022, supra at note 4 1. 108 Petitioner's Memorandum, supra at note 77, pp . 510-51 6. 109 See Acknowledgment of Receipt dated 12 Apri l 202 1, Exhibit "R-7", supra at note 18. 110 See Acknowledgement of Receipt dated 12 November 2021 , supra at note 25.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Reg ional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X contrary, it merely acknowledged receipt of the SDT. Tabije even testified that - [PRESIDING] JUSTICE DEL ROSARIO: Q: So, in Malabon there were food handlers. That is how I understand you. And do you say that service in Malabon is the correct address where service should be made? MS. TABI]E: A: Yes, your Honor. [PRESIDING] JUSTICE DEL ROSARIO: Q: Now, you are saying that only food handlers received the communications from the BIR. How many employees are there in that Malabon office? MS. TABIJE: A: The food handlers, s1r, they were six (6), your Honor, at that time. [PRESIDING] JUSTICE DEL ROSARIO: Q: There were six (6). The directors or corporate officers, do they hold office in Malabon? A: MS. TABIJE: Yes, your Honor. [PRESIDING] JUSTICE DEL ROSARIO: Q: Do they hold office in Malabon? MS. TABI]E: A: Yes, your Honor, but at that time we were operating skeletal workforce so it was only limited time that, it was mostly online like one or twice a week that the officers come to Malabon. [PRESIDING] JUSTICE DEL ROSARIO: Yes. Q: Now, do you say that the I_.etter of Authority was validly served in Malabon?t'

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X MS. TABIJE: A: Letter of Authority, yes, your Honor. [PRESIDING] JUSTICE DEL ROSARIO: Q : Even if it was received by the food handler? MS. TABIJE: A: At that time, your Honor. [PRESIDING] JUSTICE DEL ROSARIO: Q: No. The question is simple. The Letter of Authority was received by a food handler and then you never questioned the manner by which the Letter ofAuthority was served, right? MS. TABIJE: A: Yes, your Honor. [PRESIDING] JUSTICE DEL ROSARIO : Q: And the recipient of the Letter of Authority was a mere food handler, yes? MS. TABIJE: A: Yes, your Honor. [PRESIDING] JUSTICE DEL ROSARIO: Q: So, when a food handler now again receives the Preliminary Assessment Notice, the Formal Letter of Demand. Why would you say that these food handlers are no longer authorized when, in the first place, when the Letter ofAuthority was received by a food handler, there was no objection, no letter- complaint filed with the BIR saying that next time do not serve it to a food handler. You never did that, right? MS. TABIJE: A: The one who received the LOA, your Honor, was the team leader or in-charge. [PRESIDING] JUSTICE DEL ROSARIO: Q: Yes. But he was simply a food handler according to your Judicial Affidavit, he was a food handler. Alright? MS. TABIJE: � A: Yes, your Honor.t

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X [PRESIDING] JUSTICE DEL ROSARIO: Q: So, when a food handler receives a document for and in behalf of the petitioner and insofar as the Letter of Authority is concerned, that is binding. But when a Preliminary Assessment Notice is received by the same or another food handler, that is no longer binding. Is that your theory? MS. TABIJE: A: No, Sir. [PRESIDING] JUSTICE DEL ROSARIO: Q: But that is the way you are making it appear before this Court. Now, if you said that the directors and the officers are not actually in the place where supposedly the address was registered with the BIR, how do you expect the BIR to serve notices to the petitioner? Are they going to look where the directors are[?] 113 Second, it was established that Erlyn Marcos, the food handler who received the First LOA was able to forward the same to petitioner's bookkeeper. Moreover, Libao, the food handler who received the FLD/FAN was also able to endorse the same such that petitioner, through its President, was able to file a Protest (Request for Reinvestigation) against the FLD/FAN. Tersely, petitioner acted on the matters received by the food handlers. Such conduct hardly supports its stance (of absence of authority) but contradicts the same instead. Thus, petitioner's acts of (a) not advising the BIR that its food handlers were not authorized to receive any BIR communications; and (b) acting on BIR issuances which were received by its food handlers, effectively barred it from assailing the authority of its food handlers under the principle of estoppel in pais or equitable estoppel. As explained by the Supreme Court in Factory Automation and Instrumentation Corp. v. Commissioner ofInternal Revenue:114 t Petitioner does not deny that Irene Masula received the FAN . and FLO sent via registered mail. Petitioner nonetheless argues that 113 TSN dated 28 May 2024, pp. 32-35. 11 4 G.R. No . 236789 (Notice), 27 March 2023; C itations omitted and emphasis supplied.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Irene Masula is not its authorized representative when it comes to receiving notices on its behalf, and that the principle of estoppel should not be applied herein. Petitioner is mistaken. The principle ofestoppel may be applied in this case. The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith, and justice, and its purpose is to forbid one to speak against his or her own act, representations, or commitments to the injury of one to whom they were directed and who reasonably relied upon. It has been applied wherever and whenever special circumstances of a case so demand . This Court has applied the principle of estoppel on the part of the taxpayer in several tax cases. Here, petitioner is estopped from claiming that it did not receive the FAN and FLD sent through registered mail because of Irene Masula's alleged lack of authority to receive the same. As the CTA En Bane observed, Irene Masula previously received the PAN addressed and sent to petitioner through registered mail. Petitioner was thereafter able to file a protest to the PAN on June 8, 2011. Petitioner did not contest the authority ofIrene Masula to receive the PAN. It cannot now claim that the same person is unauthorized to receive the FAN, when it acted on the PAN that Irene Masula previously received. Here, petitioner simply denied receiving the FAN by stating that Irene Masula is not its authorized representative. However, as discussed, petitioner is estopped from claiming that Irene Masula is not its representative authorized to receive notices on its behalf. Moreover, Tabije's attempt to reconcile why the food handler who received the First LOA was able to forward the same to the management -r; while the food handlers who received the PAN, FLD/FAN and FDDA were allegedly pot able to do so, fails to convince in light of her declarations

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Incidentally, although Tabije attempted to attribute the supposed failure of the food handler to refer the assessment notices to petitioner due to the Covid-19 pandemic, she failed to explain why petitioner (despite such claim) was able to still act on the matter raised in the said BIR issuances. Particularly, had there really been an issue on the receipt of these issuances, it should not have then reach out to the BIR or it should have contested the manner (in its Protest to the FLD/FAN filed on 20 April 2021) they were served. In sum, this Court finds that the FLD/FAN and the FDDA were validly served on petitioner. Therefore, the FDDA had become final and executory upon petitioner's failure to appeal within 30 days from its receipt thereof. THE COLLECTION LETTER IS NOT THE COMMISSIONER OF INTERNAL REVENUE'S (CIR'S) FINAL DECISION THAT IS APPEALABLE TO THE COURT OF TAX APPEALS (CTA). Arguing that the 30-day period to appeal to the CTA should be counted from its receipt of the Collection Letter, petitioner cites South Entertainment Gallery, Inc. v. Commissioner of Internal Revenue,116 where this Court's Second Division allegedly held that the 30-day period to appeal to the CTA should be counted from the receipt of the Collection Letter.117 Indeed, jurisprudence is replete with cases wherein the 30-day period to appeal to the CTA was counted from a letter (not an FDDA) from the CIR. However, for it to be appealable to the CTA, the said letter should, by its tenor and the circumstances of its issuance, constitute the CIR's final decision on the contested assessment. t Therefore, in Commissioner ofInternal Revenue v. Isabela Cultural Corporation,118 the Supreme Court ruled that the Final Notice Before . Seizure is tantamount to the CIR's decision that is appealable to the 116 CTA Case No. 8257,09 July 2014. 11 7 See Petition for Review, supra at note I. 11 8 G.R. No. 135210, 11 July 2001.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X CTA. It held that a "final demand letter from the Bureau of Internal Revenue, reiterating to the taxpayer the immediate payment of a tax deficiency assessment previously made, is tantamount to a denial of the taxpayer's request for reconsideration. Such letter amounts to a final decision on a disputed assessment and is thus appealable to the Court of Tax Appeals (CTA) ."119 Similarly, in Commissioner of Internal Revenue v. Avon Products Manufacturing, Inc.,120 the Supreme Court held that the Collection Letter dated og July 2004 constitutes the final decision of the Commissioner that is appealable to the Court of Tax Appeals. It found that the "Collection Letter demonstrated a character of finality such that there can be no doubt that the � Commissioner had already made a conclusion to deny Avon's request and she had the clear resolve to collect the subject taxes."121 In sum, not all collection letters coming from the CIR are appealable to the CTA - it is only those that had the nature and tenor of a final decision on a disputed assessment. Such is not the case for petitioner. To recall, petitioner received the FDDA on 12 November 2021 wherein it was found liable for deficiency taxes amounting to P3,190,043�55, inclusive of surcharges, interest, and compromise.122 Respondent, having not received a response from petitioner, concluded that the assessment had become final and executory. Thus, on 29 April 2022, respondent issued the WDL authorizing the distraint and levy of petitioner's real and personal properties.123 Moreover, respondent issued several WOGs addressed to different banks on 02 June 2022.124 t Presumably because respondent was unable to find sufficient real and personal property to answer for the assessment, it also issued three . (3) collection letters addressed, not to petitioner, but to its 119 I d. 120 G.R. Nos. 20 1398-99 & 201418-1 9,03 October 20 18. 121 I d. 122 See Final Decision on Disputed Assessment dated 03 November 2021 , supra at note 25 . 123 See Warrant of Distraint and/or Levy (WDL) No. RR5-WDL-04-26-22-2965(026) dated 29 April 2022, Exhibit " R-1 3", supra at note 26. 124 See Warrants of Garnishment, Exhib it " R- 15" to " R-15-22", supra at note 27.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X incorporators, as follows: (1) Norma Castillo Peralta; (2) Tabije; and (3) Jacinto, Josefina David Sta. Ana, and Alfredo Sta. Ana.125 The three (3) letters are identical, and the one received by Tabije on 26 August 2022 (which was the one appealed to this Court and the subject of the instant petition) reads:126 MS. DENISE DIANNE DAVID TABIJE DELICIOUS KAKANIN ENTERPRISES CORPORATION #1 Congressional Avenue Ext., Bahay Toro Quezon City Ma'am: DELICIOUS I<AI<ANIN ENTERPRISE CORPORATION TIN: oo6-594-261-ooo Assessment No.: 38863/FDDA Date Issued: November 3, 2021 KIND OF TAX BASIC SURCHARGE INTEREST COMPROM ISE TOTAL MOUNT TAX YEAR PENALTY DUE IT 2018 1,099�394 �6 6 - 341,203-91 4 0,000.00 1,480,S98�57 VT 2018 902,397�33 - 303,798.86 30,000.00 1, 236 ,1 �.19 WE 2018 186,164�47 46.541.12 63,591.74 20,000.00 316,297�32 DST 2018 86,135�96 21,533�99 29, 2 81.51 20,0 00.00 156>951�46 Total 2,274,092.42 68,075�11 737,876.02 no,ooo.oo 3�190,043�55 Please be inform ed that the above-mentioned Delinquent Account case has been assigned to Revenue Officer (RO) Atty. Roberto G. Damian Jr. Verification from the records of the Securities and Exchange Commission (SEC) disclosed that you a re one of the incorporators of the said corporation. In this connection, we are informing you that the internal revenue tax liabilitylies mentioned above remained unpaid /unsettled to date. However, if payment has been made, kindly provide us proof of such payment so we may proceed with the cancellation/closure ofyour liability. Our office is located at General Concepcion St. cor. EDSA, 4 th Floor BIR New Building, Arrears Management Section - Collection Division, Barrio Calaanan, Caloocan City. Otherwise, this Office will be constrained to enforce appropriate action provided for by law to effect collection thereof, without further notice.t 125 See Collection Letters al l dated 16 August 2022, supra at note 28. 126 Supra at note 29; Emphasis in the orig ina l text.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Reg ional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Please give this matter your preferential attention. Very truly yours, ROBERTO R. TARON Chief, Collection Division A perusal of the wordings and tenor of the Collection Letter clearly shows that it did not resolve or decide any disputed assessment. This is so because respondent had long issued its decision on the petitioner's Protest (Request for Reinvestigation) to the FLD/FAN, in the form of the FDDA issued on 03 November 2021 and received by petitioner on 12 November 2021.127 In fact, had petitioner followed South Entertainment Gallery, Inc. v. Commissioner ofInternal Revenue128 to its conclusion, it would not have cited the same in support ofthe timeliness of the instant petition. In Commissioner of Internal Revenue v. South Entertainment Gallery, Inc., 129 the Supreme Court ruled that the 30-day period to appeal had long expired when the Collection Letter dated 25 March 2011 was issued. Instead, the WDL, based on its tenor and the circumstances of its issuance, served as the CIR's final decision on the protest that is appealable to the CTA. The Supreme Court, thus, declared that the CTA should have dismissed the appeal on the ground of lack of jurisdiction. The Supreme Court held: In this case, the Formal Letter of Demand and Final Assessment Notice dated April 2, 2oo8 was sent by registered mail to the respondent on April1o, 2008. Petitioner did not receive any response from respondent. Thus, petitioner sent a Preliminary Collection Letter dated June 10, 2008. The Preliminary Collection Letter had a tenor of finality. It .Cj/ made reference to the Formal Letter of Demand and Final Assessment U Notice dated April 2, 2008 issued and sent to respondent for the 127 See Final Decision on Disputed Assessment dated 03 November 202 1, supra at note 25. 128 Supra at note 116. 129 G. R. No. 225809, 17 March 202 1; Citations omitted, italics and emphases in the origina l text and su p p lied .

' ' )- CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X collection of its internal revenue tax liabilities. Respondent was directed to pay the tax liabilities within 10 days from receipt, with a warning that should it fail to do so, petitioner will initiate collection through administrative summary remedies without further notice. In its June 19, 2oo8 letter-reply to the Preliminary Collection Letter, respondent stated that it had already paid the withholding tax deficiency and raised its exemption from income tax and VAT deficiencies as PAGCOR licensees. While it essentially assailed the correctness of the deficiency assessments, it did not raise its non- receipt ofthe Formal Letter ofDemand and Final Assessment Notice. In the absence of a timely protest from respondent, it was then reasonable for petitioner to presume that the Formal Letter of Demand and Final Assessment Notice had become final, executory, and demandable. Respondent's protest in its June 19, 2oo8 letter was belatedly raised. On June 22, 2010, a Warrant of Distraint and Levy was issued and served against respondent. The Warrant of Distraint and Levy on June 22, 2010 constitutes a constructive denial or rejection of respondent's claim in its June 19, 2oo8letter. It is petitioner's final decision on respondent's belated protest that is appealable to the Court of Tax Appeals. Respondent should have filed its appeal to the Court ofTaxAppeals within 30 days from June 22, 2010, or on July 22, 2010, but it failed to do so. Instead, respondent filed a request for withdrawal and cancellation of the Warrant of Distraint and Levy on September 29,2010, or 99 days from receipt of the Warrant In this case, respondent's request for withdrawal and cancellation of the Warrant of Distraint and Levy was filed on September 29, 2010, or only after 99 days from receipt of the Warrant. Petitioner does not deny receipt of respondent's reply letter (containing its protest) to the preliminary collection letter. Finally, there was no such categorical statement in the letter-response dated February 3, 2011 of the Bureau of Internal Revenue Regional Director Romulo L. Aguila, Jr. Parenthetically, the 30-day period to appeal had long lapsed when respondent filed its petition for review on March 31, 2011. Respondent's belated request for cancellation and withdrawal of the Warrant did not serve to extend the thirty [(3o)]-day period to appeal. "A taxpayer's right to contest assessments, particularly the t right to appeal to the Court of Tax Appeals, is a mere statutory right that may be waived or lost, as in this case." Considering that the . petition for review was filed way beyond the 30-day prescriptive

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional � \' Director of Revenue Region No. 5, Caloocan City DECISION X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X period, the Court ofTax Appeals should have dismissed the appeal on the ground of lack of jurisdiction. Thus, petitioner was too late when it decided to act on the assessment at the Collection Letter stage. This is especially true since petitioner could have also appealed the WDL and the WOGs, as the validity of their issuance is among the "other matters" within the jurisdiction of the CTA under Section 7(a)(1) of RA No. 1125/3� as amended by RA 9282.131 The provision reads: 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[.)t32 In this connection, the Supreme Court held in Philippine journalists, Inc. v. Commissioner ofInternal Revenue133 that: 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 of the 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 distraint and levy issued by the BIR t f is valid and to rule if the Waiver of Statute of Limitations was validly ~.ffected. 13 0 Supra at note 88 . 13 1 Supra at note 89. 132 Italics in the orig inal text and emphasis supplied. 133 G.R. No. 1628 52, 16 December 2004; Emphas is supplied.

CTA Case No. 10988 Delicious Kakanin Enterprises Corporation v. Commissioner of Internal Revenue, and Regional Director of Revenue Region No. 5, Caloocan City DECISION � Page 33 of 35 X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Finally, as previously mentioned, We are not unaware that during the proceedings, this Court denied respondent's Motion to Dismiss grounded on lack of jurisdiction. However, such denial is interlocutory and preliminary in nature. As stated in the Court's Resolution:IJ4 Jurisdiction is not to be determined by any plea or theory set up by respondents in their Motion to Dismiss. Respondents' contention that petitioner had received the FDDA but nevertheless failed to appeal the same within the prescribed period is a matter of evidence that should be presented in a full-blown trial that requires the presentation of such document and its authentication. Merely attaching a copy of said document in the Answer does not dispense of such requirement. IJS As provided under Rule 135, Section s(g)136 of the Rules of Court, as amended, every court shall have the power to "amend and control its processes so as to make them conformable to law and justice". Thus, it is within this Court's power to modify its initial and preliminary finding that it has jurisdiction over the case. In conclusion, We declare that the instant petition was filed out of time, consequently, this Court did not acquire jurisdiction over the case. It is a well-settled doctrine that the timely perfection of an appeal is a mandatory requirement.137 It is worth emphasizing that an appeal is neither a natural nor a constitutional right, but is merely statutory. The implication of its statutory character is that the party who intends to appeal must always comply with the procedures and rules governing appeals; or else, the right of appeal may be lost or squandered. Neither t is the right to appeal a component of due process. It is a mere statutory privilege and may be exercised only in the .manner prescribed by, and in accordance with, the provisions oflaw.'38 134 See Resolution dated 26 May 2023 , supra at note 35, p. 219. 135 Emphasis supplied. 136 SEC. 5. Inherent powers of courts. - Every court shall have power: (g) To amend and contro l its process and orders so as to make them conformab le to law and justice[ .] 137 Philippine National Bank v. Commissioner of Internal Revenue, G.R. No. 172458, 14 December 2011. 138 Duty Free Philippines v. Bureau of Internal Revenue, G .R. No. 197228, 08 October 20 14, citing Spouses Elbe Lebin and Erlinda Lebin v. Vilma S. Mirasol, eta!., G.R. No. 164255, 07 September 20 II and Boardwalk Business Ventures, Inc. v. Elvira A. Villareal (deceased) substituted by Rey naIdo P. Villareal, Jr., eta/. , G.R. No. 181 182, I0 April 20 13.

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