COMMISSIONER OF INTERNAL REVENUE v. SAN MIGUEL CORPORATION

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF INTERNAL CTA EB No. 2326 REVENUE, (CTA Case No. 9504) Petitioner, -versus- SAN MIGUEL CORPORATION, CTA EB No. 2330 Respondent. (CTA Case No. 9504) x----------------------------------------------x SAN MIGUEL CORPORATION, Petitioner, -versus- Present: Del Rosario, P.J. . COMMISSIONER OF INTERNAL Castaneda, Jr., REVENUE, Uy, Ringpis-Liban, Respondent. Manahan, Bacorro-Villena, Modesto-San Pedro, Reyes-Fajardo, and Cui-David, JJ. X------------------------------------------------------------------------------ RESOLUTION CASTANEDA, JR., J.: This resolution pertains to CTA EB NO. 2326 and resolves Commissioner of Internal Revenue (CIR)'s Motion for Partial 1c-

RESOLUTION CTA EB Nos. 2326 & 2330 (CTA Case No. 9504) Reconsideration (Re: Decision dated 24 February 2022) filed on March 17, 2022. On April 12, 2022, San Miguel Corporation (SMC), by counsel, filed its Comment on/Opposition to "Motion for Partial Reconsideration...." dated March 17, 2022 of Commissioner of Internal Revenue. On April 27, 2022, CIR's motion was submitted for resolution. The dispositive portion of the April 5, 2022 Decision states: "WHEREFORE, premises considered, the consolidated Petitions for Review in CTA EB Nos. 2326 and 2330 are DENIED for lack of merit. Accordingly, the assailed Decision and Resolution promulgated on January 14, 2020 and on July 30, 2020, respectively, by the CTA First Division are AFFIRMED as to the result. SO ORDERED." CIR's motion is based on the following ground: The HONORABLE COURT ERRED IN RULING ORDERING THE CANCELLATION OF THE DEFICIENCY INTEREST, SURCHARGE AND COMPROMISE PENALTY PAID BY SAN MIGUEL CORPORATION. CIR reiterates that the "good faith reliance" defense on this particular issue is a settled matter and inferior court must follow the rule established by a decision [Filinvest case/ of the Supreme Court, and that reliance in good faith must be relatively applied. CIR again emphasized that no particular BIR Ruling was issued to SMC to the effect that it is not liable for surcharge, interest and compromise penalty. After a careful review of the ground raised and arguments presented by CIR, this Court finds that these are mere reiterations, and that no valid or cogent reasons were presented for the Court to deviate from our findings and conclusions reached in our Decision dated February 24, 2022, thus, the motion is denied. ~ 1 Commissioner ofInternal Revenue v. Filinvest Development Corporation, G.R. 163563, July 19,2011.

RESOLUTION CTA EB Nos. 2326 & 2330 (CTA Case No. 9504) Page 3 of4 In this case, the CTA Division found that "good faith reliance on previous rulings by the taxpayer was neither raised as an issue nor passed upon by the SC [Supreme Court] in the Filinvest case."2 We emphasize the settled rule that "good faith and honest belief that one is not subject to tax on the basis of previous interpretation of government agencies tasked to implement the tax laws are sufficient justification to delete the imposition of surcharges and interest.3 Moreover, considering that there is no agreement between the parties as to the imposition of the compromise penalty, it is proper to delete the said compromise penalty. WHEREFORE, premises considered, Commissioner of Internal Revenue (CIR)'s Motion for Partial Reconsideration (Re: Decision dated 24 February 2022) is DENIED. SO ORDERED. Q_.........ez:c. ~~"" lf<RJ.. . JtfANITO C. CASTANEDA, Associate Justice WE CONCUR: (I reiterate my Concur'rfng Opinz"iw(on the assailed Decision) ROMAN G. DEL ROSARIO Presiding Justice ER~P.UY ~- ~ ..; (__ Associate Justice MA. BELEN M. RINGPIS-LIBAN Associate Justice ~-~.~ (With due respect, !join PJ's Concurring Opinion) CATHERINE T. MANAHAN Associate Justice 2 Rollo (CTA EB No. 2326), p. 60. 3 The City ofIloilo v. Smart Communications, Inc. (SMART), G.R. No. 167260, February 27, 2009.

RESOLUTION CTA EB Nos. 2326 & 2330 (CTA Case No. 9504) Page 4 of4 (With due respect, I mainJ6ff(~ vote joliiirrg PJ's Concurring Opinion) JEAN l\1AJ:9E A. BACORRO-VILLENA Associate Justice MARlAR ~ I~V~F. .RE/0Y.iw8.-. F~~ .JiRDO MARIAN Associate Justice ~'Mnbt LANEE S. CUI-DAVID Associate Justice