COMMISSIONER OF INTERNAL REVENUE v. CONCEPCION INDUSTRIES, INC.

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF CTA EB No. 2920 (CTA Case No. 10584) INTERNAL REVENUE, Present: Petitioner, -versus- RINGPIS-LIBAN, EJ. BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and, ANGELES, JJ. CONCEPCION INDUSTRIES, Promulgated: __ -~e~~~~d~~:� INC., -~~~- ~-~ ~~~~:_Q�~� x- ______________ RESOLUTION REYES-FAJARDO, J. : On October 20, 2025, a Decision1 was rendered, disposing CTA EB No. 2920 as follows : WHEREFORE, the Petition for Review dated June 5, 2024, filed by the Commissioner of Internal Revenue in CTA EB No. 2920 is DENIED, for lack of merit. The Resolutions dated January 10, 2024 and April 26, 2024, issued by the Court of Tax Appeals - Second Division in CTA Case No. 10584 are AFFIRMED. SO ORDERED. Rollo, pp. 89-98.

RESOLUTION CTA EB No. 2920 (CTA Case No. 10584) We sustained the Court of Tax Appeals (CTA) in Division's invalidation of the Bureau of Internal Revenue (BIR)' s deficiency internal revenue tax assessments covering Taxable Year (TY) 2014, issued against respondent, because the same emanated from an illicit examination conducted by petitioner's tax agents. Particularly, the Letter of Authority (LOA) authorized Group Supervisor Olivia F. Aviles (GS Aviles), and Revenue Officers Aurora Pelayo (RO Pelayo) and Felina Guimbao (RO Guimbao) to examine respondent's records for said year. Yet, Revenue Officers Olivia Sison (RO Sison), Josa Gomez (RO Gomez), and Neriza Manuel (RO Manuel) participated in the audit and examination of respondent for TY 2014, and recommended the findings of deficiency taxes sans an LOA in their names, from petitioner or its duly authorized representative. On November 4, 2025, petitioner filed its Motion for Reconsideration [re: Decision dated 20 October 2025],2 mainly insisting that the BIR's 2014 deficiency internal revenue tax assessments are binding upon respondent. Specifically, the foregoing assessments were a result of a valid and licit examination and audit performed by petitioner's tax agents. On January 9, 2026, respondent filed its Comment/Opposition (To Petitioner's Motion for Reconsideration dated 4 November 2025),3 riposting that the 2014 deficiency internal revenue tax assessments found by the BIR against it, are void for being a product of an improper audit and examination by petitioner's tax agents. The Motion lacks merit. Petitioner disclaims the participation of ROs Sison, Gomez, and Manuel in the conduct of audit and examination on respondent for TY 2014.4 Yet, petitioner's admission unveils otherwise. To be exact, petitioner admitted that the pertinent Letter of Authority (LOA) endowed Group Supervisor Olivia Aviles (GS Aviles), and Revenue Officers Aurora Pelayo (RO Pelayo) and Felina Guimbao (RO Guimbao) to examine respondent's books of account 2 Id., unpaginated. 3 Id., unpaginated. ' Page 5, petitioner's Motion. Id., unpaginated.

RESOLUTION CTA EB No. 2920 (CTA Case No. 10584) and other accounting records for Taxable Year (TY) 2014.5 Petitioner's Amended Answer then invoked the testimony of Chief Revenue Officer Olivia F. Aviles (RO Aviles)6 in support of its cause. RO Aviles said7 that the following documents contain the respective recommendation of 2014 deficiency taxes against respondent, viz.: Document Recommendation Si~natories Memorandum dated Issuance of GS Aviles, RO Pelayo, RO Guimbao, September 11, Olivia Sison (RO Sison), Josa Gomez (RO 20178 Preliminary Gomez), and Neriza Manuel (RO Manuel) Memorandum dated October Assessment Notice GS Aviles, RO Pelayo, RO Guimbao, RO 16, 20179 Sison, RO Gomez, and RO Manuel Issuance of Formal Letter of Demand and Final Assessment Notice Since ROs Sison, Gomez, and Manuel were not named in the LOA, it stains the BIR examination and audit, as well as the resulting internal revenue tax assessments for TY 2014 with invalidity. Being null, respondent bears no liability therefor. ACCORDINGLY, petitioner's Motion for Reconsideration [re: Decision dated 20 October 2025] is DENIED, for lack of merit. The Decision dated October 20,2025 in CTA EB No. 2920 is AFFIRMED. SO ORDERED. ~ h f. ~ ~ fo,"().,_rk MARIAN IV#. REYlfs-FAJXRDO Associate Justice WE CONCUR: ~-~' MA. BELEN M. RINGPIS-LIBAN Presiding Justice Par. 4 of Amended Petition for Review (Division Docket, p. 270), as admitted in Par. 2 of Amended Answer (Division Docket, p. 564). footnote 7, respondent [now petitione!Js A1nended Answer. Division Docket, p. 579. 7 Answer to Question Nos. 17-19, 26-28, and 40-41, Judicial Affidavit of RO Aviles. 8 BIR Records, pp. 197-202. 9 BIR Records, pp. 227-228.

RESOLUTION CTA EB No. 2920 (CTA Case No. 10584) \ Justice /mutii!JJ LANEE S. CUI:dAVID Associate Justice c~cf~~i'Sfs Associate Justice jf!!ng With due respect, I reiterate my vote the previous DO of Justice Manahan HENRYS. ANGELES Associate Justice