COMMISSIONER OF INTERNAL REVENUE v. STEEL CORPORATION OF THE PHILIPPINES

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF INTERNAL CTA EB NO. 2724 REVENUE, (CTA Case No. 9866) Petitioner, Present: -versus- DEL ROSARIO, P.J., RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. STEEL CORPORATION OF THE Promulgated: PHILIPPINES, Respondent. X--------------------------------- RESOLUTION CUI-DAVID, J.: Before the Court En Bane is a Motion for Reconsideration (Re: Decision promulgated on 30 September 2024) 1 filed b y � petitioner via personal service on October 17, 2024, and viae- mail on October 18, 2024 , assailing the Decision2 promulgated on September 30, 2024 (assailed Decision), the dispositive portion of which reads: WHEREFORE, premises considered, the Petition for Review filed by the Commissioner of Internal Revenue is DENIED for lack of merit. The assailed Decision dated May 17, 2022, and the Resolution dated December 16, 2022, are AFFIRMED. SO ORDERED. En Bane (EB) Docket, pp. 123-129. 2 !d. at 101 - 117.

RESOLUTION CTA EB No. 2724 (CTA Case No. 9866) Commissioner of Internal Revenue v. Steel Corporation of the Philippines ){------------------------------------------------------------------------------------------){ The assailed Decision sustained the ruling of the Court in Division, which ordered the cancellation and setting aside of the deficiency income tax and value-added tax assessments issued against respondent for taxable year 2012. In moving for the reconsideration of the assailed Decision, petitioner raises the following sole ground: THE HONORABLE COURT ERRED IN FINDING THAT PETITIONER'S DEFICIENCY TAX ASSESSMENTS ARE INVALID In its Comment (To the Petitioner's Motion for Reconsideration) 3 filed both personally and electronically on November 27, 2024, respondent avers that petitioner's challenge to the assailed Decision heavily relies on the rulings of the Supreme Court in Perez v. Court of Tax Appeals4 ("Perez") and Marcos II v. Court of Appeals. 5 Petitioner contends that assessments based on estimates are presumed correct. It further contends that in Perez, "reflected sources of funds accounted for in the taxpayer's return lead to the inference that part ofits income has not been reported." However, respondent counters that petitioner fails to disclose material distinctions between Perez and the present case. Specifically, in Perez, the Collector of Internal Revenue applied the "net worth" method to determine income tax deficiencies. Respondent explains that under the "net worth" method, the taxpayer must establish that any increases in the taxpayer's net worth are attributable to taxable income. In Perez, the taxpayer failed to prove that the increases in bank balances, asset acquisitions, and investments in various enterprises from 1946 to 1950 were derived from taxable income. Hence, these unsubstantiated increases in his net worth exposed him to additional income tax liabilities. Respondent also notes that while the Perez case focused on increases in net worth, petitioner in the present case relies on alleged undeclared importations, which jurisprudence had long confirmed as an unreasonable basis for an assessment. Hence, at the pain of being repetitive, respondent asserts that importation, by itself, does not necessarily equate to undeclared sales that would result in VATable sales or taxable !d. at 134-140. 4 G.R. No. L-10507, May 30, 1958. G.R. No. 120880, June 5, 1997 [Per J. Torres, Jr., Second Division].

RESOLUTION CTA EB No. 2724 (CTA Case No. 9866) Commissioner of Internal Revenue v. Steel Corporation of the Philippines X------------------------------------------------------------------------------------------X income. Thus, importation alone is an unreasonable basis for the deficiency tax assessments. After a thorough examination of petitioner's Motion for Reconsideration and respondent's Comment, the Court En Bane finds that all arguments raised in the instant motion have already been determined and passed upon, first by the Court in Division and subsequently on appeal by the Court En Bane. Indeed, petitioner's Motion for Reconsideration is a replica of his Petition for Review filed with the Court En Bane. Revisiting these arguments would only result in a waste of time and resources of the Court. The ruling in Social Justice Society (SJS) Officers et al. v. Lim 6 provides instructive guidance on the effect and disposition of a motion for reconsideration: The filing of a motion for reconsideration, authorized by Rule 52 of the Rules of Court, does not impose on the Court the obligation to deal individually and specifically wlth the grounds relied upon therefor, in much the same way that the Court does in its judgment or final order as regards the issues raised and submitted for decision. This would be a useless formality or ritual invariably involving merely a reiteration of the reasons already set forth in the judgment or final order for rejecting the arguments advanced by the movant; and it would be a needless act, too, with respect to issues raised for the first time, these being, as above stated, deemed waived because not asserted at the first opportunity. It suffices for the Court to deal generally and summarily with the motion for reconsideration, and merely state a legal ground for its denial (Sec. 14, Art. VIII, Constitution); i.e., the motion contains merely a reiteration or rehash of arguments already submitted to and pronounced without merit by the Court in its judgment, or the basic issues have already been passed upon, or the motion discloses no substantial argument or cogent reason to warrant reconsideration or modification of the judgment or final order; or the arguments in the motion are too unsubstantial to require consideration, etc. WHEREFORE, premises considered, the Motion for Reconsideration (Re: Decision promulgated on 30 September 2024) filed by petitioner Commissioner of Internal Revenue is DENIED for lack of merit. 6 Social Justice Society (SJS) Officers, eta/. v. Lim, G.R. Nos. 187836 & 187916, March 10,2015.

RESOLUTION CTA EB No. 2724 (CTA Case No. 9866) Commissioner of Internal Revenue v. Steel Corporation of the Philippines X------------------------------------------------------------------------------------------X SO ORDERED. WE CONCUR: (I reiterate my Concu ng Opini on the assailed Decision of the Court in Division) ROMAN G. DEL ROSARIO Presiding Justice )4v. ~ -Y'-- MA. BELEN M. RINGPIS-LIBAN Associate Justice ~. J.fo.._L'--- CATHERINE T. MANAHAN Associate Justice \ MARIA ~ 9w.,;. ~ -F~ MARIAN IVY F. REYES-FAJARDO Associate Justice c~tAss.ocia;te J~us~~;E:/S HENRY Jjo...ANGELES Associate Justice