ROBERT CHRISTOPHER M. CARMONA, doing business under the name SAGA CASTING AND PRODUCTIONS v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION ROBERT CHRISTOPHER M. CTA CASE NO. 8484 CARMONA, doing business under the name SAGA CASTING AND Members: PRODUCTIONS, DEL ROSARIO, eL Petitioner, UY, and - versus - MINDARO-GRULLA, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, MAY 2 8 2015 I II: 3q (\�V.� Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RESOLUTION DEL ROSARIO, PJ.: This resolves respondent's "MOTION FOR RECONSIDERATION (Re: Decision promulga ted 20 January 2015)" fi led on February 2, 2015. In her motion for reconsideration, respondent argues that the three (3) -year prescriptive period to assess is not without exemptions. Respondent alleges that petitioner failed to declare his correct sales in his Income and Value-Added Tax (VAT) returns in the amount of P68,747,335.27 or equi valent to 400.72% undeclared sales. This discrepancy manifests an evident substantial under declaration resulting in the falsity or fraudulent of the Income and VAT returns with an intent to evade the payment oftax. Upon peru sal of the reco rd s of this case, the Court notes that the issue on the fraudulent/falsity of petitioner's Income Tax and VAT returns causing the applicability of the ten (1 0)-year period to assess was on ly raised for the first in the present Motion for Reconsideration . Respondent never alleged this issue in its Preliminary Assessment Notice (PAN), Final

RESOLUTION Robert Christopher M Carmona, doing Business under the name SAGA Casting and Productions, vs. Commissioner ofInternal Revenue CTA Case No. 8484 Page 2 of3 Assessment Notice (FAN), Answer to the Petition for Review or m her Memorandum. Considering that the allegation of fraud or falsity in the return is a mere after thoug ht of respondent in trying to justify the issuance of the assessment beyond the three (3)-year prescripti ve period to assess and there is nothing in the PAN and FAN which wo uld warrant the application of the exceptions provided under Section 222 of the National Internal Revenue Code (NIRC) of 1997, as amended, respondent's a llegation of fraud or falsity in the return is bereft of merit. Furthermore, a perusal of the records shows that respondent was only ab le to show through ceriification from third patiies the amount of Pl ,500,353.95 and P3 ,829,157.96 as under-declaration of sales on Income and VAT returns, respectively, or equi valent to 8.92% and 26.42% undeclared sales, as follows: BIR BIR Name of Taxpayer Gross Exhibit Records Jollibee Foods Corporation Purchases p 13,888,764.70 No. page 15 & 20 75 & 22 16 50 Stores Specialists, Inc. 505,500.00 17 49 Bank of the Philippine Islands 1,606,000.00 18 44 Makati Shangri-La Hotel 142,500.00 13,775.5 1 Asia Society Philippine Foundation, 19 4 1 Inc. 21 20 Ayala Land 663 ,850.00 22 19 Sofitel Philippine Pl aza Manila 1,500,000.00 TOTAL SALES p 18.320.390.21 Total Sales supported by certificati on/letters Income VAT Less: Sales per Income Tax!VAT Return filed 18,320,390.21 18,320,390.21 Under-Declaration of Sales on Income Tax/Sales per 16,820,036.26 14,491 ,232.25 VAT 1,500,353.95 3,829, 157.96 Percentage 8.92% 26.42% The amount of P 18,320,390.2 1, however, is not even conclusive considering that the Bureau of Internal Revenue (BIR) did not provide any proof such as a ceriified true copy of receipts/invoices, alphalist or BIR returns in addition to the certifications issued by third parties. At the very

RESOLUTION Robert Christopher M Carmona, doing business under the name SAGA Casting and Productions, vs. Commissioner ofInternal Revenue CTA Case No. 8484 Page 3 of3 least, the BIR should have provided and offered in evidence a printed copy of its system-generated Reconciliation of Listings for EnForcement (RELIEF) or Tax Reconciliation System (TRS). Indubitably, respondent failed to prove that there was a substantial under declaration in petitioner' s sales for taxable year 2007, prompting the applicability of the ten ( 10)-year prescriptive period. Moreover, assuming arguendo that the ten (10)-year period to assess is applicable, the BIR still has no authority to assess petitioner considering that the Letter of Authority (LOA) dated September 25, 2009 was served only on October 26, 2009 or on the thirty first (31 51) day from its date of issue. Records further show that the said LOA was not revalidated as required by Revenue Administrative Memorandum Order No. 1-00, which categorically states that a LOA must be served or presented to the taxpayer within 30 days from its date of issue; otherwise, it becomes null and void unless revalidated. WHEREFORE, premises considered, the "Motion for Reconsideration (Re: Decision promulgated 20 January 2015)" is hereby DENIED for lack of merit. SO ORDERED. WE CONCUR: Presiding Justice ERLINDA P. UY ~ t.~I.M~~ b~ Associate Justice CIELITO N. MINDARO-GRULLA Associate Justice