WIPRO PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

CTA Form o. 8 (For DCC) 1111111111111111 111111 11111 11111 1111111111111111111111111 1111111111 1111111111111 22-000133-0048 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION CTA CASE NO. 10814 WIPRO PHILIPPINES, INC., Petitioner, - versus- NOTICE OF RESOLUTION COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. AYESHA RANIA B. GUILING-MATANOG ATTY. LARA NICOLET. GONZALES Bureau of Intemal Revenue Room 703, Litigation Division, BIR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Diliman, Quezon City CABRERA & COMPANY 28th Floor, AlA Tower (fonnerly Philamlife Tower) 8767 Paseo de Roxas 1226 Makati City GREETINGS: You are hereby notified by these presents that on November 13, 2024, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, November 14, 202 Atty. Ma Executi

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION WIPRO PHILIPPINES, INC., CTA CASE NO. 10814 Petitioner, Members: -versus - DEL ROSARIO , P. J., Chairperson, BACORRO-VILLENA, and CUI-DAVID, JJ. COMMISSIONER OF Pr o m u lg at ed: INTERNAL REVENUE, Respondent. NOV ArifJ ){- - - - - - - - - - - - - - - - - - - - - - - - - - - RESOLUTION CUI-DAVID, J .: This resolves respondent's Motion for Reconsideration (Re: Decision dated 24 June 2024}1 filed on J uly 12, 2024, with petitioner's Comment/ Opposition [Re: Respondent's Motion for Reconsideration dated 11 July 2024f2 filed on August 12, 2 024. Respondent seeks reconsideration of the Cou rt's Decision 3 promulgated on June 24, 2024 (the "assailed Decision"), the dispositive portion of which r eads: WHEREFORE, in light of the foregoing considerations, the present Petition for Review is GRANTED. Accordingly, the subject deficiency Income Tax assessment in the total amount of P6,3 15,375.47, inclusive of interests, for the fiscal year ending March 31, 2016, is CANCELLED and WITHDRAWN and th e FDDA dated February 4, 2022, issued by respondent against petitioner is REVERSED and SET ASIDE. Docket, pp. 1033- 1056. 2 /d. at I063-1077. 3 !d. at I007- 1030.

RESOLUTION CTA Case No. 10814 Wipro Philippines, Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Respondent is ENJOINED from proceeding with the collection of the said deficiency Income Tax assessment. SO ORDERED. In support of the Motion, respondent raises the following grounds: I. THE HONORABLE COURT ERRED IN CANCELLING AND WITHDRAWING THE FINAL DECISION ON DISPUTED ASSESSMENT. II. WITH ALL DUE RESPECT, THE HONORABLE COURT ERRED WHEN IT STATED IN ITS DECISION THAT RESPONDENT VIOLATED PETITIONER'S RIGHT TO DUE PROCESS. III. WITH ALL DUE RESPECT, THE HONORABLE COURT ERRED WHEN IT DECLARED IN ITS DECISION THAT PETITIONER IS NOT LIABLE FOR DEFICIENCY INCOME TAX IN THE TOTAL AMOUNT OF PHP6,315,375.47, INCLUSIVE OF INTERESTS, FOR THE FISCAL YEAR ENDING MARCH 31, 2016. Respondent contends that in its Decision, the Court addressed the issue of due process, which neither party had raised. According to respondent, the Court should not rule on the validity of the taxes beyond what petitioner has initially raised. Respondent maintains that petitioner's right to due process was not violated. Respondent further argues that petitioner is liable for deficiency Income Tax for the fiscal year ending March 31, 2016. Respondent asserts that while petitioner claims an Income Tax Holiday (ITH) exemption, it failed to present this exemption during the tax audit investigation. Had petitioner submitted its ITH exemption, respondent asserts it would have been considered in the Final Decision on Disputed Assessment (FDDA). Given the issuance of the FDDA, respondent argues that the Court's jurisdiction is strictly appellate in nature, i.e., it should confine itself to whether the findings of respondent are consistent with the law. In rejecting respondent's arguments, petitioner interposes that:

RESOLUTION CTA Case No. 10814 Wipro Philippines, Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x 1. The Honorable Court has the authority to rule on issues expressly raised by either party, in the pleadings .or otherwise, including those issues necessary to the proper and orderly disposition of a case; 2. Petitioner is not estopped to question the propriety of the issuance of the Preliminary Assessment Notice and Formal Letter of Demand/Final Assessment Notice by the Respondent; 3. The Honorable Court is a court of record, and thus, it is allowed to receive evidence, documentary or otherwise, not submitted with the Respondent during the administrative proceedings below; and, 4. Even assuming for the sake of argument that the enumerated pieces of documentary evidence above- mentioned is inadmissible, the Respondent violated the Petitioner's right to due process; After a careful examination of the record and meticulous evaluation of the arguments proffered by respondent in his Motion for Reconsideration, the Court finds that, aside from the issue regarding the Court's authority to address matters not raised by the parties, all other arguments in the motion have already been thoroughly discussed and passed upon in the assailed Decision of June 24, 2024. Reiterating these points would only expend unnecessary time and resources. Anent respondent's argument that the Court cannot rule on matters not raised by the parties, it suffices to say that while the validity of the assessment was not explicitly raised, this Court is not precluded from considering it given that a void assessment bears no fruit. 4 This principle is supported by the Supreme Court's ruling in Commissioner of Internal Revenue v. Lancaster Philippines, Inc., 5 where the Court of Tax Appeals was affirmed as having the authority to address issues not specifically raised by the parties, stating: 4 Commissioner of Internal Revenue v. Fitness By Design, Inc., G.R. No. 215957, November 9, 2016, 808 SCRA 422 [Per J. Leonen, Second Division]; Samar-! Electric Cooperative v. Commissioner of Internal Revenue, G.R. No. 193100, December 10, 2014, 744 SCRA 459 [Per J. Villararna, Jr., Third Division]: Commissioner of Internal Revenue v. BASF Coating+ Inks ?hils.. Inc., G.R. No. 198677, November 26, 2014, 743 SCRA 113 [Per J. Peralta, Third Division]; Commissioner of Internal Revenue Metro Star Superama. Inc., G.R. No. 185371, December 8, 2010,637 SCRA 633 [Per J. Mendoza, Second Division]; Commissioner of Internal Revenue tJ. Reyes, G.R. Nos. !59694 & 163581, January 27, 2006, 516 Phil. 176, 189-190 [Per CJ. Panganiban, First Division]. 5 G.R. No. 183408, 12 July 2017 [Per J. Martires, Second Division].

RESOLUTION CTA Case No. 10814 Wipro Philippines, Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x On whether the CTA can resolve an issue which was not raised by the parties, we rule in the affirmative. Under Section 1, Rule 14 of A.M. No. 05-11-07-CTA, or the Revised Rules of the Court of Tax Appeals, the CTA is not bound by the issues specifically raised by the parties but may also rule upon related issues necessary to achieve an orderly disposition of the case. The text of the provision reads: SECTION 1. Rendition of judgment. - x x x In deciding the case, the Court may not limit itself to the issues stipulated by the parties but may also rule, upon related issues necessary to achieve an orderly disposition of the case. The above section is clearly worded. On the basis thereof, the CTA Division was, therefore, well within its authority to consider in its decision the question on the scope of authority of the revenue officers who were named in the LOA even though the parties had not raised the same in their pleadings or memoranda. The CTA En Bane was likewise correct in sustaining the CTA Division's view concernmg such matter. (Citations omitted, boldfacing supplied) WHEREFORE, premises considered, respondent's Motion for Reconsideration (Re: Decision dated 24 June 2024) is DENIED for lack of merit. SO ORDERED. WE CONCUR: Associate Justice