OROVILLE RESOURCES AND VENTURES, INC. (ORVI) v. COMMISSIONER OF INTERNAL REVENUE

CTA Form No.8 111111111111 1111111111 11111 11111 1111111111 111111111 111111 11111 111111111111111111 20-000008-0079 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE NO. 10243 OROVILLE RESOURCES AND NOTICE OF DECISION VENTURES, INC. (ORVI), Petitioner, -versus- COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo St., Legazpi Village Makati City ATTY. SYLVIA R. ALMA JOSE ATTY. AYESHA HANIA B. GUILING-MATANOG Room 703, Litigation Division, BIR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Diliman, Quezon City ATTY. ELEUTERIO F. DIAO IV Room 220, Tomas Saco Scapes (TSS) Tomasco Street, Macasandig, Cagayan De Oro City 9000 Misamis Oriental GREETINGS: You are hereby notified by these presents that on February 27, 2026, a Decision was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, March 2, 2026. AttyE. xMeacriuat~ iv;~CouF.rCthIaInI -Te

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION OROVILLE RESOURCES CTA CASE NO. 10243 AND VENTURES, INC. (ORVI), Members: Petitioner, -versus- BACORRO-VILLENA, Acting Chairperson, and CUI-DAVID, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. FEB 27 2026 <.1 :00 PM ~ )C- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -)C DECISION CUI-DAVID, J. : Before this Court is a Petition for Review with Motion to Quas h Warrant of Distraint and Levy (Petition for Review), 1 filed on January 14, 2020, by p etitioner Oroville Resource s and Ventures, Inc. (ORVI or petitioner) against r espondent Commissioner of Internal Revenue (CIR o r respondent). Petitioner seeks to nullify, cancel, and set aside the a ssessments issued by respondent for alleged deficien cy income taJ<, value-a dded taJ< (VAT), eJ<pand ed withholding t aJ< (EWT), final withholding taJ< (FWT), documentary stamp taJ< (DST), and compromise penalties in the aggregate amount of P 1, 102,977.34 for taJ<able year (TY) 2017 .2 THE PARTIES Petition er is a s tock corpor a tion, with principal office a ddress a t Capistrano-Cruz Taal Streets, Cagayan De Oro City 1 Docket. pp. 6-19. 2 /d. at 23 1. Pre-Trial Order, I. Summary of the Case.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x (registered address),3 represented by its President, Ma. Teresa CH. Biaco.4 It is duly registered with the Bureau of Internal Revenue (BIR) with Tax Identification No. 003-875-474, as evidenced by BIR Form No. 2303 with Certificate of Registration No. 1997-098-0101, issued on September 9, 1997.5 Petitioner is engaged in general trading activities and other business undertakings, including but not limited to real estate leasing.6 Respondent CIR is empowered, among others, to decide disputed assessments, refunds of internal revenue taxes, fees and other charges, penalties in relation thereto, and other matters arising from the implementation of the National Internal Revenue Code (NIRC) and other laws administered by the BIR.7 He may be served with summons and other court processes at the BIR National Office Building, BIR Road, Diliman, Quezon City.s THE FACTS AND PROCEEDINGS BEFORE THE COURT On April 12, 2018, petitioner filed its Annual Income Tax Return for TY 2017. 9 On November 25, 2018, petitioner was furnished a copy of Letter of Authority (LOA) No. A16-2018-00000047 / eLA201600053797, dated October 25, 2018, signed by Regional Director Hermeno A. Palamine of Revenue Region No. 16, Cagayan De Oro City, authorizing Revenue Officer (RO) Nor- aisah Mala-atao (Mala-atao) and Group Supervisor James Valmoria to examine petitioner's books of accounts and other accounting records for TY 20 17.10 However, petitioner alleges that Mr. Emilio Rodrigo B. Enriquez (Mr. Enriquez), who received the LOA on November 6, 2018, is neither an employee nor a stockholder of petitioner, and had no authority to accept such document.l 1 Also, petitioner contends that the LOA was improperly served at Mr. ,ff( Docket. pp. 221-222. Joint Stipulation of Facts and Issues (JSFI). Summary of Admitted Facts. par. 2: Exhibit ��p_ r. Docket. p. 24. Docket. pp. 6-7. Petition for Review. I. The Parties. par. 1: Exhibit ��p_J .. and "'P-T. Docket. pp. 21-23. Docket. pp. 221-222. JSFL Summary of Admitted Facts. par. 2: Exhibit ��P-r. Docket. p. 24. BIR Records (Exhibit .. R-16.. ). p. 155. Financial Statements Decem her 31. 2017. Notes to financial Statements. Note I -General Information. Docket. p. 7. Petition for ReYie\Y. I. The Parties. par. 2: 221-222 . .JSFL Summary of Admitted Facts. par. I. !d. Docket. p. 7. Petition for ReYiew. II. Jurisdictional Allegations. par. 4:222. JSFL Summary of Admitted Facts. par. 3: Exhibit ��P-4"". Docket. pp. 25-33. 10 Docket. p. 7. Petition for Review. II. Jurisdictional Allegations. par. 5: 222. JSFI. Summary of Admitted Facts. par. 4: Exhibit .. P-5 ... Docket. p. 39: Exhibit ..R-1 ... BIR Records. p. !91. 11 Docket. p. 330. Memorandum for the Petitioner. Statement of the Case and the Facts. par. 2.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 3 of35 X-----------------------------------------------------------------------------------------------------X Enriquez's residence at House No. 92, 9th_291h Street, Nazareth, Cagayan de Oro City (known address), instead of petitioner's registered address.l2 Subsequently, on an unknown date, petitioner received by registered mail a Notice for Informal Conference (NIC) dated January 11, 2019, signed by AdoraL. Sijo, Chief of Assessment Division, with tax liabilities totaling 1'1,052,710.54.13 On April 24, 2019, respondent issued a Preliminary Assessment Notice (PAN). 14 The PAN was allegedly served by RO Mala-atao on May 16, 2019 at petitioner's registered address but failed because petitioner allegedly no longer maintained an office there.l 5 RO Mala-atao then attempted service at the known address the following day, but since the notice was refused by the housekeeper, she resorted to substituted service. 16 On May 31, 2019, the PAN was also sent by registered mail to petitioner's registered address, but was returned to the mailing section.J7 On July 4, 2019, since there was no reply to the PAN, respondent issued a Formal Letter of Demand and Final Assessment Notice (FLD/FAN). 18 RO Mala-atao allegedly tried to serve the FLD/FAN on August 19 and 20, 2019, but no one was at the known address of petitioner to receive the same. 19 Hence, she resorted to substituted service on August 22, 2019. 20 Petitioner denies ever rece1vmg copies of the PAN and v FLD/FAN.21 " !d u Docket. p.7-8. Petition for Rc,�iew. II. Jurisdictional /\I legations. par. 6: 112. JSFI. Summary of Admitted Facts. pars. 5-6: Exhibit ��P-6../ Exhibit .. R--r�. BIR Records. p. 208-216. The breakdown off>l.052.710.54 in the NJC \\�as stipulated as follows: Income Tax r 744.965.89 VAT EWT 34.135.56 FWT 5.635.00 DST 226.478.17 Compromise Penalties 10.495.92 31.000.00 Total f' 1.052.71 0.54 14 Exhibit .. R-6''. BIR Records. pp. 267-272. 15 Docket. p. 65. Answer (with Opposition to Motion to Quash Warrant of Distraint and Lev~) ]Ansm~rl. par. 11. 16 /d. at par. 12. 17 !d. at par. 14. 18 Exhibit "R-8'' & "R-9". BIR Records. pp. 292-303. 19 Docket. p. 67. Ans\vcr. par. 15: 350. Memorandum citing Docket. pp. 178-185. Exhibit "R-1 T. Judicial Affidavit of Ren::nue OJTicer Noraisah R. Mala-atao. Q&A no. 30. 20 Docket. p. 67. Answer. par. 16: 350. Memorandum citing Docket. pp. 178-185. Exhibit "R-1 T. Judicial Affidavit of Revenue Officer Noraisah R. Mala-atao. Q&A no. 30. 21 Docket. p. 9-12. Petition tOr Rcvic\\. Arguments and Discussion. par. I.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x On December 16, 2019, petitioner received a Warrant of Distraint and Levy (WDL), dated the same day, reflecting the alleged deficiency taxes in the total amount of1'1,102,977.34.22 On January 14, 2020, petitioner filed the present Petition for Review.23 Summons was served on the Office of the Solicitor General on January 24, 2020, and on respondent on January 22, 2020. 24 On February 5, 2020, respondent filed a Motion for Extension of Time to File Answer,25 which the Court granted, giving respondent thirty (30) days, or until March 7, 2020, to file an Answer.26 Thereafter, respondent filed a Second Motion for Additional Time to File Answer27 on March 6, 2020, which the Court likewise granted, giving respondent a non-extendible period of 30 days, or until April 6, 2020, to file an Answer.28 On July 6, 2020, respondent belatedly filed his Answer (with Opposition to Motion to Quash Warrant of Distraint and Levy) [Answer].29 In a Resolution dated July 27, 2020, the Court denied petitioner's Motion to Quash Warrant of Distraint and Levy, incorporated in its Petition for Review.30 On August 25, 2020, a Notice ofPre-Trial Conference3 1 was issued, setting the case for Pre-Trial Conference on September 14, 2020. v 22 !d. at 8-9. Petition for Review. II. Jurisdictional Allegations. par. 9: 222. JSFI. Summary of Admitted Facts. par. 8: 47. Exhibit ��p_T: Tht: breakdown offll.l 02.977.34 in the WDL is as follows: Income Tax 1' 784.251.00 35.881.82 VAT 5.922.19 EWT FWT 225.508.05 10.414.28 DST 41.000.00 Compromise Penaltks 1'1. 102.977.34 Total 03 Docket. pp. 6-19. l.t !d. at 48. 2 ~ !d. at 49-52. 26 /d. at 54. Order dated February 7. 2020. 27 /d. at 56-59. :s /d. at 61. Order dated Marcil 10. 2020. " !d. at 62-90. 30 !d. " !d. at I 06-107.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X The Respondent's Pre-Trial Briej32 was filed on September 11, 2020, while the Pre-Trial Brieffor the Petitioner33 was filed on October 5, 2020. Respondent later filed an Amended Pre- Trial Briej34 on February 17, 2021. During the November 4, 2020 Hearing supposedly for the Pre-Trial Conference, the Court referred the case to the Philippine Mediation Center- Court of Tax Appeals (PMC-CTA) for mediation proceedings and ordered the parties to submit their Joint Stipulation of Facts and Issues (JSFI) before the next scheduled hearing.35 On December 4, 2020, the PMC-CTA submitted a Back to Court report, 36 indicating that mediation was refused by the parties. The Court duly noted the report in its Resolution dated February 22, 2021.37 After several postponements, the Pre-Trial Conference proceeded on November 29, 2021.38 On February 17, 2022, the parties belatedly filed a Joint Manifestation with Motion to Admit Joint Stipulation ofFacts and Issues.39 On March 10, 2022, the Court issued the Pre-Trial Order,40 approving the parties' JSFI and deeming the pre-trial terminated. On April4, 2022, petitioner manifested during the hearing that it is willing to enter into a possible compromise settlement with respondent. 41 An Urgent Motion for Resetting42 with an attached Letter of Intent to Settle/ Compromise Agreement43 dated April 16, 2022 was received by the Court on June 13, v 2022. 32 /d. at 108-113. 33 !d. at \30-133. 14 /d.atl53-158. '-" !d at 137. Order dated November ...J-. 2020. �16 ld 1�-1-3 . .n ld at I...J-6. Resolution dated December IS. 2020. .<s ld at 116. Order dated September 1-L 2020: 137. Order Jated Non=mbcr -L 2020: 139. Resolution dated I'-<oYembcr 4. 2020: 146. Resolution dated December 18. 2020: 187. Order dated F~..":bruar: 22. 2021: 194. Order dated February 26. 2021: 214. Resolution dated May 24. 2021: 215. Noti<.:c of Resetting dated July 21. 2021: 216. Notice of Resetting dated September 14.2021. 30 /d. at218-227. 40 !d. at231-234. 41 /d. at 236. Order dated April 4. 2022. 42 /d. at. 238-239. 43 /d. at 240-241.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X On May 29, 2023, the present case was transferred to the First Division pursuant to Administrative Circular No. 01-2023 (Reorganizing the Divisions of the Court) dated May 23, 2023.44 Trial ensued. Petitioner presented a single witness, its Treasurer, Ms. Ma. Arabella CH. Fernando (Ms. Fernando), who attended via videoconferencing and testified by way of her Judicial Affidavit. 45 Petitioner filed its Formal Offer of Evidence46 on February 15, 2024, to which respondent filed a Comment (Re: Petitioner's Formal Offer of Evidencej47 on February 21, 2024. In a Resolution dated July 8, 2024,48 the Court admitted all of petitioner's offered evidence. Respondent presented two witnesses, namely: 49 (1) RO Mala-atao,so and (2) RO Sharmaine N. Sampaco. 51 Respondent's Formal Offer of Evidence52 was filed on October 4, 2024, to which petitioner failed to file a comment.53 The Court admitted all of respondent's exhibits in a Resolution dated February 14, 2025.54 On November 11, 2024, the Memorandum for the Petitioners was filed while respondent's Memorandum56 was filed on March 21, 2025. On April 21, 2025, the instant case was submitted for decision. 57 THE ISSUES As stipulated by the parties, the issues submitted for this Court's resolution are: .t.t "' /d. at 251. Notice of Resolution dated Ma~ 29. 2023. "'5 !d. at 275-276. Order dated February 7. 2024-: 120--125. E:-.:hibit ..p_g.. _Judicial Affidavit. "'6 !d. at 277-280. 47 /d. at 282-284. " ld at 306-307. 49 /d. at 312-313. Order dated September 24. 2024. 50 /d. at 178-185. Exhibit ..R-1 T. Judicial Aftidm�it ofRe\enuc Officer Noraisah R. Mala-atao. 51 /d. at 202-206. Exhibit ..R-Js��. Judicial Affidavit of Ren::nue Ofticer Sharmaine N. Sampaco. ' 2 !d. at 316--323. 53 /d. at 327. Records Verification dated October 30. 2024. 1 /d. at 344-345. '� '' ld at 329-336. ~6 !d. at 348-372. 57 /d. at 348. Notice of Resolution dated April 21. 2025.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X For petitioner: 1. Whether the assessment 1s null and void for failure to comply with due process? 2. Whether the Court has jurisdiction on the validity of the Warrant of Distraint and Levy issued by the respondent? 3. Whether Petitioner is liable for the Income Tax, Value Added Tax, Final Withholding Tax, Surcharge, Interest and Compromise Penalties? For respondent: 1. Whether or not the Honorable Court has jurisdiction over the instant petition. 2. Whether or not the assessment issued against petitioner is already final and executory for failure of petitioner to file a Protest to FAN/FLD dated 7 July 2019. 3. Whether or not petitioner duly received the PAN, FAN/FLD, and Warrant of Distraint and/ or Levy in accordance with law. ss Petitioner's arguments: In its Petition for Review59 and Memorandum for the Petitioner,6� petitioner contends that: 1. The Court has jurisdiction to act on the present Petition for Review as its authority extends to "other matters" ansmg under the NIRC and other laws enforced by the BIR; 2. There was a violation of due process and respondent's own regulations; hence, the assessment is null and void; 3. The LOA was received by an unauthorized person and was not delivered at petitioner's registered business address at Capistrano-Cruz Taal Streets, Cagayan de Oro City, but was instead sent to the residence of Mr. Enriquez located at House No. 92, 9th-29th Street, Nazareth, Cagayan de Oro City; 4. It did not receive the PAN, FAN and FLD; and 58 Docket. p. 23 L Pre-Trial Order. II. Statement of the Facts& Issues: 222-223. JSfl. Issues To Be Tried Or Resolved. 9 Docket. pp. 6-19. ' 60 !d. at 329-336.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X 5. The assessed deficiency taxes and compromise penalties are without legal and factual bases. Respondent's counter-arguments: In his Answer6 1 and Memorandum,62 respondent argues that: 1. The Court has no jurisdiction over the instant Petition for Review for petitioner's failure to file a protest to the FLD/FAN; 2. Petitioner was not denied due process considering that the ROs have followed the guidelines set forth in Revenue Regulations (RR) No. 18-2013 and petitioner is deemed to have received the notices issued by the BIR; and 3. Even assuming without admitting the Court's jurisdiction, the assessment has factual and legal bases and petitioner is liable for the assessed deficiency taxes. THE COURT'S RULING The present Petition for Review is impressed with merit. The Petition for Review was timely filed; hence, this Court has jurisdiction over the instant case. For an orderly disposition of the case, the Court shall first resolve the issue of jurisdiction. Respondent contends that the Court has no jurisdiction over the present Petition for Review, arguing that the assessment has already become final, executory, and demandable due to petitioner's failure to file a valid and timely protest against the FLD IFAN. In contrast, petitioner denies the receipt of such FLD /FAN, among others. It asserts that the CTA's jurisdiction includes "other matters" arising under the NIRC or other laws 61 /d. at 62-90. 62 !d. at 348-372.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x administered by the BIR, which encompasses the determination of the validity of a WDL. The Court agrees with petitioner. It is well settled in our rules and jurisprudence that the CTA'sjurisdiction is not confined solely to decisions or inactions of the CIR involving assessments and claims for refund. Rather, it likewise encompasses "other matters" arising under the NIRC of 1997, as amended, or under other laws administered by the BIR. Section 7(a)(1) and (2) of Republic Act (RA) No. 1125,63 as amended by RA No. 9282,64 confers upon the CTA jurisdiction over decisions, inactions of respondent, and other matters" arising under the NIRC of 1997, as amended, to wit: SEC. 7. Jurisdiction.- The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; (Emphasis supplied) Similarly, Section 3(a)(1) of Rule 4 of the Revised Rules of the Court of Tax Appeals (RRCTA) provides: SEC. 3. Cases within the jurisdiction of the Court m Division. - The Court in Division shall exercise: 6�' An Act Creating the Court of Tax Appeals. June 16. !95-L 64 An Act Expanding the Jurisdiction of the Court of Ta:-.: Appeals (CTA). Elevating Its Rank to the Level of a Collegiate Court \vith Special Jurisdiction and Enlarging Its Membership. Amending for the Purpose Certain Sections of Republic Act No. 1125. as Amended. Othcnvise Known as the La\v Creating the Court of Tax Appeals. and for Other Purposes. March 30. 2004.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x (a) Exclusive original over or appellate jurisdiction to review by appeal the following: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (Emphasis supplied) In Commissioner of Internal Revenue v. Bank of the Philippine Islands,55 the Supreme Court categorically ruled that the CTA has jurisdiction to determine the propriety of a WDL, as such matter falls within the phrase "other matters" ansmg under the NIRC, thus: [T]he issue for the CTA to resolve was the propriety not of any assessment but of a tax collection measure implemented against BPI. Accordingly, the CTA's disposition was distinctly for the cancellation of the warrant and nothing else. The law expressly vests the CTA the authority to take cognizance of "other matters" arising from the 1977 Tax Code and other laws administered by the BIR which necessarily includes rules, regulations, and measures on the collection of tax. Tax collection is part and parcel of the CIR's power to make assessments and prescribe additional requirements for tax administration and enforcement. Moreover, in Commissioner of Internal Revenue v. Manila Medical Services, Inc. (Manila Doctors Hospital), 66 the Supreme Court reiterated the CTA's jurisdiction to determine the validity of a WDL, viz.: As explained by the Court in Commissioner of Internal Revenue v. Court of Tax Appeals Second Division, the exclusive appellate jurisdiction of the CTA Division is not limited to cases involving decisions of the CIR or matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the NIRC or related laws administered by the BIR. The wording of the provision is clear and simple. It gives the CTA the jurisdiction to determine the validity of the warrant of distraint and levv. (Emphasis and underscoring supplied) 6-' G.R. No. 227049. September 16.2020 [Per J. lnting. Second Division]. 66 G.R. No. 255473. February 13. 2023 [Per J. Singh. Third Di\ isionl

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 11 of35 X-----------------------------------------------------------------------------------------------------X Considering that the validity of a WDL is appealable to this Court, it is clear that the CTA is properly vested with jurisdiction to take cognizance of the instant case. Anent the timeliness of petitioner's appeal, Section 11 of RA No. 1125, as amended, reads: SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. - Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. (Emphasis supplied) The above prov1s10n is likewise reiterated under Section 3(a), Rule 867 of the RRCTA. Accordingly, an appeal to the CTA must be filed by the party adversely affected, within 30 days from receipt of the adverse decision or from the occurrence of other appealable matters arising under the NIRC or its regulations. In the present case, petitioner received the WDL, which is the adverse decision appealable to this Court, on December 16, 2019.68 Counting 30 days, it had until January 15, 2020 to file a Petition for Review. Records show that the Petition for Review was filed on January 14, 2020, and is timely.69 Having established this Court's jurisdiction and the timeliness of the appeal, the Court now resolves the case on the merits. 67 Sec. 3. Jt'ho ma_v appeal: period tofile petition. ---(a) A party adversely affected by a decision. ruling or the inaction of the Commissioner of Internal RcYcnue on disputed assessments or claims for refund of internal revenue taxes. or by a decision or ruling of the Commissioner of Customs. the Secretary of Finance. the Secretary of Trade and Industry. the Secretary of Agriculture. or a Regional Tria! Court in the ewrcise of its original jurisdiction may appeal to the Court by petition for revie\v filed within thirty clays after recdpt or a copy of such decision or ruling. or expiration of the period fixed by law for the Commissioner of Internal Revenue to act on the disputed assessments. In case of inaction or the Commissioner or Internal Rc\�enue on claims for refund of internal revenue taxes erroneously or illegally collected. the taxpayer must lilc a petition for review\\ ithin the 1\\-o-year period prescribed by Ia\\" from payment or collection of the taxes. 68 Docket. pp. 8~9. Petition for Rcvie\\. II. Jurisdictional !\!legations. par. 9:222. JSfl. Summar:. or Admitted Facts. par. 8: Exhibit ��P-T. Docket p. 47. 69 Docket. p.6.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X Respondent failed to prove the proper service of the LOA, thereby violating petitioner's right to due process and rendering the deficiency tax assessment void. Even assuming arguendo that the LOA had been properly served, the PAN, FLD/FAN, and, by extension, the WDL, are likewise void for respondent's failure to comply with the due process requirements laid down by law and by the BIR's own rules on service. At the outset, petitioner disputes the receipt of the LOA, PAN and FLD/FAN. Consequently, with such denial, the burden of proof now rests upon respondent to establish by competent evidence the proper serv1ce and actual receipt of these issuances or notices by the taxpayer. 70 This rule was emphatically pronounced by the Supreme Court in the oft-cited case of Commissioner of Internal Revenue v. Metro Star Superama, Inc., 71 citing Barcelon, Roxas Securities, Inc. (now known as UBP Securities, Inc.) v. Commissioner of Internal Revenue (Barcelon),72 thus: Jurisprudence is replete with cases holding that if the taxpayer denies ever having received an assessment from the BIR, it is incumbent upon the latter to prove by competent evidence that such notice was indeed received by the addressee. The onus probandi was shifted to respondent to prove by contrary evidence that the Petitioner received the assessment in the due course of mail. (Emphasis supplied) More recently, in Commissioner of Internal Revenue v. South Entertainment Gallery, Inc. (South Entertainment), 73 the Supreme Court similarly held that a direct denial of receipt of an assessment notice shifts the burden to the CIR to prove tv/ �7 Commissioner q(!ntemal Rew:nue r. GJ..\1 Phi!Jj)pines .\fant!fixturing. Inc.. G.R. No. 202695. february 29. 2016 [Per J. Peralta. Third Division]. citing Commissioner o( Internal Revenue v. :Hetro S'tar Superama, Inc .. G.R. No. 185371. December 8. 20\0 lPcr J. Mendoza. Second Di\"isionJ: &wee/on. Ro.Yas Securdies, Inc. (nOll" known as UBP Securities. Inc.) v. Commissioner of lntema! Re\�enue. G. R. No. 157064. August 7. 2006 [Per .1. Chico- Nazario. First Division]. 71 G.R. No. 185371. December 8. 2010 [Per .1. Mendoza. Second Division]. 7~ G. R. ~o. 157064. August 7. 2006 [Per J. Chico-Nazario. First Di\�ision]. B G.R. No. 223767. Apri\24. 2023lPer C.J. Gcsmundo. First DhisionJ.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x actual receipt thereof. The Court further held that the CIR "cannot rely on the supposed incompetence and lack of personal knowledge of [the taxpayer's] witness to testify on the alleged non-receipt of the [assessment notice]." Thus, it is incumbent upon respondent to sufficiently prove that the LOA, PAN and FLD/FAN were properly served upon petitioner, and that the BIR strictly complied with its own regulations as part of the due process requirements under Section 228 of the NIRC of 1997, as amended, which provides: Section 228. Protesting of Assessment. - When the Commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his findings: ... The taxpayers shall be informed in writing of the law and the facts on which the assessment is made; otherwise, the assessment shall be void. Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an assessment based on his findings. (Emphasis supplied) Based on the foregoing provision, the taxpayer must be informed in writing of the factual and legal bases of the assessment and afforded the opportunity to respond. Non- compliance with Section 228 "does not only render the assessment void, but also finds no validation in any provision in the Tax Code."74 To implement Section 228, RR No. 12-1999,75 was issued, which was subsequently amended by RR No. 18-2013,76 and further amended by RR No. 7-2018. 77 The prescribed modes of service of assessment notices are set forth in Section 3.1.6 of RR No. 12-1999, as amended by RR No. 18-2013, which reads: 7"' Commissioner of lntemcd Revenue v. Cnioil Corporation. Ci.R. No. 204405. August 4. 2021 [Pc:r J. Hernando. Second Division] citing Commissioner o(/ntenwl Rerenue \'. Reyes. 516 Phil. 176. 191 (2006 ). 75 Implementing the Provisions of the National Internal Re\enue Code of 1997 Governing the Rules on Assessment of National Internal Revenue Taxes. Civil Penalties and Interest and the Extra-Judicial Settlement of a Taxpayer's Criminal Violation of the Code through Payment of a Suggested Compromise Penalty. 7" Am~!nding C~:rtain Sections of Rev~!nuc Regulations 1\o. 12-99 Relative to the Due Process Requirement in the Issuance of a Deficiency Tax Assessment. 77 Amending Certain Sections of RC\'enuc Regulations No. 12-99. as Amended by Revenue Regulations No. I8-13. Relative to the Due Process Requirement in the Issuance of a Deficiency Tax Assessment. 22 January 2018.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 14 of35 X-----------------------------------------------------------------------------------------------------X 3.1.6 Modes of Service. The notice (PAN/FLD/FAN/FDDA) to the taxpayer herein required may be served by the Commissioner or his duly authorized representative through the following modes: (i) The notice shall be served through personal service by delivering personally a copy thereof to the party at his registered or known address or wherever he may be found. A known address shall mean a place other than the registered address where business activities of the party are conducted or his place of residence. In case personal service is not practicable, the notice shall be served by substituted service or by mail. (ii) Substituted service can be resorted to when the party is not present at the registered or known address under the following circumstances: The notice may be left at the party's registered address, with his clerk or with a person having charge thereof. If the known address is a place where business activities of the party are conducted, the notice may be left with his clerk or with a person having charge thereof. If the known address is the place of residence, substituted service can be made by leaving the copy with a person of legal age residing therein. If no person is found in the party's registered or known address, the revenue officers concerned shall bring a barangay official and two (2) disinterested witnesses to the address so that they may personally observe and attest to such absence. The notice shall then be given to said barangay official. Such facts shall be contained in the bottom portion of the notice, as well as the names, official position and signatures of the witnesses. Should the party be found at his registered or known address or any other place but refuse to receive the notice, the revenue off1cers concerned shall bring a barangay official and two (2) disinterested witnesses in the presence of the party so that they may personally observe and attest to such act of refusal. The notice shall then be given to said barangay official. Such facts shall be contained in the bottom portion of the notice, as well as the names, official position and signatures of the witnesses. "Disinterested witnesses" refers to persons of legal age other than employees of the Bureau of Internal Revenue. trl

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X (iii) Service by mail is done by sending a copy of the notice by registered mail to the registered or known address of the party with instruction to the Postmaster to return the mail to the sender after ten (10) days, if undelivered. A copy of the notice may also be sent through reputable professional courier service. If no registry or reputable professional courier service is available in the locality of the addressee, service may be done by ordinary mail. The server shall accomplish the bottom portion of the notice. He shall also make a written report under oath before a Notary Public or any person authorized to administer oath under Section 14 of the NIRC, as amended, setting forth the manner, place and date of service, the name of the person/barangay official/professional courier service company who received the same and such other relevant information. The registry receipt issued by the post office or the official receipt issued by the professional courier company containing sufficiently identifiable details of the transaction shall constitute sufficient proof of mailing and shall be attached to the case docket. Service to the tax agent/practitioner, who is appointed by the taxpayer under circumstances prescribed in the pertinent regulations on accreditation of tax agents, shall be deemed service to the taxpayer. (Emphasis supplied) Moreover, Item III (23) of Revenue Memorandum Order (RMO) No. 19-201578 mandates that the RO assigned to the case shall present or serve the electronic LOA (eLA) to the taxpayer or its representative in accordance with Section 3.1.6 of RR No. 12-1999, as amended. Thus, the service of the LOA must likewise conform to the prescribed modes of service applicable to assessment notices. Further, Revenue Memorandum Circular (RMC) No. 11- 201479 clarifies that: (6) The notice (PAN/FLD/FAN/FDDA) shall first be served to the taxpayer's registered address before the same may be served to the taxpayer's known address, or in the alternative, may be served to the taxpayer's registered address and known address simultaneously. (Emphasis supplied) 78 SUBJECT: I3IR Audit Program. September 15. 2015: Item 111(23) of RMO No. 19-2015 states: "The RO assigned to the case shall present or ser\'e the eLi\ to the ta\payer or his representative in accordance \vith Section 3.1.6 of RR No. 12-99 as amended by RR No. 18-2013'". 79 Clarifying Certain Issues Relative to Due Process Requirement in the Issuance of a Deficiency Tax Assessment Pursuant to Revenue Regulations (RR) 12-99. as amended b) RR 18-2013. February 18.201-1-.

DECISION CTA Case No. !0243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X By necessary implication, the same rule applies to the service of the LOA. Accordingly, the LOA and assessment notices must first be served at petitioner's registered address before service may be made at a known address. Consistent with Section 3.1.6 of RR No. 12-1999, as amended, service must primarily be effected through personal service; substituted service or service by mail is permissible only upon proof that personal service was not practicable. A perusal of the proffered documentary and testimonial evidence shows the modes of service allegedly resorted to by the BIR, as summarized below: Address Address Where Appearing on Notice Notice was Alleged Mode of Service LOA SO the Notice Allegedly 1. By personal service - Cruz Taal-Cor. Respondent alleged that the Capistrano, Deemed Served RO exerted effort to serve the Cagayan De Oro LOA at petitioner's registered House No. 92, address but found out that the corporation has no existing gth-29th Sts. office therein. SI Nazareth, Cagayan De Oro City 2. By substituted service- The LOA was served by leaving a CCJJJY with Mr. Enriquez82 NJC83 Cruz Taal-Cor. It cannot be By registered mail - It was PANss Capistrano, verified from the stipulated by the parties that Cagayan De Oro records whether petitioner received the NIC City with the NIC was dated January 11, 2019 and notation below received at the petitioner admitted that it was "cc: Oroville registered received by registered mail.S4 Resources & address or Ventures, Inc. known address. House #92, gth_ 29th Street, Nazareth, Cagayan De Oro City" Cruz-Taal House No. 92, 1. By personal service - Corner, gth-29th Sts. Respondent alleged that the Capistrano Nazareth, BIR tried to serve the PAN at 80 Exhibit --R-1"". BIR Records. p. 191. 81 Docket p. 73. AnS\\eL par. 38.a: 179. Exhibit ��R-1 T. Judicial Anidavit of Revenue Officer Noraisah R. :vfala- atao. Q&A nos. 7-1 0. 82 Docket p. 73. Ans\\t:r. par. 38.c: 179. Exhibit ��R-1 T. Judicial Affidm�it of Re,�enue Officer Noraisah R. \lfala- atao. Q&i\ nos. 7-10. 83 Exhibit --P-6""/ Exhibit ��R-4-�. RIR Records. pp. 208-216. 8_. Docket. p. 222. .ISri. Summary of Admitted Facts. pars. 5-6. 85 Exhibit ��R-6"'. BIR Records. pp. 267-272. 277-282.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 17 of35 X-----------------------------------------------------------------------------------------------------X Street, Cagayan Cagayan De Oro petitioner's registered address De Oro City 9000 City but failed since it was found that there was no existing office therein.s6 2. By substituted service - Since the housekeeper refused to receive the PAN, RO tendered the PAN to the housekeeper as witnessed by Brgy. Kagawad Henry Y. Madria and witnesses, Noly Antalan and Christy Salomo.s7 FLD/ Cruz-Taal House No. 92, 3. By registered mail- The PAN Corner, was also mailed at petitioner's FAN89 Capistrano 9th-29th Sts. registered address but Street, Cagayan returned from the mailing De Oro City 9000 Nazareth, section on July 8, 2019 and mailed again on July 9, 20 19.88 Cagayan De Oro 1. By personal service - RO Mala-atao testified that she City attempted to personally serve the FLD /FAN at petitioner's known address.90 WDL92 Cruz-Taal House No. 92, 2. By substituted service - Corner, Since no one was at the known Capistrano 9th_ 2 9 t h Sts. address, the FLD/FAN was Street, Cagayan served by substituted service De Oro City Nazareth, as witnessed by SK Chairman, Jomarie Emeterio and Cagayan De Oro witnesses, Patrick P. Sanchez and Kristine Jay T. Ong.9i City 1. By personal service - Respondent alleged that the RO went to petitioner's registered address to serve WDL but failed.93 2. By substituted service - Since petitioner was not in the _):)remises, the WDL was 86 Docket pp. 65 & 7-L Answer. pars. II & 38.d: 181-182. Exhibit .. R-IT. Judicial Aflidavit of Revenue Officer \.... / Noraisah R. Mala-atao. Q&A nos. 20--23. ,- 87 Docket p. 65 & 74. Answer. pars. 12 & 38.c: 181-182. Exhibit .. R-IT. Judicial Affidavit of Re\'cnuc Officer Noraisah R. Mala-atao. Q&A nos. 20-23: BIR Records. pp. 277-282. ss Docket. p. 67 & 74. Ans,ver. pars. \4 & 38. f:. 182. Exhibit .. R-1 T. Judicial Aftidav it of ReYenuc Officer Noraisah R. Mala-atao. Q&A nos. 24-26: Exhibit .. R-7... BIR Records. 282-285. Exhibits ..R-8.. & ��R-9... 292-303. Docket. p. 183. Exhibit ..R-1 T. Judicial Affidavit of Rc\'cnue Officer Noraisah R. Mala-atao. Q&A no. 30: Exhibit ..R-10"".l3IR Records. p. 306. Affidavit afRO Ma1a-atao. Docket. p. 67 & 74. Answer. pars. 15-16 & 38.g: 182-183. Exhibit ..R-1 T. Judicial Aftidavit of Revenue Officer Noraisah R. Mala-atao. Q&A nos. 27-32: Exhibits ��R-Io��. ��R-11". & ��R-12"". BIR Records. pp. 304-306. Exhibit --R-14"". BIR Records. p. 314. 93 Docket. p. 68 & 75. Answer. pars. 24 & 38.j: L:-.:hibit --R-14". BIR Records. p. 314.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 18 of35 X-----------------------------------------------------------------------------------------------------X constructively served at the known address.94 The Court now proceeds to examine in detail the propriety of the service of the LOA and the assessment notices, and respondent's compliance with the due process requirements laid down by law, jurisprudence, and the BIR's own rules. a. Service of the LOA The LOA is the authority given to the appropriate RO assigned to perform assessment functions. 95 It empowers or enables said RO to examine the books of account and other accounting records of a taxpayer for the purpose of collecting the correct amount of tax96 or to recommend the assessment of any deficiency tax due.97 The LOA commences the audit process and informs the taxpayer that it is under audit for possible deficiency tax assessment,98 consistent with Sections 6 (A) and 13 of the NIRC of 1997, as amended.99 Due process attends every stage of the assessment process. The issuance and proper service of the LOA prior to any examination or assessment are requirements of due process. They are not mere formalities or technicalities, but substantive obligations imposed upon the taxing authority. An assessment issued without a valid LOA, or without proper service thereof, is void. Petitioner challenges the validity of the service of the LOA, arguing that such blatant disregard of procedural requirements tf(' ld !-lim/ayang Filipino Plans. Inc. v. Commissioner o('!nterna! Revenue. G.R. No. 2-J.\848. May 14.2021 [Per J. Carandang. First Divisionl citing ('ommissioner of' Internal Revenue \'. Sony Philippines, Inc.. G.R. No. 178697. November 17. 2010 [Per J. Mendoza Second Division I. Aiedicard Philippines. Inc. v. Commissioner of!nte/'1/a/ Re\�enue. Ci.R. No. 222743. April 5. 2017 [Per .1. Reyes. Third Division]: ('ommissioner q(Internal Rerenue ,._ Sony Philt/Jpines. Inc.. G.R. :.Jo. 178697. NoYember 17. 20 I0 lPer J. Mendoza. Second Division]. 97 Section 13 ofNIRC of 1997. as amended. Commissioner oflnterna! Revenue,. De La .'!aile L'nirersity. Inc.. G.R. Nos. 196596 eta!.. No\�cmbcr 9. 2016 fPcr J. Brion. Second Divisionj. SEC. 6. Pmver of the Commissioner to ;\lake .-lssessments and Prescribe Additional Requirements for Tax .-ldministration and c�n(orcement. - (A) Examination of R~tum and Determination of Ta\. Due. -Aller a return has been tiled as required under the provisions of this Code. the Commissioner or his dul~ authorized represcntati'.-�e may authorize the examination or any ta:\.payer and the assessment of the correct amount of tax: Provided. hom!\er. That failure to tile a return shall not prevent the Commissioner from authorizing C:\.amination of an) taxpayer. SEC. 13. Authority q(a Revenue q[ficer.- Subject to the rules and regulations to be prescribed by the Secretary of Finance. upon recommendation of the Commissioner. a Revenue Otlicer assigned to perform assessment functions in any district may. pursuant to a Letter or Authority issued b) the Revenue Regional Director. examine taxpayers within the jurisdiction of the district in order to eolkct the correct amount ofta'\. or to recommend the assessment of any deficiency tax due in the same manner that the said acts could have been performed by the Revenue Regional Director himself.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X and lack of due diligence invalidated the service of the LOA and rendered all subsequent proceedings void. Petitioner categorically denies receipt of the LOA and asserts that it was served upon Mr. Enriquez, who was neither an officer nor an authorized representative of petitioner. As testified by petitioner's witness, Ms. Fernando, Mr. Enriquez is merely the son of one of petitioner's shareholders, Ms. Ma. Teresa B. Enriquez, and has no participation in petitioner's management or operations. The LOA was allegedly served at Mr. Enriquez's place of business, a carwash establishment, located at No. 92, 9th-29th Streets, Nazareth, Cagayan de Oro City, thus: 11. Question: When was the first time that you were informed that ORVI was subjected to an examination by the respondent CIR? Answer: When the petitioner was given copies of a Letter of Authority No. eLA 20160005397 /LOA-A16-2018-00- 000000047 dated October 26, 2018. It was received and tendered to Emilio Rodrigo B. Enriquez on November 25, 2018, who is not an officer or employee of Petitioner ORVI. In fact Emilio Rodrigo [B.] Enriquez is the son of Teresa B. Enriquez, one of ORVI stockholders and said Letter of Authority was served on his place of business (carwash service) at No. 92, 9- 29th Streets, Nazareth, Cagayan de Oro City. 100 (Emphasis supplied) This fact was further emphasized during Ms. Fernando's cross-examination by respondent's counsel: ATTY. MICHAEL KEVIN P. BAYONA: Q. Who is this Emilio Rodrigo Enriquez? MS. MA. ARABELLA C.H. FERNANDO A. Emilio Rodrigo is the grandson of my sister. But he is in no way connected to Oroville Resources. ATTY. MICHAEL KEVIN P. BAYONA: Q. All right. He is the grandson? MS. MA. ARABELLA C.H. FERNANDO A. Yes. ATTY. MICHAEL KEVIN P. BAYONA: Q. And then, Teresa B. Enriquez is your? 100 Docket pp. 332-334. Memorandum fOr the Petitioner. par. II.A: Sec also Docket. p. 122. Exhibit --p_g.. _Judicial Affidavit oi'Ms. Ma. Arabella CH. Fernando. par. !I.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 20 of35 X-----------------------------------------------------------------------------------------------------X MS. MA. ARABELLA C.H. FERNANDO A. The mother of Emilio. ATTY. MICHAEL KEVIN P. BAYONA: Q. Of Emilio? She is your sister? MS. MA. ARABELLA C.H. FERNANDO A. Teresa Enriquez is the daughter of my sister, Teresa Bianco. ATTY. MICHAEL KEVIN P. BAYONA: Q. And she is one of the stockholders of Oroville? MS. MA. ARABELLA C.H. FERNANDO A. Yes. That's true. ATTY. MICHAEL KEVIN P. BAYONA: Q. All right. So, the Letter of Authority, the Notice for Informal Conference and the WDL or the Warrant of Distraint and Levy were received (Interrupted). MS. MA. ARABELLA C.H. FERNANDO A. By Emilio. ATTY. MICHAEL KEVIN P. BAYONA: Q. By Emilio at No. 92929 St., Nazarette St. Cagayan De Oro. Correct? MS. MA. ARABELLA C.H. FERNANDO A. Yes. In fact, we have copies of the signature received in those papers, those documents (Interrupted).IOI (Emphasis supplied) Petitioner further claims that the LOA was not served at its registered address located at Capistrano-Cruz Taal Streets, Cagayan de Oro City. Instead, it was allegedly delivered to an unrelated location, the residence of Mr. Enriquez at House No. 92, 9th-29th Street, Nazareth, Cagayan de Oro City, which petitioner alleges also serves as Mr. Enriquez's carwash business establishment.1o2 On the other hand, respondent asserts that RO Mala-atao exerted effort to serve the LOA at petitioner's registered address but allegedly found that petitioner held no office there, as the premises were supposedly leased out. Owing to the alleged impossibility of service, respondent claims that the LOA was instead served at petitioner's "known address." 103 In her 101 TSN. Yls. Ma. Arabella CH. Fernando. February 7. 202--1-. pp. 16---17. 102 Docket. pp. 332-334. Memorandum for the Petitioner. par. !LA: See also Docket. p. 122. b;hibit .. p_g��. Judicial Affida\'it of Ms. Ma. Arabella Cl--1. Fernando. par. 11. 103 Docket. p. 73-74. Answer. pars. 38.a & 38.c.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x testimony, RO Mala-atao affirmed that service was effected at this supposed known address, as follows: 104 8. Q: How was the Letter of Authority served to petitioner? A: We served the Letter of Authority at its known address at House No. 92, 91h-29th Sts., Brgy. Nazareth Cagayan De Oro City since it was revealed that the corporation holds no office in its registered address because the same was leased out. She further admitted that the LOA was served upon Mr. Enriquez at the purported known address. During cross- examination, it was also revealed that despite knowing that Mr. Enriquez was merely the son of one of petitioner's incorporators, and not an authorized representative of the corporation, she nevertheless proceeded to serve the LOA upon him, to wit: ATTY. DIAO Q And in the Letter of Authority, it is addressed to Oroville Resources and Ventures, Inc., correct? MS. MALA-ATAO A Yes Sir. ATTY. DIAO Q With address at Capistrano, Cagayan De Oro City. In your Judicial Affidavit, you admitted that you resorted to a substituted service, correct? You did not serve it at the office of Oroville. Is that correct? MS. MALA-ATAO A Yes Sir. ATTY. DIAO Q In fact, it was received by a certain Emilio Enriquez, correct? MS. MALA-ATAO A Yes Sir. 104 !d. at 179. Exhibit ��R-1 T. Judicial Affidavit of Rcn;nuc Ofticcr Noraisah R. Mala-atao. Q&A no. 8.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X ATTY. DIAO Okay, your Honors. Q Did you inquire what is the relation of the person who received the Letter of Authority, Mr. Emilio Enriquez, to the taxpayer Oroville Resources and Ventures, Inc.? MS. MALA-ATAO A Yes Sir, I did. ATTY. DIAO Q What is the relation of Mr. Enriquez to Oroville? MS. MALA-ATAO A He is son of one of the incorporators and officer of the Oroville Ventures po. ATTY. DIAO Q Did you inquire if Mr. Enriquez is an officer of the taxpayer or an employee of the taxpayer? MS. MALA-ATAO A I did inquire but the service was done in a family home address. ATTY. DIAO Q By the way, do you know what was the reply of Mr. Enriquez when you inquired from him whether he is connected in any way to Oroville Resources and Ventures, Inc.? MS. MALA-ATAO A His replied was, he is son of one of the incorporators. ATTY. DIAO Q And where was it served? MS. MALA-ATAO A At the House No. 92 19th to 29th Street Nazareth, Cagayan De Oro City.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x ATIY. DIAO Q Okay. Not in the official business address of Oroville, correct? MS. MALA-ATAO A I did not because there is no office in that registered address. lOS (Emphasis supplied) RO Mala-atao further explained that after finding no office at petitioner's registered address, they examined petitioner's General Information Sheet (GIS) and purportedly discovered that House No. 92, 9th-29th Sts. Nazareth, Cagayan De Oro City, was a common address of petitioner's incorporators. On this basis, she decided to serve the LOA at what she considered petitioner's known address, to wit: Q Can you explain why it was in the home address? MS. MALA-ATAO A There is a registered address in the BIR records, this was the first address we opt to serve the LA. Unfortunately, the corporation held no office in that registered address, Capistrano St. ATIY. RAMO Q And when you did not find any office in this official business address or found any physical office, what did you do? MS. MALA-ATAO A We went to the General Information Sheet, GIS, to see the majority of the [in]corporators addresses. ATIY. RAMO Q And what did you find in that GIS? MS. MALA-ATAO A The very common address was the House No. 92 19th to 29th St. Cagayan De Oro City. 105 TSN. RO T\'or-aisah R. Mala-atao. September 24. 202-1-. pp. 8-11.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X ATTY. RAMO Q And that address, was that taxpayer also found in that address? MS. MALA-ATAO A It is in our BIR ITS system, Integrated Tax System their addresses. Some of the incorporator's addresses are also seated in No. 92 9th to 29th Streets. JUSTICE DAVID Revenue Officer Mala-atao, in your answer to Question No. 8, you mentioned about this known address at House No. 19th to 29th Streets Brgy. Nazareth, Cagayan De Oro City. Again, this address belongs to, does not belong to the taxpayer or to the petitioner in this case but it belongs to? MS. MALA-ATAO Incorporators po, your Honors. JUSTICE DAVID And the name of the incorporator is? MS. MALA-ATAO Maria Theresa Chavez Bianco. JUSTICE DAVID Is Ms. Bianco an officer of the petitioner? MS. MALA-ATAO Yespo. JUSTICE DAVID What is her position?

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X MS. MALA-ATAO On some documents, she appeared to be the Treasurer. On Financial Statements, she signed as the Chairman or the President. JUSTICE DAVID Okay. You mentioned that she also signed as President? MS. MALA-ATAO Yes, in the Financial Statements. JUSTICE DAVID In the Financial Statements. So, you are telling us that Ms. Bianco is not only the Treasurer but also a President of the company? MS. MALA-ATAO Yes Ma'am, yes, your Honors. JUSTICE DAVID And what is your basis? MS. MALA-ATAO Through the submitted documents and the Financial Statements they submitted to the BIR. JUSTICE DAVID Did you attach that Financial Statement as part of your evidence? MS. MALA-ATAO Yes, your Honors. JUSTICE DAVID Is that part of the BIR records? MS. MALA-ATAO Yes, your Honors.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 26 of35 X-----------------------------------------------------------------------------------------------------X JUSTICE DAVID Going back, this Ms. Bianco is not only a Director but also a Treasurer. And as you said earlier, sometimes she signed the company's document as President. MS. MALA-ATAO Or Chairman. JUSTICE DAVID President or? MS. MALA-ATAO Chairman. JUSTICE DAVID Or Chairman, okay. And why did you choose to serve the LOA at her address? MS. MALA-ATAO Because she is one of the incorporators. And based on our documents, she signed the Financial Statements. JUSTICE DAVID How about the other incorporators? Did you try to serve the LOA to the address of the other incorporators? MS. MALA-ATAO One of the incorporators is outside the Cagayan De Oro. 106 (Emphasis supplied) Based on the foregoing, it is undisputed that Mr. Enriquez received the LOA at the purported known address. However, given petitioner's categorical denial of such receipt, the burden of proof shifted to respondent to establish, by competent evidence, that the LOA was properly served upon petitioner or its duly authorized representative, and that such service strictly complied with the procedures prescribed by law and regulations. Respondent, however, failed to discharge this y burden in this case. 106 TSN. RO Nor-aisah R. Ma\a-atao. September 2+. 2024. pp. I..J--17. 19-20.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x Here, respondent merely alleged that RO Mala-atao exerted efforts to serve the LOA at petitioner's registered address and, upon supposedly finding no office there, resorted to substituted service at a known address. Yet, apart from this bare assertion, no sufficient or convincing evidence was presented to substantiate such claim. No corroborating evidence was offered to establish that petitioner indeed holds no office at the registered address, which would have justified resort to substituted service. Respondent's reliance solely on RO Mala-atao's uncorroborated statements is insufficient to establish compliance with the prescribed procedures. The Court further notes that RO Mala-atao failed to provide specific details regarding her alleged attempt to personally serve the LOA at petitioner's registered address, such as the actual date of service, or the basis for her assertion that the premises were "leased out." There is also no indication that the registered address had been abandoned or vacated. Although respondent insists that efforts were exerted to personally serve the LOA, these efforts were neither elaborated upon nor reflected in the BIR Records. No verification from any tenant, nor confirmation from the barangay, was presented to show that petitioner held no office at said address. It is a basic rule of evidence that bare allegations, unsubstantiated by evidence, are not equivalent to proof. Simply put, mere allegations are not evidence. 107 Moreover, RO Mala-atao deemed House No. 92, 9th-29th Street, Nazareth, Cagayan de Oro City as petitioner's known address merely because it appeared, according to her, on petitioner's GIS as a common address of petitioner's incorporators. However, no GIS or similar document was presented in evidence to support this claim. Even assuming arguendo that such address appears therein, the residence of an incorporator does not automatically become the corporation's authorized address for service of official notices. Evidently, the LOA was served upon a person not shown to be authorized and at an address other than petitioner's registered address, without prior competent proof of a valid attempt at personal service. This contravenes the BIR's own regulations. 107 Toyo Seat Philippines Corporation r l"elasco. G.R. No. 240774. \1an:h 3. 2021 [Per J. Gaerlan. first Division].

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue Page 28 of35 x-----------------------------------------------------------------------------------------------------x Accordingly, respondent failed to discharge its burden of proving proper service of the LOA. The resulting assessment is therefore void. b. Service of PAN Petitioner likewise denies receipt of the Preliminary Assessment Notice (PAN). Respondent alleges that the BIR initially attempted to serve the PAN at petitioner's registered address but failed upon allegedly discovering that petitioner maintained no office there.tos RO Mala-atao testified that she resorted to substituted service at petitioner's supposed "known address" since the housekeeper refused to receive the PAN. The notice was tendered to the housekeeper, as witnessed by Brgy. Kagawad Henry Y. Madria and two witnesses, namely Mr. Noly Antalan and Ms. Christy Salomo. 109 To prove such service, BIR Records show a copy of the PAN with handwritten notation "NOTE: REFUSED TO RECEIVE' on the top side of the notice, together with handwritten names, signatures and positions/ designations of the purported witnesses.tto However, similar to the Court's findings with respect to the service of the LOA, respondent failed to establish that personal service at petitioner's registered address was indeed attempted and that resort to substituted service at a known address was justified. RO Mala-atao made the same unsupported allegations that she initially attempted to serve the PAN at petitioner's registered address but found no office therein, to wit: 21. Q: How did you serve the PAN? A: Again, I tried to personally serve on the registered business address of the taxpayer but failed since the corporation holds no office at the same. I also tried to serve the notice to the known address of the taxpayer but the said notice was refused to be received by the housekeeper therefore, I resorted to substituted service. 10~ Docket. p. 65 & 7cl. Answer. pars. II & 38.d: 181-182. Exhibit ��R-IT. Judicial Affidavit of Rc\\:~nue Officer Noraisah R. Mala-atao. Q&A nos. 20--23. 109 Dockd. p. 65 & 74. Answer. pars. 12 & 38.e: JSI-182. Exhibit ��R-IT. Judicial /\ffidm�it of Ren~nue Officer Noraisah R. Mala-atao. Q&A nos. 20--23. 110 Exhibit '"R-6... BIR Records. pp. 267-272. 277-282.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x The PAN was also sent through registered mail but unfortunately, it was returned to the mailing section with the accompanying return card. III As in the service of the LOA, respondent failed to present competent documentary proof to substantiate RO Mala-atao's assertion. Bare allegations cannot suffice to establish compliance with regulatory requirements. Compounding this deficiency is an inconsistency in respondent's own pleadings. Paragraph 11 of respondent's Answer states that the PAN was attempted to be served at petitioner's registered address at Cruz Taal-Capistrano Street, Cagayan De Oro City on May 16, 2019, while paragraph 38.d provides that such attempt occurred on 17 May 2019. RO Mala-atao's testimony failed to clarify this discrepancy. This inconsistency further raises doubt on the unsupported claim that RO Mala-atao initially attempted to serve the PAN at the registered address, as required under RMC No. 11-2014. Even assuming arguendo that substituted service was properly resorted to, a closer examination of the PAN with the handwritten notation shows that respondent still failed to comply with the requirements set forth in Section 3.1.6 of RR No. 12-1999, as amended by RR No. 18-2013, specifically: Should the party be found at his registered or known address or any other place but refuse to receive the notice, the revenue officers concerned shall bring a barangay official and two (2) disinterested witnesses in the presence of the party so that they may personally observe and attest to such act of refusal. The notice shall then be given to said barangay official. Such facts shall be contained in the bottom portion of the notice, as well as the names, official position and signatures of the witnesses. (Emphasis supplied) The PAN merely contains the handwritten notation "NOTE: REFUSED TO RECEIVE." This bare notation does not satisfy the regulatory requirement that the specific facts constituting the refusal be stated in the notice itself. It fails to indicate the date when the service was made and the party who refused to receive the PAN, which are vital facts to which the barangay official and the witnesses should have attested. Hence, respondent failed to comply with the prescribed v procedures in effecting the service of the PAN. 111 Docket p. 181. Exhibit ��R-JT_ Judicial AffidaYit ofRcn~nue Oflicer Noraisah R. Mala-atao. Q&A no. 21.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue x-----------------------------------------------------------------------------------------------------x Respondent further asserts that to ensure the receipt of PAN, it was also sent by registered mail on May 31, 2019, but was returned to the mailing section on July 8, 2019, and was thereafter re-mailed on July 9, 2019.112 To prove mailing of the PAN to petitioner's registered address, respondent offered in evidence Registry Return Receipt No. RE 047 483 439 ZZ. 113 However, respondent failed to present the notarized written report on service by mail required under Section 3.1.6 ofRR No. 12-1999, as amended by RR No. 18-2013. Said provision expressly requires the server to execute a written report under oath before a Notary Public or authorized officer, setting forth the manner, place, and date of service, the identity of the recipient, and other relevant details, with the registry receipt attached to the case docket, viz.: (iii) Service by mail is done by sending a copy of the notice by registered mail to the registered or known address of the party with instruction to the Postmaster to return the mail to the sender after ten (10) days, if undelivered. A copy of the notice may also be sent through reputable professional courier service. If no registry or reputable professional courier service is available in the locality of the addressee, service may be done by ordinary mail. The server shall accomplish the bottom portion of the notice. He shall also make a written report under oath before a Notary Public or any person authorized to administer oath under Section 14 of the NIRC, as amended, setting forth the manner, place and date of service, the name of the person/barangay official/professional courier service company who received the same and such other relevant information. The registry receipt issued by the post office or the official receipt issued by the professional courier company containing sufficiently identifiable details of the transaction shall constitute sufficient proof of mailing and shall be attached to the case docket. (Emphasis supplied) RMO No. 40-2019 dated May 30, 2019,1 14 reiterates the provisions under Section 3.1.6 of RR No. 12-1999, as amended, and further prescribes the procedures for the proper service of assessment notices. As to service by mail, it provides, among others: 112 !d. at 67 & 7-1-. Am,\\ cr. pars. 14 & 38.f. 113 Exhibit "'R-T. BIR Records. unpaged (bchn:cn pp. 282-283). 11 .f SUBJECT: Pn:scribing the Procedures for the Proper Service of Assessment Notices in Accordance with the Provisions of Section 3.1.6 of Revenue Regulations (RR) No. 18-2013.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X 2. In case personal service is not possible, the assessment notice shall be served either by substituted service or by mail. However, substituted service can only be resorted to when the party is not present at the registered or known address. 2.2. Service by mail shall be done by sending a copy of the assessment notice through - 2.2.1 Registered mail with an instruction to the Postmaster to return the mail to the sender after ten (10) days, if undelivered; or 2.2.2 Reputable professional courier service; or 2.2.3 Ordinary mail, if no registry or reputable courier is available in the locality of the taxpayer. 3. The envelope containing the notice must be properly addressed with the following statement: 3.1 To be printed/ stamped on the lower portion of the face of the envelope 3.2 To be printed/stamped on the backside of the envelope, the instruction "If undelivered within ten (10) days, please return to (indicate specific BIR office and address)." 6. In compliance with Section 3.1.6 (iii) of Revenue Regulations No. 18-2013, the server shall prepare the following written reports in triplicate copies, which shall be under oath before a Notary Public or any person authorized to administer oath under Section 14 of the NIRC, as amended, setting forth the manner, place and date of service, the name of the person/barangay official/professional courier service company who received the same and such other relevant information. 6.1 Report on Personal/ Substituted Service (Annex A) 6.2 Report on Service by Mail/Courier (Annex B) 6.3 Distribution of copies: (Emphasis supplied)

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X The BIR Records are devoid of arJY notarized written report of the substituted service by registered mail. Proof of mailing is not equivalent to proof of valid service, especially where the regulation expressly requires a sworn written report detailing the mar~ner, place, ar~d date of service. The mere presentation of a registry receipt does not cure the defect. Thus, the service of the PAN was invalid. c. Service of FLD/FAN Petitioner likewise categorically denies receipt of the FLD/FAN. Respondent claims that since no protest was filed against the PAN, the FLD/FAN was served through substituted service at petitioner's alleged known address. In support thereof, respondent presented: 11s (1) FLD/FAN dated July 4, 2019;116 (2) Affidavit ofRO Mala-atao;117 (3) Report on Personal/ Substituted Service; 11 8 and (4) Acknowledgment of Receipt;119 Respondent also presented the testimony of RO Mala-atao, to wit: 30. Q: How did you serve the Formal Letter of Demand and the Final Assessment Notice? A: I attempted to personally serve the FLD/FAN on August 19 and 20, 2019. However, no one was at the taxpayer's known address to receive the same. On August 22, 2019, I served the same through substituted service. I executed an affidavit, report and an acknowledgment receipt to prove the service of the notices. 12� (Emphasis supplied) Notably, respondent admits that service was made at the alleged known address ar~d not at petitioner's registered address. Significar~tly, respondent made no prior attempt to 11 .' Docket. p. 67. Answer. par. 15. 116 Exhibits .. R_g�� & "R-9". BIR Records. pp. 297-303. "' Exhibit"R-10". BIR Records. p. 306. 118 Exhibit ��R-11 ... BIR Records. p. 305. 119 Exhibit ��R-1 2'". BIR Records. p. 304. 12u Docket. p. 183. Exhibit ��R-IT. Judicial Aftidm-it of Revenue Officer Noraisah R. Mala-atao. Q&A no. 30.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X serve the FLD /FAN at petitioner's registered address before resorting to substituted service. This directly contravenes RMC No. 11-2014, which unequivocally requires that assessment notices be served first at the taxpayer's registered address before service may be made at the known address. In South Entertainment, the Supreme Court held that the proper service of the FLD/FAN forms part of the due process requirements in the issuance of a deficiency tax assessment under Section 3 of RR No. 12-99. Absent valid service, the assessment is rendered nugatory.l21 In fine, even assuming that the LOA had been properly served, the service of the PAN and FLD/FAN remains problematic as the said assessment notices were served in violation of the due process requirements under Section 3.1.6 of RR No. 12-1999, as amended by RR No. 18-2013, and clarified by RMC No. 11-2014. Respondent likewise failed to overcome petitioner's categorical denial of receipt and to establish actual and valid service of the assessment notices. Well-settled is the rule that an assessment that fails to strictly comply with the due process requirements set forth in Section 228 of the NIRC of 1997, as amended, and RR No. 12- 1999, as amended, is void and produces no effect. 122 A void assessment bears no valid fruit123 and could not be the basis for the issuance of a WDL.l 24 Further, jurisprudence dictates that the BIR may summarily enforce collection only when it has accorded the taxpayer administrative due process, which vitally includes the issuance of a valid assessment. 125 Corollarily, the Warrant of Distraint and Levy issued m this case is likewise void and without legal effect. v 121 Commissioner of!ntema/ Revenue v. Sowh Entertainmellf Ga/!eJ:v. Inc., G.R. No. 223767. April24. 2023 [Pt":r C.J. Gesmundo. First Division]. 122 .Hannasoft Technology Corpormion v. Commissioner(?( Internal Ren:nue. G.R. No. 2-1-4202. July 10. 2023 [Per J. Dimaampao. Third Di\'ision J citing Commissioner o(/memal Revenw.:: ,._ .\leJro Star 5iuperama. Inc.. 652 Phil. 172. 186 (2010). 123 Commissioner ofInternal Revenue v. Reyes. G.R. Nos. 159694 & 163581. January 27.2006 [Per C.J. Panganiban. First Division]. 124 Afannasofi Technology C01poratio11 v. Commissio!1er of Internal Revenue. G.R. No. 244202. July 10. 2023 [Per .I. Dimaapao. Third DivisionJ citing Commissioner of Internal Revenue v. Metro Star Superama. Inc.. 652 Phil. 172. (186)2010). 125 Commissioner of Internal Revenue\'. Filipinos .)"hell Petroleum Corporation. G.R. Nos. 197945 & 204119-20. July 9. 2018l?cr J.J.eonardo-De Castro. First Division[.

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X Given the nullity of the assessment and the consequent invalidity of the WDL, the Court finds it unnecessary to pass upon the remaining issues raised by the parties. WHEREFORE, premises considered, the instant Petition for Review filed by petitioner Oroville Resources and Ventures, Inc. (ORVI), is hereby GRANTED. Accordingly, the deficiency income tax, value-added tax, expanded withholding tax, final withholding tax, documentary stamp tax, and compromise penalties in the aggregate amount of 1'1,102,977.34 for taxable year 2017, as reflected in the Formal Letter of Demand and the corresponding Assessment Notices dated July 4, 20 19, as well as the Warrant of Distraint and Levy dated December 16, 2019, are hereby CANCELLED and SET ASIDE. Respondent Commissioner of Internal Revenue, or any person acting on his behalf, is hereby ENJOINED and PROHIBITED from further instituting, pursuing, or otherwise taking any action for the collection of the foregoing void assessments. SO ORDERED. !CONCUR: LA1Ws'!~-DAVID Associate Justice -

DECISION CTA Case No. 10243 Oroville Resources and Ventures, Inc. (ORVI) v. Commissioner of Internal Revenue X-----------------------------------------------------------------------------------------------------X CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to - the writer of the opinion of the Court's Division. JEAN MARl Actin