COMMISSIONER OF INTERNAL REVENUE v. MARKET STRATEGIC FIRM, INC.,

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY En Bane COMMISSIONER OF INTERNAL CTA EB NO. 2281 REVENUE, (CTA Case No. 9280) Petitioner, Present: -versus- DEL ROSARIO, P.J., RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. Promulgated: MARKET STRATEGIC FIRM, INC., Respondent. X --------------------------------------------------------------------- ----------------�~~ RESOLUTION MODESTO-SAN PEDRO, J.: For the Court's resolution is petitioner's "Motion for Reconsideration [re: Amended Decision dated 04 November 2022]" ("Motion"), filed on 25 November 2022, with respondent' s "Comment (On CIR's Motion for Reconsideration on the Amended Decision)" ("Comment"), filed on 3 January 2023 . Petitioner's Motion expresses his disagreement with this Court's Amended Decision, dated 4 November 2022 ("Assailed Decision"). He claims that (a) the case of Commissioner of Internal Revenue v. McDonald's Philippines Realty Corp. 1 ("McDonald's" ) cannot be retroactively applied to this case; (b) Letters of Authority ("LOAs") are not required for Revenue Officers ("ROs") of the Large Taxpayers Service ("LTS"); and (c) RevenueP-- G.R. No. 242670, I0 May 202 1.

� RESOU-TIO~ CTA EB :Jo. 2281 (CTA Case No. 9280) Page 2 of.J. Memorandum Order ("RMO") Nos. 19-2009 and 44-2010 already withdrew the requirement that LOAs be revalidated. Respondent replies by arguing that (a) even jurisprudence prior to McDonald's emphasized the importance of properly issuing LOAs; (b) such earlier jurisprudence also shows that ROs from the LTS are mandated to be armed with a LOA; and (c) RMO No. 43-90 clearly requires the revalidation ofLOAs The Motion fails to persuade. First, the Supreme Court has already demonstrated that McDonald's is applicable retroactively. This can be seen in the High Court's use of said doctrine in Commissioner ofInternal Revenue v. Wellington investment & Manufacturing Corporation2 and Republic of the Philippines v. Robigie Corporation,3 both of which involve LOAs issued before the promulgation of McDonald's. Indeed, the general rule regarding doctrines drawn from the decisions of the Supreme Court is that these establish the "contemporaneous legislative intent" oflaws and are thus effective from the date of enactment of said laws, as held in Roque Senarillos v. Epifanio Hermosisima, et a/.4 and Columbia Pictures, Inc., eta/. v. Court ofAppeals, eta/. 5 Only jurisprudence that institutes a new doctrine, one that replaces an old doctrine, cannot be retroactively applied.6 In short, the Court En Bane's retroactive application of McDonald's was not in error. Given that McDonald's is perfectly applicable to this case, petitioner's further contention that Ros from the LTS do not have to obey the LOA requirement is also untenable. The LOA in McDonald's itself was also issued by the LTS, after all, but this did not prevent the Supreme Court from voiding the assessment there. The Court sees no reason to treat the LOA in the present case any differently. Finally, petitioner's reliance on RMO Nos. 19-2009 and 44-2010 is misplaced. Said issuances notwithstanding, the Court in Division already found that the offending Memorandum of Assignment ("MOA") was issued for the "continuation of the audit/investigation to replace the previously assigned Revenue Officer(s) who resigned/retired/transferred to another district office" (emphasis supplied).7 This same finding was echoed in they G.R. No. 249795. 29 November 2022. G.R. No. 260261. 3 October 2022. G.R. No. L-10662. 14 December 1956. G.R. No. 110318.28 August 1996. 0 See San Miguel Corporation v. Commissioner of Internal Revenue. G.R. No. 257697. 12 April 2023. See Decision. dated I0 February 2020. pp. 3 I-32. EB Records. pp. 54-55.

RESOUTIO'\ CTA tB :Jo. 2281 (CTA Case No. 9280) Page 3 of-l Assailed Decision.8 Both the tenor of the MOA and the fact that petitioner issued the MOA in the first place led to the Court in Division and the Court En Bane finding that petitioner attempted to replace the Ros with a mere memorandum and not a LOA. That RO Allan Maniego was also named in the LOA and that the cited RMOs supposedly withdraw the revalidation requirement does not change these facts of the MOA's tenor and issuance. They furthermore do not explain why petitioner issued the MOA utilizing such tenor in the first place if he truly believed that RO Maniego still had the authority to audit respondent's records. Given that respondent issued a MOA to, in its own words, "replace" the ROs assigned to the case, the Court En Bane retains its stance that respondent violated petitioner's right to due process. We thus uphold that assailed ruling. WHEREFORE, petitioner's Motion for Reconsideration [re: Amended Decision dated 04 November 2022], filed on 25 November 2022, is hereby DENIED for lack of merit. The Amended Decision, dated 4 November 2022, is hereby AFFIRMED. SO ORDERED. WE CONCUR: I reiterate my eparate Co curring Opinion. ROMAN G. DEL ROSARIO Presiding Justice ~.~ -v L__ MA. BELEN M. RINGPIS-LIBAN Associate Justice dut;',.~; With latntain my Dissenting Opinion. CATHERINE T. MANAHAN Associate 1ustice See Amended Decision. dated 4 November 2022. p. 6. id.� p. 192. L __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

RESOI.lTIO" CTA EB No_ 2281 (CTA Case No. 9280) Page 4 of4 ~ ~ r. ~-~/All~ MARIAN rv#. REY~S~FA.YARDO Associate Justice ~,~nion With due respect, I join the ofJustice Manahan dated Nov. 4, 2022 LANEE S. CUI-DAVID Associate Justice HENRY 1/�NGELES Associate Justice