COMMISSIONER OF INTERNAL REVENUE v. ZILOG ELECTRONICS PHILIPPINES, INC.

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF CTA EB NO. 2762 INTERNAL REVENUE, (CTA Case Nos. 9403 & 9492) Petitioner, -versus- Members: DEL ROSARIO, P.J., RINGPIS-LIBAN , MANAHAN , BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. ZILOG ELECTRONICS Promulgated: PHILIPPINES, INC., NQV 13 2Q2'� Respondent. ., ' )(- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -)( RESOLUTION CUI-DAVID, J.: This resolves petitioner's Motion for Reconsideration [re: Decision dated 18 June 2024] filed on July 9, 2024, with respondent's Comment/ Opposition (To Petitioner's Motion for Reconsideration dated 8 July 2024) filed on August 6, 2024. Petitioner prays that the Decision dated June 18, 2024 (assailed Decision), with the following dispositive portion, be reconsidered: WHEREFORE, in view of the foregoing, the instant Petition for Review is DISMISSED due to lack of jurisdiction. Accordingly, the assailed Decision dated November 23, 2022 of the Court's First Division in CTA Case Nos. 9403 and' 9492 had lapsed to fina lity and is a lready beyond our power to rev1ew.

RESOLUTION CTA EB No. 2762 (CTA Case Nos. 9403 & 9492) Commissioner of Internal Revenue v. Zilog Electronics Philippines, Inc. x------------------------------------------------------------------------------------------x SO ORDERED. Petitioner argues that the Court erred in affirming the Court in Division's denial of his Motion for Reconsideration and Motion for Leave to File and Admit Attached Amended Motion for Reconsideration. Petitioner avers that the technical rules of procedure are liberally construed to promote substantial justice. Petitioner asserts that he was able to file a Motion for Leave to File and Admit the Attached Amended Motion for Reconsideration, under Sections 2 and 3, Rule 10 of the Rules of Court, upon realizing that the Motion for Reconsideration filed with the Court in Division inadvertently referred to the Separate Concurring Opinion. Petitioner submits that the assessment is valid because the issuance of a Letter of Authority (LOA) is not mandatory when the audit is conducted by the Office of the Commissioner (OCIR), citing Section 13 of the National Internal Revenue Code (NIRC) of 1997, as amended. Even assuming that an LOA is required, the reassignment to another revenue officer (RO) by virtue of a Memorandum of Assignment sufficiently vests authority to such RO to conduct an audit investigation. Petitioner insists that respondent is liable to pay the assessed deficiency taxes for the fiscal year ending March 31, 20 11, because respondent failed to provide sufficient evidence and explanation to overturn the audit finding that it issued sales invoices not declared in its income tax return. Thus, respondent was assessed the corresponding deficiency income tax, which must be judicially affirmed given respondent's failure to present proof of error in the assessment. On the other hand, respondent counters that petitioner's allegations merely rehash the same arguments previously presented in his Petition for Review before this Court, all of which have been evaluated and rejected in the assailed Decision. As such, the assailed Decision must be considered final and executory. The Court finds no merit m petitioner's Motion for Reconsideration. Petitioner's contention that he was able to file a Motion for Leave to File and Admit Attached Amended Motion for Reconsideration to rectify the Motion for Reconsideration filed

RESOLUTION CTA EB No. 2762 (CTA Case Nos. 9403 & 9492) Commissioner of Internal Revenue v. Zilog Electronics Philippines, Inc. X------------------------------------------------------------------------------------------X with the Court in Division under Sections 21 and 3,2 Rule 10 of the Revised Rules of Court is unpersuasive. It is clear from Section 3 of the Revised Rules of Court that substantial amendments by leave of court "shall be refused if it appears to the Court that the motion was made with intent to delay." Here, petitioner filed his Motion for Leave to File and Admit Attached Amended Motion for Reconsideration with the Court in Division only on February 23, 2023, or more than two (2) months after he posted the Motion for Reconsideration on December 19, 2022, to which respondent already filed a Comment (to Respondent's Motion for Reconsideration). As discussed in the assailed Decision, the Court in Division's Decision dated November 23, 2022, which petitioner received on December 2, 2022, had already become final and executory when petitioner filed a Motion for Leave to File and Admit the Attached Amended Motion for Reconsideration. Even so, the Court proceeded to discuss the merits of the case, but the assessment failed to withstand judicial scrutiny. As declared in the assailed Decision, the conduct of an audit by an RO without a LOA violates a taxpayer's right to due process. To go against this dictum would contradict the prevailing jurisprudence, 3 which this Court is not keen to do. Lastly, petitioner failed to point out any error in law or, in fact, in the Court's appreciation of the evidence presented by respondent. In fine, there is no justifiable reason to disturb the findings in the assailed Decision. WHEREFORE, petitioner's Motion for Reconsideration [re: Decision dated 18 June 2024] is DENIED for lack of merit. SO ORDERED. /;#vndn~ LANEE S. CUI-DAVID Associate Justice SEC. 2. Amendments as a matter ofright.- A party may amend his pleading once as a matter of right at any time before a responsive pleading is served or, in the case of a reply, at any time within ten (10) calendar days after it is served. SEC. 3. Amendments by leave of court. - Except as provided in the next preceding Section, substantial amendments may be made only upon leave of court. But such leave shall be refused if it appears to the court that the motion \vas made with intent to delay or confer jurisdiction on the court, or the pleading stated no cause of action from the beginning which could be amended. Orders of the court upon the matters provided in this Section shall be made upon motion filed in com1, and after notice to the adYcrsc party, and an opportunity to be heard. People v. Gernafe, G.R. No. 256868, October 4. 2023; Commissioner of Internal Revenue v. Manila Medical Services. Inc., G.R. No. 255473, February 13, 2023; Republic v. Robiegie Corp., G.R. No. 260261, October 3, 2022; Himlayang Filipino Plans, Inc. v. Commissioner of Internal Revenue, G.R. No. 241848, May 14, 2021; Medicard Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 222743, Apri\5. 2017.

RESOLUTION CTA EB No. 2762 (CTA Case Nos. 9403 & 9492) Commissioner of Internal Revenue v. Zilog Electronics Philippines, Inc. Page 4 of4 x------------------------------------------------------------------------------------------x WE CONCUR: Presiding Justice ~. ~ -v "----��. MA. BELEN M. RINGPIS-LIBAN Associate Justice C~"7-~-.. �~�~--- cATHERINE T. MANAHAN Associate Justice '\... ustice ~ ~ F. ~ - F~'Or4t> MARIAN IW F. REyiES-FAltARDO Associate Justice c~t.�~RE~RES Associate Jus;i~,;T HENRY ~~NGELES Associate Justice