COMMISSIONER OF INTERNAL REVENUE v. MISSOURI SQUARE, INC.

Republic of the Philippines COURT OF TAX APPEALS Quezon City EN BANC COMMISSIONER OF CTA EB NO . 1521 INTERNAL REVENUE, (CTA Case No. 8707) Petitioner, Present: DEL ROSARIO, P.J., CASTANEDA, JR. -versus- BAUTISTA, UY, CASANOVA, FASON-VICTORINO, MINDARO-GRULLA, RINGPIS-LIBAN, and MISSOURI SQUARE, INC., MANAHAN, JJ. Res pondent. Promul9..ated: MAR 28 2018 #: 3'Ta .~. x------------------------~~!;(;~lJ-~~(;~ --------------------x~ MINDARO-GRULLA, J.: This resolves petitioner's "Motion for Reconsideration" of t he Decision dated Ja nuary 24, 2018 of this Court En Bane, t he pertinent portion of which states: "In sum, not only is the petition procedurally infirm but also the arguments raised to support the petition were likewise bereft of merit. Hence, there is no compelling reason to disturb the findings and conclusion of the Court in Division as it is supported by the evidence on record. It is well-settled that a void assessment bears no fruit. WHEREFORE, the Petition for Review is D ENIED, for lack of merit. Accordingly, the Amended Decision dated September 8, 2016 is AFFIRMED. No pronouncement as to costs. SO ORDERED." In assailing this Court's Decision, respondent argues that th e ru les of procedure may be relaxed in some cases to attai n th e end s of su bstantial justice and that respondent

Commissioner of Internal Revenue vs. Missouri Square Inc. Page 2 of 3 CTA EB No. 1521 {CTA Case No. 8707) RESOLUTION was not denied due process of law when the Final Assessment Notice (FAN) was issued seven (7) days after the receipt of the Preliminary Assessment Notice (PAN). We are not persuaded. Even if we disregard the procedural infirmity in filing the petition, the arguments raised to support the petition which were rehashed in this motion were likewise bereft of merit. Petitioner insists that there was no violation of due process. However, petitioner's failure to strictly comply with the requirements laid down by law and its own rules is a denial of the taxpayers right to due process. 1 To reiterate, Section 3 of Revenue Regulations (RR) No. 12-99 2 , provides the due process requirements in the issuance of a deficiency tax assessment. In particular, Section 3.1.2 refers to the due process requirements for the issuance of the PAN and the subsequent issuance of the formal letter of demand and final assessment notice, to wit: "3.1.2 Preliminary Assessment Notice {PAN). - If after review and evaluation by the Assessment Division or by the Commissioner or his duly authorized representative, as the case may be, it is determined that there exists sufficient basis to assess the taxpayer for any deficiency tax or taxes, the said Office shall issue to the taxpayer, at least by registered mail, a Preliminary Assessment Notice {PAN) for the proposed assessment, showing in detail, the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based (see illustration in ANNEX A hereof). If the taxpayer fails to respond within fifteen (15) days from date of receipt of the PAN, he shall be considered in default, in which case, a formal letter of demand and assessment notice shall be caused to be issued by the said Office, calling for payment of the taxpayer's deficiency tax liability, inclusive of the applicable penalties." (Emphasis Supplied) Evidently, respondent's receipt of the FAN, seven (7) days after the receipt of the PAN is a violation of the due 1 Commissioner of Internal Revenue vs. Metro Star Superama, Inc., G.R. No. 185371, December 8, 2010. 2 Implementing the Provisions of the National Internal Revenue 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.

Commissioner of Internal Revenue vs. Missouri Square Inc. Page 3 of 3 CTA EB No. 1521 (CTA Case No. 8707) RESOLUTION process requirements in the issuance of a deficiency tax assessment. In sum, We find no substantial argument was raised to merit reconsideration of our Decision promulgated on January 24, 2018. WHEREFORE, premises considered, petitioner's "Motion for Reconsideration" is hereby DENIED for lack of merit. SO ORDERED. c... rJ~ �~ t.J. CIELITo N. Mw.:J .J A... lo_.L MIN"oXR'd-lifruLLA Associate Justice WE CONCUR: Presiding Justice ~h c -~~c.(. J2. LOVEL R. BAUTISTA JuANITO C. CASTANEtiA, JR. CAESA~SANOVA Associate Justice Associate Justice ER~ P. UY AssoCiate Justice ABON-VICTORINO (On Leavo) MA. BELEN M. RINGPIS-LIBAN Associate Justice ~�)--~~ CATHERINET.MANAHAN Associate Justice