ORIENT OVERSEAS CONTAINER LINE LTD., represented by OOCL (PHILIPPINES) INC., v. COMMISSIONER OF INTERNAL REVENUE

CT A Fonn No. 8 (For DCC) 1111111111111111 11111111111 111111111111111111111111111111 11111 1111111111 11111111 20-000 161 -0080 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION CTA CASE NO. 10296 NOTICE OF RESOLUTION ORIENT OVERSEAS CONTAINER LINE LTD., represented by OOCL (PHILIPPINES) INC., Petitioner, -versus - COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GE:'IERAL 134 Amorsolo St. , Legazpi Vi ll age Makati City ATTY. FELIX PAUL R. VELASCO 1TI ATTY. SYLVIA R. ALMA-JOSE ATTY. AYESHA BANIA B. GUILING-MATANOG ATTY. MARVEEN B. DE LA PAZ Bureau oflntemal Revenue Room 703, Litigation Division, BIR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Di liman, Quezon City CASTI LLO LAMAN TAN PAl'JTALEON & SAN JOSE 2nd to 5th & 9th Floors, T he Valero Tower 122 Valero Street, Salcedo Village Makati City GREETINGS: You are hereby notified by these presents that on August 1, 2025, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, August 5, 2025. Joh~ Atty. Maria an-Te II Executive Cl:~~wCth

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION ORIENT OVERSEAS CTA CASE N0.10296 CONTAINER LINE LTD., Members: DEL ROSARIO , EJ., Chairperson , represented by OOCL BACORRO-VILLENA, and CUI-DAVID , .ll. (PHILIPPINES) INC., Petitioner, -versus- COMMISSIONER OF INTERNAL REVENUE, PArUomGu0lg~ ated: -IJ'f;1i~{JIf,J Respondent. X-------------------- ------ --- -_ ":_~ --- - --- - --- - X RESOLUTION BACORRO-VILLENA, L.: For the Court's resolution is respondent Commissioner oflnternal Revenue's (respondent's/ CIR's) "Motion for Reconsideration Re: Decision dated 9 January 2025" 1 (MR), filed on 30 January 2025, with petitioner Orient Overseas Container Line Ltd.'s (petitioner's! OOCL's), represented in this case by OOCL (Philippines) Inc. (OPI), uOpposition (to respondent's Motion for Reconsideration dated January 28, 2025)" 2 (Opposition) thereto, filed on 10 Februa1y 2025 . Respondent seeks the reversal of the Court's Decision dated 09 January 20253 (assailed Decision), which granted petitioner's Petition for Review4 filed on 01 July 2020. In doing so, the Court declared~ U the subject deficiency tax assessment void and enjoined respondent Div ision Docket. Volume II. pp. 1273-1282. ld.. pp. 1286- 1291. l d.. pp. 1240- 1272. ld., Volume I. pp. 6-4 1.

RESOLUTION CTA Case No. 10296 Orient Overseas Container Line Ltd., represented by OOCL (Philippines) Inc. v. Commissioner of Internal Revenue Page 2 of7 X------------------------- ----- --- -- -- -- -------------X from taking any further action against petitioner in connection with this case. The dispositive portion of the assailed Decision reads, thus: WHEREFORE, the foregoing premises considered, the instant Petition for Review filed by petitioner Orient Overseas Container Line Ltd. on 01 july 2020 is hereby GRANTED. Accordingly, the Preliminary Assessment Notice dated 28 November 2016, Formal Letter of Demand with Details of Discrepancies and Assessment Notices dated 21 December 2016, and Final Decision on Disputed Assessment dated 17 Februa1y 2020 - all issued against petitioner Orient Overseas Container Line Ltd. for assessed deficiency internal revenue taxes in the fiscal year from 01 july 2012 to 30 june 2013, are declared VOID. Consequently, respondent Commissioner of Internal Revenue or any person duly acting on his or her behalf is ENJOINED from pursuing any actions against petitioner Orient Overseas Container Line Ltd. relative to herein case. SO ORDERED. In the instant MR, respondent argues that the Court erred in ruling that the subject deficiency tax assessment is void. Respondent insists that petitioner was accorded with due process because it was: (1) able to participate in the administrative proceedings; and (2) clearly informed of the identity of the revenue officers (ROs) who will continue the investigation or audit. Respondent also claims that the Memorandum of Assignment (MOA) directing the RO to continue the audit for fiscal year ending 30 June 2013 (FY 2013) is proper. The MOA subsequently issued derived its authority from the original Letter of Authority (LOA) initially issued. Finally, respondent highlights that Revenue Memorandum Order (RMO) No. 8-2oo6 provides that only one LOA per taxable year can be t issued to a taxpayer. Respondent maintains that if only those ROs would be authorized to continue the audit, collection of taxes would be jeopardized in violation of the lifeblood doctrine.

RESOLUTION CTA Case No. 10296 Orient Overseas Container Line Ltd., represented by OOCL (Philippines) Inc. v. Commissioner of Internal Revenue x- ------------------------------------------------------- --x In its Opposition, petitiOner echoes the Court's findings that respondent violated its right to due process due to the latter's failure to issue a new LOA, despite the assignment of a new RO for the continuation of its audit. We resolve. At the onset, it is noted that respondent has raised issues that have already been passed upon and discussed exhaustively in the assailed Decision. Nonetheless, to put the issues to rest, We shall indulge respondent with a brief discussion below. As regards respondent's argument that the MOA issued directing RO Alvin B. Lasquety (RO Lasquety) to continue the audit is proper and that there was no violation of petitioner's right to due process. A review of the records of the case reveals that RO Lasquety's authority sprung from an MOA issued by the Division Chief of Regular Large Taxpayers Audit Division 2 (RLTAD-2). It is worthy to note that the MOA dated o8 April2016 and the corresponding change in RO and GS happened prior to the issuance of the Preliminary Assessment Notice (PAN) 5 and Formal Letter of Demand (FLD)6 on 28 November 2016 and 21 December 2016, respectively. As We have previously discussed in the assailed Decision, Sections 6(A), w(c) and 13 of the National Internal Revenue Code (NIRC) of� � 19977, as amended, which provide that only the CIR and his or her dulyt Exhibit ..R-8... BIR Records. Folder I. pp. -155--165. Exhibit .. R-1 0... id .. pp. 509-527. SEC. 6. Pml'er of'the Commissioner 10 .\luke .-!.ssc.�;sl/lt!nls ami Prl:'scrihe Additional Requirements /or Tax .-!.dministrmion and Enj(J!"CI.!!JICnl. -- (A) Examinalion ojReturn and Determinalion offax Due. After a return has been filed as required under the provisions of this Code. the Commissioner or his duly authorized representative may authorize the examination or an; taxpayer and the assessment of the correct amount of tax, notwithstanding any law requiring the prior authorization of any government agency or instrumentality: Prorided. hmrl!rer. That failure to file a return shall not prevent the Commissioner from authorizing the examination of any taxpayer. SEC. 10. Re1�emte Regional Direc!or. - Linder rules and regulations. policies and standards formulated b) the Commissioner. \\ ith the approval of the Secretary of Finance, the Revenue Regional director shalL within the region and district offices under his jurisdiction, among others:

RESOLUTION CTA Case No. 10296 Orient Overseas Container Line Ltd., represented by OOCL (Philippines) Inc. v. Commissioner of Internal Revenue x- ------------------------------ ----------------------X authorized representatives (i.e., Deputy Commissioners, Revenue Regional Directors, and such other officials as may be authorized by the CIR) may issue the LOA, respondent's own rules, specifically, RMO No. 43-908 mandates the issuance of a new LOA in cases of reassignment or transfer of examination to another RO. It reads- Any reassignment/transfer of cases to another RO(s), and revalidation of [LOAs] which have already expired, shall require the issuance of a new [LOA], with the corresponding notation thereto, including the previous [LOA] number and date of issue of said [LOAs].9 Applying the above principles to the case at bar, the MOA signed by the Division Chief of RLTAD-2 does not and cannot confer authority to RO Lasquety to continue the audit or investigation of petitioner's books of accounts for the FY 2013. In the absence of the authority conferred by a valid and duly issued LOA, the investigation and subsequent assessment of petitioner's supposed tax deficiencies could not be sanctioned. Q The Supreme Court, citing the case of Commissioner of Internal Revenue v. Sony Philippines, Inc. 10, went on to state: . ' (a) Implement lm\�S. policies. plans. programs. rules and regulations of the depat1ment or agencies in the regional area: (b) Administer and enforce internal revenue 13\Y). and rules and regulations. including the assessment and collection of all internal revenue ta\es. charges and fees: (c) Issue Letters of authority for the e'\amination ofta;..payers \\ ithin the region[.] SEC. 13. ...Juthority f}(O Reremu: Officer.- Subject to the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. a Revenue Officer assigned to perform assessment functions in an) district Jl1<t). pursuant to a Letter of Authority issued by the Revenue Regional Director. examine taxpa: crs within the jurisdiction of the district in order to collect the correct amount of tax. 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. Amendment of Revenue Memorandum Order No. 37-90 Prescribing Revised Pol icy Guidelines for Examination of Returns and Issuance of Letters of Authority to Audit. Emphasis and underscoring supplied. 10 G.R. No. 178697. 17 November 2010: Emphasis and underscoring supplied.

RESOLUTION CTA Case No. 10296 Orient Overseas Container Line Ltd., represented by OOCL (Philippines) Inc. v. Commissioner of Internal Revenue X-------------------------------------------------------- --X Clearly, there must be a grant of authority before any revenue officer can conduct an examination or assessment. Equally important is that the revenue officer so authorized must not go beyond the authority given. In the absence of such an authority, the assessment or examination is a nullity. Further, the Supreme Court in Commissioner ofInternal Revenue v. McDonald's Philippines Realty Corp.n concluded that: In summary, We rule that the practice of reassigning or transferring revenue officers originally named in the LOA and substituting them with new revenue officers to continue the audit or investigation without a separate or amended LOA ill violates the taxpayer's right to due process in tax audit or investigation; (ii) usurps the statutory power of the CIR or his duly authorized representative to grant the power to examine the books of account of a taxpayer; and (iii) does not comply with existing BIR rules and regulations, particularly RMO No. �U-90 dated September 20, 1990. In this case, the records indisputably show that RO Lasquety and Group Supervisor Joseph Christian Santos (GS Santos) continued the audit and/or investigation of petitioner's books of accounts solely by virtue of an MOA. Furthermore, only the Division Chief of RLTAD-2 [an official who is not among those authorized to issue LOAs pursuant to existing laws and regulations, particularly Section 13'" in relation Section w(c) 13 of the NIRC of 1997, as amended, Item D(4) of RMO No. 43-9014 and Item I1(2) of RMO No. 29-o7's] signed the MOA. It is thus apparent that the lead officer tasked to carry out the investigation had not been validly clothed with the proper authority to continue the al!dit and recommend the issuance of the assessments against petitioner.Q/ II G.R. No. 242670. I0 May 2021; Emphasis and underscoring supplied. Supra at note 7. !d. Supra at note 8. Prescribing the Audit Policies. Guidelines and Standards at the Large Taxpayers Service.

RESOLUTION CTA Case No. 10296 Orient Overseas Container Line Ltd., represented by OOCL (Philippines] Inc. v. Commissioner of Internal Revenue X--------------------------------- --------------------X Relevantly, in Ortigas and Company Limited Partnership v. judge Tirso Velasco, et a/.16, the Supreme Court explained, to wit: The filing of a motion for reconsideration, authorized by Rule 52 of the Rules of Court, does not impose on the Court the obligation to deal individually and specifically with the grounds relied upon therefor, in much the same way that the Court does in its judgment or final order as regards the issues raised and submitted for decision. This would be a useless formality or ritual invariably involving merely a reiteration of the reasons already set forth in the judgment or final order for rejecting the arguments advanced by the movant; and it would be a needless act, too, with respect to issues raised for the first time, these being, as above stated, deemed waived because not asserted at the first opportunity. It suffices for the Court to deal generally and summarily with the motion for reconsideration, and merely state a legal ground for its denial (Sec. 14, Art. VIII, Constitution); i.e., the motion contains merely a reiteration or rehash of arguments already submitted to and pronounced without merit by the Court in its judgment, or the basic issues have already been passed upon, or the motion discloses no substantial argument or cogent reason to warrant reconsideration or modification of the judgment or final order; or the arguments in the motion are too unsubstantial to require consideration, etc. Furthermore, the Supreme Court in Shangri-La International Hotel Management, Ltd., eta/. v. Developers Group of Companies, Inc. 17 ruled: The bulk of the aforementioned grounds is a mere rehash of movant's previous arguments. While DGCI is correct in stating that a motion for reconsideration, by its very nature, may tend to dwell on issues already resolved in the decision sought to be reconsidered and that this should not be an obstacle for a reconsideration, the hard reality is that movant has failed to raise matters substantially plausible or compellingly persuasive to warrant the desired course of action. Considering that the grounds presently raised have been sufficiently considered, if not squarely addressed, in the subject Decision, it behooves movant to convince the Court that certain U findings or conclusions in the Decision are contrary to law. As it is,~ however, the instant motion does not raise any new or 16 G.R. No. I09645 (Resolution). 04 March 1996. 17 G.R. No. 159938. 22 January� 2007: Citation omitted and emphasis supplied.

RESOLUTION CTA Case No. 10296 Orient Overseas Container Line Ltd., r�epresentcd by OOCL (Philippines) Inc. v. Commissioner of Internal Revenue X-------------------- --------------x substantial legitimate ground or reason to justify the reconsideration sought. Indubitably, it is the movant's duty to convincingly show grounds for a reconsideration of an assailed judgment or order, or at the least give its previous arguments a fresh perspective in such a way that would warrant a re-examination of the case. Unfortunately, in the instant case, respondent had failed to do so. WHEREFORE, the foregoing premises considered, respondent's "Motion for Reconsideration (Re: Decision dated 9 January 2025)" filed on 30 January 2025 is hereby DENIED for lack of merit. SO ORDERED. JEANMA WE CONCUR: ROMAN G. DEL ROSARIO Presiding Justice LAJrj~~VID Associate Justice