BETA ELECTROMECHANICAL CORPORATION, v. COMMISSIONER OF INTERNAL REVENUE

CTA Form No. 8 (For DCC) 111111111111111:IIIIIIIIIIIIIIIIIIII 9-000082-01 ] 6 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE NO. 10040 BETA ELECTROMECHANICAL CORPORATION, Petitioner, - versus - NOTICE OF RESOLUTION COMMISSIONER OF INTERNAL REVENUE, Respondent . 1 () : OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Lcgazpi Village Makati City ATTY. MARVEEN B. DE LA PAZ Bureau of Intcrnal Revenue Room 703, Litigation Division, BIR National Office Building Sen. Miriam P, Dcfcnsor-Santiago Avenue Diliman, Quezon City OLALIA DELA CRUZ LAW OFFICE (Counsel for the petitioner) Unit 506, Taipan Place, J. ORigas Jr. Avenue Onigas Center, Pasig City TIONGCO SIAG BELLO & ASSOCIATES LAW OFFICES (Collaborating counsel .for the peUtionel') Units 2 104-2 105, Robinson's Equitable Tower, 4 ADB Avenue, Ortigas Center 1605 Pasig City GREETINGS: You are hereby notified by these presents that on June 18, 2024, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, June 19, 2024 Atty. MarA;Ltte Y.h an ExecutiVe Clerk of Court hI

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION BETA ELECTROMECHANICAL CTA Case No. 10040 CORPORATION, Petitioner, Members: -uerstLs- DEL ROSARIO, P. J., Chairperson, MANAHAN9 and REYES-FAJARDO, m. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. }{ - - - - - - - - - - - - - - - - - - - - - - RES 0 LU TI MANAHAN, J..' For resolution of the Court is respondent's Motion for Reconsideration (Re: Decision dated 5 March 2024) filed on April 4, 2024, with petitioner's Comment and Opposition mo the Motion for Reconsideration o/ Respondent) filed on May 2, 2024. Respondent asserts in the instant motion that: (1) The Court has no jurisdiction over the present case ; (2) The requirement of due process was properly complied with in issuing the Formal Letter of Demand (FLD); and (3) The assessment issued against petitioner is valid and lawful. On its part, petitioner counters that: (1) The assessment has not attained finality as a result of the timely protest to the FLD/Final Assessment Notice (FAN) filed by petitioner and the respondent is estopped from assailing and challenging such fact;

RESOLUTION CTA Case No. 10040 (2) The tax assessments and all subsequent acts of respondent CIR are void for lack of a valid Letter of Authority (LOA) and the Letter of Re-assignment did not cure such patent defect; (3) The issuance of the Warrant of Distraint and/or Levy (WDL) and its precursor Collection Letter emanated from a void tax proceedings as it is tainted with patent violations of the right to due process of petitioner BEC; (4) The respondent Commissioner of Internal Revenue (CIR) failed to issue to petitioner BEC a Final Decision on Disputed Assessment (FDDA) required under Revenue Regulations (RR) No. 12-99, as amended and Revenue Memorandum Order No. 026- 16; (5) The Collection Letter issued by respondent CIR to petitioner BEC is not the FDDA contemplated under RR No. 12-99, as amended; and, (6) The failure of respondent CIR and its duly authorized representative to consider the overwhelming evidence submitted to reconcile the discrepancies and/or to dispute the assessments constitutes a grave violation of the right to due process of petitioner BEC. After careful consideration of the merits. the Court resolves to deny the instant motion for reconsideration. Petitioner timely filed its protest Respondent asserts that petitioner, through a certain Medellin Penecilla, received the FLD/ FAN on October 26, 2015. Meanwhile, petitioner's protest dated November 23, 2015 was stamped received by the Large Taxpayer's Service on December 1, 2015, or thirty-six (36) days after petitioner's receipt of the FLD / FAN. On the other hand, petitioner counters that it timely filed its protest before the Excise Large Taxpayers Audit Division (ELTAD) as shown in the transmittal sheet. After scrutiny of the records, the transmittal sheet,1 which forms part of the BIR Records collectively marked and offered as respondent's Exhibit "R- 11", reveals that the subject protest 1 Exhibit "R- 11", BIR Records, p. 336.

RESOLUTION CTA Case No. 10040 was stamped received by the BIR-EI,TAD on November 24, 2015. As such, the Court agrees with petitioner that it timely filed its protest. The subject assessments are void Finally, respondent argues that all presumptions are in favor of the correctness of the assessment. However, this presumption cannot be applied when there is patent violation of a taxpayer's right to due process, i.e., right to be informed of the reason for the denial of a protest. As held by this Court in the assailed Decision: "Notwithstanding the foregoing arguments, the subject FLD did not address any of them. The BIR only reiterated uerbatim in the Details of Discrepancy of the said FLD, what it stated in the Details of Discrepancy of the undated PAN, save for the adjustments in one basic income tax due and basic deficiency VAT only. To emphasize, pursuant to the /loon case, the concerned taxpayer must be fully apprised of the factual and legal bases of the assessments, and must not be left unaware on how respondent or his authorized representatives appreciated the explanations or defenses raised by petitioner in connection with the assessments. Correspondingly, as part of the due process requirement in the issuance of tax assessments, respondents must give reason(s) for rejecting petitioner's refutations, and must give the particular facts upon which the conclusions for assessing petitioner are based, and those facts must appear on record. Respondent has obviously not observed such requirement in the issuance of the subject FLD. XXX XXX XXX To reiterate, tax assessments issued in violation of the due process rights of a taxpayer are null and void. Furthermore, a void assessment bears no valid fruit. Such being the case, the subject tax assessments cannot be enforced against petitioner, and respondent or the BIR has no right to collect the same. Considering that the subject assessment is void, the Court need not belabor on the other issues raised in the instant motion. Hence, the denial thereof is in order

RESOLUTION CTA Case No. 10040 FOR THESE REASONS, respondent's Motion for Reconsideration (Re: Decision dated 5 March 2024) is DENIED, for lack of merit. SO ORDERED. aM I WE CONCUR: CATHERINE T. MANAHAN Associate Justice Presiding Justice @""~ %' &w -F?i.* MARIAN IWT. REYES-FAJARDO Associate Justice