EUROFRAGANCE PHILIPPINES, INC., v. COMMISSIONER OF INTERNAL REVENUE

CTA Form No.8 (For DCC) lllllllllllllllllllllllllllllllllllllllllllll llllllllllllllllllllllllll 19-00045 8-0 059 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE NO. 10169 EUROFRAGRANCE PIDLIPPINES, INC., Petitioner, -versus - NOTICE OF RESOLUTION COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. SBERYLL P. CACAYURAN ATTY. APRILYN T. POBAR Bureau oflntemal Revenue - R evenue Region No. 8B 2/F, Legal Division, BIR Regional Office Bldg. 313 Sen. Gil Puyat Avenue, Makati City ANGARA ABELLO CONCEPCION REGALA & CRUZ 22nd Floor, ACCRALAW Tower Second Avenue comer 30th Street Cresent Park West, Bonifacio Global City 1635 Taguig, Metro Manila GREETINGS: You are hereby notified by these presents that on March 19, 2024, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, March 20, 2024. AttyE. Mxaerci~~~af F. Chan-Te Court II

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION EUROFRAGANCE CTA Case No. 10169 PHILIPPINES, INC., Members: Petitioner, DEL ROSARIO, PJ, Chairperson, - versu s - MANAHAN, and REYES-FAJARDO, JL COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. RESOLUTION REYES-FA]ARDOI J.: For the Court's resolution is the Commissioner of Internal Revenue (CIR)'s Motion for Partial Reconsideration (of the Decision dated 29 September 2023), 1 taking into consideration Eurofragance Philippines, Inc. (Eurofragance)'s Comment/Opposition (To the Motion for Partial Reconsideration dated 19 October 2023).2 On September 29, 2023, the Court promulgated a Decision3 (the "Assailed Decision") partially granting Eurofragance's Petition for Review. The dispositive portion reads:4 "WHEREFORE, the Petition for Review filed on September 23, 2019, by Eurofragance Philippines, Inc., is PARTIALLY GRANTED. The deficiency VAT assessment issued by respondent against petitioner covering the period January 1, 2017 to June 30, 2017 is UPHELD IN PART. Accordingly, petitioner is ORDERED Motion for Partial Reconsideration, Docket, Vol. III, pp. 1378 -1387. 2 Comment/Opposition, Docket, Vol. III, pp. 1391- 1401. 3 Decision, Docket, Vol. III, pp. 1343-1369. !d. at p. 1368.

CTA Case No. 10169 Eurofragance Philippines, Inc. v. Commissioner ofInternal Revenue TO PAY respondent, the aggregate amount of TWO HUNDRED NINETY-FIVE THOUSAND THREE HUNDRED SIXTY-EIGHT PESOS AND FIFfY-FOUR CENTAVOS (P295,368.54), inclusive of the 25% surcharge and deficiency interest imposed under Sections 248(A)(3) and 249(B) of the NIRC of 1997, as amended by Republic Act (RA) No. 10963, also known as Tax Reform for Acceleration and Inclusion (TRAIN), and as implemented by RR No. 21-2018, computed as follows: Basic Deficiency Value-Added Tax Due f>191,270.32 25% Surcharge 47,817.58 20% Deficiency Interest (July 25, 2017 to Dec. 31, 201 7) 16,664.10 [?191,2 70.32 x 20% x 159/365 Dnys] 12% Deficiency Interest (January 1, 2018 to Sept. 22, 39,616.54 2019) P295,368.54 [?1 91,270.32 x 12 % x 630/ 365 Dnys] Total Amount Due as of September 22,2019 In addition, petitioner is ORDERED TO PAY delinquency interest at the rate of twelve percent (12%) per annum on the total unpaid amount of P295,368.54, as determined above, or equivalent to P97.11 per day, computed from September 23, 2019 until full payment thereof, pursuant to Section 249(C) of the NIRC of 1997, as amended by RA No. 10963, also known as TRAIN, as implemented by RR No. 21-2018. SO ORDERED." In the Motion for Partial Reconsideration, the CIR disagrees with the Court's conclusion that the Bureau of Internal Revenue (BIR) is wrong in disallowing !>2,525,107.63 worth of input taxes and that only !>191,270.32 worth of input taxes was correctly disallowed. The CIR argues that: fir st, Eurofragance failed to comply with the substantiation and invoicing requirements under Sections llO(A) and 113(A) of the National Internal Revenue Code (NIRC) of 1997, as amended, and under Section 4.110-8 of Revenue Regulations No. 16- 05;5 second, most of Eurofragance's submitted official receipts and invoices showed that the countersignatures were different from the signatures of the original issu er; 6 and third, assuming arguendo that the Notarized Certifications from suppliers can be given credit, the same should have been presented by Eurofragance to the BIR at the s Motion for Pa rtial Reconsid eration, Docke t, Vol. III, p. 1382. 6 I d.

CTA Case No. 10169 Eurofragance Philippines, Inc. v . Commissioner of Internal Revenue administrative level under the doctrine of exhaustion of administrative remedies.7 In its Comment/Opposition, Eurofragance points out that the CIR's Motion for Partial Reconsideration as a mere reiteration of the argument raised in the latter's A nswer and Memorandum which has already been passed upon by the Court. Further, that the Court correctly ruled that the BIR was wrong in disallowing P2,525,107.63 worth of input taxes. We resolve. At the onset, the Court notes the Compliances dated October 19, 2023, filed by Eurofragance on even date with attached Payment Form (BIR No. 0605) and corresponding eFPS payment confirmation9 to which no comment was filed by the CIR. The Court finds no compelling reason to reverse or modify the assailed Decision dated September 29, 2023. The argument raised by the CIR, particularly on the substantiation of input value-added tax, has already been passed upon and discussed at length by the Court. Any further discussion on this issue will only be unnecessarily repetitive and would not serve any useful purpose. In this regard, the pronouncement in Social Justice Society (SJS) Officers, et al. v. Lim,10 is instructive: The grounds relied on being m ere reiterations of the issues already passed upon by the Court, there is no need to "cut and paste" pertinent portions of the Decision or re-write the ponencia in accordance with the outline of the instant motion. As succinctly put by then Chief Justice Andres R. Narvasa in Ortigns nnd Co. Ltd. Partnership �u. Judge Velnsco on the effect and disposition of a motion for reconsideration: 7 Motion for Partial Recons ideration, Docket, Vol. III, p. 1384. 8 Compliance, Docke t, Vol. III, pp. 1370 - 1374. 9 Docket, Vol. III, pp. 1375- 1376. 10 G.R Nos. 187836 & 187916, March 10,2015.

CTA Case N o. 10169 Eurofrngnnce Philippines, Inc. v. Commissioner of Internal Revenue The filing of a motion for reconsideration, authorized by Rule 52 of the Rules of Cour t, does not impose on the Court the obligation to deal individually and specifically w ith 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 m otion 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 subm itted to and pronounced without merit by the Court in its judgment, or the basic issues have already been passed upon, or the m otion discloses no substantial argument or cogent reason to warrant reconsideration or m odification of the judgmen t or final order; or the arguments in the motion are too unsubstantial to require consideration, etc. Similarly, the CIR's invocation of the d octrine of exhaustion of administrative remedies in assailing the Court's admission of the notarized certifications by Eurofragance's suppliers which, according to the CIR, should have been presented by Eurofragance before the BIR at the administrative level, must fail. Section 8 of Republic Act No. 1125, as amended by Republic Act No. 9282, categorically provides that the Court of Tax Appeals (CTA) shall b e a court of record and as s u ch it is require d to conduct a formal trial (trial de novo) where the parties must present their evidence accordingly, if they desire the Court to take such evidence into consideration.11 As evidence is considered and evaluated again, the scope of the CIA's review covers factual findings.12 Thus, in Commissioner of Internal Revenue v. Philippine National Bank,13 the Supreme Court emphasized the principle of trial de novo in cases filed before the CTA, to wit: 11 Col//1//issioner ofilztemal Reve1111e v. Manila Mining Corp., G.R. No. 153204, August 31, 2005. 12 Philippine Airlines, Inc. vs. Co111missi01 zer of Internal Revwue, G.R. Nos. 206079-80 and 206309, January 17, 2018. 13 G.R. N o. 180290, September 29, 2014.

CTA Case No. 10169 Eurofrrzgance Philippines, Inc. v. Commissioner ofInternrzl Revenue More importantly, the Court of Tax Appeals is not precluded from accepting respondent's evidence assuming these were not presented at the administrative level. Cases filed in the Court of Tax Appeals are litigated de novo. WHEREFORE, in light of the foregoing considerations, the CIR's Motion for Partial Reconsideration (of the Decision dated 29 September 2023) is DENIED for lack of merit. SO ORDERED. ~ fbv F ~ ~~'f.vh MARIAN rviJF. REY~-FAJXRDO Associate Justice WE CONCUR: Presiding Justice ~ /""'*- ~ / ] -/....� \ - CATHERINE T. MANAHAN Associate Justice