LIGHT RAIL TRANSIT AUTHORITY v. BUREAU OF INTERNAL REVENUE, Represented by the Commissioner of Internal Revenue

Republic of the Philippines COURT OF TAX APPEALS Quezon City En Bane LIGHT RAJ TRANSIT AUTHORITY, CTA EB No.1325 Petitioner, (CTA Case No. 8891) Present: DEL ROSARIO, P], - versus- CASTANEDA, JR., BAUTISTA, UY, CASANOVA, FABON-VICTORINO, MINDARO-GRULLA, and BUREAU 0 INTERNALREVENUE RINGPIS-LIBAN,Jl. represent by the COMMISSI NER OF INTERNAL Promulgated: REVENUE, Respondent. 0CT0 5 2016 11:3o a . ~ X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~- - X DECISION , L.: an appeal, by way of a Petition for Review1, filed by the Light Rail ransit Authority (LRTA) on July 9, 2015 assailing the Resolutions dated February 2, 2015 2 and May 19, 20153, respectively, rendered b the Court of Tax Appeal's (CTA) Third Division in CTA Case No. 8891, hich dismissed LRTA's Petition for Review for lack of jurisdiction. Petiti ner LRTA is a government instrumentality under the Departmen of Transportation and Communications (DOTC), created under Exe utive Order (EO) No. 603, issued by then President.._ 1 CTA En Bane olio, pp. 7-22 z Division Doc et, pp. 278-284 3 Ibid., pp. 308 312

DECISION CTA EB No. 13 5 (CTA Case No. 891) Page 2 of14 Ferdinand E. Marcos, on July 12, 1980, as amended by EO No. 210, issued by th n President Corazon C. Aquino, dated July 7, 1997. It may be served ith pleadings, notices, orders, resolutions, decisions and other court processes through its Legal Department, Administration Building, LR A Compound, Aurora Boulevard, Pasay City.4 Respo dent Bureau of Internal Revenue (BIR) is the government agency offic ally responsible for the assessment and collection of all national int rnal revenue taxes, fees and charges and the enforcement of all forfeit res, penalties and fines connected with such taxes. It is represented by the Commissioner of Internal Revenue (CIR) who holds office at th 4th Floor, BIR National Office Building, Agham Road, Diliman, Qu zon City. As cu led from the records of the case, respondent issued a Preliminary Assessment Notices (PAN) on December 8, 2008 against petitioner al eging unpaid deficiency income tax, value-added tax (VAT), withholding tax on compensation (WTC), expanded withholding tax (EWT) and ithholding tax on VAT for calendar year (CY) 2003 in the amount ofP ,521,915.61. On Ja uary 21, 2009, petitioner filed a letter6 dated December 22, 2008 with r spondent protesting the said PAN. On De ember 24, 2008, respondent issued a Formal Assessment Notice with Details of Discrepancies7 (FAN) against petitioner for its alleged defi iency taxes in the amount of P3,555,982.19, inclusive of increments. onse, petitioner protested the FAN via a letter dated January 7, 009, reiterating its position in the previous protest letter dated Dece ber 22, 2008.8 On A ril 26, 2011, petitioner received a Final Decision on Disputed As essment9 (FDDA) dated April 1, 2011 denying its request for reinvesti ation."'" 4 See paragraph 9, III. The Parties, Petition for Review, CTA En Bane Rollo, pp. 8-9 s Annex "D" oft e Petition for Review, CTA En Bane Rollo, pp. 41-42 6 Annex "E", ibi ., pp. 46-49 7 Annex "F", id., p. 50-54 aAs mentioned n the Final Decision on the Disputed Assessment dated April1, 2011

DECISION CTA EB No. 13 5 (CTA Case No. 891) Page 3 of14 On Ma 6, 2011 petitioner appealed the FDDA to then CIR Kim S. Jacinto-Hena es, through a letter Re: Final Assessment Appea}lo of even date, reque ting reconsideration of the FDDA. Petitioner also re- submitted it supporting documents on July 7, 2011, through a letter Re: Final Assess ent Appeal (Submission of Oocuments)11. Howe er, on September 22, 2011, petitioner received a Preliminary ollection Letter12 (PCL) dated September 20, 2011 from respondent' Regional District Office (ROO) No. 51, Revenue Region No. 8, demandin payment of its alleged tax deficiencies in the amount of P9,279,619. 6 within ten (10) days thereof. In repl , petitioner sent a letter Re: Preliminary Collection Letter dated 20 eptember 201113 on September 30, 2011 informing respondent' ROO No. 51, Revenue Region No.8, that the matter is still the subject o a pending appeal with the CIR. Then, n January 13, 2012, petitioner received a Final Notice Before Seizu e14 dated November 23, 2011 from respondent's ROO No. 51, Revenue Region No. 8, giving it a period of ten (10) days within which to set le its tax liabilities. In a le ter Re: Assessment Notice No. 33963-03-08-060515 dated February 3, 012 filed with respondent's ROO No. 51, Revenue Region No. 8, petiti ner reiterated that its case is still the subject of a pending appeal with he CIR. As such it will act on the matter accordingly, upon receipt ofth latter's decision. On M y 17, 2012, a Warrant of Distraint andjor Levy16 (WOL) dated March 5, 2012 was served upon petitioner. On Ju e 14, 2012, petitioner filed a letter17 dated May 28, 2012, with respo dent's ROO No. 51, Revenue Region No. 8, seeking ~ 9 Annex "G" oft e Petition for Review, CTA En Bane Rollo, pp. 55-58 10 Annex "H", ibi ., p. 59 11 Annex "1", id., . 60 12 Annex "J", id., . 61 13 Annex "K", id., p. 62 14 Annex "L", id., p. 63 1s Annex "M", id. p. 65 16 Annex "N", id. p. 66 17 Annex "0", id. p. 67

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 4 of14 reconsiderati n of the WDL. Petitioner claims that it has been consistently filing with respondent its Monthly VAT Declaration, Monthly Re ittance Return of VAT and other percentage taxes withheld, as videnced by the copies of BIR Forms 2550M and 1600, respectively, s attached in the said latter. In a 1 tterts dated April 4, 2013, respondent's RDO No. 51, Revenue Reg on No.8 granted petitioner's request and forwarded the docket of t e case to its Revenue Officers for re-investigation of petitioner's ax deficiencies. Relative thereto, petitioner was further instructed to present all relevant documents within sixty (60) days for proper re-ev luation of its case. There fter, on June 17, 2014, petitioner received a letter19 from respondent' RDO No. 51, Revenue Region No. 8 dated June 9, 2014 informing p titioner that due to its failure to submit the pertinent relevant doc ments in support of its request, the findings in the FDDA dated April , 2011 is therefore upheld. On Au ust 12, 2014, petitioner received a letter20 dated June 30, 2014 from e Regional Director of Revenue Region No. 8, informing petitioner t at its case has already become final, executory and demandable As a r suit, petitioner elevated the matter on September 11, 2014 to the CTA v a a Petition for Reviewzt. After aving been granted an extension of time within which to file an Ans er, respondent instead filed a Motion to Dismisszz on November 5 2014 praying that the Petition for Review be dismissed for lack of juris iction. On Ja uary 14, 2015, petitioner filed a Comment/Opposition (To the Motion Dismiss dated 4 November 2014)23. .._ 1s Annex "P", id. p. 68 19 Annex "R", id, pp. 70-71 20 Annex "S", id. p. 72 21 Division Doc et, pp. 6-14 22 Ibid., pp. 254 260 23/d., pp. 273-2 6

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 5 of14 Accordi gly, on February 2, 2015, the CTA Third Division promulgated he Resolution24 being assailed in this wise: " HEREFORE, the 'Motion to Dismiss,' is hereby ED. Accordingly, the Petition for Review is hereby DISMI SED for lack of jurisdiction. ORDERED." On Fe ruary 24, 2015, petitioner filed an Omnibus Motion (Motion for econsideration on the Decision dated 2 February 2015 and Motion to Q ash Warrant of Distraint and Levy dated 12 February 2015)25. On 19, 2015, the Court a quo promulgated the assailed Resolutionz6, denying petitioner's Omnibus Motion for lack of merit. Aggrie ed, petitioner appealed the matter to the Court En Bane on July 9, 2015 ia the instant Petition for Review27. Petitioner prays that the Court E Bane render judgment reversing the assailed Resolutions dated Febru ry 2, 2015 and May 19, 2015, respectively, rendered by the CTA Third ivision and, that the assessment notices, collection letters, and all oth r actions enforcing the alleged deficiency taxes against petitioner fo CY 2003 be declared null and void. On Au ust 3, 2015, petitioner's counsel filed a Notice of Change of Address28 i orming the court of the change of address of LRTA, Legal Department to LRTA Line 2 Santolan Depot, Marcos Highway, Santolan Pasig City. s such, it prayed that the change of address be noted and entered int the records. In a inute Resolution29 dated August 4, 2015, the Court En Bane noted petiti ner's counsel's change of address, thereby directing that all pleadings, otices, orders, decisions, resolutions and court processes be served top titioner's counsel at its new address. Q- 24 Supra No.2 2s Division Doc et, pp. 292-298 26 Supra No.3 27 Supra No.1 28 CTAEn Ban 29/bid., p. 76

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 6 of14 On Au ust 4, 2015, the Court En Bane issued a Resolution3� directing res ondent to file its comment within ten (10) days from receipt there f. However, as per Records Verification31 dated September 17, 2015, res ondent failed to file its comment. Conseq ently, in a Resolution32 dated October 15, 2015, the Court En Bane gave due course to the instant Petition and granted the parties a period of thirty (30) days within which to file their respective memorandu Hance, petitioner filed its Memorandum (For Petitioner)33 on Decembe 23, 2015, while respondent failed to file his memorandum as per Recor s Verification34 dated January 14, 2016. Thus, the Court En Bane deeme the present case submitted for decision via a Resolution3s dated Januar 29, 2016. The is ues36 raised in the instant Petition for Review are whether the CTA Thir Division has jurisdiction over the present case and whether the assessme ts issued by respondent have prescribed. Petiti ner argues that the court a quo erroneously concluded that the Final No ice Before Seizure dated November 23, 2011 constitutes as respondent' final decision that is appealable before the CTA. Petitioner claims that he same cannot be considered as having finally disposed of the matter since Ms. Corazon M. Montes, Officer-in-Charge of respondent' RDO No. 51, agreed to conduct a re-investigation of the case. There re, it is the letter dated June 30, 2014 issued by Regional Director Jo as DP Amara of BIR Revenue Region No. 8, which denied petitioner's request for reinvestigation, that should rightfully be considered s respondent's final decision. Moreover, petitioner asserts that respon ent's right to assess its alleged deficiency taxes for CY 2003 has alread prescribed since respondent only issued his FAN on December 4, 2008, which is more than four (4) years from the time petitioner id its last VAT Return for CY 2003.~ 30 /d., pp. 78-7 31 /d., p. 80 3Z /d., pp. 82-8 33 /d., pp. 84-9 34 /d., p. 99 35 /d., pp. 101- 02 36 Paragraphs 2-33, VII. Issues, Petition for Review, CTA En Bane Rollo, p. 12

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 7 of14 After d e consideration, We find no merit in the instant Petition. Settled is the rule that the perfection of an appeal in the manner and within t e period laid down by law is not only mandatory but also jurisdictional Perforce, jurisdiction refers to the power of a court to hear and de rmine a case - to ascertain whether or not a court has jurisdiction, e provisions of the law should be inquired into. The CTA, being a court of special jurisdiction, can take cognizance only of matters that are clea y within its jurisdiction.37 As such, Section 7(a) of Republic Act (RA) No. 112538, as further amended by RA No. 928239, enumerates the instance where the CTA may exercise its appellate jurisdiction, viz: c. 7.jurisdiction.- The CTA shall exercise: (a) xclusive appellate jurisdiction to review by appeal, as rovided: (1) Decisions of the Commissioner of Internal Reve ue in cases involving disputed assessments, refun s of internal revenue taxes, fees or other charges, penal ies in relation thereto, or other matters arising under the ational Internal Revenue Code or other laws admi istered by the Bureau of Internal Revenue; Inaction by the Commissioner of Internal Revenue ses involving disputed assessments, refunds of inter al revenue taxes, fees or other charges, penalties in relat ons thereto, or other matters arising under the Nati nal Internal Revenue Code or other laws administered by t e Bureau of Internal Revenue, where the National Inte al Revenue Code provides a specific period of action, in w ich case the inaction shall be deemed a denial; tiiZ x x x." (Emphases Ours) 37 Allied Banki g Corporation vs. CIR, G.R. No. 175097, February 5, 2010 38 "An Act Cre ting the Court of Tax Appeals" 39 An Act Exp ding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending fo the Purpose Certain Sections of Republic Act No. 1125, as Amended, Otherwise Kn wn as The Law Creating the Court of Tax Appeals, And For Other Purposes

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 8 of14 Evident y, it is the CIR's decision or inaction involving disputed assessments hat is cognizable by this Court. The rule is that for the Court of Tax ppeals to acquire jurisdiction, an assessment must first be disputed by he taxpayer and ruled upon by the Commissioner of Internal Reve ue to warrant a decision from which a petition for review may be taken o the Court of Tax Appeals.4o More s , it has been previously interpreted that a "disputed assessment" rises where a taxpayer questions an assessment and asks for reconside ation or cancellation of the same.41 It is precisely for this reason that, ection 228 of the NIRC of 1997, as amended, provides the manner upo which a taxpayer may question and appeal any deficiency tax assessme t issued against it, viz: "S C. 228. Protesting of Assessment - When the Commis ioner or his duly authorized representative finds that proper axes should be assessed, he shall first notify the taxpaye of his findings: Provided, however, That a preasse sment notice shall not be required in the following cases: XXX ithin a period to be prescribed by implementing rules nd regulations, the taxpayer shall be required to respon to said notice. If the taxpayer fails to respond, the Commi sioner or his duly authorized representative shall issue an asse sment based on his findings. S ch assessment may be protested administratively by fili g a request for reconsideration or reinvestigation within thirty (30) days from receipt of the assessment in such orm and manner as may be prescribed by imple enting rules and regulations. Within sixty (60) days from fi ing of the protest, all relevant supporting documents shall h ve been submitted; otherwise, the assessment shall final. the protest is denied in whole or in part, or is not ... acted pon within one hundred eighty (180) days from 40 Oceanic Wi less Network, Inc. vs. Commissioner of Internal Revenue, et. al., G.R. No. 148380, Dece her 9, 2005 41 Commission r of Internal Revenue vs. Leonardo Villa, et al., GR L-23988, January 2, 1968

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 9 of14 submiss on of documents, the taxpayer adversely affected by the d cision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision or from the lapse of the one hundred eighty (180)-d y period; otherwise, the decision shall become final, ex cutory and demandable." (Emphases Ours) Aprop s thereto, the implementing rules and regulations of Revenue Reg lations (RR) No. 12-9942, specifically Section 3.1.5, clearly defines what �s disputed assessment, to wit: "3 1.5 Disputed Assessment. - The taxpayer or his duly au horized representative may protest administratively against he aforesaid formal letter of demand and assessment notice 'thin thirty (30) days from date of receipt thereof. x x x XXX In general, if the protest is denied, in whole or in part, by the Co missioner or his duly authorized representative, the taxpaye may appeal to the Court of Tax Appeals within thirty (30) da s from date of receipt of the said decision, otherwise, the ass ssment shall become final, executory and demandable: Provid d, however, that if the taxpayer elevates his protest to the ommissioner within thirty (30) days from date of receipt of the final decision of the Commissioner's duly author zed representative, the latter's decision shall not be consid red final, executory and demandable, in which case, the pr est shall be decided by the Commissioner. x x x." (Emphasis Ours) Clearl , upon receipt of the CIR's final decision on the disputed assessment , the taxpayer can file a petition for review with the CTA within thir (30) days after receipt of a copy of such decision. However, the immed ately quoted provision further provides that if the final decision w s only rendered by the CIR's duly authorized representative,.e 42 "IMPLEMEN lNG THE PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE OF 1997 GOVER lNG THE RULES ON ASSESSMENT OF NATIONAL INTERNAL REVENUE TAXES, CIVIL ENALTIES AND INTEREST AND THE EXTRA-JUDICIAL SETTLEMENT OF A TAXPAYER'S RIMINAL VIOLATION OF THE CODE THROUGH PAYMENT OF A SUGGESTED COMPROMISE PENALTY", dated September 6, 1999

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 10 of14 the taxpayer s given the option of whether (1) to elevate its protest to the Commissi ner of Internal Revenue upon receipt of denial of protest by the author zed representative, or (2) to directly appeal such denial to the Court of Tax Appeals, again, both within thirty (30) days from receipt of the denial of the protest.43 Applyi g the foregoing in the present case, though the FDDA was issued on Ap il 26, 2011, it was, however, issued only by the CIR's duly authorized r presentative - a BIR Regional Director. Pursuant to Section 3.1.5 of RR N . 12-99, petitioner is given the option to either elevate the decision to t e CTA or, appeal the same to the CIR; both must be done within thir (30) days from receipt of the denial of the protest. Accordingly, by choosing to appeal the FDDA to the Commissioner on May 6, 2011 the FDDA issued by the BIR Regional Director cannot yet be consider d as final, executory and demandable. A table of the antecedent aterial events is provided hereafter for ease of reference, to wit: DATE MATERIAL EVENT December I, 2008 petitioner received a PAN44 issued by Regional January 21 ,2009 Director Ma. Nieva A. Guerrero, on behalf of then CIR December 24, 2008 Sixto S. EsC{uivas IV January 7 2009 petitioner filed a letter of protest45 a FAN46 was issued by Regional Director Ma. Nieva A. April26, 2011 Guerrero on behalf of then CIR Sixto S. Esquivas IV petitioner protested the FAN47 May6,t. 011 petitioner received a FDDA4B issued by Regional May 26, 2011 Director Jaime B. Santiago, on behalf of then CIR Kim September ~1,2014 S. Jacinto-Henares petitioner appealed the FDDA to the CIR through a letter Re: Final Assessment Appeal49 end of the 30 days within which petitioner may elevate the matter with the CTA petitioner filed a Petition for Reviewso with the CTA 43 See Moog Co ntrols Corporation Philippine Branch vs. Commissioner of Internal Revenue, CTA EB Case N). 44, May 10, 2005 44 Supra No.5 45 Supra No.6 46 Supra No. 7 47 Supra No.8 48 Supra No.9 49 Supra No. 1( so Supra No. 2

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 11 of14 Now, t e next logical question would be what are the periods applicable w en the taxpayer opts to elevate its protest to the CIR since Section 3.1.5 fRR No. 12-99 is silent on the matter. We fin the case of COMMISSIONER OF INTERNAL REVENUE VS. SARANGANI ESOURCES CORPORA TIONS 1 instructive on the issue at hand, viz: "It must be stressed that Section 228 of the NIRC of 1997, a amended, provides only for one 180-day period for the IR or her authorized representative to decide the protest. Thus, RR No. 12-99, which implements Section 228, does no provide for a fresh or separate 180-day period for the CIR to decide the appealed decision of her authorized tative. lain reading of Section 228 of the NIRC of 1997, as , and Section 3.1.5 of RR No. 12-99 reveals that there is only on '180-day period' which shall be counted from the date of sub �ssion of the relevant su ortin documents. The date of sub ission of the relevant supporting documents, as express y provided in Section 228 of the NIRC of 1997, as amende , and Section 3.1.5 of RR No. 12-99, shall be within 0 da s from the filin of the rotest. There is no mentio in either Section 228 of the NIRC of 1997, as amend d, nor in Section 3.1.5 of RR No. 12-99, that upon appeal to the CIR of the decision of her duly authorized repres ntative, the taxpayer may submit additional docum nts or that the taxpayer is given a fresh period of 60 days to submit such additional supporting documents. such, respondent Sarangani Resources erred in countin a new 180-day period from October 15, 2009 for the CIR to decide on the appealed decision of her authorized repres tative. When the decision of the CIR's authorized repres ntative was appealed to the CIR, the running of the 180- da e iod should still be counted from March 19 2009 the ondent submitted the relevant su ort of its rotest. __ s1 CTA EB No. 098, April28, 2015

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 12 of14 Co sidering that the 180-day period expired on Septemb r 15, 2009, pursuant to Section 228 of the NIRC of 1997, as amended, respondent Sarangani Resources had thirty (30) da s, or until October 15, 2009 to appeal to the CTA. Records show that respondent filed the Petition for Review in CTA Cas No. 8105 only on May 13, 2010, or two hundred and ten (21 ) days beyond the last day to file the petition for ince the Petition for Review with the CTA was filed nd the 30-day reglementary period, the CTA Special First Di ision had no jurisdiction to entertain the Petition for Review �n CTA Case No. 8105, and should thus have been dismiss d for lack of jurisdiction." (Emphases Ours) Verily, while RR No. 12-99, as amended, allows that the final decision oft e CIR's duly authorized representative be appealed to the CIR, such pr vision may only be construed in a manner consistent with Section 228 f the NIRC of 1997, as amended. It is well-settled that rules and regulati ns, which are the product of a delegated power to create new and ad itional legal provisions that have the effect of law, should be within th scope of the statutory authority granted by the legislature to the adm nistrative agency. It is required that the regulation be germane to he objects and purposes of the law; and that it be not in contradictio to, but in conformity with, the standards prescribed by law. 52 Going ack to the present case, the thirty (30) days within which to elevate o this Court the final decision of the CIR or his duly authorized epresentative under Section 228 of the NIRC of 1997, as amended, is still observed and not, in anyway, extended or renewed. Considering that the FDDA was received by petitioner on April 26, 2011, petitioner h d until May 26, 2011 within which to elevate the case to this Court. y belatedly filing its Petition for Review on September 11, 2014, respo dent's Assessment Notice No. 33963-03-08-0605 for CY 2003 alread became final, demandable and executory. With uch emphasis, We again stress that while the right to appeal a de ision of the Collector to the Tax Court is merely a statutory remedy, ne ertheless the requirement that it must be brought within thirty days after receipt of the Collector's decision, or ruling is jurisdiction 1. "If a statutory remedy provides as a condition precedent,-..... sz Commission r of Customs and the District Collector of the Port of Subic vs. Hypermix Feeds Corpora �on, G.R. No. 179579, February 1, 2012

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 13 of14 that the acti n to enforce it must be commenced within a prescribed time, such re uirement is jurisdictional and failure to comply therewith may be raise in a motion to dismiss".s3 Hence, in view of the foregoing, this Court is deprived of jurisdiction o rule on the fallibility, much less belabor on the substantive v lidity, of the subject assessments. FORE, the Petition for Review is hereby DENIED for lack of merit. Ace rdingly, the Resolutions dated February 2, 2015 and May 19, 2015, res ectively, in CTA Case No. 8891 are both AFFIRMED. WE CONCUR (With Concurrin pinion) ROMAN G. DEL ROSARIO Presiding Justice LOVELL R.,AUTISTA Associa e Justice (1!:4. ~ J' - MA. BELEN M. RINGPIS-LIBAN Associate Justice 53 Ker and Com any, Ltd. vs. The Court of Tax Appeals and the Collector of Internal Revenue, G.R. No. L-123 6, January 31, 1962, citing Callahan vs. Chespeake & Ohio, 407 Supp. 323, mentioned on . 175, Moran's Rules of Court, Vol. 1, 1952 Ed.

DECISION CTA EB No. 132 (CTA Case No.8 91) Page 14 of14 CERTIFICATION Pursua t to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation ith the members of the Court en bane before the case was assigned to th writer of the opinion of the Court. Presiding Justice

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY EN BANG LIGHT RAIL RANSIT CTA EB NO. 1325 AUTHORITY (CTA Case No. 8891) Petitioner, Present: -versus- Del Rosario, P.J. , Castaneda , Jr., Bautista , Uy , Casanova, Fabon-Victorino , Mindaro-Grulla, and Ringpis-Liban, JJ. COMMISSIO ER OF INTERNAL REVENUE, Promulgated: 0CT0 5 2016 X- ~ ~~ a~. ,.-.X - - - - - - - - - - - - Respondent - - - - - - - - - - - - - - - - - ---------- CONCURRING OPINION DEL ROSAR 0, P.J.: I concu in the ponencia in denying the Petition for Review filed by Light Rail Transit Authority (LRTA) on July 9, 2015 which assails the Court in ivision's Resolutions dated February 25, 2015 and May 19, 2015. Record reveal that the Court in Division dismissed the Petition for Review fil d therein by LRTA for lack of jurisdiction. The Court in Division rule that the Final Notice Before Seizure (FNBS) dated November 2 , 2011 issued by Corazon M. Montes, OIC-Revenue District Offic r of Revenue District Office No. 51, constitutes as the final decision of respondent Commissioner of Internal Revenue (CIR) that is appeal ble before the Court in Division. As found by the Court in Division, L TA received the FNBS on January 13, 2012 , thus, it had thirty (3 ) days from said date to appeal the same before the Court in Divis on . Since LRTA's Petition for Review was filed with the~ I

Concurring Op. rJion CTA EB No. 13L!f5 (CTA Case No. 8891) Page 2 of6 Court in Division only on September 11, 2014, or way beyond the thirty-day pe iod to appeal, thus, the Court in Division ruled that the assessment 1ad already attained finality. On the other hand, in dismissing LRTA's present Petition for Review, the J onencia holds that the thirty-day period to file an appeal with the Cour in Division should be reckoned from April 26, 2011, the date when LRTA received the Final Decision on Disputed Assessment (FDDA) dated April 1, 2011 issued by Jaime B. Santiago, Re ~ional Director of Revenue Region No. 8. For ea~ e of reference, the following are the material dates of the case: Decembe 8, 2008 LRTA received Preliminary Assessment Notice (PAN) dated December 8, 2000 assessing it for January 2 1, 2009 unpaid deficiency income tax, VAT, Withholding December 24, 2008 Tax on Compensation, Expanded Withholding January 21, 2009 Tax and Withholding Tax on VAT for calendar year 2003, issued by the OIC-Regional Director April 26 2011 of Revenue Region No. 8 May 6, 2011 LRTA filed with the Revenue Region No. 8 its September 22, 2011 Reply to the PAN dated December 22, 2008 LRTA received the Formal Assessment Notice September 30, 2011 (FAN) dated December 24, 2008 issued by the OIC-Regional Director of Revenue Region No. 8 January 1p, 2012 LRTA filed a letter-protest dated January 7, 2009 against FAN, addressed to the CIR February 3, 2012 LRTA received the FDDA dated April 1, 2011 May 17, 2012 denying LRTA's request for reinvestigation, issued by the OIC-Regional Director of Revenue Region No. 8 LRTA appealed the FDDA to then CIR Kim 5. Jacinto-He nares LRTA received a Preliminary Collection Letter dated September 20, 2011, issued by the Ole- Revenue District Officer of Revenue District Office No. 51 LRTA sent a letter informing the OIC-Revenue District Officer of Revenue District Office No. 51 that a matter is still the subject of a pending appeal with the CIR LRTA received the FNBS dated November 23, 2011 issued by the OIC-Revenue District Officer of Revenue District Office No. 51 LRTA filed a letter addressed to the Ole- Revenue District Officer of Revenue District Office No. 51 reiterating the filing on May 6, 2011 of its Letter to then CIR Kim S. Jacinto-Henares A Warrant of Distraint and/or Levy (WDL)

Concurring Op nion CTA EB No. 13. 5 (CTA Case No. 8891) Page 3 of6 June 1~ , 2012 issued by the OIC-Revenue District Officer of April4 2013 Revenue District Office No. 51 was served June 1 , 2014 upon LRTA. August 1~, 2014 LRTA filed a letter dated May 28, 2012 Septembe 11, 2014 addressed to the OIC-Revenue District Officer of Revenue District Office No. 51 seeking reconsideration of the WDL LRTA received a letter from OIC-Revenue District Officer of Revenue District Office No. 51 granting its request for reinvestigation of its tax deficiencies LRTA received a letterfrom OIC-Revenue District Officer of Revenue District Office No. 51 informing LRTA that due to its failure to submit the pertinent relevant documents in support of its request, the findings in the FDDA dated April 1, 2011 are upheld LRTA received a letter from the Regional Director of Revenue Region No. 8 informing LRTA that its case has already become final, executory and demandable LRTA appealed filed a Petition for Review before the Court in Division Based on the foregoing, the Court in Division aptly dismissed the Petition f1 r Review filed by LRTA, albeit in my view, the dismissal should have been based on the ground that the Petition for Review was !either prematurely filed or time-barred. Section 3.1.5 of Revenue Regulations (RR) No. 12-99, implementin~ Section 228 of the National Internal Revenue Code (NIRC) of 191n7, as amended, reads: "3.1.5 Disputed Assessment. - The taxpayer or his duly authorizE d representative may protest administratively against the aforesai< formal letter of demand and assessment notice within thirty (3( ) days from date of receipt thereof. If there are several issues i valved in the formal letter of demand and assessment notice bl t the taxpayer only disputes or protests against the validity of some of the issues raised, the taxpayer shall be required to pay the defic ency tax or taxes attributable to the undisputed issues, in which ca~e, a collection letter shall be issued to the taxpayer calling for payrr ent of the said deficiency tax, inclusive of the applicable surcharg~ and/or interest. No action shall be taken on the taxpayers disputed issues until the taxpayer has paid the deficienciY tax or taxes attributable to the said undisputed issues. The pre� criptive period for assessment or collection of the tax or ()"J taxes att ibutable to the disputed issues shall be suspended. X)jx XXX XXX

Concurring Op ion CTA EB No. 13 5 (CTA Case No. 8891) Page 4 of6 I general, if the protest is denied, in whole or in part, by the Co missioner or his duly authorized representative, the taxpaye may appeal to the Court of Tax Appeals within thirty (30) da s from date of receipt of the said decision, otherwise, the a sessment shall become final, executory and deman ble: Provided, however, that if the taxpayer elevates his pro est to the Commissioner within thirty (30) days from date of eceipt of the final decision of the Commissioner's duly authori ed representative, the latter's decision shall not be conside ed final, executory and demandable, in which case, the pro st shall be decided by the Commissioner." (Emphasis supplied The de ision of the CIR or his duly authorized representative is appealable t this Court within thirty (30) days from receipt thereof by the taxpaye ; otherwise, the assessment shall become final, executory a d demandable. Section 3.1.5 of RR No. 12-99 also categoricall provides that the decision of the authorized representati e will not attain finality if the taxpayer appeals the same to the IR who shall then be required to decide the protest himself. In the resent case, LRTA alleges in its Petitions for Review respectively fled before the Court in Division and the Court En Bane that after rec iving the FDDA dated April 1, 2011, issued by the Ole- Regional Dir ctor of Revenue Region No. 8, on April 26, 2011, LRTA filed a Final ssessment Appeal with the office of the then CIR Kim S. Jacinto-Hena es on May 6, 2011, which was well within the thirty-day period specif ed in Section 3.5.1 of RR No. 12-99. To support its allegation, L TA attached a copy of said Final Assessment Appeal to the Petitions or Review filed with the Court in Division and the Court En Bane. In the absence of any evidence to the contrary and considering hat the CIR failed to specifically deny this material averment of LRTA, such allegation is deemed admitted under Sections 8 a d 11 of Rule 8 of the Revised Rules of Court. 1 a1 1 SECTION 8. How to Contest Such Documents. - When an action or defense is fou ded upon a written instrument, copied in or attached to the corresponding leading as provided in the preceding section, the genuineness and due exec tion of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth what he claims to be th facts; but the requirement of an oath does not apply when the adverse party oes not appear to be a party to the instrument or when compliance with an order for an inspection of the original instrument is refused. SECTION 11. Allegations Not Specifically Denied Deemed Admitted. - Material averm nt in the complaint, other than those as to the amount of unliquidated da ages, shall be deemed admitted when not specifically denied.

Concurring Op nion CTA EB No. 13 5 (CTA Case No. 8891) Page 5 of6 Since o final decision has been rendered by the CIR on LRTA's app al of the FDDA issued by the OIC-Regional Director of Revenue Re ion No. 8, LRTA's appeal to the Court of Tax Appeals (CTA) wasp emature. Otherwise stated, there being no CIR decision on LRTA's ppeal to speak of, LRTA could not yet invoke the appellate juri diction of the CTA pursuant to Section 7 of Republic Act (RA) No. 11 5 as amended by RA No. 9282. Indeed, the premature invocation of the CTA's intervention is fatal to LRTA's cause of action. On th other hand, even assuming arguendo that the WDL issued by th OIC-Revenue District Officer of Revenue District Office No. 51 may e regarded as the CIR's final decision on LRTA's appeal of the FDDA, the thirty-day period to file an appeal before the Court in Division sho ld have been counted from LRTA's receipt of the WDL on May 17, 012. Accordingly, a Petition for Review questioning the validity of W L should have been filed with the Court in Division not later than Ju e 16 2012. To be ure, the issue on the validity of the issuance of the WDL falls within th ambit of other matters arising under the NIRC or other laws adminis ered by the BIR. Thus, in Philippine Journalists, Inc. vs. Commission r of Internal Revenue, 2 the Supreme Court clarified that the issue on he validity of a warrant of distraint and levy falls within the "other atters" clause of Section 7 (1) of RA No. 1125, as amended by A No. 9282, which is appealable to the CTA, viz.: " e agree with petitioner. Section 7(1) of Republic Act No. 1125, th Act Creating the Court of Tax Appeals, provides for the jurisdicti n of that special court: XXX XXX. T e appellate jurisdiction of the CTA is not limited to cases which in olve decisions of the Commissioner of Internal Revenue on matte s relating to assessments or refunds. The second part of the prov sion covers other cases that arise out of the NIRC or related I ws administered by the Bureau of Internal Revenue. The wor ing of the provision is clear and simple. It gives the CTA the �urisdiction to determine if the warrant of distraint and c1 levy iss ed by the BIR is valid and to rule if the Waiver of Statute of Limitat ons was validly effected." (Emphasis supplied) Allegations of sury in a complaint to recover usurious interest are deemed admitted if not d nied under oath. 2 G.R. No. 1628 2, December 16, 2004.

Concurring Op nion CTA EB No. 13 5 (CTA Case No. 8891) Page 6 of6 In addi ion, LRTA's motion seeking for reconsideration of the WDL filed "th the Revenue District Office No. 51 did not toll the thirty-day pe iod to appeal the WDL to this Court. Consequently, the thirty-day p riod to appeal continued to run despite the filing by petitioner o said motion for reconsideration and despite the subsequent exchanges of communication between LRTA and Revenue Dis rict Office No. 51. Under this situation, since the Petition for Review as filed by LRTA only on September 11, 2014 which was way be ond the thirty-day period to appeal to this Court, the WDL has be ome final and executory. On the basis of the foregoing disquisition, I vote to DENY the Petition for R view filed by LRTA before the Court En Bane for lack of merit. The P tition for Review filed by LRTA with the Court in Division should appro riately be dismissed based on the aforestated grounds. Presiding Justice