WEB-JET INVESTMENT AND DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City SECOND DIVISION WEB-JET INVESTMENT CTA CASE NO. 1on8 AND DEVELOPMENT CORPORATION, Members: CASTANEDA, JR., Chairperson, and Petitioner, BACORRO-VILLENA, JL -versus- Vr----- COMMISSIONER OF INTERNAL REVENUE, Promulgated: / x - - - - - - - - - - - ~~~p_o_n~~~~�- - - - - - ~ - - - - - - - -0~~ ~ x J .. rf r� ~~- , JUDGMENT BASED ON COMPROMISE AGREEMENT BACORRO-VILLENA, L: In a Resolution dated 20 July 2020, the Court required the parties to submit as proof of their compromise agreement the originals or certified true copies of the following: 1. Duly signed Compromise Agreement; 2. Certificate of Availment (CA) showing the approval of the National Evaluation Board (NEB); and, 3� All other requirements necessary for the perfection of their Compromise Agreement.'/

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No. .1Jl.11ll Web-Jet Investment and Development Corporation v. CIR Page2 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X On 19 January 2021, the parties filed a "Joint Motion to Approve Attached Judicial Compromise Agreement" absent NEB approval. After several pleas from the parties for extensions of time to submit the NEB approval, the Court, in a Resolution dated 27 July 2021, further required the parties to submit the original or certified true copies of the following additional requirements: 1. Secretary's Certificate authorizing Tiffany G. Ty (Ty) to sign the Judicial Compromise Agreement (JCA) on behalf of petitioner; and, 2. BIR Form No. o6os (Payment Form) and proof of payment of the compromise amount. Pending submission of the above-mentioned documents, the judgment on the JCA was therefore held in abeyance. In the interim, the parties' filed their "Compliance with Joint Motion to Approve Judicial Compromise Agreement" on o8 July 2021, attaching thereto the certified true copies of the NEB Approval and theCA issued by the Commissioner of Internal Revenue (CIR). On os August 2021, the parties filed their "Compliance and Manifestation'" with the original Secretary's Certificate authorizing Ty to sign the JCA, BIR Forms No. o6os and Certification issued by the Bureau of Internal Revenue (BIR) Revenue District Office (RDO) No. 39 of Quezon City . The Compromise Agreement reads in part: WHEREAS, the PARTIES, for the purpose of avoiding and putting an end to a protracted, expensive and mutually prejudicial litigation, have agreed to amicably settle the above-mentioned case, upon terms and conditions hereinafter set forth; NOW, THEREFORE, for and in consideration of the foregoing premises, the PARTIES hereto have agreed as followy Received by the Court on 0 I October 2021.

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No.l!Ul.ll. Web-jet Investment and Development Corporation v. CIR Page 3 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Section 1. Judicial Compromise Amount. In order to settle the above-mentioned case, the TAXPAYER has offered and the BIR has accepted the total payment of 1'1,776>313�54 ("Judicial Compromise Amount") (comprising of 40% of the total basic deficiency income and value added tax in the amount of P4>190,z98.51 and wo% of the basic expanded withholding tax assessment). Section z. Submission to the Honorable CTA. This Agreement fully signed by the PARTIES shall be submitted for the approval of the Honorable CTA in CTA Case No. wu8. The PARTIES undertake to perform any and all acts, and submit any and all documents required by the Honorable CTA to be able to render a Judgment by Compromise Agreement in the said case. Section 3� Effectivity of the Agreement. This Agreement shall take effect and bind the PARTIES upon approval by the Honorable CTA. This Agreement shall thereafter remain in force and effect until completion and fulfillment of the covenants and undertaking of the PARTIES hereto. Section 4� Deliverables of the PARTIES upon approval of this Agreement by the Honorable CTA. Upon final approval by the Honorable CTA of this Agreement the BIR undertakes to execute and deliver to the Taxpayer any and all documents as may be required to effectively and fully implement the provisions of this Agreement, withdrawing and cancelling the FLO/FAN dated 13 January 2017 and FDDA dated 31 May 2019 for the 2013 fiscal year. Section 5� Authority to Enter Compromise Agreement. The BIR, through Commissioner Caesar R. Dulay warrants that he has the necessary authority and capacity under the law to enter, sign, and execute this Agreement, and to deliver its implementing documents upon its approval of the Honorable CTA. The TAXPAYER warrants that MS. TIFFANY G. TY is duly authorized by the Board of Directors of the TAXPAYER and has full legal capacity to enter, sign, and execute this Agreement, and to deliver payment of the above-agreed additional amount. Section 6. Full and Final Settlement. This Agreement is executed by the PARTIES for the purpose of amicably settling and ending CTA Case No. 10u8. Upon approval by the court, the BIR recognizes the full satisfaction of the supposed tax liability of the TAXPAYER pursuant to the FLO/FAN dated 13 January 2017 and FDDA dated 31 May 2019 for the 2013 fiscal year which is the subject of CTA Case No. wu8 and acknowledges that the TAXPAYER no longer has any tax liability whatsoever based upon, arising from or in ' connection with the said the FLO/FAN dated 13 January 2017 any

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No.lll111l Web-Jet Investment and Development Corporation v. CIR Page 4 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X FDDA dated 31 May 2019 for the 2013 fiscal year subject of CTA Case No. wn8. Section 7� Disapproval of this Agreement by the Honorable CTA. In the event that this Agreement is disapproved by the Honorable CTA, the PARTIES agree to a curing period of sixty (6o) days from receipt of the Order/Resolution disapproving this Agreement. During such curing period, the PARTIES mutually agree to perform any and all acts necessary to rectify or correct the deficiency, defect or imperfection which caused its disapproval, and re-submit the rectified or corrected Agreement for approval of the Honorable CTA. However, in case the deficiency, defect or imperfection is not or cannot be rectified or corrected within the said curing period, or still not approved by the Honorable CTA after it is rectified or corrected by the parties: 1. The amount already paid by the TAXPAYER to the BIR shall be deemed a tax credit which may be applied against internal revenue taxes for which the TAXPAYER may be directly liable, as allowed under existing rules and regulations; and 2. The proceedings of CTA Case No. wn8 shall continue and the discussions pursuant to the disapproved Agreement cannot be used by the PARTIES in said proceeding unless consent of the other party be obtained. Section 8. No Admission of Liability. The execution of this Agreement shall not constitute or be interpreted in any way as an admission or acknowledgement of error or liability by the PARTIES. Section 9� Non-performance. The PARTIES agree that the failure of any PARTY to comply with any of the terms and conditions of this Agreement shall entitle the aggrieved PARTY to file an appropriate motion with the Honorable CTA for the immediate implementation and execution of the terms and conditions of this Agreement or the judgment or order of the Honorable CTA approving the same. Section ro. Signatures and Counterparts. This Agreement may be signed in counterparts, each of which when executed and delivered shall constitute a duplicate original, but all of which shall be taken together as a single instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, the Agreement shall have nQ effect and no party shall have any right or obligation hereunder./ 2 Judicial Compromise Agreement, Division Docket, pp. 501-505.

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No.1.1Ulll Web-Jet Investment and Development Corporation v. CIR Page 5 of6 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x Under the Civil Code3 and the Rules of Court\ as amended, courts are directed to persuade litigants in civil cases to agree upon some fair compromise. Such agreement has the force of law and is conclusive between the parties.5 A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and, thus, avoid or put an end to a lawsuit. They adjust their difficulties in the manner they have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of losing. It must not be contrary to law, morals, good customs and public policy, and must have been freely and intelligently executed by and between the parties. A compromise agreement may be executed in and out of court. Once a compromise agreement is given judicial approval, however, it becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a J.Udgment.6 After a careful scrutiny of the documents submitted by the parties in support of the judicial compromise, the Court finds the same in order and in compliance with the established laws, rules and regulations. WHEREFORE, in view of the foregoing, the parties' Joint Motion to Approve Judicial Compromise Agreement filed on o8 July 2021 is hereby GRANTED. Consequently, the Judicial Compromise Agreement is APPROVED and the same shall thus constitute as the Court's judgment in herein case. Impressed with judicial imprimatur, the parties are ENJOINED to faithfully comply with all the terms and conditions of the afores aid Compromise Agreement/ Article 2029. The court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise. RULE 18 4 PRE-TRIAL Section 2. Nature and Purpose. - The pre-trial is mandatory and should be terminated promptly. The court shall consider: (a) The possibility of an amicable settlement or of a submission to alternative modes of dispute resolution[.] 6 Maria Sheila Almira T Viesca v. David Gilinsky, G.R. No. 171698, 04 July 2007. David M Davidv. Federico M Paragas, Jr., G.R. No. 176973,25 February 2015.

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No.1.1Ul.Jl Web-Jet Investment and Development Corporation v. CIR Page 6 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X SO ORDERED. LLENA I CONCUR: :t.QAM~ c. Qro-cA-o.(,_- Q. JUANITO C. CASTANEift~ JR. Associate Justice ATTESTATION I attest that the conclusions in the above Judgment Based on Compromise Agreement were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~4A�"t;-C. ~~ t ~ JUANITO C. CASTANEDif, JR. Associate Justice 2nd Division Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Judgment Based on Compromise Agreement were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice