GRAND GEO SPHERES CONSTRUCTION CORP. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION GRAND GEO SPHERES CTA CASE NO. 9891 CONSTRUCTION CORP., Members: Petitioner, - versus - UY, Chairperson, RINGPIS-LIBAN, and MODESTO-SAN PEDRO, JJ. COMMISSIONER OF Promulgated: s023 INTERNAL REVENUE, Respondent. MAY 2 4 ~ ~Odtf,..,. X -- -- ---- - -- -- - - - - - -- - --- --- -- - -- - - - -- - -- - -- - -- - -- - -- -- - -- -- -- - - -- - -- -- -- -- -- - -- -- X ------------------- -- --------- RESOLUTION RINGPIS-LIBAN, ].: Before this Court is respondent's M otion for R econsideration (Decision d ated 11 J anuary 2023) flied on February 8, 2023, with petitioner's Opposition/Comment (To Respondent's Motion for Reconsid eration d ated February 7, 2023) flied on March 22, 2023. O n J anuary 11, 2023, the Court promulgated a D ecision cancelling respondent's deficiency income tax and value-added tax (VAT) assessments for violating petitioner's right to due process o f law, the dispositive portion o f which states as follows: "WHEREFORE, in light of the foregoing considerations, the instant Petitionfor Review is GRANTED. T he deficiency income tax and VAT assessments in the total amount o f !>8,205,711.61, including interest, for the taxable year 2011 , are VOID. Accordingly, respondent's Demand Before Suit dated May 7, 201 8 is CANCELLED and SET ASIDE. SO ORDERED.("

RESOLUTION CTA Case No. 9891 In the present Motion, respondent asserts that the Court erred in ruling that the deficiency income tax and VAT assessments issued against petitioner for taxable year 2011 in the aggregate amount of P8,205,711.61 are void for failing to sufficiendy prove that petitioner received the Letter of Authority (LOA), Preliminary Assessment Notice (PAN), and Formal Letter of Demand/Final Assessment Notice (FLD/FAN). Respondent claims that petitioner deliberately refused receipt of the assessment notices, thereby leaving Revenue Officer (RO) Charlaraine G. Dytioco without recourse but to serve the said notices via professional courier to ensure immediate receipt thereof. Respondent insists that he has fully complied with the due notice requirements under the law and that there is also a presumption that RO Dytioco regularly performed her official duty in serving the said LOA, PAN, and FLD/FAN to petitioner. As such, the presumption that the assessment notices were properly served to petitioner stands. On the other hand, in its comment, petitioner argues that the instant Motionfor Reconsideration is pro-forma as the arguments presented therein are mere reiterations of the arguments that had been proffered in respondent's Answer and Memorandum which have already been weighed and considered by the Court in resolving the present case. Petitioner reiterates that respondent failed to prove by competent evidence that it indeed received the LOA, PAN and FLD /FAN. It continues that by categorically denying receipt of the said assessment notices, the burden was shifted to respondent to prove that the mailed assessment notices were actually received by petitioner or by its authorized representative. The Court finds the present Motion for Reconsideration bereft of merit. As correctly observed by petitioner, the arguments proffered by respondent are mere reiterations of what has already been considered, weighed, and resolved by the Court in the assailed Decision. It is also worth noting that in the present Motion for Reconsideration, and even his Memorandum filed on March 1, 2022, respondent mainly relied on the presumption of correctness and regularity in the performance of official duty to prove that the assessment notices were issued pursuant to the requirement of due process oflaw under theNational Internal Revenue Code and pertinent Revenue Regulations (RR). Again, it is well-settled that if the taxpayer denies having received an assessment from the respondent, it then becomes incumbent upon the latter to prove by competent evidence that such notice was indeed received by the addressee, and while a mailed letter is deemed received by the addressee in the course of mail, this is merely a disputable presumption subject to controversion, the direct denial of which shifts the burden to the sender to prove that the mailed letter was, in fact, received by the addressee./ 1 Commissioner ofInternal Revenue v. GJA1 Philippines, Manujaduring, Im�., G.R. No. 20265, February 29,2016.

RESOLUTION CTA Case No. 9891 In the assailed Decision, since the pet1Uoner denied receipt of the assessment notices, the burden is shifted to respondent to prove by competent said assessment notices. However, evidence that petitioner indeed received the wtsthhueaefrfteitctohienteatdlopeiteeyprdrsooorvefnectwehtihhevaeotddarolebclseyupgmpeodeenltndyitteiaronrentyceepriar.voneIpddnerttflehaysectsti,nmeoriovttinewcdieaaslsthwenevaoiPsdtAaeenuNvctehenaonrpcidrlzeeeFasdreLlnybDtyee/dsFpteaAdtbiiNltdiisohannneeoddrt to do so. Lastly, there was also no written report, certification, pertinent document presented from the private courier that or any other corroborated the service of the PAN and FLD/FAN. would have Accordingly, without a clear indication as to who received the subject assessment notices, and whether the person who received the to do so, as well as the respective dates of receipt thereof, same is authorized this Court cannot conclude that respondent properly observed the due process requirements in the issuance of deficiency tax assessments, as mandated under RR No. 12-99,2 as amended by RR No. 18-2013.3 While taxes are the lifeblood of government and should be collected without hindrance, the collection of taxes however should be exercised reasonably in accordance with law and with their own rules of procedure, and always with regard to the basic tenets of due process. Tax assessments issued in violation of the due process rights of a taxpayer are null and void.4 In view of the foregoing disquisitions, there being no new matter or substantial issue raised by respondent the Court finds no compelling reason in the present Motion for Reconsideration, to reverse, amend, or modify the Decision promulgated on January 11, 2023. WHEREFORE, premises considered, is respondent's Motion for Reconsideration (Decision dated 11 January 2023) DENIED for lack of merit. SO ORDERED. ~.~~ MA. BELEN M. RIGPIS-LIBAN Associate Justice 2 SPR"SeeuntUltealBseltmJyoE,en"CndATt a:sotsefedsasSTmIemapexntppetlameoymbfeereN'rnsa6titC,nior1gin9mta9hil9ne.IanPltreVorvinoiaslliaotRinoesnvoeofnfuthetheTeNaCxateoisod,neCaTlivhIinlrotPeuergnnhaalltPRieaesyvmaennedunetInoCtfeordaeesStouagfng1de9s9tt7heedGECoxvotemrarnp-jirunodgmictiihsaeel 1 -J "SUBJECT: Amending Certain Sections of Revenue Regulations No. 12-99 Relative to the Due Process Requirement in the Issuance of a 28, 2013. See Commissioner qflnternal Revenue Deficiency Tax Assessment," dated November 17, 1988. v. A(gue, Im~, eta!., G.R. No. L-28896 February

RESOLUTION CT1\ Case No. 9891 We concur: ERL~.UY Associate Justice (':~ Officia; ot;SiiiG:iS~ MARIA ROWENA MODESTO SAN-PEDRO Associate Justice