COMMISSIONER OF INTERNAL REVENUE v. METRO RAIL TRANSIT CORPORATION

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF CTA EB No. 2862 INTERNAL REVENUE, (CTA Case No. 9651) Petitioner, Present: -v e r su s- RINGPIS-LIBAN, E.L BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES,Il METRO RAIL TRANSIT Promulgated: CORPORATION, APR Respondent. )(---- -- - --- -- - - -- - - - - - --- ---- --- -- - --- ---- - --- - ---- - )( RESOLUTION REYES-FAJARDO, J.: On September 2, 2025, a Decision was rendered, the fallo of which reads:l WHEREFORE, in light of the foregoing considerations, the Petition for Review is D ENIED for lack of m erit. Accordingly, the Decision dated March 23, 2023 and the Resolution dated January 4, 2024 of the Special Third Division of this Court in CIA Case No. 9651 are AFFIRMED. SO ORDERED. Decision, Docket - pp. 120 to 135.

RESOLUTION CIA EB No. 2862 (CIA Case No. 9651) In its Decision, the Court En Bane affirmed the Decision2 and Resolution3 of the Special Third Division of this Court ("Court in Division"), and annulled petitioner's Final Decision on Disputed Assessment (FDDA) 4 for want of authority. The Court ruled that absent a new or separate Letter of Authority (LOA) issued by the Commissioner of Internal Revenue (CIR) or his duly authorized representative, Revenue Officer (RO) Benedicta and Group Supervisor (GS) Santos are without authority to conduct the audit and recommend the issuance of the deficiency tax assessments. Consequently, the resulting assessments are void. Unyielding, petitioner filed his Motion for Reconsideration, arguing that the RO and GS named in the LOA merely recommended the issuance of the FDDA, which was issued by the CIR or his duly authorized representative, and that the assessments should not be voided for lack of authority. Petitioner further maintains that respondent belatedly raised the issue of the RO's authority or LOA defect, which should be barred as a new issue on appeal, and invokes estoppel on the ground that respondent allegedly benefited from waivers extending the assessment period. Petitioner likewise argues that the Court erred in relying on Revenue Memorandum Order (RMO) No. 43-90, claiming that it is inapplicable or obsolete, and that reassignment through a Memorandum of Assignment (MOA) suffices.5 On the other hand, respondent characterizes petitioner's Motion as a mere rehash of arguments already considered and rejected by the Court. Respondent maintains that the Court correctly ruled on the lack of authority arising frorn. the LOA defect, which is jurisdictional, incurable, and may be resolved at any stage of the proceedings. Respondent further contends that petitioner's purportedly "new" arguments-such as estoppel, the alleged obsolescence of RMO No. 43-90, and sufficiency of a MOA- arc either irrelevant or inconsistent with settled jurisprudence.6 The Motion lacks merit. 2 Dated March 23, 2023, Docket - pp. 29 to 44. Dated January 4, 2024, Docket- pp. 46 to 51. Dated July 13, 2017. Motion for Reconsideration, Docket - pp. 138 to 150. 6 Opposition, Docket - pp. 157 to 173.

RESOLUTION CTA EB No. 2862 (CTA Case No. 9651) At the onset, a careful reading of petitioner's Motion reveals that it merely reiterates arguments already raised in his Petition for Review and exhaustively addressed in the Decision. These arguments have already been considered and squarely rejected by both the Court in Division and the Court En Bane. To reinvent the wheel is a wastage of Court's time and resources.7 In any event, the Motion fails for the same reason already explained in the Decision. Per settled jurisprudence, the authority of ROs to examine a taxpayer's books and records must emanate from a valid LOA, and that only the ROs specifically named therein may conduct the audit. When the ROs originally named in the LOA ceased to participate in the audit and were replaced by other officers without the issuance of a new LOA, the authority to audit was effectively lost. Any assessment resulting from such unauthorized audit is void.s Petitioner's attempt to downplay the defect by arguing that the ROs merely "recommended" the assessments, while the FDDA emanated from the CIR or his authorized representative, is unavailing. As expressly ruled in the Decision, the absence of a valid LOA deprived RO Benedicta and GS Santos of authority to conduct the audit. As a necessary consequence, acts performed in the course of such unauthorized audit-including the preparation or recommendation of the assessn1ents-cannot be accorded legal effect. This is consistent with Commissioner of Internal Revenue v. Opulent Landowners, Inc., 9 which ruled that deficiency tax assessments are void in the absence of a new LOA issued in favor of the ROs who recommended their issuance. 7 Social Justice Society (SJS) Officers, et al. v. Lilli, G.R Nos. 187836 & 187916, March 10,2015. People v. E & 0 Pnrls Supply, Inc., G.R. No. 259284, january 24, 2024; Com111issioner of Intemnl Revenue v. McO,mnld's Philippines Realty Corp., G.R. No. 242670, May 10, 2021; Medicard Philippines, Inc. v. Connnissioner of Inlcnwl Revenue, G.R. No. 222743, April 5, 2017. G.R. Nos. 249883-84, january 27, 2020.

RESOLUTION CIA EB No. 2862 (CIA Case No. 9651) Equally unavailing is petitioner's insistence that the issue of lack of authority should not have been entertained because it was allegedly raised for the first time on appeal. The Court has already ruled that the validity of an assessment, including the authority of the ROs who conducted the audit, is a jurisdictional matter that may be passed upon at any stage of the proceedings10 Moreover, under the Section 1, Rule 14 of the Revised Rules of the Court of Tax Appcals,ll the Court is not confined to the issues raised by the parties and may resolve matters necessary for an orderly and complete disposition of the case.J2 In fine, the Court finds no compelling reason to reverse or modify its ruling. WHEREFORE, petitioner's Motion for Reconsideration is DENIED for lack of merit. The Decision promulgated on September 2, 2025 is AFFIRMED. SO ORDERED. ~~f.~ -t~�~ MARIAN IVA F. Ri'YEs-Fi\.JARDo Associate Justice WE CONCUR: ~. -t;.e.... ))-- MA. BELEN M. RINGPIS-LIBAN Presiding Justice j(l 1-iiJJI!nynHg Pilipi11o PlnHs. l11c. v. Co/JIJJiissioHer of illterunl Reve/lue, G.R. No. 241848, May 14, 2021. 11 RULE 14. judgment. Its Entry and Execution SECTION 1. Rendition of Judgment. - In deciding the case, the Court may not limit itself to the issues stipulated by the parties but may also rule upon related issues necessary to achieve an orderly disposition of the case. 12 Co111111issioner of Inlernnl Revenue v. Lnnc11ster Pllilippilles, Inc., G.R. No. 183408, July 12, 2017.

RESOLUTION CIA EB No. 2862 (CIA Case No. 9651) I reiterate my concur, nee in then PJ Del Rosario's Separate 1curring Opinion JEAN MARIE A. BACORRO-VILLENA Associate Justice MARIA concurr~~ I reiterate my PJ Del Rosario's SCO LANEE S. CUI-DAVID Associate Justice I reitera~dforlli~}tini11}jt~'4?arate Concurring Opinion of (Ret.) PJ DeFRosario. CORAZON G. FERRER-FLORES Associate Justice (In h i bi t e d ) HENRYS. ANGELES Associate Justice