BUKIDNON II ELECTRIC COOPERATIVE, INC. (BUSECO), v. COMMISSIONER OF INTERNAL REVENUE

I REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION BUKIDNON II ELECTRIC CTA Case No. 10930 COOPERATIVE, INC. (BUSECO), Members: Petitioner, REYES-FAJARDO; Chairperson, and ANGELES, lL -versus- COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. APR 2 3 2026 //; :::t"li '~�-. e:- X-- ---- -------- -- -------- --------------------------- X RESOLUTION REYES-FAJARDO, J. : ) On December 5, 2025, a Decision1 was rendered, the fallo o� which reads: WHEREFORE, in light of the foregoing considerations, the present Petition for Review is PARTIALLY GRANTED. Accordingly, the BIR's assessment for deficiency income tax, including surcharge and interest, in the aggregate amount of P8,153,399.23, for the TY 2019, is UPHELD. However, the subject compromise penalties being imposed by the BIR totaling P125,000.00 are CANCELLED and SET ASIDE. Pursuant to Section 13 of RA No. 9282, the Court authorizes respondent to seize and distraint any goods, chattels, or effects, and the personal property, including stocks and other securities, debts, credits, bank accounts, and interests in and rights to personal Decision, Dockel - Vol. 1, pp. 348 to 361.

RESOLUTION CTA Case No. 10930 property, and/ or to levy the real property, of petitioner, in sufficient quantity to satisfy the taxes herein ordered to be paid, and the increments thereto incident to delinquency. SO ORDERED. In so ruling, the Court found that: 1) petitioner failed to prove that it is a non-stock, non-profit electric cooperative duly registered with the National Electrification Administration (NEA) to validly invoke the pennanent incmne tax exemption granted under Section 39(a) of Presidential Decree (PD) No. 269;2 and 2) compromise penalties may not be imposed without the conformity of the taxpayer. Unyielding, both parties separately moved for reconsideration. Respondent, in his Partial Mo tion for Reconsideration (Re: Decision dated 5 December 2025),3 argues that compromise penalties may validly be imposed for violations uncovered during audit and may be reflected in assessment notices and the Final Decision Disputed Assessment (FDDA). Respondent adds that the imposition of compromise penalties remains proper even if no criminal action is filed, since they are collected in lieu of instituting criminal proceedings for the violations com1nitted . Petitioner, in its Motion for Reconsideration,4 argues that the Court erred in concluding that it failed to establish its registration with the NEA. Petitioner maintains that the Court's rejection of the certified m achine copy of its NEA Certificate of Registration for failure to present the original was unduly rigid, asserting that duplicates are generally admissible under the Rules on Evidence.5 To dispel any perceived doubt as to its NEA registration, petitioner submits additional documents6 issued by the NEA 2 The supposed evide nce (marked as Exhibit " P-2") p urporting to prove such regish�ation with the NEA was not ad mitted in ev idence for fa ilure to present the original the reof, Reso lution dated Septembe r 13,2024, Docket, pp. 336 to 337. 3 Docket - Vol. 1, pp. 362 to 367; Personally filed on Ja nuary 6, 2025 and elech�onically filed on January 7, 2026. Docket- Vol. 1, pp. 371 to 375; Personally and elech�onically filed on Jan uary 12, 2026. 5 l d. 6 Specifically: a Corporate Secreta ry's Certificate issued by the NEA (Exhibit " P-21" ), a Certified True Copy of petitioner's Certificate of Certification bearing the NEA dry seal (Exhibit " P-22"), and NEA Memorandum to EleclTic Cooperatives No. 2020-057 relating

RESOLUTION CTA Case No. 10930 purportedly confirming its status as a duly registered electric cooperative under N EA supervision. In this regard, petitioner invokes the liberal application of procedural rules in the interest of substantial justice, arguing that the Cour t should consider these documents notwithstanding their belated submission? Petitioner likewise invokes the ruling of the First Division of this Court (CTA First Division) in Bukidnon II Electric Cooperative, Inc. (BUSECO) v . Commissioner of Internal Revenue, CTA Case No. 11142, promulgated on October 9, 2025. Petitioner argu es that in said case, the Court recognized BUSECO as a non-stock, non-profit electric cooperative duly registered w ith the NEA and entitled to the income tax exemption under PD No. 269. Althou gh that case inv olved a different taxable year, p etitioner maintains that the judicial determination therein regarding its NEA registration should be considered controlling and tha t the present Decision should be harmonized with the findings in CTA Case No. 11142.8 Both Motions are d evoid of merit. As to respon dent's Partial Motion for Reconsideration, the Court finds n o reason to d epart from its earlier ruling cancelling the compromise penalties. It is settled that compromise penalties are merely amounts su ggested in settlemen t of criminal liability and, by their nature, require the taxp ayer's consent.9 Compromise n ecessarily implies mutual agreement between the parties, and the option to accept or refuse the sam e rests with the taxp ayer.10 Thus, absent proof that petitioner agreed to the compromise, the assessed compromise pen alties cannot be sustained. As to petition er's Motion for Reconsideration, petition er failed to demonstrate any reversible error in the Court's finding on the basis of the eviden ce formally admitted in this case. to the Elecb�ic Cooperative Overall Performance Assessment (Exhibit "P-23"), Motion for Reconsideration, Docket - Vol. 1, pp. 371 to 375. 7 Motion for Reconsideration, Docket - Vol. 1, p p. 371 to 375; Persona lly and electronically filed on Ja nuary 12, 2026. 8 ld. 9 Tl1e Pllilippi11es llltemational Fair, Inc. v. Tl1e Collector of Internal Revenue, et nl., G.R. Nos. L- 12928 and L-12932, March 31, 1962. 10 I d.

RESOLUTION CTA Case No. 10930 First. Petitioner's additional NEA documents attached to its Motion for Reconsideration cannot be considered as part of the evidence of record. At the outset, it bears stressing that under Rule 30, Section 5(a)11 of the Rules of Court, petitioner, as the party asserting entitlement to the exemption, should have adduced during trial all the evidence upon which it relied in support of its claim. Upon admission of the eviden ce, the case is deemed submitted for decision under Section 5(g)12 of the same Rule. The Supreme Court has explained that a party who bears the burden of proof must present, at the first instance, all the evidence it relies upon, and such evidence cannot be presented piecemeal.13 Thus, the additional NEA documents, which petitioner submitted only together with its Motion for Reconsideration, came too late. Notably, petitioner did not even allege-much less establish-that these documents were newly discovered, previously unavailable, or could not have been presented during trial d espite the exercise of reasonable diligence. Rule 132, Section 34 of the Rules of Court is explicit: a court shall consider no evidence which has not been formally offered, and the purpose for which the evidence is offered must be specified. This rule applies suppletorily in proceedings before the Court of Tax Appeals (CTA) pursuant to Rule 1, Section 3 of the Revised Rules of the CTA (RRCTA). 14 H ere, the additional NEA documents were neither presented, identified, nor formally offered in evidence during trial, much less admitted by the Court. Petitioner's unilateral attachment of such documents to its Motion for Reconsideration does not make them part of the evidentiary record. Thus, petitioner cannot, through a mere motion for reconsideration, cure its failure to establish by competent and duly admitted eviden ce its claimed registration with the NEA. II RULE 30, TRIAL, Section 5. Order of trial. - Subject to the provisions of Section 2 of Rule 31, and unless the court for special reasons o therwise directs, the h�ial shall be limited to the issues stated in the pre-h�ia l order and shall proceed as fo llows: (a) The plaintiff shall adduce evidence in support of his or her com plaint; 12 RULE 30, TRIAL, Section 5. Order of h�ia l. - ... (g) Upon ad mission of the evidence, the case shall be deemed submitted for decision, unless the court directs the parties to argue or to submit their respecti ve memoranda or any further pleadings. 13 Silldophil, f11c. v. Republic of the Pllilippi11es, G.R. No. 204594, Novem ber 7, 2018, citing Republic v . Snlldign11bnynll, G.R. No. 152154, July 15, 2011. 14 A.M. N o. 05-11-07-CTA, Nove mbe r 22,2025.

RESOLUTION CTA Case No. 10930 Accordingly, the Court is constrained to resolve petitioner's Motion for Reconsideration on the basis only of the evidence formally admitted in this case. Second. Petitioner's reliance on the supposed liberality of procedure is unavailing. While procedural rules may, in appropriate cases, be relaxed in the interest of substantial justice, such liberality is not a license to disregard the fundamental rules governing the presentation and admission of evidence.Is In Commissioner of Internal Revenue v. De La Salle University, Inc.,16 the Supreme Court sustained the CTA's consideration of supplemental evidence because the same had been formally offered in evidence and the adverse party failed to timely object thereto. The circumstances obtaining in that case are not present h ere. Here, petitioner did not make a formal offer of evidence with respect to Exhibits "P-21," "P-22," and "P-23." Instead, petitioner merely attached and referred to these documents in its Motion for Reconsideration as additional NEA-issued records purportedly supporting its claim of registration. Absent any showing of justifiable reason for their belated submission, petitioner cannot invoke the interest of substantial justice to compel the Court to receive and consider, after judgment, documents that were never formally offered and admitted in evidence in accordance with the Rules. Third. Petitioner's inv ocation of the CTA First Division's ruling in CTA Case No. 11142, Bukidnon II Electric Cooperative, Inc. (BUS ECO) v. Commissioner ofInternal Revenue, is unavailing. The Court is not obliged to take judicial notice of the ruling or records in CTA Case No. 11142. As a rule, evidence presented and admitted in another CTA case cannot simply be adopted in a separate 15 Asin United Bnnk v. Goodlmul Co111pnny, Inc., G .R. No. 188051, Novem ber 22, 2010; Land Bnllk of the Philippi11es v . CoHlinwtnl Wntcltntnn SewrihJ Services, Inc., G.R. No. 175163, October 19, 2007. .I 16 G.R. Nos. 196596,198841 & 198941, November 9, 2016. ~

RESOLUTION CTA Case No. 10930 case without being offered and identified anew .17 Each case is distinct and must be resolved on the basis of the evidence on record therein, even if similar parties or issu es are involved.18 In any event, the circumstances obtaining in CTA Case No. 11142 materially differ from those obtaining here. In that case: firstly, petitioner sufficiently established its NEA registration through admitted evidence, particularly its Certificate of Franchise No. 076 dated August 6, 1973 issu ed by the NEA;19 secondly, respondent did not dispute p etitioner's status as a non-stock, non-profit electric cooperative; and finally, the Petition for Review was primarily granted because the assessm ent was declared void for denial of due p r o c e ss .20 In contrast, here, the supposed proof of petitioner's NEA registration was not admitted in evidence. Also, respondent sp ecifically d enied petitioner's allegation of su ch registration, thereby placing upon petitioner the burden to prove the same. The Court too resolved the case on that evidentiary footing, sustaining the income tax assessment because petitioner failed to establish the factual basis for invoking the income tax exemption under PD No. 269. Besides, under Article 8 of the Civil Code21 and the doctrine of stare decisis, only decisions of the Supreme Court constitute binding judicial precedents.22 H ence, petitioner cam1ot insist that this Court is bound to adopt the findings in CTA Case No. 11142. In fine, the Court finds no cogent reason to disturb its findings and conclusions in the assailed Decision. WHEREFORE, premises considered, respondent's Partial Motion for Reconsideration (Re: Decision dated 5 December 2025) and petitioner's Motion for Reconsideration are DENIED for lack of merit. 17 Silkair (Singapore) Pte. Ltd. v. ConnnissioHer of lHtemal Revwue, G.R. No. 184398, February 25, 2010. 18 /d. 19 C.T.A. Case No. 11142, Exhibit "P-2," Docket, p. 29. 20 Bukidnon II Electric Cooperative, l11c. (BUSECO) v. Connnissio11er of 111tenzal Revenue, C.T.A. Case No. 11142, October 9, 2025. 21 C ivil Code, A rticle 8 . Judic ial d ecisio ns a pply ing o r inte rpre ting the laws or the Constitutio n shall fo rm a part of the legal system of the Philippines. 22 Buella y Aba/ain v. People, G.R. No. 244027, April 11, 2023; United Coconut Pla11ters Ba11k v . Spouses Walter Uy al!d Lily Uy, G.R. No. 204039, January 10, 2018.

RESOLUTION CTA Case No. 10930 Accordingly, the Decision promulgated on December 5, 2025 IS SUSTAINED. Respondent's Compliance with A ttachments dated February 10, 2026, with attached Urgent Motion for Extension of Time to File Comment/Opposition dated February 9, 2026, is NOTED WITHOUT ACTION for being moot and academic. Respond ent's Comment/Opposition dated February 15, 2026 is likewise NOTED WITHOUT ACTION for having been filed out of time, after the incidents had already been submitted for resolution pursuant to the Court's Minute Resolution dated February 12, 2026. SO ORDERED. ~ ~ t. ~ ~ ~Oj~rkJ MARIAN IV{ F. REYES-FAJARDO Associate Justice I CONCUR: HENRY I!!GELES Associate Justice