PHILIPPINE TRIGON SHIPYARD CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

,_ � REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION PHILIPPINE TRIGON SHIPYARD CORPORATION, CTA Case No. 10607 Petitioner, M embers: -versus- REYES-FAJARDO, Acting Chairperson, and A N G E L E S, J J. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. JAN 1 g ~ - = : 11-�- - X- - - - _ - - - - - - - - - - - - - - - - - - - - - - -~ - 9_ ~.- - X DECISION ANGELES, J.: Before the Court is a Petition for Review1 filed by Philippine Trigon Shipyard Corporation (petitioner) against the Commissioner of Internal Revenue (CIR) (respondent), praying that the Final Decision on Disputed Assessment (FDDA) dated July 28, 2021, which found petitioner liable for deficiency taxes covering Taxable Year (TY) 2017, be reversed. PARTIES Petitioner is a domestic corporation whose primary purpose is to establish, engage in and carry on the business of construction, installation and operation of power and industrial plants, shipbuilding which shall be under the supervision of a duly licensed naval architect or a shipbuilding engineer, drydocking, ship repair and manufacturing of machines and engine parts, as well as any other related items for commerce, and of repairing machines, engines and other electrical apparatus. Its principal place of business is located at 399 C. Padilla St., Duljo (Pob), Cebu City. 1 Docket - Vol. 1, pp. 14 to 78. ~

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Respondent is the duly appointed CIR who holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City.2 ANTECEDENT FACTS On September 07, 2018, respondent, through OIC-Assistant Commissioner, Large Taxpayers Service, LT Division-Cebu, Teresita M. Dizon, issued Letter of Authority (LOA) 123-2018-ooooooo5 with Serial No. eLA201500089569,3 authorizing Revenue Officers (ROs) Duke Ramil Lincuna, Gisela Amodia, Joyce Amor Molina, and Venus Beta-Chi Santiago, and Group Supervisor (GS) Vivial Pollisco to examine petitioner's books of accounts and other accounting records for all internal revenue taxes forTY 2017. The LOA was accompanied by a Checklist ofRequirements.4 Petitioner received LOA 123-2018-ooooooo5 and the accompanying Checklist of Requirements on September 12, 2018.5 Thereafter, on February 28, 2020, petitioner received the Notice of Informal Conference (NIC) dated February 26, 2020.6 Petitioner received the Preliminary Assessment Notice (PAN) dated November 12, 2020,? together with Details of Discrepancies (DOD), which found petitioner liable for alleged deficiency Income Tax (IT), Value-Added Tax (VAT), Expanded Withholding Tax (EWT), Withholding Tax on Compensation (WTC), Final Withholding Tax (FWT), Documentary Stamp Tax (DST), Improperly Accumulated Earnings Tax (IAET), and compromise penalties, in the aggregate amount of Php22,939,941.40, including interest and surcharge. Subsequently, on January oS, 2021, petitioner received the Formal Letter of Demand (FLD) dated January o8, 2021,8 with attached DOD, which adjusted petitioner's alleged deficiency IT, VAT, EWT, WTC, FWT, IAET, and compromise penalties to Php23,699,143.91, inclusive of interest and surcharge. 'Joint Stipulation of Facts and Issues, Docket- Vol. 2, pp. 86o to 867. 3 Exhibit "P- 4," Docket- Vol. 3, p. 1069; Exhibit "R-1," BIR Records, p. 02. 4 Exhibit "R-2," BIR Records, pp. 03 to 04. 5 Exhibit "R-1," to "R-2," BIR Records, pp. 02 to 04. 6 Exhibit "R-3," BIR Records, pp. 203 to 205. 7 Exhibit "P-14," Docket- Vol. 3, pp. 1329 to 1338; Exhibit "R-5," BIR Records, pp. 233 to 242. 8 Exhibit "P-15,'' Docket- Vol.3, pp. 1339 to 1348. .,..

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Petitioner filed a Request for Reinvestigation of the FLD on February o8, 2021.9 On April o8, 2021, petitioner filed its Supplement to the Request for Reinvestigation. 10 On July 28, 2021, respondent issued the FDDA, 11 with DOD, modifying petitioner's alleged deficiency IT, VAT, EWT, WTC, FWT, IAET, and compromise penalties amounting to Php24,636,982.31, inclusive of interest and surcharge. Petitioner received the FDDA on the same date.'2 PROCEEDINGS BEFORE THIS COURT Petitioner filed its Petition for Review electronically'3 on September 15, 2021, pursuant to Court of Tax Appeals (CTA) En Bane Resolution No. 4-2021,'4 and physically on October 10, 2014.'5 The Petition, however, failed to include the name of the intended witness and the summary of the witness' intended testimony, as required under Section 6, Rule 7 of the Rules of Court. Thus, in the Resolution dated December 07, 2021, '6 the Court directed petitioner to comply with the said requirements within ten (10) days from receipt. On February 14, 2022, petitioner filed its Compliance,'7 submitting the names of the petitioner's witnesses and the corresponding summary of their testimonies. On March 01, 2022, the Court issued a Resolution'8 noting petitioner's Compliance. In the same Resolution, summons was issued to respondent.'9 Thereafter, on April o8, 2022, respondent posted his Motion for Extension of Time to File Answer. 20 9 Exhibit "P-16," Docket- Vol. 3, pp. 1357 to 1378. '"Exhibit "P-17," Docket- Vol. 3, pp. 1380 to 1407. "Exhibit "P-26," USB (Exhibit "P-28-2""); Exhibit "R-g,"" BIR Records, pp. 369 to 385. 12 Petitioner's Memorandum, Docket- Vol. 3, p. os. ' 3 Docket- Vol. 1, pp. 12 to 13. '4 Pleadings, Motions and Other Court Submissions Filed by Email, dated February 24, 2021. ' 5 Docket- Vol. 1, pp. 14 to 72. ' 6 Docket- Vol. 2, pp. 688 to 689. ' 7 Id, at 696 to 701. '' Id, at 705. "Id, at 706. '"Id, at 708 to 711. ('"

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x In the Resolution dated April 25, 2022,21 the Court granted respondent's Motion for Extension of Time to File Answer. The Court also ordered respondent to elevate the Bureau of Internal Records (BIR) Records of the case within ten (10) days from filing of its Answer. On May 10, 2022, respondent posted his Answer22 interposing special and affirmative defenses. On May 27, 2022, the Court issued a Resolution23 noting respondent's Answer. In the same Resolution, the case was referred for mediation at the Philippine Mediation Center-Court of Tax Appeals (PMC-CTA). Subsequently, the Reporting of Mediation Schedule, stating that the mediation conference is set on September 7, 2022 with (Ret.) Justice Amelia R. Cotangco-Manalastas, was filed on August 23, 2022 by Ms. Avigail B. Sanchez, Mediation Staff Assistant II. On August 30, 2022, petitioner filed a Manifestation with Motion informing the Court of the change the address of its counsel's address, and requesting that all notices, orders, decisions and processes in connection with this case be sent and delivered to the new address at Suite 530, Cityland Pasong Tamo, No. 2210 Don Chino Roces Avenue, Makati City.24 On August 31, 2022, the Court issued a Resolution25 noting the Reporting of Mediation Schedule filed on August 23, 2022. In the same Resolution, petitioner's Manifestation with Motion filed on August 30, 2022 was noted and granted. Thereafter, (Ret.) Justice Amelia R. Cotangco-Manalastas, Mediator, filed a Request for Extension26 on October 03, 2022 to give the parties additional time within which to reach an amicable settlement. The Court issued a Resolution on October 25, 2022 granting the Request for Extension.27 "Id, at 714. "Id, at 731 ' 3 Id, at 705. "Id, at 733 to 735� os Id, at 736. ' 6 Id, at 740. "Id, at 742 to 743� ,..

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x On December 28, 2022, the Court issued a Resolution28 noting the Records Verification29 dated November 24, 2022 which disclosed that the parties failed to report the status of their possible compromise settlement. In the same Resolution, the Court set the case for pre-trial conference. On January 4, 2023, the Court issued a Notice of Pre-Trial Conference. 30 On January 12, 2023, the Court's Judicial Records Division issued a Records Verification Report31 stating that respondent's counsel failed to elevate the BIR Records. In view thereof, the Court issued a Resolution32 on January 19, 2023, directing Atty. Marveen B. Dela Paz to certify and elevate the entire BIR Records for this case, and to show cause why he failed to do so, within ten (10) days from receipt. On February 06, 2023, respondent's counsel filed his Compliance33 transmitting the BIR records of the case and explaining why he was not able to comply with the Court's Resolution dated April 25, 2022. Petitioner and respondent filed their Pre-Trial Briefs on February 17, 2022,34 and February 22, 2022,35 respectively. The Pre-Trial Conference was thereafter conducted on February 22, 2022. The Court, in its Resolution dated February 22, 2023, noted and deemed compliant respondent's Compliance36 with its Resolution dated April 25, 2022. On February 21, 2023, the PMC-CTA informed the Court that the mediation proceedings were unsuccessful.37 The same was noted by the Court in the Resolution dated March oS, 2023.38 8 Id, at 746. ' "Id, at 744- ,, Id, at 747- ,, Id, at 748. "Id, at 750. '' Id, at 752 to 755� '' Jd, at 759 to 763. "Jd, at 779 to 818. 36 Jd, at 752 to 755� "Id, at 849. '' Jd, at 888. t-

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x On March 07, 2023, both parties filed their Joint Stipulations of Facts and Issues.39 The same was admitted and approved in the Minute Resolution dated March 23, 2023.40 On March 09, 2023, the Court received petitioner's Motion for the Appointment of an Independent Certified Public Accountant.4' The said Motion was granted in open court during the hearing conducted on May 18, 2023. 42 The Court issued the Pre-Trial Order on May 26,2023.43 The case was transferred to the Third Division on May 31, 2023.44 Thereafter, on May 29, 2023, the case was transferred to the Third Division.45 Trial ensued, during which the parties presented their respective testimonial and documentary evidence. Petitioner presented the testimonies of Atty. Edgar G. Dela Torre, its President,46 and Mr. Marco Fernando L. Ng, the Court-commissioned Independent Certified Public Accountant (ICPA). 47 The ICPA Report was submitted on July 03, 2023. 48 On July 28, 2023, petitioner filed its Formal Offer of Evidence (FOE).49 Respondent filed his Comment (On Petitioner's Formal Offer of Evidence),50 stating that he has no objections to the admissibility of petitioner's evidence. Petitioner's FOE was then submitted for resolution. 5' 39 Jd, at 86o to 867. 40 Jd, at 911. "Id, at 891 to 894. 4' Id, at 945. 43 Pre-Trial Order, Id, at 948 to 962. "Id, at 963. 45 Id, at 501. 46 Exhibit "P-18," Docket- Vol. 1, pp. 368 to 382; Docket- Vol. 2, pp.1031 to 1032. ''Docket- Vol. 2, pp. 1033 to 1049. 48 Exhibit "P-28," Docket- Vol. 2, pp. 971 to 1004. 49 Docket- Vol. 3, pp. 1033 to 1049. 50 Docket- Vol. 3, p. 1409. 5' Docket- Vol. 3, p. 1413. ,..

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner of Internal Revenue x---------------------------x The Court admitted all of petitioner's exhibits except Exhibit "P-21-2-A-1543" in the Resolution dated December 31, 2023.52 On April 04, 2024, respondent presented RO Duke Ramil Lincuna who testified by way of Judicial Affidavit dated February 17, 2023.53 On April 11, 2024, respondent filed his Formal Offer of Evidence,54 to which petitioner filed its Comment and Opposition.55 Respondent's FOE was thereafter submitted for resolution. In the Resolution dated July 23, 2024,56 the Court admitted all of respondent's exhibits. On September 16, 2024, petitioner filed its Memorandum. 57 On the other hand, respondent failed to file his Memorandum.58 Thereafter, on January 20, 2025, the Court issued a Minute Resolution,59 submitting the case for decision. THE ISSUE As stipulated by the parties, the sole issue is submitted for the Court's resolution is as follows: 60 Whether or not Petitioner is liable to pay the amount of Php24,636,982.31 for alleged deficiency income tax, value-added tax, expanded withholding tax, withholding tax on compensation, final withholding tax, documentary stamp tax, improperly accumulated earnings tax and administrative penalty and interest, for taxable year 2017, plus 25% surcharge and 20% deficiency and delinquency interest for late payment, pursuant to Section 249(C) of the NIRC of 1997; and delinquency interest at the rate of 12% per annum from 1 January 2018 until the amount is fully paid pursuant to Section 249(C) of the NIRC of 1997, in relation to Section 249(A) of the same Code, as amended by the TRAIN law. 5' Docket- Vol. 3, p. 1424 to 1426. 53 Docket- Vol. 3, pp. 1430 to 1431. 54 Docket- Vol. 3, pp. 1433 to 1438. 55 Docket- Vol. 3, pp. 1440 to 1450. 56 Docket- Vol. 3, pp. 1457 to 1458. 57 Docket- Vol. 3, pp. 1459to 1551. 58 Docket- Vol. 3, p. 1558. 59 Docket- Vol. 3, p. 1559. '" Joint Stipulation of Issues, Joint Stipulation of Facts and Issues, Docket- Vol. 2, pp. 860 to 867.

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x ARGUMENTS OF THE PARTIES Petitioner's arguments Petitioner alleges that its right to due process was violated. It claims that the FDDA did not consider the matters raised by petitioner in its Request for Reconsideration of the FLD, and in its Supplement to the Request for Reinvestigation.61 Petitioner also maintains that respondent's right to assess petitioner for alleged deficiency VAT, WfC, EWf, and Fwr has already prescribed. It contends that under Section 203 of the National Internal Revenue Code of 1997, as amended (NIRC), respondent has only three (3) years within which to assess internal revenue taxes. Petitioner asserts that respondent failed to establish that the ten (10)-year prescriptive period under Section 222 of the NIRC applies in the present case. Thus, the three (3)-year prescriptive period to assess applies. Consequently, petitioner argues that respondent's right to assess petitioner with respect to the months of January to November 2017 for WfC, EWf, and Fwr, and the 1st to 3rd quarters for VAT were issued beyond the three (3)-year prescriptive period.62 Lastly, petitioner contends that it was able to prove that respondent's findings on the alleged deficiency taxes are erroneous.63 Respondent's arguments Respondent counters that the Court does not have jurisdiction over the case. He asserts that the issue about prescription is undisputed given that petitioner only raised the same in the instant Petition. He claims that this issue was undisputed by petitioner, and is therefore outside the jurisdiction of this Court.64 Respondent additionally maintains that his right to assess petitioner for the alleged deficiency taxes have not prescribed, pursuant to the numerous issuances by the BIR which suspended the running of the three (3)-year prescriptive period during the time 6' Petitioner's Memorandum, Docket- Vol. 3, pp. 1466 to 1487. 6' Id. at 1487 to 1495. 63 Id. at 1495 to 1549. 64 Respondent's Answer, Docket- Vol. 2, pp. 716 to 718. ,..

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x when community quarantine was being implemented in the Philippines in view of the COVID-19 pandemic.65 Respondent also contends that petitioner is liable to pay the alleged deficiency taxes, reiterating his findings and bases set forth in the FDDA.66 RULING OF THE COURT The Petition for Review is partially granted. The CTA has jurisdiction over the present appeal. Section 7(a)(1) of Republic Act (R.A.) No. 1125, as amended, vests the Court of Tax Appeals exclusive appellate jurisdiction over decisions of the CIR, thus: SEC. 7� Jurisdiction- The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue;xxx Correlatively, Section 11 of R.A. No. 1125, as amended, provides that the taxpayer has thirty (30) days from receipt of the CIR's decision to file the appeal to the CTA: SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. - Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. "Id. at 718 to 719. 66 Id. at 719 to 723. r

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A Division of the CTA shall hear the appeal: Provided, however, That with respect to decisions or rulings of the Central Board of Assessment Appeals and the Regional Trial Court in the exercise of its appellate jurisdiction appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear the case en bane. (Emphasis supplied) Under Section 228 of the NIRC, a taxpayer has thirty (30) days from receipt of the assessment to file a protest either by way of request for reconsideration or reinvestigation, failure to do so will make the assessment final, executory, and demandable. In case of a request for reinvestigation, the taxpayer must submit the necessary supporting documents, after which the BIR has one hundred eighty (180) days to act, pursuant to Section 3.1.4 of Revenue Regulations (RR) No. 12-99, as amended. Upon the lapse of the one hundred eighty (180)-day period, the taxpayer may either treat the inaction of the CIR as a deemed denial and appeal to the Court within thirty (30) days, or await the issuance of the Final Decision on Disputed Assessment and thereafter file an appeal within thirty (30) days from receipt thereof. In this case, records show that petitioner received the FLD/FAN on January o8, 2021. Petitioner therefore had thirty (30) days, or until February o8, 2021,67 within which to file its protest. Since petitioner filed its request for reinvestigation on February o8, 2021, the assessment was timely and validly contested. Records likewise show that petitioner received the FDDA on July 28, 2021. Petitioner thus had thirty (30) days, or until August 27, 2021, within which to appeal with the CTA. It must be noted, however, that the National Capital Region (NCR) has been placed under Modified Enhanced Community Quarantine (MECQ) beginning August 21, 2021 until 15 September 202168� In light of this, the Supreme Court issued Office of Court Administrator (OCA) Circular No. 114-202169 which provides that all courts in the NCR (except the Supreme Court) shall be physically 67 February 07, 2021 fell on a Sunday. The next working day is February o8, 2021, Monday. 68 IATF-EID Resolution No. 134, August 19, 2021; IATF-EID Resolution No. 135-A, August 26, 2021; IATF-EID Resolution No. 137, September 07, 2021. 69 RE: COURT OPERATIONS STARTING 23 AUGUST 2021. ,.

DECISION CTA Case No. 10607 Philippine Tr�igon Shipyard Corporation v. Commissioner ofInternal Revenue X--------------------------X closed for the duration of the MECQ. Furthermore, the time for filing and service of pleadings and motions during the period of MECQ shall be suspended and shall resume after seven (7) calendar days counted from the first day of the physical reopening of the relevant court. Meanwhile, the Court, in its En Bane Resolution No. 4-202170 dated February 24, 2021, allowed the filing of pleadings, motions and other court submissions by email during the Period of State of Public Health Emergency due to the COVID-19 Pandemic. In light of the afore-cited Supreme Court OCA Circular No. 114-2021, the thirty (30)-day reglementary period to file an appeal before this Court was suspended from August 21, 2021 until September 15, 2021, and resumed after seven (7) calendar days counted from September 16, 2021. On September 15, 2021, petitioner filed the instant Petition for Review electronically,?' pursuant to Court of Tax Appeals (CTA) En Bane Resolution No. 4-2021.72 Accordingly, the same was timely filed and the Court has jurisdiction over the case. Petitioner's right to due process was not violated Petitioner invokes the case of Commissioner of Internal Revenue vs. Avon Products Manufacturing, Inc/3 (Avon) to support its contention that its right to due process was violated by respondent. In Avon, the Supreme Court concluded that the taxpayer was deprived of due process when respondent gave no reasons for rejecting the explanations of the taxpayer raised during the various stages of the assessment, viz: The facts demonstrate that Avon was deprived of due process. It was not fully apprised of the legal and factual bases of the assessments issued against it. The Details of Discrepancy attached to the Preliminary Assessment Notice, as well as the Formal Letter of Demand with the Final Assessment Notices, did not even comment or address the defenses and documents submitted by Avon. Thus, Avon was left unaware on how the Commissioner or her authorized representatives appreciated the explanations or 70 PLEADINGS, MOTIONS AND OTHER COURT SUBMISSIONS FILED BY EMAIL. 7' Docket- Vol. 1, pp. 12 to 13. ""Pleadings, Motions and Other Court Submissions Filed by Email", dated February 24, 2021. 73 G.R. Nos. 201398-99 and 201418-19, October 3, 2018. ,...

DECISION CTA Case No. 10607 Philippine Tr�igon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x defenses raised in connection with the assessments. There was clear inaction of the Commissioner at every stage of the proceedings. XXX Upon receipt of the Final Assessment Notices, Avon resubmitted its protest and submitted additional documents required by the revenue examiners, including the original General Ledger for 1999. As testified by Avon's Finance Director, Mildred C. Emlano, the Bureau of Internal Revenue examiners were convinced with Avon's explanation during the meeting on August 4, 2003, particularly, that there was no underdeclaration of sales. Still, the Commissioner merely issued a Collection Letter dated July 9, 2004, demanding from Avon the payment of the same deficiency tax assessments with a warning that should it fail to do so within the required period, summary administrative remedies would be instituted without further notice. This Collection Letter was based on the May 27, 2004 Memorandum of the Revenue Officers stating that ''[Avon] failed to submit supporting documents within 6o-day period." This inaction on the part of the Bureau of Internal Revenue and its agents could hardly be considered substantial compliance of what is mandated by Section 228 of the Tax Code and the Revenue Regulation No. 12-99. It is true that the Commissioner is not obliged to accept the taxpayer's explanations, as explained by the Court of Tax Appeals. However, when he or she rejects these explanations, he or she must give some reason for doing so. He or she must give the particular facts upon which his or her conclusions are based, and those facts must appear in the record. XXX Similarly, in this case, despite Avon's submission of its explanations and pieces of evidence to the assessments, the Commissioner failed to acknowledge these submissions and instead issued identical Preliminary Assessment Notice, Final Letter of Demand with the Final Assessment Notices, and Collection Letter, the latter being premised on Avon's alleged failure to submit supporting documents to its protest. Had the Commissioner performed her functions properly and considered the explanations and pieces of evidence submitted by Avon, this case could have been settled at the earliest possible time. For instance, all the evidence needed to settle the issue on under-declared sales, which constituted the bulk of the deficiency tax assessments, have been submitted to the Bureau of Internal Revenue. Indeed, from these same submissions, the Court of Tax Appeals concluded that there was no under-declaration of sales. As aptly pointed out by Avon, "The [Commissioner could not] feign simple mistake or misappreciation of the evidence ... because [the issue was] plain and simple." ,.

DECISION CTA Case No. 10607 Philippine Tr�igon Shipyard Corporation v. Commissioner ofInternal Revenue X--------------------------X Petitioner then cited a number of cases promulgated by this Court74 which applied Avon to rule that the taxpayers' right to due process was violated. Petitioner claims that the facts of Avon and the cases promulgated by this Court which cite the same are on all fours with the case at hand. Petitioner highlights that despite its Request for Reinvestigation and Supplement to the Request for Reinvestigation in protest to the FLD, respondent's FDDA contained the same findings reflected in the FLD without providing an explanation for rejecting petitioner's defenses and arguments. Consequently, the ruling in Avon and the afore-mentioned cases should be controlling in the case at hand. The Court disagrees with petitioner. It must be noted that in Avon, the taxpayer thereon timely filed its reply to the initial audit findings/informal conference, PAN, and FAN/FLD, and that despite these, respondent failed to acknowledge these submissions and instead issued identical PAN, FLD, and Collection Letter. As regards the cases promulgated by this Court that were cited by petitioner, the Court likewise notes that the taxpayers thereon also filed their Reply to the PAN. It is worth highlighting that in the case at hand, the court records are nonetheless bereft of any proof that petitioner filed a reply to the NIC and PAN, which were not considered in the PAN and FAN. Therefore, the facts in Avon are not exactly the same with the facts of the case at hand. RR No. 12-99, as amended, sets forth the due process requirements in the issuance of a deficiency tax assessment, including the issuance of the FDDA: "SECTION 3� Due Process Requirement in the Issuance ofa Deficiency Tax Assessment. - 3.1 Mode of procedure in the issuance of a deficiency tax assessment: XXX " Commissioner of Internal Revenue us. Moming Star Milling Corp., CTA EB Case No. 2419, June 21, 2022; Commissioner of Intemal Revenue us. UPS SCS (Philippines), Inc., CTA EB Case No. 2271, February 24, 2022; Flour Daniel, Inc.-Philippines vs. Commissioner of Internal Revenue, CTA Case No. 9267, February 12, 2018; Marina Square Properties, Inc. us. Commissioner ofInternal Revenue, CTA Case No. 10349, Apriln, 2024. (1..

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner of Internal Revenue x---------------------------x 3.1.3 Formal Letter of Demand and Final Assessment Notice (FLD/FAN). The Formal Letter of Demand and Final Assessment Notice (FLD/FAN) shall be issued by the Commissioner or his duly authorized representative. The FLD/FAN calling for payment of the taxpayer's deficiency tax or taxes shall state the facts, the law, rules and regulations, or jurisprudence on which the assessment is based; otherwise, the assessment shall be void (see illustration in ANNEX "B"[*] hereof). 3.1.4 Disputed Assessment. The taxpayer or its authorized representative or tax agent may protest administratively against the aforesaid FLD/FAN within thirty (30) days from date of receipt thereof. The taxpayer protesting an assessment may file a written request for reconsideration or reinvestigation defined as follows: XXX 3.1.5 Final Decision on a Disputed Assessment (FDDA). - The decision of the Commissioner or his duly authorized representative shall state the (i) facts, the applicable law, rules and regulations, or jurisprudence on which such decision is based, otherwise, the decision shall be void (see illustration in ANNEX "C"[*] hereof), and (ii) that the same is his final decision. The distinction of due process requirements between an "assessment" and a "decision", such as the FDDA in this case, has been explained by the Supreme Court in the case of Commissioner of Internal Revenue vs. Liquigaz Philippines Corp75 (Liquigaz), to wit: The importance of providing the taxpayer of adequate written notice of his tax liability is undeniable. Section 228 of the NIRC declares that an assessment is void if the taxpayer is not notified in writing of the facts and law on which it is made. Again, Section 3.1.4 of RR No. 12-99 requires that the FLD must state the facts and law on which it is based, otherwise, the FLD/FAN itself shall be void. Meanwhile, Section 3.1.6 of RR No. 12-99 specifically requires that the decision of the CIR or his duly authorized representative on a disputed assessment shall state the facts, law and rules and regulations, or jurisprudence on which the decision is based. Failure to do so would invalidate the FDDA. XXX In resolving the issue on the effects of a void FDDA, it is necessary to differentiate an "assessment" from a "decision." In St. Stephen's Association v. Collector of Internal Revenue, the Court has long recognized that a "decision"- differs from an "assessment," to wit: 75 G.R. Nos. 215534 & 215557, April18, 2016. ,.

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue X--------------------------X In the first place, we believe the respondent court erred in holding that the assessment in question is the respondent Collector's decision or ruling appealable to it, and that consequently, the period of thirty days prescribed by section 11 of Republic Act No. 1125 within which petitioner should have appealed to the respondent court must be counted from its receipt of said assessment. Where a taxpayer questions an assessment and asks the Collector to reconsider or cancel the same because he (the taxpayer) believes he is not liable therefor, the assessment becomes a "disputed assessment" that the Collector must decide, and the taxpayer can appeal to the Court of Tax Appeals only upon receipt of the decision of the Collector on the disputed assessment, in accordance with paragraph (1) of section 7, Republic Act No. 1125, conferring appellate jurisdiction upon the Court of Tax Appeals to review "decisions of the Collector of Internal Revenue in cases involving disputed assessment..." The difference is likewise readily apparent in Section 7 of R.A. 1125, as amended, where the CTA is conferred with appellate jurisdiction over the decision of the CIR in cases involving disputed assessments, as well as inaction of the CIR in disputed assessments. From the foregoing, it is clear that what is appealable to the CTA is the "decision" of the CIR on disputed assessment and not the assessment itself. An assessment becomes a disputed assessment after a taxpayer has filed its protest to the assessment in the administrative level. Thereafter, the CIR either issues a decision on the disputed assessment or fails to act on it and is, therefore, considered denied. The taxpayer may then appeal the decision on the disputed assessment or the inaction of the CIR. As such, the FDDA is not the only means that the final tax liability of a taxpayer is fixed, which may then be appealed by the taxpayer. Under the law, inaction on the part of the CIR may likewise result in the finality of a taxpayer's tax liability as it is deemed a denial of the protest filed by the latter, which may also be appealed before the CTA. Clearly, a decision of the CIR on a disputed assessment differs from the assessment itself. Hence, the invalidity of one does not necessarily result to the invalidity of the other-unless the law or regulations otherwise provide. XXX As established, an FDDA that does not inform the taxpayer in writing of the facts and law on which it is based renders the decision void. Therefore, it is as if there was no decision rendered by the CIR. It is tantamount to a denial by inaction by the CIR, which may still be appealed before the CTA and the assessment evaluated on the basis of the available evidence and documents. (Emphases supplied) Y'

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofIntemal Revenue X--------------------------X Verily, the Supreme Court76 also clarified that the FDDA must state the facts and law on which the findings are based to provide the taxpayer the opportunity to file an intelligent appeal. In the case at hand, the FDDA issued by respondent substantially informed petitioner of its tax liabilities. Hence, petitioner's right to due process was not violated. Respondent's right to assess portions of the deficiency VAT, EWT, and WTC is barred by prescription. Petitioner maintains that by the time respondent issued the FLD on January o8, 2021, prescription had already set in for deficiency VAT for the 1st to 3rd quarters of TY2017, and deficiency EWT, WTC, and FWT for the months of January to November 2017. We find petitioner's argument partly meritorious. Section 203 of the NIRC reads as follows: SEC. 203. Period of Limitation upon Assessment and Collection. - Except as provided in Section 222, internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided, That in a case where a return is filed beyond the period prescribed by law, the three (3)-year period shall be counted from the day the return was filed. For purposes of this Section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day. The afore-quoted provision clearly dictates that internal revenue taxes must be assessed within three (3) years from the last day prescribed by law for the filing of the tax return or the actual date of filing of such return, whichever comes later. As such, an assessment issued after the three (3)-year prescriptive period is not valid and effective, except as provided in Section 222 of the NIRC. However, pursuant to Section 4 (z) of RA No. 11469 dated March 24, 202077, the statutory deadlines and timeliness for the filing and submission of any document were extended, to wit: 76 Supra note 78. 77 Bayanihan to Heal as One Act. r

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x SEC. 4. Authorized Powers. - Pursuant to Article VI, Section 23 (2) of the Constitution, the President is hereby authorized to exercise powers that are necessary and proper to carry out the declared national policy. The President shall have the power to adopt the following temporary emergency measures to respond to crisis brought by the pandemic: xxxxxxxxx (z) Move statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees, and other charges required by law, and the grant of any benefit, in order to ease the burden on individuals under Community Quarantine; In order to implement the afore-quoted provision, the BIR issued numerous Revenue Issuances that have the effect of suspending the running of the statute of limitations for the assessment of taxes. Revenue Date of Subject Issuance Issue RRNo. March 30, Implements Section 4 (z) of RA No. 7-2020 2020 11469 (Bayanihan to Heal as One Act), particularly in the extension of statutory deadlines and timelines for the filing and submission of any documents and the payment of taxes RMCNo. March 30, Suspends the running of the Statute of 34-2020 2020 Limitations m the assessment and collection of taxes pursuant to Section 223 of the NIRC of 1997, as amended, due to the declaration of a National Emergency from the COVID-19 Situation RMCNo. AprilS, Further extends the due dates for the 39-2020 2020 submission and/or filing of certain documents and/or returns as well as payment of certain taxes under RR No. 7-2020 RRNo. April14, Amends Section 2 of RR No. 7-2020 10-2020 2020 relative to the extension of statutory deadlines and timelines for the filing and submission of any document and the payment of taxes pursuant to Section 4 (z) of RA No. 11469 (Bayanihan to Heal as One Act) RRNo. April30, Amends Section 2 of RR No. 10-2020 11- 2020 2020 relative to the extension of statutory ,.

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x deadlines and timelines for the filing and submission of any document and the payment of taxes pursuant to Section 4 (z) of RA No. 11469 (Bayanihan to Heal As One Act) RRNo. May 21, Amends Section 2 of RR No. 10-2020, 12-2020 2020 as amended by RR No. 11-2020, relative to the extension of statutory RMCNo. July 22, deadlines and timelines for the filing and submission of any document and 74- 2020 2020 the payment of taxes pursuant to Section 4 (z) of RA No. 11469 L_ (Bayanihan to Heal As One Act) Amends and/or clarifies certain provisions of RMC No. 34-2020 relative to the suspension of the running of the Statute of Limitations - -- The computation of the period of suspension was clarified in RMC No. 136-2020, issued on December 7, 2020, which provides as follows: Item 32 in the matrix provided under RR No. 11-2020 pertains to the suspension of the statute of limitation provided under Section 203 and 222 of the Tax Code. The said matrix provided that the suspension shall start from March 16,2020, when the state of emergency was declared due to COVID 19 virus until sixty days after the lifting of the quarantine. With such suspension, the counting of the three (3)- year prescriptive period for the period to assess and the the five (5)-year period to collect, shall exclude the number of days covered by the period of suspension, which is a total of one hundred thirty-seven (137) days. (Emphasis supplied) Accordingly, respondent's right to assess was extended as follows: VAT Period Last Day to File Actual Date of Original Last Day Extended Last Day MARCH Return Filing to Assess to Assess JUNE SEPT 25 April 2017 24 April 2017 27 April 2020 11 September 2020 DEC 25 July 2017 24 July 2017 27 July 2020 11 December 2020 25 October 2017 23 October 2017 26 October 2020 12 March 2021 25 January 2018 25 January 2018 25 January 2021 11 June2021 p.

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x WTC Period Last Day to File Actual Date of Original Last Day Extended Last Day JAN Return Filing to Assess to Assess FEB 13 February 7 February 2017 13 February 2020 13 February 2020 MAR 2017 APR MAY 13 March 2017 7 March 2017 13 March 2020 13 March 2020 JUNE JULY 13 Apri12017 6April2017 13 April 2020 28 August 2020 AUG 15 May 2017 8 May 2017 13 May 2020 27 September 2020 SEPT OCT 13 June 2017 8 June 2017 13 June 2020 28 October 2020 NOV 13 July 2017 5 July 2017 13 July 2020 27 November 2020 DEC 14 August 2017 7 August 2017 13 August 2020 28 December 2020 - 13 September 5 September 14 September 29 January 2021 2017 2017 2020 13 October 2017 9 October 2017 13 October 2020 27 February 2021 13 November 7 November 2017 13 November 30 March 2021 2017 2020 13 December 4 December 2017 14 December 30 April 2021 2017 2020 25 January 2018 15 January 2018 25 January 2021 11 June 2021 EWT Period Last Day to File Actual Date of Original Last Day Extended Last Day JAN Return Filing to Assess to Assess FEB 13 February 7 February 2017 13 February 2020 13 February 2020 MAR 2017 APR MAY 13 March 2017 7 March 2017 13 March 2020 13 March 2020 JUNE JULY 13 April 2017 6 April 2017 13 April 2020 28 August 2020 AUG 15 May 2017 8 May 2017 13 May 2020 27 September 2020 SEPT OCT 13 June 2017 8 June 2017 13 June 2020 28 October 2020 NOV 13 July 2017 5 July 2017 13 July 2020 27 November 2020 DEC 14 August 2017 7 August 2017 13 August 2020 28 December 2020 13 September 5 September 14 September 29 January 2021 2017 2017 2020 13 October 2017 4 October 2017 13 October 2020 27 February 2021 13 November 7 November 2017 13 November 30 March 2021 2017 2020 13 December 11 December 14 December 30 April 2021 2017 2017 2020 25 January 2018 15 January 2018 25 January 2021 11 June 2021 Taking into account that petitioner received the FLD on January o8, 2021, it thus appears that respondent's right to assess petitioner has prescribed insofar as the following deficiency taxes are II'

DECISION CTA Case No. 10607 Philippine Tr�igon Shipyard Corporation v. Commissioner ofIntemal Revenue x---------------------------x concerned: (1) VAT, for the 1st and 2nd quarters; (2) WTC, for January to July 2017; and (3) EWT, for January to July 2017. It bears emphasis that tax assessments are presumed correct under the law and issued in the regular performance of the tax authorities' duty. As a consequence, it is incumbent upon the taxpayer to dispute such correctness and regularity.78 Although the Court holds that respondent's authority to assess petitioner for (1) deficiency VAT, for the 1st and 2nd quarters; (2) deficiency WTC, for January to July 2017; and (3) deficiency EWT, for January to July 2017, has already prescribed, petitioner nonetheless carries the burden of proving which portions of the assessed deficiency taxes correspond to the prescribed periods. Petitioner, however, failed to adduce evidence identifying the amounts attributable to those months, having submitted only the relevant tax returns which merely establish their dates of filing. Accordingly, no deduction or disallowance shall be made as regards the portions of the assessed deficiency taxes which have prescribed. Petitioner's alleged deficiency taxes must be reduced. According to the FDDA, petitioner is liable for the following basic deficiency taxes: Deficiency Tax Amount Income Tax Php 9,975,983.08 VAT EWT 4,178,484.83 WTC 72,041.02 FWT 1,237,472.33 DST 256,461.43 IAET 198,987.00 Compromise Penalties 1,060,283-49 Total 225,000.00 Php 16,979,713.18 I 78 Mcdonald's Philippines Realty Corporation vs. Commissioner of Internal Revenue, G.R. No. 247737, August o8, 2023.

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x I. Income Tax Php 9,909,949.13 Taxable Income per Return 3,867,101.02 7,053,723-45 Add: 2,540,392-50 Disallowed compensation expenses due to 7,693,398.05 non-withholding of tax 2,886,485.24 Disallowed income payments due to 1,357,241.37 nonwithholding of tax 5,102,819.83 Undeclared importation resulting in unreflected source of funds 746,906.75 Undeclared local VAT purchases resulting in unreflected source of funds Undeclared expenses resulting in unreflected source of funds (MAP/SLP) Undeclared expenses resulting in unreflected source of funds Undeclared sales/receipts (AITIED vs SJ, SLS & SAWT) Undeclared sales/receipts (SAWT vs SLS) Undeclared sales/receipts (ITR vs VAT & 2,005,206.26 Notes to FS) 43,163,223.60 Taxable income per investigation 12,948,967.08 Income tax due Less: 2,856-443.oo 2,972,984.00 CWT 116,541.00 Php Tax payments Deficiency income tax 9,975,983.08 The Court shall discuss each assessment item below. 1. Disallowed compensation expenses due to non-withholding of tax Respondent avers that petitioner claimed as a deduction its compensation expenses without duly subjecting the same to the corresponding withholding tax. Respondent derived this amount by comparing the salaries per Audited Financial Statements (AFS) /

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Income Tax Return (ITR) with the BIR Form No. 1601C submitted by petitioner: Amount of compensation per AFS Php 35,510,154�59 Amount of compensation per BIR 31,643,053�57 Form No. 1601C Disallowed compensation Php 3,867,101.02 Petitioner counters this by attributing the alleged disallowed compensation to the salaries of minimum wage earners (MWEs) and other employee-related expenses which are not subject to income tax, and consequently, not subject to WTC. Upon verification of the records/9 the Court finds that petitioner was in fact able to substantiate Php33,329,638.13 out of the Php35,510,154-59 that was claimed as an expense. This was computed from the Alphalist of Employees of petitioner and its Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes. The findings of the ICPA also support this finding. 80 Therefore, only the amount of Php2,180,516-46 shall be considered as disallowed. ii. Disallowed income payments due to nonwithholding oftax Respondent claims that certain expenses of petitioner should be disallowed due to non-withholding of the corresponding EWT. This amount was arrived at by comparing the income payments of petitioner per Monthly Alphalist of Payees (MAP) vis-a-vis the Summary List of Purchases (SLP). Respondent deemed the difference (with SLP the higher one) as being tantamount to income payments that were not duly subjected to EWT, which should be disallowed. Petitioner rebuts this by stating that the transactions captured by respondent refer to its purchases of capital goods in the previous years, where the acquisition cost exceeded Php1,ooo,ooo.oo. Hence, petitioner amortized the same, and the corresponding input VAT was 79 Exhibit "P-19," "P-19-1-A" to "P-19-1-C", USB (Exhibit "P-28-2") so Exhibit "P-28", Docket- Vol. 2, pp. 971 to 1003. ~

DECISION CTA Case No. 10607 Philippine T1�igon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x spread evenly for sixty (6o) months or for the duration of the estimated useful life, whichever is lower. As such, the alleged discrepancy was brought about by the timing difference in the reporting of the purchase of these capital goods for EWT purposes as against the amortization of the same for input VAT purposes. The Court concurs with petitioner's position. Sec. no(A) of the NIRC expressly provides for the amortization of the input VAT in case of purchase of capital goods with an acquisition cost of more than Php1,ooo,ooo.oo, to wit: SEC. no. Tax C1�edits. - A. Creditable Input Tax. - XXX Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code shall be spread evenly over the a month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,ooo,ooo): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, finally, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or free. The Court, upon checking the records (i.e., Monthly Remittance Returns of Creditable Income Taxes Withheld, corresponding sales invoices, Alphalist of Payees, and amortization schedules) is satisfied with the conclusion of the ICPA in his Report that it was indeed timing difference that brought about the alleged discrepancy between the SLP and the Alphalist81 � Petitioner was able to substantiate Php6,562,598.39 as representing the amortizations for TY 2017 for purchases of capital goods with an acquisition cost of more than Php1,ooo,ooo.oo made during 2013 to 2015. The Court was able to verify that petitioner duly withheld the corresponding EWT from such purchases during the 8' Exhibit "P-28", Docket- Vol. 2, pp. 971 to 1003. It

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x period of purchase (i.e., 2013 to 2015). These pertain to purchases from: (1) Cebu Titan Surplus Inc; (2) Contractors Equipment Corporation; (3) Kilton Motor Corp; (4) Mesco, Inc; and (5) Toyota Cebu City Inc. Accordingly, the disallowed amount should be reduced to Php491,125.06, the breakdown of which is as follows: Supplier SLP Alphalist Disallowed EWT EWTDue expense Rate Ace Hardware Php Php 80,610.27 Php 7,340-41 1.00% Php 73-40 Phils Inc 87,950.68 Billota, Ana Fe C. 7,000.00 0.00 7,000.00 1.00% 70.00 Cebu Atlantic 562,257-63 4Ss,312.99 76,944.64 1.00% 769-45 Hardware Ii Cebu Titan 249,999-96 0.00 0.00 1.00% 0.00 Surplus Inc Club Ultima 8,031.05 4,014.64 4,016,41 1.00% 40.16 Philippines Inc Contractors 714,285-72 0.00 0.00 1.00% 0.00 Equipment C Holaysan, Sandra 9,281.25 -21,602.67 30,883-92 1.00% 308.84 Joy K. Innove 82,166.80 77,540.20 4,626.60 2.00% 92-53 Communication Inc Kilton Motor 1, 785,714.23 0.00 0.00 1.00% 0.00 Corp Kima Glass 26,830-36 16,454-90 10,375-46 1.00% 103-75 Supply Company LuckyLrd 1,895,141.03 1,762,050.00 133,091.03 2.00% 2,661.82 Security Force Mactan Shangri 1,017-71 0.00 1,017-71 1.00% 10.18 La Hotel Max's Kitchen Inc 3,903.57 1,596-43 2,307.14 1.00% 23.07 Mesco Inc 2,436,943-75 151,229-74 0.00 1.00% 0.00 Pldt 86,491.03 79,471.75 7,019.28 2.00% 140-39 Regan Industrial 12,384,232-5 12,227,768.23 156,464.29 1.00% 1,564.64 Sales Inc 2 Robinsons 2,732.14 0.00 2,732.14 1.00% 27-32 Appliances Corp ~

DECISION CTA Case No. 10607 Philippine Tr�igon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Sm Prime 37,982-47 36,253.62 1,728.85 2.00% 34�58 Holdings Inc Rad 46,177�97 3,912-45 2.00% 78.25 Smart 50,090-42 Communications Inc Toyota Cebu City 1,625,725.65 98,841.45 0.00 1.00% 0.00 Incorp VicOng 27,011.61 1,451.79 25,559.82 1.00% 255.60 Enterprises Inc Yale Hardware 330,268.84 314,163.93 16,104.91 1.00% 161.05 Corporation Php Php 491,125.06 6,415.03 -- m. Undeclared importation resulting in unrejlected source of funds; iv. Undeclared local VAT purchases resulting in unrefiected source of funds (Notes to FS us VAT); v. Undeclared expenses resulting in unrefiected source of funds (MAP/SLP); and vi. Undeclared expenses resulting in unrefiected source of funds (AITEID us SLP & MAP) For the following assessment items, respondent claims that petitioner underdeclared its expenses/purchases which is tantamount to unreflected source of funds subject to income tax. Respondent anchored its findings on the ruling of the Supreme Court in the case of Perez us. The Court of Tax Appeals82 (Perez). First, regarding the "Undeclared Importation Resulting in Unreflected Source of Funds", respondent alleges that a matching of the importation reflected in the Notes to AFS and the importation reported in the VAT returns would show an underdeclaration of importation, viz: 8' G.R. No. L-10507. May 30, 1958.

DECISION CTA Case No. 10607 Philippine Trigon Shipym�d Corporation v. Commissioner ofInternal Revenue x---------------------------x Importation declared per Note 20 2,583,450.00 oftheAFS Importation per VAT Return 43,057-50 Undeclared importation 2,540,392.50 Second, for the "Undeclared Local VAT Purchases Resulting in Unreflected Source of Funds (Notes to FS vs VAT)", respondent alleges that a matching of the local VAT purchases reflected in the Notes to FS versus the amount reported in the VAT returns disclose an underdeclaration oflocal purchases: VAT Purchases per Note 20 ofthe 94,028,547-58 AFS, net of importation 86,335,149-53 7,693,398.05 VAT Purchases per VAT Return, net of importation Undeclared local VAT purchases Third, regarding the "Undeclared Expenses Resulting in Unreflected Source of Funds (MAP/SLP)", respondent alleges that a matching of the MAP with the SLP disclose an underdeclaration of expenses. Finally, for the "Undeclared Expenses Resulting in Unreflected Source of Funds (AITEID vs SLP & MAP)", respondent alleges that a matching of the third party data with the SLP and MAP disclose an underdeclaration of expenses. Petitioner counters the above allegations of respondent by stating that respondent's reliance on Perez is misplaced. Petitioner invokes the Supreme Court case of Collector ofInternal Revenue us. Benipayo83 to refute respondent's assertion, which states that: In order to stand the test of judicial scrutiny, the assessment must be based on actual facts. The presumption of correctness of assessment being a mere presumption cannot be made to rest on another presumption... The Court is persuaded by petitioner's argument. 83 G.R. No. L-13656, January 31, 1962. ~

DECISION CTA Case No. 10607 Philippine T1'igon Shipyard Corpomtion v. Commissioner of Intemal Revenue x---------------------------x It is worth to emphasize that the three elements m the imposition of income tax are: (1) there must be gain or profit, (2) that the gain or profit is realized or received, actually or constructively; and, (3) it is not exempted by law or treaty from income tax.84 Income tax is assessed on income received from any property, activity or service that produces the income.85 Such being the case, in the imposition or assessment of income tax, it must be clear that there was an income, and such income was received by the taxpayer, not when there is an under-declaration of purchases.86 Applying the above test to the issues at hand, the Court finds that the above elements are not present. Respondent merely presumed that the alleged discrepancy j underdeclared purchases constitute undeclared income. It is therefore clear that respondent's assessment was not made to rest upon undeclared income actually received by petitioner. Therefore, respondent's deficiency income tax on the alleged undeclared purchases/expenses resulting in unreflected source of funds of Php14,477,517.16 is without basis, and should therefore be cancelled. vii. Undeclared sales/receipts (AITEID vs SJ, SLS & SAWT) Respondent assessed petitioner with deficiency income tax from alleged undeclared sales/receipts by matching the third party data against petitioner's sales journal (SJ), summary list of sales (SLS), and summary alphalist of withholding taxes (SAWT). According to respondent, the difference between the third party data, and the highest among the SJ, SLS, and SAWT represents undeclared sales/receipts of petitioner. Petitioner counters by citing BIR's Revenue Memorandum Order (RMO) No. 46-04 which it claims as requiring revenue officers to obtain certifications from third party sources in cases of discrepancies arising from data matching processes. Petitioner also quotes this Court's decision in the case of Commissioner ofInternal 84 Commissioner of Intemal Revenue us. Court of Tax Appeals, G.R. No. 108576, January 20, 1999� 8 ' Ibid. 86 Commissioner of Internal Revenue vs. Philippine Daily Inquirer, Inc., G.R. 213943, March 22, 2017, adopting the decision of the CTA in Philippine Daily Inquirer, Inc. us. CIR, CTA Case No. 7853, Februa1y 16, 2012

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Revenue vs. MCC Transport Singapore Pte. Ltd,87 which ruled that the data gathered by the BIR from third-party information sources should be verified in order to render the assessment valid. The Court finds petitioner's arguments meritorious. Basic is the rule that tax assessments by tax examiners are presumed correct and made in good faith. All presumptions are in favor of the correctness of a tax assessment. However, in order to stand the test of judicial scrutiny, the assessment must be based on actual facts. The presumption of correctness of assessment being a mere presumption cannot be made to rest on another presumption. Hence, assessment should not be based on mere presumptions no matter how reasonable or logical said presumptions may be.88 As ruled by the Supreme Court in Commissioner of Internal Revenue v. Hantex Trading Co.89 in order to stand judicial scrutiny, the assessment must be based on facts supported by credible evidence. The Court found that the revenue examiner failed to verify the information coming from the purported third-party sources per Audit Information, Tax Exemption and Incentives Division (AITEID). This is confirmed by respondent's witness, RO Duke Ramil Lincuna, when asked during the cross-examination, which We quote90: Q: Okay, so in the FLD, with the details of discrepancies which you attached in your judicial affidavit, among the findings there is a discrepancy arising from matching of third party data. Were you able to receive any confirmation or certification from third party sources, Mr. Witness? A: No, I did not receive any confirmation... (Emphasis supplied) Without accomplishing the aforementioned verification requirement, the data gathered from the computerized/third party matching are left unauthenticated. Thus, the information being unverified, the reliability and correctness of alleged discrepancy found by respondent is doubtful. 87 CTA EB Case No. 1961 (CTA Case Ko. 9045), July 14, 2020 88 Collector oflntemal Revenue us. Benipayo, G.R. No. L-13656, January 31, 1962. 89 G.R. No. 136975, March 31, 2005. 9" Transcript of Stenographic Notes, April 04, 2024, pp. 6 to 7. "'-

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue X--------------------------X As such, respondent's deficiency income tax on the alleged undeclared sales/receipts of Php5,102,819.83 is again without basis, and must be cancelled. vm. Undeclared sales/receipts (SA WT vs SLS) According to respondent, the higher amount reflected in the SAWf over the SLS disclose an under declaration of sales/receipts, with regard to petitioner's customer 4K Development Corporation. Petitioner refutes this and attributes the discrepancy to timing difference. Petitioner claims that on December 07, 2017, it issued to its customer a billing statement amounting to Php746,906.76. Thus, the withholding taxes were reported (SAWf) in 2017. But for VAT purposes, the sale transaction was only reflected in January 2018. The Court finds petitioner's argument compelling. Petitioner was able to present adequate evidence sufficient to overturn the factual and legal basis of the disallowance (i.e., BIR Form 2307 with 4K Development Corp for the period of October to December 2017, Official Receipt No. 1001 dated January 03, 2018, and BIR Form No. 2550M and its corresponding SLS for January 2018). Accordingly, respondent's assessment of undeclared sales/receipts amounting to Php746,906.76, having no basis in fact and in law, should be cancelled. ix. Undeclared sales/receipts (ITR vs VAT and Notes to FS) Respondent maintains that petitioner is liable for deficiency income taxes arising from an undeclared sales/receipts, which it was able to arrive at from a reconciliation of petitioner's sales/receipts per ITR versus its sales/receipts per VAT Returns and Notes to AFS. Revenues PeriTR PerFS Per VAT Sales of Services Php Php VATable Php 131,876,254.06 Total Sales 133,593,319.00 133,593,319.38 Zero Rated 6,703,929-40 Php Php 133,593,319.00 133,593,319.38 138,580,183-46

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x VAT Php A/R 37,568,750-79 Sales/Services 133,593,319-38 Ending, net 176,148,934-25 per Note 20 page of VAT 21 oftheAFS Total VAT (131,876,254.06) A/R (42,267,473-93) Sales/Services Beginning, per VAT Returns net of VAT filed Undeclared 1, 7 1 7 , 0 6 5 - 3 2 Should be 133,881,460.32 VAT Sales Sales for (133,593,319-38) LT. Php 288,140.94 Add: 288,140�94 Undeclared Sales I.T. Sales Php Declared per ITR Total 2,005,206.26 Undeclared Undeclared Sales I.T. Sales Petitioner disagrees and explains the discrepancy thru the difference in recognition of its sales transactions for income tax purposes vis-a-vis for VAT purposes. Petitioner states that for income tax purposes, it reports its sales on an accrual basis. Whereas for VAT purposes, it reports its sales under the cash basis. Therefore, petitioner's sales per ITR includes all service income for the year. On the other hand, the sales per VAT returns only include sales or receipts which are collected in the taxable year. The Court finds for petitioner. A perusal of the records reveals that petitioner was able to substantiate the amount of VAT Sales/Services per ITR/AFS, with respect to the Php1, 717,065.32. However, as regards the alleged undeclared sales of Php288,140.94, the records are bereft of evidence that would support petitioner's argument. Consequently, respondent's assessment of undeclared sales/receipts amounting to Php1,717,065.32 which is without basis should be cancelled, while Php288,140.94 shall be upheld. II. VAT Php 131,876,254-06 VATable sales per return �'

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue X---------------------------X Add: 1, 717,065.32 6,703,929-40 Undeclared sales 2,540,392.50 Unsupported VAT zero-rated sales 7,693,398.05 Undeclared importation resulting in 2,886,485.24 unreflected source of funds Undeclared local VAT purchases resulting 1,357,241.37 in unreflected source of funds 5,102,819.83 Undeclared expenses resulting in 746,906.75 unreflected source of funds (MAP/SLP) Undeclared expenses resulting in unreflected source of funds Undeclared sales/receipts (AITIED vs SJ, SLS & SAWT) Undeclared sales/receipts (SAWT vs SLS) VATable sales per investigation 160,624,492.52 Output tax due thereon per investigation 19,274,939.10 Less: Creditable input tax per return VAT payable per investigation (10,562,274.02) Less: Tax Credits 8,712,665.08 Net VAT payments Excess input tax forwarded to next year 6,016,934�93 (4,534,180.25) Deficiency VAT (1,482, 754.68) Php 4,178,484.83 i. Undeclared sales/receipts (Notes to FS vs VAT) According to respondent, petitioner has undeclared VAT sales, which it was able to arrive at via comparing petitioner's VAT sales/receipts per AFS versus its sales/receipts per VAT Returns. VAT Sales/Services per Note Php 133,593,319.38 20 page 21 ofthe AFS (131,876,254�06) VAT Sales/Services per VAT Php 1,717,065.32 Returns filed Undeclared VAT Sales JA

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner of Internal Revenue x---------------------------x Petitioner reiterates its claim that the alleged discrepancy was brought about thru the difference in recognition of its sales transactions for income tax purposes vis-a-vis for VAT purposes. We find for petitioner. The ICPA, in his Report,91 found that petitioner's actual VAT Sales was Php131,876,254�06, which was the same amount reported in petitioner's VAT Returns. Furthermore, the ICPA categorically confirmed that the alleged discrepancy was indeed brought about by timing difference. In view thereof, respondent's assessment of undeclared sales/receipts amounting to Php1,717,065.32 is without basis, and should therefore be cancelled. ii. Unsupported VAT zero-rated sales According to respondent, petitioner failed to adduce evidence to support its zero-rated sales. Petitioner maintains that these sales to (1) Granexport Manufacturing Corporation (GMC), and (2) Hinatuan Mining Corporation (HMC), are zero-rated sales by virtue of Sec. 108(B) of the NIRC. Petitioner claims that GMC is a Philippine Economic Zone Authority (PEZA)-registered Export Enterprise, while HMC is a Board of Investments (EOI)-registered entity. The Court finds petitioner's argument persuasive. Sections 106 and 108 of the NIRC provide for the zero-rating of sales of goods and services to certain entities, viz: Sec. 106. Value-added Tax on Sale of Goods or Properties - (A) Rate and Base of Tax- There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor. '' Exhibit "P-28", Docket- Vol. 2, pp. 971 to 1003. #"

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x (1) X X X (2) The following sales by VAT-registered persons shall be subject to zero percent (o%) rate: (a) Export Sales- The term 'export sales' means: (3) XXX (4) XXX (5) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws; and Sec. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.- (A) Rate and Base of Tax.- xxx (B) Transactions Subject to Zero Percent (o%) Rate. - The following services performed in the Philippines by VAT registered persons shall be subject to zero percent (o%) rate: (1) XXX (2) XXX (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (o%) rate; Sec. 106(A)(5), and Sec. 108(B)(3), allows for the VAT zero-rating of sales to HOI-registered entities, and PEZA-registered entities, respectively. Petitioner was able to provide the following documents, which are sufficient to support its claim: corresponding billing statements, official receipts, and SLS, PEZA-certification of GMC, and the BOI-certification of HMC. As such, respondent's assessment of "unsupported VAT zero-rated sales" amounting to Php6,703,929-40 must be cancelled. m. Undeclared importation resulting in unreflected source of funds; (1\

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x iv. Undeclared local VAT purchases resulting in unrefiected source of funds (Notes to FS vs VAT); v. Undeclared expenses resulting in unrefiected source of funds (MAP/SLP); vi. Undeclared expenses resulting in unrefiected source of funds (AITEID vs SLP & MAP); vii. Undeclared sales/receipts (AITEID vs SJ, SLS & SAWT); and vm. Undeclared sales/receipts (SA WT vs SLS) Respondent reiterates the same justifications raised in the deficiency income tax assessment. Petitioner repeats the same arguments raised in the deficiency income tax assessment. The Court adopts the conclusions it reached in the deficiency income tax assessment for this purpose. Therefore, the corresponding assessment of Php20,330,243.74 is without basis and must therefore be cancelled. III. EWT [Basic Php 72,041.02] The Court reiterates its corresponding discussion in the deficiency income tax assessment under "Disallowed income payments due to nonwithholding of tax." As determined therein, petitioner is only liable for the amount of Php6,415.03. IV. WTC [Basic Php 1,237,472.33] The Court reiterates its corresponding discussion in the deficiency income tax assessment under "Disallowed compensation (1\

DECISION CTA Case No. 10607 Philippine Trigon Shipym�d Corporation v. Commissioner ofIntemal Revenue X--------------------------X expenses due to non-withholding of tax." We compute the corresponding deficiency wrc as follows: Amount of compensation per AFS 35,510,154.59 Amount of compensation per (33,329,638.13) verification 2,180,516.46 Unsupported compensation Effective tax rate 3.89% Deficiency WTC 84,921.13 Computation for effective tax 622,140.73 rate 15,974,682.37 WTCpaid 3�89% Divided by: Total taxable compensation Effective tax rate In light of the above, the deficiency WfC should be reduced to Php84,921.13. V. FWT [Basic Php 256,461.42] Respondent claims that petitioner is liable for deficiency FWT in relation to an unremitted FWT on cash dividends declared in 2016, which was disclosed inNote 10 of the AFS. Petitioner posits: (1) that the same is already beyond the scope of the LOA issued for TY 2017, considering that the transaction occurred in 2016, and (2) that they have already remitted the corresponding FWT for the dividends declared in 2016. Petitioner's argument finds merit. First, in the enforcement of the LOA, it is crucial that the assigned RO does not go beyond the authority given him.92 In the LOA, the scope of the audit was limited to the books of accounts and other accounting records for the TY 2017. Since the dividends were "Commissioner ofInternal Revenue us. Mcdonald's Philippines, G.R. No. 242670, May 10, 2021. 1"1

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x declared in 2016, respondent's authority under the LOA does not extend to petitioner's transactions outside TY 2017. Second, petitioner was able to provide competent evidence that would show that it has already remitted the corresponding FWT for the dividends declared in 2016. Accordingly, the alleged deficiency FWT of Php256,461.43 must be cancelled. VI. DST [Basic Php 198,987.00) Respondent claims that petitioner had an outstanding loan with Steel Asia Manufacturing, Inc. amounting to Php39,797,289.43, and that it failed to provide evidence to support payment of the DST due thereon. Petitioner maintains that respondent computed the alleged deficiency DST on the outstanding amount carried over from the previous year. Therefore, petitioner claims that this is also beyond the scope of authority of respondent. The Court rejects petitioner's argument. The Court reiterates that tax assessments are presumed correct under the law and issued in the regular performance of the tax authorities' duty. Therefore, it is incumbent upon the taxpayer to dispute such correctness and regularity.93 In Commissioner of Internal Revenue v. Traders Royal Bank,94 where the taxpayer was assessed DST for the Trust Indenture Agreements (TIA) but the taxpayer claimed that the TIA were exempt from DST despite not offering the TIA as evidence, the Supreme Court elucidated that: Surprisingly, not a single copy of a Trust Indenture Agreement and/or the Certificate of Participation (issued to the client as evidence of the trust) could be found in the records of the case. XXX XXX XXX 93 Mcdonald's Philippines Realty Corporation us. Commissioner of Internal Revenue, G.R. No. 247737, August o8, 2023. 94 G.R. No. 167134, March 18, 2015. It

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x The importance of the actual Trust Indenture Agreements cannot be gainsaid. The only way the Court can determine the actual relationship between TRB and its clients is through a scrutiny of the terms and conditions embodied in the said Agreements. The burden fell upon TRB to produce the Trust Indenture Agreements, not only because the said Agreements were in its possession, but more importantly, because its protest against the DST assessments was entirely grounded on the allegation that said Agreements were trusts. TRB was the petitioner before the CTA in C.T.A. Case No. 6392 and it was among its affirmative allegations that the said Trust Indenture Agreements were trusts, thus, TRB had the obligation of proving this fact. It is a basic rule of evidence that each party must prove its affirmative allegation. (Emphasis supplied) In the case at bar, petitioner failed to discharge its duty when it failed to submit adequate proof that would substantiate its allegations. Therefore, the deficiency DST assessment of Php198,987 shall be upheld. VII. IAET 2,972,984.00 Php 9,909,948.00 0.00 CY2017 Taxable Income (2,972,984.00) 68,ooo,ooo.oo 6,936,964.00 Less: Income tax paid/payable in 2017 7,204,421.79 75,204,421.79 Dividends declared/paid in 2017 82,141,385.79 Net income in 2017 68,000,000.00 11,000,000.00 7,461,449.13 Add: Retained earnings from 2016, 89,602,834.92 net of dividends declared (Appropriated) (79,000,000.00) 10,602,834�92 Unappropriated Accumulated earnings as of 12/31/2017 per return Add: Unsupported adjustments- BIR prior years Accumulated earnings as of 12/31/2017 per investigation Less: RE-appropriated in 2017 Amount that may be retained - capital stock Improperly accumulated earnings per investigation t--

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Rate 10% IAET Php 1,060,283.49 Respondent alleges that petitioner improperly accumulated earnings beyond the reasonable needs of its business without a valid justification. Petitioner seeks to have the amount of deficiency IAET reduced, in view of its prior payments of IAET in 2011 and 2014, which is in accordance with RR No. 2-2001. Petitioner's argument is meritorious. Sec. 5 of RR No. 2-200195 categorically provides: SEC. 5� Tax Base of Improperly Accumulated Earnings Tax - XXX Once the profit has been subjected to IAET, the same shall no longer be subjected to IAET in later years even if not declared as dividend. Notwithstanding the imposition of the IAET, profits which have been subjected to IAET, when finally declared as dividends, shall nevertheless be subject to tax on dividends imposed under the Tax Code of 1997 except in those instances where the recipient is not subject thereto. (Emphasis supplied) In the case at bar, petitioner was able to provide competent evidence to prove that it has previously paid IAET in 201196 and 2014.97 In view thereof, the deficiency IAET must be recomputed: Improperly accumulated earnings Php 10,602,834.92 per investigation 6,817,976.10 (8,431,85--5�9. 0) Less: Improperly accumulated 1,613,87q.8o earnings previously subjected to IAET 2011 2014 95 IMPLEMENTING THE PROvlSION O:N IMPROPERLY ACCUMULATED EARc'JINGS TAX UNDER SECTION 29 OF THE TAX CODE OF 1997. 96 Exhibit "P-13-3," USB (Exhibit "P-28-2"). 97 Exhibit "P-25-1," USB (Exhibit "P-28-2"). "-

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInternal Revenue x---------------------------x Improperly accumulated earnings 2,170,979-02 not yet subjected to IAET IAET rate 10% IAET Php 217,097-90 VIII. Compromise Penalties Late Payment of Income Php 25,000.00 Tax Late Payment ofVAT 25,000.00 Late Payment of EWT 25,000.00 Late Payment ofWTC 25,000.00 Late Payment of FWT 25,000.00 Late Payment of DST 25,000.00 Late Payment of IAET 25,000.00 Failure to Supply Correct 25,000.00 Information Failure to Adopt CAS 25,000.00 TOTAL Php 225,ooo.oo Respondent imposed compromise penalties against petitioner consisting of the late payment of the correct amount of income tax, VAT, EWT, WTC, FWT, DST, and IAET, as well as the failure to supply correct information, and failure to adopt a computerized accounting system (CAS), pursuant to RMO No. 7-2015. However, the Court observes that RMO No. 7-2015 explicitly provides that compromise penalties may be imposed only for criminal violations of the National Internal Revenue Code. As the present case does not involve any criminal violation of the Tax Code, respondent has no authority to impose compromise penalties. Consequently, the compromise penalties are ordered deleted. Accordingly, the Court partially upholds the assessments for deficiency income tax, VAT, EWT, WTC, DST, and IAET amounting to Php3,121,228.so, inclusive of interest and surcharge, adjusted as follows: 1.....

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofIntemal Revenue x---------------------------x Basic Interest Surcharge TOTAL Income Php 887,935-48 Php 368,700.00 Php o.oo Php Tax 1,256,635�48 VAT 728,696.22 324,140.0.') 0.00 1,052,836.27 EWT 6,415.03 2,853-55 0.00 9,268.58 WTC 84,921.13 37,774-78 0.00 122,695-91 DST 198,987.00 89,167.98 49,746.75 337,901.73 IAET 217,097-90 70,518.16 54,274-48 341,890-53 Total Php Php Php Php 2,124,052-76 893,154-52 104,021.23 3,121,228.50 WHEREFORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED. The assessment issued by respondent against petitioner in the FLD/FAN dated January o8, 2021 and the FDDA dated July 28, 2021 are AFFIRMED with MODIFICATIONS. ACCORDINGLY, the deficiency tax assessments for Income Tax, VAT, EWT, WTC, DST, and IAET, amounting to Php3,121,228.so, inclusive of interest and surcharge, are hereby UPHELD. SO ORDERED. HENR/)fANGELES Associate Justice I CONCUR: ~:r\.iW~F�...~,rlr;s.:~FA-JAFR~DO Associate Justice

DECISION CTA Case No. 10607 Philippine Trigon Shipyard Corporation v. Commissioner ofInter�nal Revenue x---------------------------x ATIESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. r. ~M . fF b...... ~ -F~ REfiS-FAJARDO Associate Justice Special Third Division Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. (b.~ I~- MA. BELEN M. RINGPIS-LIBAN Presiding Justice