NORKIS TRADING COMPANY, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SECOND DIVISION NORKIS TRADING COMPA~Y, CTA CASE NO. 8862 INC., Members: Petitioner, CASTANEDA, JR., Chairperson --versus- CASANOVA, and MANAHAN, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, DEC 1 2 2017 '1 :J7> /1Jf1 Respondent. x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x RESbLUTION CASTANEDA, JR., J.: For resolution are the following: 1. Respondent's "Motion for Reconsideration Re: Decision dated 16 August 2017", filed on August 31, 2017 with petitioner's Comment filed on September 22, 2017; and 2. Respondent's "Motion for Leave of Court to Admit Attached Supplement1 al Motion for Reconsideration (with Alternative Motibn to Reopen Proceedings)", filed on October 2, 2017 with petitioner's Comment filed on October 27, 2017. Respondent seeks reconsideration of this Court's Decision dated August 16, 2017, the dispositive portion of which reads: ~

RESOLUTION erA CASE NO. 8862 "WHEREFORE, premi es considered, the instant Petition for Review is hereby GRANT D. Accordingly, respondent's Final Decision on Disputed Asses ment dated July 9, 2014 is hereby REVERSED and SET ASIDE and the assessment under FAN No. IT-123-LA0057-07-14-21 in the amount of P285,927,070.68, inclusive of interest and pena ties, is hereby CANCELLED and SET ASIDE. SO ORDERED." In the said Decision, th Court ruled that the assessment is void si nee it was made beyond he prescriptive period. To recall, the assailed D cision states that respondent failed to prove that there was an lnde nity Agreement ("Agreement") and/or that petitioner received the a ount of $6,000,000.00 as indemnity fee, there is no proof as to th alleged substantial under-declaration and/or omission of fraud in the resent case. Thus, Section 203 of the NIRC of 1997, as amended, Will apply and the prescriptive period of three years will govern. In respondent's Motion f r Reconsideration, he asserts that the three (3) year prescriptive p riod is inapplicable since there was substantial under declaratio of petitioner's taxable income. Petitioner's alleged failure to include indemnity fee to its Income Tax Return (ITR) and accompanyi g Financial Statements (FS) for the fiscal year ending 30 June 20 7 constitutes an omission warranting the application of the ten (10) year prescriptive period from the time of its discovery, pursuant to Section 222 of the National Internal Revenue Code of 1997 as arne ded. Further, respondent ass rts that petitioner's convenient denial of the existence of the subject Agreement and payments or remittances to its bank accou ts with Metropolitan Bank and Trust Company should never be cou tenanced by this Court. In his Supplemental Motion for Reconsideration (with Alternative Motion to Re-open Proceedings), respondent submits for consideration of this Court t e copy of the Agreement (between Yamaha and Norkis) and the c py of the letter from the National Tax Agency of Japan which are all edly public documents citing Sections 19 and 23, Rule 132 of the evised Rules of Court to support the same.~

RESOLUTION erA CASE NO. 8862 Respondent maintains t at the above documents are prima facie evidence of the fact of their execution. Respondent prays if deem proper to re-open proce dings for the identification of the said documents. On the other hand pe itioner contends that even if these documents had been identifie and offered in evidence, neither the letter from the National Tax Agency of Japan nor the Indemnity Agreement is admissible as p blic documents. It must be attested and accompanied with prop r certifications in accordance with Sections 24 and 25 of Rule 13 of the Revised Rules of Court for it to be admissible. Petitioner citing Nedl/o)/j Lijnen B. V. Rotterdam v. Glow Laks Enterprises, states that for a c py of a foreign public document to be admissible, it must be attested by the officer having legal custody of the records or his deputy; nd it must be accompanied by a certificate by a secretary of th embassy or legation, consul general, consul, vice consular or consul r agent or foreign service officer, and with seal of his office which is ot complied in this case. After careful evaluation f the parties' arguments, this Court finds no compelling reason to reverse or modify the assailed Decision. The arguments posite by respondent in his Motion for Reconsideration are mere am lification of his previous arguments in his Answer which have be n duly considered and adequately discussed in the assailed Deci ion. As to respondent's alter ative prayer to reopen proceedings, the Court finds no compellin or persuasive reason to grant the same. In Republic of the Phili~ ines v. Sandiganbayan,2 the Supreme Court explained the nature of motion to reopen a case to introduce further evidence is as follows: "The basis for a motio to reopen a case to introduce further ;<-- evidence is Section 5, Rule 3 of the Rules of Court, which reads: 1 G.R. No. 156330, November 19, 2014 2 G.R. No. 152375, December 13, 2011, 66 SCRA 185-187

RESOLUTION CTA CASE NO. 8862 Sec. 5. Order of trial. - Subject to the provisions of section 2 of Rule 31, and unless the court for special reasons otherwise directs, the trial shall be limit d to the issues stated in the pre-trial order and shall proceed as foil ws: XXX (f) The parties may then respectively adduce rebutting evidence only, unless the c urt, for good reasons and in the furtherance of justice, permit them to adduce evidence upon their original case. "(emphasis sup lied) In the instant case, the additional documents submitted are neither newly discovered ev dence nor omitted due to fraud, accident, mistake or excusab e negligence. The Court finds that respondent has not demon trated any cogent reason for its consideration. Note that the admission f Agreement between petitioner and Yamaha Motors Co. Ltd. has already been previously denied and expunged from the records y the Court in its Resolution dated August 30, 2016. While as to the letter fr m the National Tax Agency of Japan, although respondent asserts t at the same forms an integral part of the BIR Records submitted to his Court, the subject document was not formally offered to merit onsideration. In fact, such additional documentary evidence constitu es forgotten evidence. Forgotten evidence refer to evidence already in existence or available before or during a t ial; known to and obtainable by the party offering it; and could h ve been presented and offered in a seasonable manner, were i not for the sheer oversight or forgetfulness of the party or he counsel. Presentation of forgotten evidence is disallowed, becaus it results in a piecemeal presentation of evidence, a procedure that i not in accord with orderly justice and serves only to delay the proce dings. A contrary ruling may open the floodgates to an endless revi w of decisions, whether through a motion for reconsideration or or a new trial, in the guise of newly discovered evidence. 3 Although Section 8 of No. 1125, as amended, creating the Court of Tax Appeals, express! provides that proceedings before this~ 3 Office of the Ombudsman vs. Coronel, G.~. No. 164460, June 27, 2006. '

RESOLUTION CTA CASE NO. 8862 Court shall not be governed stri tly by technical rules of evidence and there are instances where th Court allows the reopening of trial even though judgment has al eady been rendered, still, the Court finds that respondent has not demonstrated any convincing reason for the Court to apply the techn cal rules liberally. WHEREFORE, premises considered, respondent's Motion for Reconsideration and Motio for Leave of Court to Admit Attached Supplemental M tion for Reconsideration (with Alternative Motion to R -open Proceedings) are hereby DENIED for lack of merit. SO ORDERED. ~- CC. �CA~S~T~AN-E-~,~JR. J6'ANIT4 Asso iate Justice ~ ~"7� CAESAR A. CASANOVA CATHERINET.MANAHAN Associate Justice Associate Justice