1. Commissioner of Internal Revenue vs. T Shuttle Services, Inc.

Supreme Court
Second Division G.R. No. 240729, promulgated 24 August 2020

FACTS: The CIR issued to respondent a Letter of Notice informing the respondent of the
latter's discrepancy in its tax returns for Calendar Year (CY) 2007. Subsequently, the CIR
issued aLetter of Notice (LN) which was received and signed by a certain Malou Bohol.
Subsequently follow-up letter was issued which was received and signed by a certain
Amado Ramos.

Due to the inaction of respondent, the CIR issued to it, the following: (1) Letter of
Authority for the examination of its book of accounts; and other accounting records and
(2) a Notice of Informal Conference (NIC).

Subsequently, the CIR issued a Preliminary Assessment Notice (PAN) with

attachedDetails of Discrepancies that found respondent liable for deficiency income tax
(IT) and value-added tax (VAT). Then, the CIR issued a Final Assessment

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Notice (FAN), assessing respondent with deficiency VAT and deficiency IT. It then
issued a Preliminary Collection Letter requesting respondent to pay the assessed tax
liability within 10 days from notice. A FinalNotice Before Seizure (FNBS) was also issued

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giving respondent the last opportunity to settle its tax liability within 10 days from notice.

However, respondent sent a letter to the RDO and the collection officers stating that: (1)it
is not aware of any pending liability for CY 2007; (2) that Mr. B. Benitez, who signed and
received the preliminary notices, was a disgruntled rank-and-file employee not
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authorized to receive the notices; and (3) Mr. B. Benitez did not forward the notices to it.
Respondent also requested a grace period of one month to review its documents which
was however denied.
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Subsequently, respondent was constructively served with a Warrant of Distraint

and/orLevy (WDL). Aggrieved, on May 2, 2013, respondent filed a Petition for Review
with the CTA inDivision which the latter granted. This was affirmed by the CTA En Banc.

ISSUE: WON THE CTA EN BANC ERRED IN RULING THAT THE FINAL
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ASSESSMENT NOTICE ISSUED AGAINST RESPONDENT IS VOID FOR ALLEGEDLY

NOT CONTAINING A DEFINITE DUE DATE FOR PAYMENT OF THE TAX LIABILITIES
or

RULING: [Link] question of whether the CIR was able to sufficiently prove that the
PAN and the FAN were properly and duly served upon and received by respondent is a
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question of fact, to which the Supreme Court held that such factual questions are not the
proper subject of an appeal by certiorari. Hence, it sustained the CTA Division's finding
that respondent was not accorded due process and declared void the assessments
made against respondent for deficiency IT and VAT for CY 2007.

It noted that service of the PAN or the FAN to the taxpayer may be made by registered
mail. Under the Rules of Court (Section 3 (v), Rule 131), a disputable presumption arises
that "a letter duly directed and mailed was received in the regular course of the
mail."However, the presumption is rebuttable, and in which case, the burden is shifted to
the party favored by the presumption to establish that the subject mailed letter was
actually received by the addressee.

Respondent’s denial of due receipt of the PAN and the FAN, shifted the burden to the
CIR to prove that the assessment notices were duly mailed and received by respondent
orby its authorized representative. In this case, the CIR was unable to sufficiently prove
the receipt of the PAN and the FAN as the CIR failed to identify and authenticate the
signatures appearing on the registry receipts that were presented.

The Court notes that it has been the long-standing policy and practice of the Court to
respect the conclusions of quasi-judicial agencies such as the CTA, it being a highly
specialized body specifically created for the purpose of reviewing tax cases. Therefore,
in the absence of any clear and convincing proof that the findings of the CTA are not
supported by substantial evidence or that there is a showing that it committed a gross
error or abuse, the Court must presume that the CTA rendered a decision which is valid
in every respect

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2. Commissioner of Internal Revenue (CIR) vs. V.Y. Domingo Jewellers, Inc.
Supreme Court (Third Division) G.R. No. 221780, promulgated 25 March 2019

FACTS: Bureau of Internal Revenue (BIR) issued a Preliminary Assessment Notice

(PAN) against V.Y. Domingo, a corporation primarily engaged in manufacturing and
selling emblematic jewelry, for deficiency income tax and value-added tax, inclusive of
interest, at P 2, 781, 844.21 for the taxable year 2006. V.Y Domingo filed a Request for
Re-evaluation/ Re-investigation and Reconsideration with the Regional Director of
BIR-Revenue Region 6. V.Y. Domingo then received a Preliminary Collection Letter
(PCL) dated August 10, 2011 from the Revenue District Office No. 28 - Novaliches, at
P3,164,617.43 for collection of its tax liabilities.

On September 12, 2011, V.Y. Domingo sent a letter to the BIR RDO in Quezon City,
requesting certified true copies of the assessment notices. Upon receipt thereof on
September 16, 2011, it filed a Petition for Review with the CTA in Division, to have the
PCL and the assessment notices declared null and void, cancelled, withdrawn and with

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no force and effect for allegedly having been issued beyond the prescriptive period for
assessment and collection of internal revenue taxes.

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During trial, the CIR moved to dismiss for lack of jurisdiction. She argued that under
Republic Act (R.A.) No. 1125, it is neither the assessment nor the formal letter of
demand that is appealable to the CTA but the decision of the CIR on a disputed
assessment, arguing there was still no such decision
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The CTA First Division granted the CIR's motion and dismissed. It held that it was
without jurisdiction to entertain the petition, as the rule is that for the CTA to acquire
jurisdiction, as assessment must first be disputed by the taxpayer and either ruled upon
by the CIR to warrant a decision, or denied by the CIR through inaction.
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The CIR argues that assessment notices are not appealable to the CTA as the power to
decide disputed assessments is vested in the CIR, subject only to the exclusive
appellate jurisdiction of the CTA. The CIR also claims that a close scrutiny of V. Y.
Domingo’s petition for review would reveal that it was anchored on its receipt of the PCL
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issued by the BIR, which V. Y. Domingo mistakenly treated as a denial of its motion for
reconsideration of the PAN.
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ISSUE: Whether or not the CTA has jurisdiction over V. Y. Domingo’s petition for review
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RULING: No, V.Y. Domingo's immediate recourse to the CTA First Division was in
violation of the doctrine of exhaustion of administrative [Link] CTA, being a court
of special jurisdiction, can take cognizance only of matters that are clearly within its
jurisdiction. Section 7 of R.A. No. 1125, as amended by R.A. No. 9282, specifically
provides: 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.

It is clear from the said provisions of the law that a protesting taxpayer like V.Y. Domingo
has only three options to dispute an assessment: (1) If the protest is wholly or partially
denied by the CIR or his authorized representative, then the taxpayer may appeal to the
CTA within 30 days from receipt of the whole or partial denial of the protest; (2) If the
protest is wholly or partially denied by the CIR's authorized representative, then the
taxpayer may appeal to the CIR within 30 days from receipt of the whole or partial denial
of the protest; (3) If the CIR or his authorized representative failed to act upon the protest
within 180 days from submission of the required supporting documents, then the
taxpayer may appeal to the CTA within 30 days from the lapse of the 180-day period.

Under the doctrine of exhaustion of administrative remedies, before a party is allowed to

seek the intervention of the court, he or she should have availed himself or herself of all
the means of administrative processes afforded him or her.

PRINCIPLE: Under the doctrine of exhaustion of administrative remedies, before a party

is allowed to seek the intervention of the court, he or she should have availed himself or
herself of all the means of administrative processes afforded him or her. Section 228 of
the Tax Code requires taxpayers to exhaust administrative remedies by filing a request
for reconsideration or reinvestigation within 30 days from receipt of the assessment.
Exhaustion of administrative remedies is required prior to resort to the CTA precisely to

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give the Commissioner the opportunity to "re-examine its findings and conclusions" and
to decide the issues raised within her competence.

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3. Commissioner of Internal Revenue vs. Next Mobile, Inc. G.R. No. 212825,
December 07, 2015

FACTS:This case involves the Petition for Review filed by the Commissioner of Internal
Revenue (CIR) to reverse and set aside the Decision of the Court of Tax Appeals (CTA)
En Banc which affirmed its First Division’s decision in CTA Case No. 7965. The CTA
First Division cancelled and withdrew the petitioner’s formal letter of demand and
assessment notices to the respondent for being issued beyond the prescriptive period
provided by law.

Next Mobile, Inc. (respondent) filed its Annual Income Tax Return and other related tax
returns for the year ending December 31, 2001. On September 25, 2003, a Letter of
Authority authorized examination of the respondent’s books for the said period. Several
waivers of the statute of limitations were executed to extend the period of tax
assessment. However, on receiving a Preliminary Assessment Notice and subsequently
a Formal Letter of Demand along with Assessment Notices on October 25, 2005, for

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deficiency taxes amounting to P313,339,610.42, the respondent protested these
assessments.

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Upon denial of its protest, the respondent filed a Petition for Review before the CTA on
August 27, 2009. The CTA First Division ruled the assessments void for being issued
beyond the prescriptive period, pointing out irregularities in the execution of waivers and
rejecting the claim that the 10-year prescriptive period for tax assessment on false or
fraudulent returns applied.
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ISSUE: The Supreme Court examined whether the CIR’s right to assess the
respondent’s deficiency taxes had already been prescribed.
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RULING: The Supreme Court held that the CTA En Banc erred in invalidating the
assessment notices. It found the waivers executed by the respondent valid despite
procedural lapses, such as the absence of a notarized written authority and failure to
follow the mandated procedure for waiver execution. This was due to both parties being
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in pari delicto—or equally at fault—but favored enforcing the waivers to uphold the public
interest in the collection of taxes. The Court emphasized the principle that taxes are the
or

lifeblood of the government, and as such, procedural lapses by the BIR, and acts of bad
faith by the taxpayer should not prevent tax collection. The Supreme Court granted the
petition, reversed the CTA En Banc’s decision, and remanded the case to the CTA for
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further proceedings to review the merits of the respondent’s petition against the formal
letter of demand and assessment notices.

Doctrine: The waiver of the statute of limitations on tax assessment and collection must
be in strict compliance with the prescribed format and procedure under Revenue
Memorandum Order No. 20-90 and Revenue Delegation Authority Order No. 05-01 to be
valid and binding. However, in cases where both parties are in pari delicto, the public
interest in the collection of taxes may prevail, allowing a departure from strict procedural
compliance.

Class Notes:
1. Prescriptive Periods for Tax Assessment and Collection: According to Section 203 of
the 1997 National Internal Revenue Code (NIRC), taxes should be assessed within three
years from the filing of the tax return. Exceptions provided under Section 222 allow for
an extended period under certain conditions, including a written agreement to extend.
2. Waivers of the Statute of Limitations: The validity of waivers is contingent upon strict
adherence to procedural requirements, including proper execution, signature by duly
authorized persons, and acknowledgment by the BIR before the expiration of the original
prescriptive period.
3. Doctrine of Estoppel and Pari Delicto: This case illustrates the application of estoppel
and the principle of pari delicto in situations where both the taxpayer and the BIR have
contributed to procedural faults in extending the period for tax assessment and
collection.

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4. Light Rail Transit Authority v. Bureau of Internal Revenue, G.R. No. 231238, June
20, 2022

FACTS: The Regional Director issued the Formal Assessment Notice,[7] and the alleged
deficiency taxes, inclusive of interests, amounted to P3,555,982.19. The Light Rail
Transit likewise protested the Formal Assessment Notice.

The Light Rail Transit appealed[11] the Commissioner's Final Decision on Disputed
[Link] Bureau of Internal Revenue moved to dismiss the Petition on the
ground of lack of jurisdiction.[26] The Bureau of Internal Revenue argued that the
reckoning point for filing the Petition for Review was on March 17, 2012, the day the
Light Rail Transit received a copy of the Warrant of Distraint and/or Levy, not on August
12, 2014 when the Light Rail Transit received theJune 30, 2014 Letter from the Regional
Director denying its request for reinvestigation

The Court of Tax Appeals Third Division agreed with the Bureau of Internal Revenue and

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granted its Motion to Dismiss for lack of jurisdiction. According to the Court of Tax
Appeals Third Division, the Light Rail Transit did not protest the Formal Assessment
Notice, rendering the assessment final and unappealable. Consequently, the Court of

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Tax Appeals had no jurisdiction over the cognizance of the Petition for Review.

The Light Rail Transit maintains that it filed its Petition for Review within the
reglementary period. The Light Rail Transit asserts that the Regional Director's June 30,
2014 Letter denying the May 6, 2011 appeal should have been considered the
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Commissioner of Internal Revenue's final decision appealable to the Court of Tax
Appeals. The Light Rail Transit emphasizes that pending its appeal with the then
Commissioner, a duly authorized representative – the Revenue District Officer Corazon
M. Montes – issued a Warrant of Distraint and/or Levy, then granted the Light Rail
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Transit's request for reconsideration of the Warrant. According to the Light Rail Transit,
these actions of the Revenue District Officer made it believe that the Final Decision on
Disputed Assessment was not the Commissioner's final decision appealable to the Court
of Tax Appeals. It argues that it timely filed the Petition for Review upon its receipt of the
June 30, 2014 Letter.
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ISSUE: Whether or not the Court of Tax Appeals had jurisdiction over petitioner Light
or

Rail Transit Authority's Petition for Review. Subsumed in this issue is whether or not the
Final Decision on the Disputed Assessment is the final decision of the respondent
Commissioner of Internal Revenue appealable to the Court of Tax Appeals
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RULING: Yes. The June 30, 2014 Letter denying petitioner's appeal was the final
decision on the protest that is appealable to the Court of Tax Appeals. With the petitioner
having filed its Petition for Review within 30 days from receipt of the June 30, 2014
Letter, the Court of Tax Appeals had jurisdiction over the petitioner's Petition for
Review.||| Decisions of the Commissioner in cases involving disputed assessments"
mean decisions of the Commissioner on the protest to the assessment, not the
assessment itself. The protest may either be a request for reconsideration or a request
for reinvestigation, and the decision on the protest, which may also be rendered by a
duly authorized representative of the Commissioner — must be final, i.e., not merely
tentative in character. Here, there was inaction on the part of the respondent on the
petitioner's appeal of the Final Decision on a Disputed Assessment. And under the
circumstances, this Court finds that the petitioner genuinely chose to await the
Commissioner's final decision on its appeal. To our mind, the option was made in good
faith, not as an afterthought or "legal maneuver" to claim that the assessment had not
yet become final. This is shown by the petitioner's replies to the Revenue District Officer
when the latter issued the Preliminary Collection Letter and Final Notice Before Seizure.
In both reply letters, petitioner said that "it will act on the matter as soon as we receive
the Commissioner's decision on our appeal." Indeed, petitioner filed the Petition for
Review with the Court of Tax Appeals only after the issuance of the June 30, 2014 Letter
that decided its May 6, 2011 appeal to the Office of the Commissioner. Enforcement of
collection remedies pending appeal with the CIR is void and should be of no force and
effect.

Subsection 3.1.5 of Revenue Regulations No. 12-99 is clear that if the protest is
elevated to the Commissioner of Internal Revenue (CIR), "the latter's decision shall not
be considered final, executory and demandable, in which case, the protest shall be
decided by the Commissioner.

The issuance therefore of a Preliminary Collection Letter, the Final Notice Before
Seizure, and theWarrant of Distraint and/or Levy pending appeal with the Commissioner

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of Internal Revenue shall not be considered a decision of the latter. More importantly, all
of these were issued on the premise that "delinquent taxes" exist, an incorrect premise.

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Thus, the enforcement of collection remedies denying the request for reconsideration all
emanated from a non-demandable assessment. As such, all were void and should be of
no force and effect.
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5. Medicard Philippines, Inc. vs. Commissioner of Internal Revenue Supreme
Court Third Division, Go No. 222743 promulgated 5 April 2017

FACTS: MEDICARD is a Health Maintenance Organization (HMO) that provides prepaid

health and medical insurance coverage to its clients. Individuals enrolled in its health
care programs pay an annual membership fee and are entitled to various preventive,
diagnostic and curative medical services provided by duly licensed physicians,
specialists and other professional technical staff participating in the group practice
health delivery system at a hospital or clinic owned, operated or accredited by
[Link] filed its First, Second, andThird Quarterly VAT Returns through Electronic
Filing and Payment System(EFPS) and its Fourth Quarterly VAT Return. Upon finding
some discrepancies between MEDICARD’s Income Tax Returns (ITRs) and VAT
Returns, the CIRinformed MEDICARD and issued a Letter Notice . Subsequently, the
CIR also issued a Preliminary Assessment Notice (PAN) against MEDICARD
for deficiency VAT. The CIR argued that since MEDICARD does not actually
provide medical and/or hospital services, but merely arranges for the same, it services

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are not VAT exempt.

MEDICARD argued that: The services it render is not limited merely to

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arranging for the provision of medical and/or hospital services by hospitals and/or
clinics but include actual and direct rendition of medical and laboratory
services; in fact, its 2006 audited balance sheet shows that it owns x-ray and
laboratory facilities which it used in providing medical and laboratory services
to its members. Medicard received CIRS Final Decision denying its protest for review
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before the CTA.

The CTA Division held that: (1) the determination of deficiency VAT is not
limited to the issuance of Letter of Authority (LOA) alone as the CIR is granted vast
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powers to perform examination and assessment functions; (2) in lieu of an LOA, an LN

was issued to MEDICARD informing it of the discrepancies between its ITRs and VAT
Returns and this procedure is authorized under Revenue Memorandum Order. Also, the
amounts that MEDICARD earmarked and eventually paid to doctors, hospitals and
clinics cannot be excluded from the computation of its gross receipts because the act of
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earmarking or allocation is by itself an act of ownership and management over the funds
by MEDICARD which is beyond the contemplation of RR No. 4-
or

2007. Furthermore, MEDICARD’s earnings from its clinics and laboratory facilities
cannot be excluded from its gross receipts because the operation of these clinics and
laboratories is merely an incident to MEDICARD’s line of business as an HMO.
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ISSUE: 1. WHETHER THE ABSENCE OF THE LOA IS FATAL;

2. WHETHER THE AMOUNTS THAT MEDICARD EARMARKED AND
EVENTUALLY PAID TO THE MEDICAL SERVICE PROVIDERS SHOULD STILL FORM
PART OF ITS GROSS RECEIPTS FOR VAT PURPOSES

RULING: 1. [Link] absence of the LOA violated MEDICARD’s right to due process. An
LOA is the authority given to the appropriate revenue officer assigned to perform
assessment [Link] the NLRC, unless authorized by the CIR himself or by
his duly authorized representative, through an LOA, an examination of the
taxpayer cannot ordinarily be undertaken. An LOA is premised on the fact that
the examination of a taxpayer who has already filed his tax returns is a power that
statutorily belongs only to the CIR himself or his duly authorized representatives. In this
case, there is no dispute that no LOA was issued prior to the issuance of a PAN and
FAN against [Link], no LOA was also served on MEDICARD.
The LN cannot replace the LOA required under the law even if the same was issued by
the CIR himself. Under RR No. 12-2002, LN is issued to a person found to have
underreported sales/receipts per data generated under theRELIEF system. Upon
receipt of the LN, a taxpayer may avail of the BIR’s Voluntary Assessment and
Abatement Program. If a taxpayer fails or refuses to avail of the said program, the BIR
may avail of administrative and criminal remedies, particularly closure,criminal action,
or audit and [Link] the law specifically requires an LOA and RMO No.
32-2005 requires the conversion of the previously issued LN to an LOA, the absence
thereof cannot be simply swept under the rug, as the CIR would have it. In fact,
RevenueMemorandum Circular No. 40-2003 considers an LN as a notice of audit or
investigation only for the purpose of disqualifying the taxpayer from amending his
returns. The revenue officers not having authority to examine MEDICARDin the first
place, the assessment issued by the CIR is inescapably void.

2. No. The VAT is a tax on the value added by the performance of the service by the
taxpayer. It is, thus, this service and the value charged thereof by the taxpayer that is

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taxable under the [Link] authorized by the Commissioner of Internal Revenue
(CIR) himself or by his duly authorized representative, through a Letter of Authority
(LOA), an examination of the taxpayer cannot ordinarily be undertaken. The

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circumstances contemplated under Section 6 where the taxpayer may be
assessed through best-evidence obtainable, inventory-taking, or surveillance among
others has nothing to do with the LOA. These are simply methods of examining the
taxpayer in order to arrive at the correct amount of [Link], unless undertaken
by the CIR himself or his duly authorized representatives, other tax agents may
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not validly conduct any of these kinds of examinations without prior authority.
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6. Spouses Emmanuel D. Pacquiao and Jinkee J. Pacquiao vs. The Court of Tax
Appeals and the Commissioner of Internal Revenue Supreme Court (Second
Division) G.R. No. 213394 promulgated 06 April 2016

FACTS: The case is a petition for review on certiorari of the resolutions of the
Court of Tax Appeals (CTA). In 2010, Pacquiao failed to include his US earnings in
his 2009 income tax return as well as the filling of his VAT for 2008 –2009. The
Commissioner of Internal Revenue (CIR) then authorized the Bureau of Internal
Revenue’s (BIR) to examine the tax documents of the petitioners from 1995 –2009.
Despite the petitioners’ complaints, the investigation was justified as a “fraud
investigation” under the “Run After Tax Evaders” program. After its investigation, the
CIR found the petitioners liable for deficiency in income tax and non-payment of VAT
[Link] BIR then issued the Final Decision on Disputed Assessment (FDDA) and
eventually thePreliminary Collection Letter (PCL) demanding the payment of
P2,261,217,439.92

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A petition for review was filed with the Court of Tax Appeals (CTA)arguing against
CIR’s allegations that the petitioners were guilty of fraud, collection of deficiency tax from
Jinkee, and CIR’s assessment based on the “best possible source” instead of actual

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transaction documents. In its resolution, the CTAdesisted the collection of tax
payment but instead opined that the petitioners were still required to deposit a
payment of P3,298,514, 894.35 or post a bond of P4,917,772,[Link] petitioner
then asked for partial reconsideration for the reduction of the amount to be paid which
the CTA denied hence, this petition.
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ISSUE: Whether or not the exception to Section11, RA No. 1125 is appropriate to this
case
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RULING: No. Despite the petitioners claim that CTA committed a grave abuse of
discretion for not applying the exception to Section 11 of RA No. 1125, the Court
found that it was not appropriate to the current case.

Section 11 of RA No. 1125 justifies that an appeal to the CTA from the decision of the
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CIR will not suspend the collection of payment for the sanction of one's tax liability. But,
when the CTA sees that the collection may jeopardize the interest of the
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Government and/or taxpayer, it may suspend the said collection and require either to
deposit the amount claimed or file a surety bond. Citing the cases of Avelino and
Zuleta, the petitioners believe thatCTA has ample authority to issue injunctive writ
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to restrain the collection of tax and more importantly dispense with the deposit of
the amount claimed or the filing of the required bond, whenever the method
employed by the CIR in collection of tax jeopardizes the interests of the taxpayers for
being patently in violation of the law

In relation to the current case, the Court found no sufficient basis to determine
whether the dispensation of the required cash deposit or bond is appropriate. The
alleged illegality of the methods used by the CTA is not clearly evident in the current
case. Though it may be true, the determination whether the petitioners’ case falls
within the exception of Section 11, RA No. 1125 cannot be determined at this point.
The CTA should have conducted a preliminary hearing and received evidence, which it
did not,so it could have properly determined if the dispensation of the required cash
deposit or bond is appropriate to this case.
7. Republic of the Philippines represented by the Bureau of Internal Revenue vs.
First Gas Power Corporation Supreme Court (First Division) G.R. No. 214933,
promulgated 15 February 2022

FACTS: On October 24, 2002, First Gas received a Letter of Authority from the Bureau
of Internal Revenue (BIR), authorizing the examination of its books for all revenue taxes
for the taxable years 2000 and 2001. Subsequently, on September 30, 2003, the
company was notified to attend an informal conference. On March 11, 2004, First Gas
received Preliminary Assessment Notices (PANs) for deficiency income taxes and
penalties amounting to ₱84.57 million for 2000, ₱97.99 million for 2001, and ₱4.67
million in late payment penalties.

After filing a preliminary reply, First Gas received Final Assessment Notices (FANs) and
Formal Letters of Demand dated July 19, 2004, which reduced the assessments to
₱37.1 million and ₱82.36 million for the years 2000 and 2001 respectively, while the
penalties remained unchanged. These assessments stemmed from alleged unreported

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income from electricity sales and foreign investments in 2000, and disallowed interest
and compensation expenses in 2001, as well as late payments of withholding and excise
taxes.

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Three waivers of the statute of limitations were executed between April and August 2004
by the BIR’s Celia C. King. On October 5, 2004, First Gas filed a protest letter, which
went unanswered, prompting the company to file a Petition for Review with the Court of
Tax Appeals (CTA) on June 30, 2005. On September 24, 2012, the CTA Third Division
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granted the petition and canceled all tax assessments. The BIR’s motions for
reconsideration and subsequent appeal to the CTA En Banc were denied, with final
rulings issued on May 12 and October 7, 2014, affirming that the assessments were
invalid and unenforceable.
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ISSUE: Whether the deficiency tax assessments for taxable years 2000 and 2001 issued
by petitioner against respondent are valid.

RULING: In this case, the Court of Tax Appeals (CTA) En Banc affirmed the cancellation
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of the Final Assessment Notices (FANs) and Formal Letters of Demand issued by the
Bureau of Internal Revenue (BIR) against First Gas for deficiency income taxes and
or

penalties for the taxable years 2000 and 2001, declaring them invalid. For 2000, the CTA
ruled that the assessment was issued beyond the three-year prescriptive period under
Section 203 of the NIRC, as the waivers meant to extend the period were defective due
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to the absence of the date of acceptance by the BIR. The Court emphasized that such a
defect rendered the waivers void, citing established jurisprudence and the mandatory
procedural requirements under RMO 20-90 and RDAO 05-01. The BIR’s argument that
the date of notarization should be presumed as the date of acceptance was rejected, as
was its claim that First Gas was estopped from questioning the waivers. The Court
reiterated that the doctrine of estoppel cannot override clear statutory limitations,
especially when procedural safeguards are not followed. Furthermore, the CTA correctly
entertained the issue of prescription even though it was raised for the first time on
appeal, citing jurisprudence that allows courts to consider such matters when necessary
for a just resolution. As for the 2001 assessments, the Court also found them invalid
because they failed to specify a definite due date for payment, a requirement for the
validity of a FAN, as established in CIR v. Fitness By Design, Inc. Without a clear and
enforceable demand, the assessments lacked legal effect. Thus, both the 2000 and
2001 assessments were declared void, and the CTA’s cancellation of the tax liabilities
was upheld.
8. La Flor Dela Isabela, Inc. vs. Commissioner of Internal Revenue G.R. No.
202105, promulgated 28 April 2021

FACTS: On September 6, 2000, the CIR issued a Letter of Authority (LOA) for the
examination of La
Flor's books of account for "all internal revenue taxes for the period January 1, 1999 to
December 31,1999. In connection thereto, La Flor executed five waivers of the statute of
limitations to extend the CIR's period to assess and collect the deficiency taxes, to wit:
a. First Waiver dated May 28, 2002 to expire on December 1, 2002;
b. Second Waiver dated October 2, 2002 effective until June 30, 2003. The
waiver was
received by the CIR on the same day but was notarized only on November 4,
2002;
c. Third Waiver dated April 11, 2003 which was effective until December 31,
2003. The said Waiver was notarized on the same day but was submitted to the
CIR's Large Taxpayers Audit and Investigation Division (LTAID) II only on April

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14, 2003. It was signed by Assistant Commissioner for LTAlD II Edwin R Abella;
d. Fourth Waiver dated January 6, 2004 effective until December 31, 2004; and
e. Fifth and final Waiver on November 4, 2004 effective until June 30, 2005.

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On November 23, 2007, the La Flor received an undated Warrant of Distraint and/or
Levy (WDL). La Flor argues that the waivers were null and void and thus did not toll the
running of the prescriptive period for the CIR to make the assessment.
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ISSUE: Whether or not the waivers of Flor are valid

RULING: No. The waivers subject of this case failed to strictly comply with the
requirements under the law.
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First, the first and fourth waivers executed on May 28, 2002 and January 6, 2004,
respectively, failed to specify the date of acceptance by the CIR or his duly authorized
representative for the purpose of determining whether the said waivers were validly
accepted before the expiration of the original three-year period and the period agreed
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upon in case of subsequent agreement.

or

Second, all five waivers were signed by Cesar C. Maranan (Maranan), the Accounting
Manager of La Flor. Section 25 of Batas Pambansa Blg. 68, also known as The
Corporation Code of the Philippines, states that the corporate officers of a stock
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corporation are the president, secretary, treasurer, or any other officers as may be
provided for in the by-laws. No notarized written authority was attached to the waivers
authorizing Maranan to sign the waivers for and on behalf of La Flor. Neither was there
any evidence showing that Maranan was among the responsible officials of La Flor
authorized by its by-laws to execute a waiver.

Third, even assuming that the first three waivers were validly executed and that Maranan
had authority to sign the waivers on behalf of La Flor, the fourth Waiver was executed
and notarized only on January 6, 2004, clearly beyond the expiry of the third waiver on
December 31, 2003. The fourth waiver did not also indicate the date of acceptance by
the CIR or his duly authorized representative. It bears noting that both the execution and
the acceptance of the subsequent waiver should be made before the expiration of the
period of prescription or before the lapse of the period agreed upon in the prior or
preceding waiver. Patently, the fourth Waiver was executed and accepted on January 6,
2004, or beyond the period agreed upon by La Flor and the CIR in the third Waiver, i.e.
until December 31, 2003.

Consequently, with the nullity of the fourth waiver, the execution and acceptance of the
fifth waiver on November 4, 2004 were not valid since there was no more period to
extend for which the CIR could assess La Flor's internal revenue taxes for taxable year
1999. Section 222(b) of the NIRC is explicit that the period agreed upon may be
extended by subsequent written agreement made before the expiration of the period
previously agreed upon.

Hence, considering the foregoing defects in the waivers executed by the parties, the
periods for the CIR to assess or collect the alleged deficiency taxes were not extended.
The period within which the CIR could assess the internal revenue taxes of La Flor had
already prescribed.

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9. Asian Transmission Corporation vs. Commissioner of Internal Revenue,
Supreme Court (Second Division) [Link]. 230861, promulgated 14 February 2022

FACTS: The CIR’s right to assess Asian Transmission Corporation (ATC) for deficiency
taxes was due to prescribe in the first quarter of 2006. However, the execution of eight
Waivers of the Defense of Prescription under the Statute of Limitations of the Tax Code
(Waivers), through Roderick M. Tan, the Vice President for Personnel and Legal Affairs
of ATC, had consented to extend the BIR's investigation period and the CIR's
assessment period until December 31, 2018. Consequently, this allowed the CIR to
serve a FLD on July 15, 2008 assessing ATC for deficiency taxes.

ISSUE: Has the CIR’s right to assess already prescribed?

RULING: No.
The following are the defects found in the Waivers:
a. The notarization of the Waivers was not in accordance with the 2004 Rules on

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Notarial Practice;
b. Several waivers clearly failed to indicate the date of acceptance by the BIR;
c. The Waivers were not signed by the proper revenue officer; and

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d. The Waivers failed to specify the type of tax and the amount of tax due.

In this case, both parties were at fault. On one hand, the BIR failed to observe the proper
procedure in the execution of a valid waiver, as prescribed by Revenue Delegation
Authority Order No. (RDAO) 05-01. However, ATC was also remiss in its responsibility of
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preparing the waiver prior to submission to and filing before the BIR. Hence, pursuant to
the equitable principles of in pari delicto, unclean hands, and estoppel should be applied.

Moreover, although the alleged defects caused by the BIR outnumber the sole defect
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caused by ATC, if a waiver suffers from defects on account of both parties, the waiver's
validity in relation to the timeliness of the CIR's subsequent issuance of a tax
assessment is not determined by a mere plurality of the defects committed between the
BIR and the taxpayer. That ATC acquiesced to the BIR's extended investigation and
failed to assail the Waivers' validity at the earliest opportunity gives rise to estoppel.
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Moreover, ATC's belated attempt to cast doubt over the Waivers' validity could only be
interpreted as a mere afterthought to resist possible tax liability
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10. Commissioner of Internal Revenue v. Unioil Corp., [Link]. 204405, August 04,
2021

FACTS: On January26, 2009, Unioil Corporation received a Formal Letterof Demand

(FLD) and Final Assessment Notice (FAN) finding it liable for deficiency withholding tax
on compensation and deficiency expanded withholding tax for the year ending
December 31, 2005. Unioil filed its protest to the FAN on February 25, 2009, and
submitted its supporting documents on April 24, 2009.

Thereafter, Unioil filed a petition for review on November 20, 2009, considering that the
CIR failed to act on its protest and the 180-day period had already expired. Unioil
contends that the FAN issues on January 26, 2009, is null and void for being issued
beyond the three-year prescriptive period, and that the FAN failed to appraise Unioil of
the specific provision of the law or rules and regulations upon which assessments were
based.

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Moreover, Unioil contends that it did not receive Preliminary Assessment Notice (PAN)
prior to the issuance of the FAN,contrary to the procedure outlined in Revenue
Regulations No. 12-99.

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ISSUE: [Link] a PAN was served to Unioil prior to the issuance of the FA
[Link] the assessment against Unioil already prescribed
[Link] the FLD and the FAN issued by the VIR are valid?
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RULING: [Link] denied receiving the PAN, thus, it is incumbent upon the CIR to
prove the Unioil receive the assessment notice by contrary evidence. Here, the CIR
offered a draft PAN and a PAN dated November 27, 2008, to establish that a PAN was
issued in compliance with the existing revenue issuances. However, it failed to show that
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they were sent to Unioil. No other documentary or testimonial evidence was submitted
by the CIR to disprove Unioil’s alleged non-receipt of the [Link], the court concludes
that no PAN was issued.

The CIR’s negligence in their power and duty to properly assess taxes is palpable in this
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case. Ultimately, void assessment bears no valid fruit. Tax collection must be preceded
by a valid assessment to allow the taxpayer to protest thea ssessment, present their
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case, and adduce supporting evidence. Without complying with the unequivocal
mandate of first informing the taxpayer of the government's claim,therecanbeno
deprivation of property,because no effective protest can be made.
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[Link]. Sec. 203 of the Tax Code provides that internal revenue taxes shall be assessed
within 3 years after the last day prescribed by law for the filing of the return. From
January 14, 2009, (issuance of FLD and FAN which was only received by Unioil on
January 26, 2009) the three-year prescriptive period reckoned from the deadline set by
lay for the filing of the return, assessment of the January to November 2005, suffice to
state that the assessment has likewise prescribed.

[Link] FLD and FAN are void for failure to state the factual and legal bases for the
assessment. In this case, the CIR only routinely assessed Unioil for deficiency
withholding tax on compensation and expanded withholding tax and went through just
the motions without due consideration. This is apparent from the haste in which the FLD
and the FAN were issued on January 13, 2009, to ostensibly be at the three-year
prescriptive period set after January 15, 2009. Moreover, Sec. 228 of the Tax Code and
its IRR mandate the contents for an assessment: “the tax payer shall be informed in
writing of the law and the facts on which the assessment is made; otherwise, the legal
assessment shall be void.

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11. Commissioner of Internal Revenue v. Bank of the Philippine Islands Supreme
Court Second Division G.R. No. 227049 promulgated 16 September 2020

FACTS: Through a letter dated May 6, 1991, the CIR sent Assessment Notices to
Citytrust Banking Corporation in connection with its deficiency of internal revenue taxes
for the year 1986.

The assessments came after Citytrust execution of three Waivers of the Statute of
Limitations under the Tax Code and protested the assessments. In the interim, the CIR,
in a letter dated February 5, 1992, demanded the payment of the subject deficiency
taxes within 10 days from the receipt thereof.

Meanwhile, on October 4, 1996, Citytrust and BPI entered into a merger agreement
wherein the latter emerged as the surviving corporation. Subsequently, the CIR sought to
collect the above-mentioned tax liabilities and issued a Warrant of Distraint and/or Levy
on November 4, 2011, against BPI>

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BPI Assailed the November 2011 Warrant before the CTA through a petition for review
asking the tax court to suspend collection of the alleged deficiency taxes, cancel the

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November 2011 Warrant, and enjoin the CIR from further implementing it. It also prayed
for the CTA to declare the assessments as prescribed and cancel the related
assessments. The OSG argued that CTA did not acquire jurisdiction over BPI’s petition,
having been filed out of time. According to OSG, the February 5, 1992 letter was a “final
decision” within 30 days from receipt thereof rendered the tax assessment final,
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executory, and unappealable.

ISSUE: Whether the CTA acquired jurisdiction over the petition of the BPI
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RULING: Yes, the CTA properly exercised its jurisdiction over BPI’s petition for review.
BPI did not come to question any final decision issued in connection with Citytrust’s
assessment. They went before the CTA primarily to assail the November 2011 Warrant’s
issuance and implementation. To be sure, the issue for the CTA to resolve was the
propriety not of any assessment but of a tax collection measure implemented against
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BPI.
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The law expressly vests the CTA the authority to take cognizance of “other matters”
arising from the Tax Code and other laws administered by the BIR, which necessarily
includes rules, regulations, and measures on the collection of tax. Tax collection is part
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and parcel of the CIR’s power to make assessments and prescribe additional
requirements for tax administration and enforcement.
12. Consolidated Cases of Commissioner of Internal Revenue vs. San Miguel
Corporation and San Miguel Corporation vs. Commissioner of Internal Revenue
Supreme Court Second Division GR Nos. 180740 ans 180910, November 11, 2019

FACTS: January 1, 1997: Republic Act (RA) No. 8240 took effect adopting a specific tax
system instead of the ad valorem tax system imposed on, among others, fermented
liquor. As a result, fermented liquors were specifically subjected to excise taxes in
accordance to the schedule in Section 140 of RA 8240 (renumbered to Section 143
under RA 8424)

December 16, 1999: Secretary of Finance, upon recommendation of the CIR, issued RR
No. 17-99 to implement a 12% increase on excise tax, among others, fermented liquors
by January 1, 2000.

January 10, 2003: SMC filed a claim for tax refund or credit of excise tax it paid on its
Red Horse Beer product from January 11, 2001 to December 31, 2000 in the amount of

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94,494,801.96 php equivalent to the difference before the effectivity of RA 8240 and the
new rate imposed under Section 145 of RA 8424 .

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Without waiting for the CIR to act on its administrative claim for tax refund or credit, SMC
filed a Petition for Review before the CTA

CTA 1st Division: Approved SMC’s claim for tax refund or credit for its excess excise tax
payment from March 1, 2001 to December 31, 2002 in the amount of 88,090,531.56
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(excluded prescribed claim for January to February 2001).

SMC filed a Motion for Reconsideration (MR) for the prescribed claim for January to
February 2001 arguing that under the Advance Payment or Deposit scheme authorized
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by Section 11.1(2)(b) of RR No. 2-97, the filing of the returns and supporting documents
may be submitted even a week after the actual removals.

CTA 1st Division denied MR: Though the due date of tax payment is not always the
reckoning point for purposes of prescription, SMC failed to present its excise tax returns
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for January 1, 2001 to February 28, 2001 to prove the dates they were actually filed.
CIR and SMC filed a Petition for Review with the CTA En Banc
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CTA en Banc: Denied since SMC claim is barred by prescription based on Section 229
and 130(A)(2) of the Tax Reform Act of 1997 since it failed to present the proof of the
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exact amount it paid for the period February 1 to 23, 2001.

CIR filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court with the
CTA En Banc

ISSUE: W/N SMC is entitled claim has prescribed

RULING: Yes. In CIR v. Meralco (G.R. No. 181459, June 9, 2014), the court ruled that
the two (2)-year prescriptive period under Section 229 of the Tax Reform Act of 1997
applies and that the six (6)-year period for actions based on solutio indebiti under Art.
1145 of the Civil Code. The first element of solution indebiti where payment is made
when there exists no binding relation between the payor, who has no duty to pay, and
the person who received the payment is lacking. Moreover, it is inapplicable since the
Tax Code is a special law which explicitly provides for a mandatory period for claiming a
refund for taxes erroneously paid. Generalia specialibus non derogant.
Neither can the claim be excepted from the two (2)-year prescription period based on
equity considerations when there is clear statutory law governing the matter.
It is a basic rule of evidence that each party must prove its affirmative allegation. The
burden rests upon SMC to present evidence that its prescribed returns for the excise
taxes on its Red Horse beer product for February 2001 were actually filed after the
removal of the said products from the place of production or later than February 24,
2001. Yet, it failed to present a definitive computation of the excise taxes on its Red
Horse Beer product which it had paid from February 24 to 28, 2001 and which would still
have been within the prescriptive period.

Only questions of law may be raised under Rule 45 of the Rules of Court. The
sufficiency of a claimant’s evidence and the determination of the amount of refund are
questions of fact which are for the judicious determination by the CTA of the evidence on
record. Rule finds greater significance with respect to the findings of specialized courts
such as the CTA because of the very nature of its functions, which is dedicated
exclusively to the resolution of tax problems and has accordingly developed an expertise

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on the subject, and consequently its conclusions are not lightly set aside unless there
has been an abuse or improvident exercise of authority.

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13. CIR vs Liquigaz Philippines Corporation GR. No. 215534 and GR No. 215557,
April 18, 2016

FACTS: Liquigaz Philippines Corporation received a Letter of Authority from the BIR in
2006 authorizing an investigation of its 2005 tax liabilities. In April 2008, it received a
Notice of Informal Conference, followed by a Preliminary Assessment Notice (PAN) in
May and a Formal Letter of Demand (FLD)/Final Assessment Notice (FAN) in June,
showing a total withholding tax deficiency of ₱24.33 million. Liquigaz protested the FLD
in July 2008. Later that month, it received a Final Decision on Disputed Assessment
(FDDA), which lowered the assessed deficiency to ₱22.38 million.

In 2012, the Court of Tax Appeals (CTA) Division partially granted Liquigaz’s petition by
canceling the assessments on Expanded Withholding Tax (EWT) and Fringe Benefits
Tax (FBT), but upheld the assessment on Withholding Tax on Compensation (WTC). The
CTA En Banc affirmed this decision. It emphasized that the Final Decision on Disputed
Assessment (FDDA) must clearly state the factual and legal bases of the assessment;

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otherwise, it is void. However, the WTC assessment was still upheld.

ISSUE: Whether or not the failure of the FDDA to state the facts and law on which it is

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based renders the assessment void

RULING: YES. The Supreme Court agreed with the CTA that the FDDA was void for
failure to comply with the requirements that FDDA shall state the facts and the law on
which the decision is based. While it provided for the legal basis for the assessment, it
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fell short of informing the taxpayer of the factual bases thereof. As the amounts in the
FDDA are different from those in the FAN, it becomes even more imperative that the
FDDA contains details of the discrepancy. Failure to do so would deprive the taxpayer
adequate opportunity to prepare an intelligent appeal.
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The Court, however, made a distinction between an assessment and a decision.

According to the Court, the invalidity of one does not necessarily result in the invalidity of
the other –unless the law or regulations otherwise provide. The nullification of the FDDA
does not extend to the nullification of the entire assessment. An FDDA that does not
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inform the taxpayer in writing of the facts and law on which it is based renders the
decision void. It is as if there was no decision rendered. It is tantamount to a denial by
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inaction, which may still be appealed before the CTA and the assessment evaluated on
the bases of the available evidence and documents. The merits of the EWT and FBT
assessment should have been discussed and not merely brushed aside on account of
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the void FDDA. To recapitulate, a “decision” differs from an “assessment” and failure of
the FDDA to state the facts and law on which it is based renders the decision void –but
not necessarily the assessment
14. Energy Development Corporation vs. Commissioner of Internal Revenue GR
No. 203367 March 17, 2021.

FACTS: On March 30, 2009, Energy Development Corporation (EDC) filed an

administrative claim for tax credit or refund of its unutilized input VAT for its zero-rated
sales amounting for the taxable year 2007. On April 24, 2009, EDC filed a petition for
review with the CTA.

On October 6, 2010, the Supreme Court promulgated the Aichi Decision which
delineated the prescriptive periods for filing separate administrative and judicial claims
for input VAT refund or tax credit of the then Section 112 (A) and (C) of Tax Code. Then,
the CIR filed a Motion to Dismiss EDC's petition for review citing EDC's failure to comply
with the prescriptive periods under Section 112 (C) of the Tax Code. The CIR alleged
that EDC did not wait for (a) the CIR's action on its administrative claim for input VAT tax
credit or refund before appealing to the CTA within 30 days, and (b) in the alternative of
the CIR's inaction, reckon the 30-day period to appeal from the expiration of 120 days

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from the date of the submission of complete documents to support the administrative
claim under Section 112(A).

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The CTA Division, citing Aichi, explained that after the filing of the administrative claim,
the taxpayer must wait for the decision of the CIR thereon or the lapse of the 120-day
period from the submission of the complete documents in support thereof before filing a
petition for review with the CTA. In both instances, the filing of the judicial claim must be
made within 30 days of either reckoning event or period. Hence, dismissed the petition
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for review of EDC.

Subsequently, the CTA En Banc ruled that while EDC timely filed its administrative claim
for input VAT tax credit or refund under Section 112 (A) of the Tax Code, EDC, however,
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prematurely filed its judicial claim or the appeal to the CTA when it did not comply with
the indispensable requirement for the taxpayer to await the action or inaction of the CIR
within the 120-day period as prescribed in Section 112 (C) and that the dismissal of
EDC's petition for review was correct but ought to have been based on lack of cause of
action.
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ISSUE: Whether or not the Aichi case retroactively applicable to cases already filed or
or

pending in courts prior to its promulgation

RULING: Yes. The subject matter is moot. Subsections (A) and (C) of Section 112 of the
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Tax Code speak of different periods within which different claims ought to be made.
Although these subsections are not specifically designated as either an "administrative
claim" or a "judicial claim," the classification of claims and their distinct and separate
prescriptive periods can be gleaned from the wordings thereof. As held in Aichi, there is
nothing in Section 112 of the Tax Code which sanctions the simultaneous filing of
administrative and judicial claims, and the filing of the judicial claim prior to the action of
the CIR or the lapse of the 120-day period within which the CIR is required to act on the
administrative claim. Section 112 (A) simply cannot be invoked as the prescriptive period
for both administrative and judicial claims of input VAT tax refund or credit with the CIR.
The taxpayer claiming input VAT tax credit or refund should not ignore subsection (C) on
judicial claims.

Clearly, in this case, EDC did not comply with Section 112 (C) of the Tax Code relative to
the filing of its judicial claim before the CTA. Thus, even without dwelling on the
applicability of Aichi, EDC's premature judicial claim has no leg to stand on. However,
applying the exception of the San Roque case that all taxpayers can rely on BIR Ruling
No. DA-489-03, which states that taxpayer-claimant need not wait for the lapse of the
120-day period before it could seek judicial relief with the CTA by way of Petition for
Review, from the time of its issuance on December 10, 2003 up to its reversal by this in
Aichi on October 6, 2010. EDC's petition for review before the CTA which was filed on
April 24, 2009 should be reinstated since the filing of its administrative and judicial claims
fell within the 2-year period.

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15. Macario Lim Gaw, Jr. Vs. Commissioner of Internal Revenue GR No. 222837

FACTS: Sometime in November 2007, petitioner acquired six (6) parcels of land. From
April to June 2008, petitioner acquired four (4)more parcels of land. petitioner applied
for and was granted an STL Facility from BDO. It entered into an Agreement to Sell
with Azure Corporation for the sale and transfer of real properties to a joint
venture company, which at the time was still to be formed and incorporated. Then
on July 11, 2008, petitioner conveyed the 10 parcels of land to Eagle I Landholdings, Inc.
(Eagle I), the joint venture company referred to in the Agreement to Sell. In accordance
with the One Time Transactions (ONETT) Computation sheets, petitioner paid Capital
Gains Tax amounting to P505,177,213.81 and Documentary Stamp Tax amounting
to P330,390.00. BIR-RDO No. 52 issued the corresponding Certificates Authorizing
Registration and Tax Clearance Certificates.

Two years later, CIR opined that petitioner was not liable for the 6% capital gains tax but
for the 32% regular income tax and 12% value added tax, on the theory that the

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properties petitioner sold were ordinary assets and not capital assets. Further,
respondent found petitioner to have misdeclared his income, misclassified the properties
and used multiple tax identification numbers to avoid being assessed the correct amount

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of taxes.

Thus, on August 25, 2010, respondent issued a Letter of Authority to commence

investigation on petitioner's tax [Link] next day, respondent filed before the
Department of Justice (DOJ) a Joint Complaint Affidavit for tax evasion against petitioner
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for violation of Sections 254 and 255 of the NIRC.

ISSUE: Whether or not BIR can issue a final decision on a disputed assessment while a
tax evasion case is already pending.
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RULING: [Link] Sections 254 and 255 of the NIRC, the government can file a
criminal case for tax evasion against any taxpayer who willfully attempts in any manner
to evade or defeat any tax imposed in the tax code or the payment thereof. The crime of
tax evasion is committed by the mere fact that the taxpayer knowingly and willfully filed a
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fraudulent return with intent to evade and defeat a part or all of the tax. It is therefore not
required that a tax deficiency assessment must first be issued for a criminal prosecution
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for tax evasion to prosper.

While the tax evasion case is pending, the BIR is not precluded from issuing a final
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decision on a disputed assessment, such as what happened in this case. In order to

prevent the assessment from becoming final, executory and demandable, Section 9 of
R.A. No. 9282 allows the taxpayer to file with the CTA, a Petition for Review
within 30 days from receipt of the decision or the inaction of the respondent.

The tax evasion case filed by the government against the erring taxpayer has, for its
purpose, the imposition of criminal liability on the latter. While the Petition for Review
filed by the petitioner was aimed to question the FDDA and to prevent it from becoming
final.