TAX REMEDIES China Banking Corp. vs.
CIR
Disclaimer: All the cases mentioned here are those that were (1)
not skipped during recitation; (2) was reiterated by Atty. Acosta to
re-read; and/or (3) was lectured by her. So, if may kulang, I’m
sorry hehe yan lang nainote ko.
*** - Very important
* - Can be found in Atty.’s PowerPoint
*** CIR vs. Hantex Trading Co., Inc.,
General rule is that all presumptions are in favor of tax
assessments. The same is presumed correct and made in good
faith. The taxpayer has the duty to prove otherwise. However, the
exception is when the assessment is made without any foundation,
or is a naked assessment. Where the records of the taxpayer are
manifestly inaccurate and incomplete, the Commissioner may look
into other sources of information to establish income made by the
taxpayer during the years in question. The Government is entitled
to use the original records rather than to be forced to accept
purported copies which present risk of tampering.
CIR vs. Enjay Hotels, Inc., CTA
The current interest is 12%, and that deficiency interest and
delinquency interest may not be used simultaneously.
CIR vs. Next Mobile, Inc.
Doctrine of in pari delicto – Although the parties are in pari delicto,
the Court may interfere and grant relief at the suit of one of them,
where public policy requires its intervention, even though the result
may be that a bene t will be derived by one party who is in equal
guilt with the other.
Philippine Journalists, Inc. vs. CIR
Since the petitioner did not file a request for reinvestigation or
reconsideration within thirty (30) days, the assessment notices
became final and unappealable. A waiver of the statute of
limitations under the NIRC, to a certain extent, is a derogation of
the taxpayers' right to security against prolonged and unscrupulous
investigations and must therefore be carefully and strictly
construed. The waiver of the statute of limitations is not a waiver
of the right to invoke the defense of prescription as erroneously
held by the Court of Appeals. It is an agreement between the
taxpayer and the BIR that the period to issue an assessment and
collect the taxes due is extended to a date certain. The waiver does
not mean that the taxpayer relinquishes the right to invoke
prescription unequivocally particularly where the language of the
document is equivocal. For the purpose of safeguarding taxpayers
from any unreasonable examination, investigation or assessment,
our tax law provides a statute of limitations in the collection of
taxes. Thus, the law on prescription, being a remedial measure,
should be liberally construed in order to afford such protection.
As a rule, the failure to raise the defense of prescription at the
administrative level prevents the taxpayer from raising it at the
appeal stage. This rule, however, is not absolute. BPI thus provides
an exception to the rule against raising the defense of prescription
for the first time on appeal: the exception arises when the
pleadings or the evidence on record show that the claim is barred
by prescription. In this case, the fact that the claim of the
government is time-barred is a matter of record. As can be seen
from the previous discussion on the determination of the
prescription of the right of the government to claim deficiency DST,
the conclusion that prescription has set in was arrived at using the
evidence on record.
CIR vs. Standard Chartered Bank
he law prescribing a limitation of actions for the collection of the
income tax is beneficial both to the Government and to its citizens;
to the Government because tax officers would be obliged to act
properly in the making of the assessment, and to citizens because
after the lapse of the period of prescription, citizens would have a
feeling of security against unscrupulous tax agents who may find
an excuse to inspect the books of taxpayers, not to determine the
latter's real liability, but to take advantage of every opportunity to
molest peaceful, law-abiding citizens. Without such a legal defense,
taxpayers would furthermore be under obligation to always keep
their books and keep them open for inspection subject to
harassment by unscrupulous tax agents. The law on prescription
being a remedial measure should be interpreted in a way conducive
to bringing about the beneficent purpose of affording protection to
the taxpayer within the contemplation of the Commission which
recommends the approval of the law.
Aznar vs. CTA
The ordinary period of prescription of 5 years within which to
assess tax liabilities under Sec. 331 of the NIRC should be
applicable to normal circumstances, but whenever the government
is placed at a disadvantage so as to prevent its lawful agents from
proper assessment of tax liabilities due to false returns, fraudulent
return intended to evade payment of tax or failure to le returns,
the period of ten years provided for in Sec. 332 (a) NIRC, from the
time of the discovery of the falsity, fraud or omission even seems
to be inadequate and should be the one enforced. There being
undoubtedly false tax returns in this case, We affirm the conclusion
of the respondent Court of Tax Appeals that Sec. 332 (a) of the
NIRC should apply and that the period of ten years within which to
assess petitioner's tax liability had not expired at the time said
assessment was made.
* CIR vs. BASF Coating
The failure of BIR to note where to send PAN and FAN should not
be taken against BASF. When the deficiency assessments were sent
to old address despite proper notification of new address, the
running of 3-year period to assess was not suspended.
Murallos.2018 1
 Samar-I Electric Coop. vs. CIR
it was petitioner's substantial underdeclaration of withholding taxes
in the amount of P2,690,850.91 which constituted the "falsity" in
the subject returns — giving respondent the benefit of the period
under Section 222 of the NIRC of 1997 to assess the correct
amount of tax "at any time within ten (10) years after the discovery
of the falsity, fraud or omission."
CIR vs. Philippine Daily Inquirer
Fraud is never imputed. The Court stated that it will not sustain
findings of fraud upon circumstances which, at most, create only
suspicion. 25 The Court added that the mere understatement of a
tax is not itself proof of fraud for the purpose of tax evasion. Thus,
while the ling of a fraudulent return necessarily implies that the act
of the taxpayer was intentional and done with intent to evade the
taxes due, the filing of a false return can be intentional or due to
honest mistake.
CIR vs. GJM Philippines Manufacturing, Inc.
To prove the fact of mailing, it is essential to present the registry
receipt issued by the Bureau of Posts or the Registry return card
which would have been signed by the taxpayer or its authorized
representative. And if said documents could not be located, the CIR
should have, at the very least, submitted to the Court a certi cation
issued by the Bureau of Posts and any other pertinent document
executed with its intervention. The Court does not put much
credence to the self-serving documentations made by the BIR
personnel, especially if they are unsupported by substantial
evidence establishing the fact of mailing. While it is true that an
assessment is made when the notice is sent within the prescribed
period, the release, mailing, or sending of the same must still be
clearly and satisfactorily proved. Mere notations made without the
taxpayer's intervention, notice or control, and without adequate
supporting evidence cannot suf ce. Otherwise, the defenseless
taxpayer would be unreasonably placed at the mercy of the
revenue offices.
Barcelon Roxas Securities, Inc. vs. CIR
The general rule is when a mail matter is sent by registered mail,
there exists a presumption that it was received in the regular
course of mail. However, exception states that when there is direct
denial of the receipt, the burden to prove such is shifted to the BIR.
* CIR vs. Metro Star Superama, Inc.
The sending of a PAN to taxpayer to inform him of the assessment
made is part of the “due process requirement in the issuance of a
deficiency tax assessment,” the absence of which renders nugatory
any assessment made by the tax authorities. The due process
requirement in the issuance of assessments is prescribed in RR No.
12-99. These are mandatory.
*** Lascona Land Co., Inc. vs. CIR
Delinquent taxes may be collected when the 180-day period lapses
and taxpayer failed to appeal to CTA within 30 days from date of
receipt of denial of protest or from lapse of 180-day period
PAGCOR vs. BIR
CIR from RD – There must be a complete or partial denial, it cannot
be such if it is an inaction. If there is inaction, go to the Court of
Tax Appeals.
Silkair (Singapore) vs. CIR
The proper party to question, or seek a refund of, an indirect tax
is the statutory taxpayer, the person on whom the tax is imposed
by law and who paid the same even if he shifts the burden thereof
to another. Unless otherwise specifically allowed, the return shall
be led and the excise tax paid by the manufacturer or producer
before removal of domestic products from place of production.
Diaego Philippines, Inc. vs. CIR
The person entitled to claim a tax refund is the statutory taxpayer
or the person liable for or subject to tax.
*** University Physicians Services, Inc. vs. CIR
This is one of the exceptions under the PAN. Kung na-carry over
mo na, bakit ka pa magrerefund. Such remedy is also not
revocable. Pag refund or tax credit, pwede. Pero kapag carry over
hindi.
Metrobank vs. CIR
Final withholding taxes are considered as full and final payment of
the income tax due, and thus, are not subject to any adjustments.
Thus, the two (2)-year prescriptive period commences to run from
the time the refund is ascertained, and not upon the discovery by
the taxpayer of the erroneous or excessive payment of taxes.
* Aichi vs. CIR
Period within which refund or tax credit of input taxes shall be
made.-- In proper cases, the CIR shall grant a refund or issue the
tax credit certificate for creditable input taxes within 120 days from
the date of submission of complete documents in support of the
application filed. In case of full or partial denial of the claim for tax
refund or tax credit, or the failure on the part of the CIR to act on
the application within the period prescribed above, the taxpayer
affected may, within 30 days from the receipt of the decision
denying the claim or after the expiration of the 120 day period,
appeal the decision or the unacted claim with the CTA. Claim for
tax credit or refund filed within the two-year period from close of
taxable quarter BUT NOT WITHIN 30 DAYS AFTER THE PERIOD
PRESCRIBED IN SEC 112, NIRC IS PREMATURE.
* Medicard case
An LOA is the authority given to the appropriate revenue officer
assigned to perform assessment functions. It empowers or enables
said revenue officer to examine the books of account and other
accounting records of a taxpayer for the purpose of collecting the
correct amount of tax. 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 on to the CIR himself or his duly
authorized representatives. Unless authorized by the CIR himself
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or by his duly authorized representative, through an LOA, an regulation issued by the administrative agency in the performance
examination of the taxpayer cannot ordinarily be undertaken. The of its quasi-legislative function, the regular courts have jurisdiction
requirement of authorization is not dependent on whether the to pass upon the same.
taxpayer may be required to physically open his books and financial
records but only on whether a taxpayer is being subject to Duty Free Phil. vs. BIR
examination. The enactment of R.A. No. 9282 elevated the rank of the CTA to a
collegiate court, making it a co-equal body of the CA. The SC has
Letter of Authority Letter of Notice no jurisdiction to review decisions rendered by a division of the
Not found in the NIRC and is CTA, when the exclusive appellate jurisdiction is vested in such.
Addressed to a revenue
only for the purpose of
officer – specifically required
notifying the taxpayer that a SMI-ED Technology, Inc. vs. CIR
under the NIRC before an
discrepancy is found based
examination may be had. The CTA can make an assessment as it is within its jurisdiction.
on the BIR’s RELIEF system.
Valid only for 30 days from
No limit. PAL vs. CIR
date of issue.
An evidence not presented to the BIR may be submitted to and
120 days to conduct
No limit. may even be used by the CTA because this is the first time you file
examination.
a case on a litigatory level. Had the BIR act on the protest, the BIR
would have asked for more evidence or documents. In the CTA
* Sony case
cases are new, new cases have new issues, and thus, need new
Revenue Officers went beyond the scope of their authority because evidence.
the deficiency VAT assessment they arrived at was based on
records from January to March 1998 or using the fiscal year which
Magsaysay Lines vs. CA
ended in March 31, 1998. An LOA should cover a taxable period
An appeal should be taken 15 days from notice of the ruling, award,
not exceeding one taxable year.
order, decision or judgment from the date of publication, if
publication is required for its effectivity.
JURISDICTION OF THE CTA

Liboro vs. CA
Phil. Refining Co. vs. CA
A motion for extension is allowed. However, the extension should
The Court of Tax Appeals is a highly specialized body specifically be limited only to 15 days, unless such case is an exceptional
created for the purpose of reviewing tax cases. Through its character, then the court may grant a longer period.
expertise, it is undeniably competent to determine issues. Findings
of the CTA will not be ordinarily reviewed, and is binding to the SC.
CIR vs. Wyeth Suaco
The period of prescription of action to collect a taxpayer’s
Pacquiao vs. CTA
deficiency income tax assessment is interrupted when the taxpayer
Absent any evidence and preliminary determination by the CTA, requests for a review or reconsideration of the said assessment,
the Court cannot make any factual finding and settle the issue of and starts to run again when the said request is denied.
whether the petitioners should comply with the security
requirement. The determination of whether the methods,
CIR vs. NLRC
employed by the CIR in its assessment, jeopardized the interests
The NLRC provides for the collection of delinquent taxes by any of
of a taxpayer for being patently in violation of the law is a question
the following remedies:
of fact that calls for the reception of evidence which would serve
(a) Distraint of personal property or levy of real property of
as basis. In this regard, the CTA is in a better position to initiate
the delinquent taxpayer; and
this given its time and resources. The remand of the case to the
(b) Civil or criminal action.
CTA on this question is, therefore, more sensible and proper.

Hong Kong and Shanghai Bank vs. Rafferty

Tridharma Marketing Corp. vs. CTA
Possession of movables is not necessary to the validity of the lien,
The CTA is in better position to initiate the remand of the case to
whether by contract or law. Such lien will attach upon movable
the CTA as it is more sensible and proper. The remand of questions
property even when in the hands of the purchaser.
involving suspension of collection is the proper course of action.

*** Gaw, Jr. vs. CIR

CIR vs. CTA
The crime of tax evasion is committed by the mere fact that the
While the above statute confers on the CTA jurisdiction to resolve
taxpayer knowingly and willfully led a fraudulent return with intent
tax disputes in general, this does not include cases where the
to evade and defeat a part or all of the tax. It is therefore not
constitutionality of a law or rule is challenged. Where what is
required that a tax deficiency assessment must first be issued for
assailed is the validity or constitutionality of a law, or a rule or

Murallos.2018 3
a criminal prosecution for tax evasion to prosper. 51 While the tax
evasion case is pending, the BIR is not precluded from issuing a
final decision on a disputed assessment. In order to prevent the
assessment from becoming final, executory and demandable,
Section 9 of R.A. No. 9282 allows the taxpayer to le 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 led by the
government against the erring taxpayer has, for its purpose, the
imposition of criminal liability on the latter. While the Petition for
Review led by the petitioner was aimed to question the FDDA and
to prevent it from becoming final. The stark difference between
them is glaringly apparent. As such, the Petition for Review Ad
Cautelam is not deemed instituted with the criminal case for tax
evasion.
CIR vs. JAL
The 50% surcharge or fraud penalty is imposed on a delinquent
taxpayer who willfully neglects to file the required tax return within
the period prescribed by the law, or who willfully files a false or
fraudulent tax return.
CIR vs. Covanta
Subject to certain exceptions, a taxpayer may avail of tax amnesty
by complying with documentary submissions to the BIR. Forms
needed to avail tax amnesty:
(a) Notice of availment;
(b) SALN;
(c) Tax amnesty return.
However, if the taxpayer fails to file his/her SALN or tax amnesty
return or net worth, the taxpayer shall cease to enjoy immunity.
LG Electronics vs. CIR
Cases that involve final and executory judgments are excluded
from the tax amnesty program.
REMEDIES UNDER THE LGC
*** Petron vs. Municipality of Pililla
A tax on business is distinct from the tax on the article itself. Thus,
if the imposition of tax in petroleum products contravenes a
declared national policy, it should have been expressly stated.
Pasig vs. Meralco
Unlike a city, a municipality is bereft of authority to levy franchise
tax, thus, the ordinance enacted for that purpose is void. The
conversion of the municipality into a city does not lend validity to
the void ordinance. Neither does it authorize the collection of tax
under the questioned ordinance.
*** Magtajas vs. Pryce
There is a requirement that ordinances should not contravene a
statute. Municipal Governments are only agents of the National
Government. Local councils exercise only delegated legislative
powers conferred on them by the congress as the National
Lawmaking Body. The delegate cannot be superior to the principal
or exercise powers higher than those of the latter. The tests of a
valid ordinance are well established. An ordinance must conform to
the following substantive requirements:
(1) It must not contravene the constitution or any statute.
(2) It must not be unfair or oppressive.
(3) It must not be partial or discriminatory.
(4) It must not prohibit but may regulate trade.
(5) It must be general and consistent with public policy.
(6) It must not be unreasonable.
*** Caltex vs. CBAA
Equipment and machinery, as appurtances to the gas station
building or shed, and which fixtures are necessary to the gas
station, for without them the gas station would be useless, and
which have been attached or affixed permanently to the gas station
site are taxable improvements and machinery within the meaning
of the Assessment Law and the Real Property Tax Code. It is a
familiar phenomenon to see things classed as real property for
purposes of taxation which on general principle might be
considered personal property.
*** Systems Plus vs. Caloocan City
The remedy of appeal to the Local Board of Assessment Appeals
(LBAA) is available from an adverse ruling or action of the
provincial, city, or municipal assessor in the assessment of property
who is not satisfied with the action of the provincial, city, or
municipal assessor may within 60 days from the date of receipt of
the written notice of assessment, appeal to the LBAA by filing a
petition under oath in the form prescribed for the purpose, together
with copies of the tax declarations and such affidavits or documents
submitted in support of the appeal.
***Chavez vs. Ongpin
Within 60 days from the date of receipt of the written notice of
assessment, any owner who doubts the assessment of his property
may appeal to the LBAA. In case the owner or administrator is not
satisfied with the LBAA, he may, within 30 days, appeal to the
CBAA. The decision of the CBAA shall become final and executory
after the lapse of 15 days from the date of receipt of the decision.
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