TEAM ENERGY CORPORATION, v.
 CIR Energy's failure to comply with the prescriptive periods is,
G.R. No. 197770, March 14, 2018
TAXPAYER: Team Energy is a VAT-registered entity engaged
in power generation and electricity sale to NPC under a Build,
Operate, and Transfer scheme. Team Energy filed with the
BIR an Application for Effective Zero-Rate of its supply of
electricity to the NPC, which was subsequently approved. It
later appealed before the Court of Tax Appeals its 2003 first
quarter VAT claim.
Team Energy argues that when it filed its claims for refund
with the BIR and the Court of Tax Appeals, both the
administrative and judicial claims for refund must be filed
within the two (2)-year prescriptive period, and that to deny
its claim duly proven before the CTA First Division "would
result to unjust enrichment on the part of the government."
GOVERNMENT: CIR opposed, saying that the amount claimed
by Team Energy was not properly documented, and there was
lack of proof that the claims were filed within the prescriptive
period, and the 30-day period to appeal. CTA First Division
partially granted Team Energy’s petition, excluding a specific
amount from VAT exemption for failure to submit
substantiation requirements. CTA also stated that the claims
were filed within the 2-year prescriptive period.
ISSUE: WON the CTA erred in disallowing Team Energy
Corporation's claim for tax refund on the ground of lack of
jurisdiction
HELD: No. Section 112(D) of the 1997 NIRC is clear that resort
to an appeal with the Court of Tax Appeals should be made
within 30 days either from receipt of the decision denying the
claim or the expiration of the 120-day period given to the
Commissioner to decide the claim.
In this case, Team Energy's judicial claim was filed beyond the
30-day period required. Thus, BIR had 120 days to act on the
claim. Team Energy, however, filed its appeal with the CTA
67 days late. Thus, CTA En Banc correctly denied its claim for
refund due to prescription. When Team Energy filed its
refund claim in 2004, the 1997 NIRC was already in effect,
which clearly already provided for the mandatory and
jurisdictional requirement of the 120+30-day periods.
A claim for input VAT refund or credit is construed strictly
against the taxpayer.66 Accordingly, there must be strict
compliance with the prescriptive periods and substantive
requirements set by law before a claim for tax refund or
credit may prosper.67 The mere fact that Team Energy has
proved its excess input VAT does not entitle it as a matter of
right to a tax refund or credit. The 120+30-day periods in
Section 112 is not a mere procedural technicality that can be
set aside if the claim is otherwise meritorious. It is a
mandatory and jurisdictional condition imposed by law. Team
thus, fatal to its claim.
CIR v. COVANTA ENERGY PHILIPPINE HOLDINGS, INC.,
G.R. No. 203160, January 24, 2018
TAXPAYER: CEPHI was sent Formal Letters of Demand and
Assessment Notices by the CIR for VAT, MCIT, and expanded
withholding tax (EWT) deficiencies. CEPHI thus filed formal
letters of protest which remained unacted upon. Thus, CEPHI
filed petitions before the CTA, seeking the cancellation and
withdrawal of the deficiency assessments. CEPHI also filed a
supplemental petition informing CTA that it availed of the tax
amnesty under R.A. No. 9480, together with the evidence and
documents relevant to its tax amnesty.
GOVERNMENT: The CIR was of the position that CEPHI is not
entitled to the immunities and privileges under R.A. No. 9480
because its documentary submissions failed to comply with
the requirements under the tax amnesty law.
Since tax amnesty does not extend to withholding agents
with respect to their withholding tax liabilities, the CTA
Second Division ruled that CEPHI is liable to pay the deficiency
EWT assessment, plus additional deficiency and delinquency
interest. CTA En Banc denied CIR’s appeal stating that without
any evidence that CEPHI's net worth was underdeclared by at
least 30%, there is a presumption of compliance with the
requirements of the tax amnesty law. For this reason, CEPHI
may immediately enjoy the privileges of the tax amnesty
program.
ISSUE: Whether the CTA erred in upholding the validity of the
tax amnesty availed by CEPHI.
HELD: No. CEPHI is entitled to the immunities and privileges
of the tax amnesty program upon full compliance with the
requirements of R.A. No. 9480, which governs the tax
amnesty program for national internal revenue taxes for the
taxable year 2005 and prior years. Subject to certain
exceptions, a taxpayer may avail of this program by complying
with the documentary submissions to BIR and thereafter,
paying the applicable amnesty tax.
Upon the taxpayer's full compliance with these requirements,
the taxpayer is immediately entitled to the enjoyment of the
immunities and privileges of the tax amnesty program. But
when: (a) the taxpayer fails to file a SALN and the Tax
Amnesty Return; or (b) the net worth of the taxpayer in the
SALN as of December 31, 2005 is proven to be understated to
the extent of 30% or more, the taxpayer shall cease to enjoy
these immunities and privileges.
Considering that CEPHI completed the requirements and paid
the corresponding amnesty tax, it is considered to have
totally complied with the tax amnesty program. As a matter
of course, CEPHI is entitled to the immediate enjoyment of
the immunities and privileges of the tax amnesty program.
[42]
 Nonetheless, the Court emphasizes that the immunities
and privileges granted to taxpayers under R.A. No. 9480
is not  absolute. It is subject to a resolutory condition insofar
as the taxpayers' enjoyment of the immunities and privileges
of the law is concerned. These immunities cease upon proof
that they underdeclared their net worth by 30%.
CIR v. LANCASTER PHILS., INC.,
GR No. 183408, July 12, 2017
TAXPAYER: In 1999, Lancaster's books of accounts and other
accounting records for all internal revenue taxes were
examined by BIR’s officers pursuant to a letter of authority.
BIR cited Lancaster for overstatement of its purchases for the
fiscal year April 1998 to March 1999 and disallowed the
purchases of tobacco from farmers covered by Purchase
Invoice Vouchers (PIVs).
Invoking Sections 43 and 45 of the NIRC, Lancaster argued
that the February and March 1998 purchases should not have
been disallowed. Lancaster concluded that it correctly posted
the subject purchases in the fiscal year ending March 1999 as
it was only in this year that the gross income from the crop
was realized.
Subsequently, Lancaster received from the BIR a final
assessment notice (FAN) which assessed Lancaster's
deficiency income tax amounting to P11,496,770.18, as a
consequence of the disallowance of purchases claimed for
the taxable year ending 31 March 1999. Lancaster duly
protested the FAN. There being no action taken by the CIR on
its protest, Lancaster filed on 21 August 2003 a petition for
review before the CTA Division.
GOVERNMENT: The CIR argues that the revenue officers did
not exceed their authority when, upon examination (of the
Lancaster's books of accounts and other accounting records),
they verified that Lancaster made purchases for February and
March of 1998, which purchases were not declared in the
latter’s fiscal year from 1 April 1997 to 31 March 1998.
Additionally, the CIR posits that Lancaster did not raise the
issue on the scope of authority of the revenue examiners at
any stage of the proceedings before the CTA and,
consequently, the CTA had no jurisdiction to rule on said
issue. On both counts, the CIR is mistaken.
ISSUE: WON the CTA En Banc erred in holding that
petitioner's revenue officers exceeded their authority to
investigate the period not covered by their letter of authority.
HELD: No. Under the NIRC, the jurisdiction of the CTA is not
limited only to cases which involve decisions or inactions of
the CIR on matters relating to assessments or refunds but also
includes other cases arising from the NIRC or related laws
administered by the BIR.
In connection therewith, the CIR may authorize the
examination of any taxpayer and correspondingly make an
assessment whenever necessary. The authority to make an
examination or assessment, being a matter provided for by
the NIRC, is well within the exclusive and appellate
jurisdiction of the CTA. On whether the CTA can resolve an
issue which was not raised by the parties, we rule in the
affirmative.
PROCTER & GAMBLE ASIA ., v. CIR
G.R. No. 205652, September 06, 2017
TAXPAYER: P&G filed subsequent applications to the BIR and
CTA requesting the refund or issuance of tax credit
certificates (TCCs) of its input VAT attributable to its zero-
rated sales covering the taxable periods of January 2005 to
March 2005, and April 2005 to June 2005. P&G presented
evidence to prove its entitlement for the VAT refund. The CIR,
on the other hand, submitted the case for decision based on
the pleadings, as the claim for refund was still pending before
the BIR.
The CTA dismissed P&G's judicial claim for having been
prematurely filed; for failure to observe the 120-day period
granted to the CIR. Thus, CTA did not acquire jurisdiction over
the same.
P&G avers that its judicial claims were filed with the CTA
before the adoption of the Aichi doctrine. Accordingly, its
claims were deemed timely filed. P&G further contends that
the CTA En Banc gravely erred in applying the Aichi doctrine
retroactively.
Lastly, P&G claims that assuming, without conceding, that its
judicial claims were prematurely filed, its failure to observe
the 120-day period was not jurisdictional but violates only the
rule on exhaustion of administrative remedies, which was
deemed waived when the CIR did not file a motion to dismiss
and opted to actively participate at the trial.
GOVERNMENT: The CIR, on the other hand, insists that the
plain language of Section 112(C) of the NIRC, as amended,
demands mandatory compliance with the 120+30-day rule;
and P&G cannot claim reliance in good faith with BIR Ruling
No. DA-489-03 to shield the filing of its judicial claims from
the vice of prematurity.
ISSUE: WON the CTA En Banc erred in dismissing P&G's
judicial claims for refund on the ground of prematurity.
HELD: Yes. Based on the plain language of the Sec. 112[C] of
NIRC, the CIR is given 120 days within which to grant or deny
a claim for refund. Upon receipt of CIR's decision or ruling
denying the said claim, or upon the expiration of the 120-day
period without action from the CIR, the taxpayer has 30 days
within which to file a petition for review with the CTA.
There is no dispute that the 120+30-day period is mandatory
and jurisdictional, and that the CTA does not acquire
jurisdiction over a judicial claim that is filed before the
expiration of the 120-day period. There are, however, two
exceptions to this rule. The first exception is if the
Commissioner, through a specific ruling, misleads a particular
taxpayer to prematurely file a judicial claim with the CTA.
Such specific ruling is applicable only to such particular
taxpayer. The second exception is where the
Commissioner, through a general interpretative rule issued
under Section 4 of the Tax Code, misleads all taxpayers into
filing prematurely judicial claims with the CTA. In these cases,
the Commissioner cannot be allowed to later on question the
CTA's assumption of jurisdiction over such claim since
equitable estoppel has set in as expressly authorized under
Section 246 of the Tax Code.
Clearly, BIR Ruling No. DA-489-03 is a general interpretative
rule. Thus, all taxpayers can rely on BIR Ruling No. DA-489-03
from the time of its issuance on 10 December 2003 up to its
reversal by this Court in Aichi on 6 October 2010, where this
Court held that the 120+30 day periods are mandatory and
jurisdictional. Thus, P&G's judicial claims were deemed timely
filed and should not have been dismissed by the CTA.
CIR vs. PHIL.ALUMINUM WHEELS, INC.
G.R. No. 216161, August 9, 2017
TAXPAYER: Respondent is a corporation organized and
existing under Philippine laws which engages in the
manufacture, production, sale, and distribution of automotive
parts and accessories. BIR issued a Final Assessment Notice
(FAN) against respondent, to which respondent requested for
reconsideration, and later an application for the abatement of
its tax liabilities. Respondent informed the BIR that it already
paid its tax deficiency on withholding tax and that it was also
in the process of availing of the Tax Amnesty Program under
RA 9480 to settle its deficiency tax assessment for the taxable
year 2001. Respondent also complied with the requirements
of RA 9480 which include: the filing of a Notice of Availment,
Tax Amnesty Return and Payment Form, and remitting the tax
payment.
GOVERNMENT: BIR denied respondent’s request and issued a
Final Decision on Disputed Assessment (FDDA) and demanded
full payment of the deficiency tax assessment from
respondent. BIR denied respondent’s application for tax
abatement on the ground that the FDDA was already issued
by the BIR and that the FDDA had become final and executory
due to the failure of the respondent to appeal the FDDA with
the CTA.
ISSUE: Whether respondent is entitled to the benefits of the
Tax Amnesty Program under RA 9480.
HELD: The Acceptance of Payment Form, the Notice of
Availment, the SALN, and the Tax Amnesty Return shall be
submitted to the RDO, which shall be received only after
complete payment. The completion of these requirements
shall be deemed full compliance with the provisions of RA
9480. Respondent’s completion of the requirements of the
Tax Amnesty Program under RA 9480 is sufficient to
extinguish its tax liability under the FDDA of the BIR. The
FDDA issued by the BIR is not a tax, case “subject to a final
and executory judgment by the courts” as contemplated by
Section 8(f) of RA 9480. The determination of the tax liability
of respondent has not reached finality and is still not subject
to an executory judgment by the courts as it is the issue
pending before this Court.
NORTHERN MINDANAO POWER CORP v. CIR
GR NO. 185115, Feb. 18, 2015
GOVERNMENT: Petitioner, as a corporation engaged in
production sale of electricity, allegedly incurred input VAT on
its domestic purchases of goods and services that were used
in its production. Hence, petitioner filed an administrative
claim for a refund on June 20, 2000 for the 3rd and 4th quarters
of 1999, and on July 25, 2011 for 2000. Alleging inaction by
the CIR, petitioner filed a petition with the CTA on Sept. 28,
2001, but the court denied the claim on the ground that term
“zero-rated” was not imprinted on the receipts or invoices
presented by petitioner in violation of Sec. 4.108-1 of RR No.
7-95, petitioner failed to substantiate its claim for a refund
and to strictly comply with the invoicing requirements of the
law and tax regulations.
TAXPAYER: Petitioner appealed that Sec. 4.108-1 of RR No. 7-
95 which expanded the statutory requirements for the
issuance of the official receipts and invoices found in Sec. 113
of NIRC by providing for the additional requirement of the
imprinting “zero-rated” is unconstitutional. Company invoices
are sufficient to establish the actual amount of sale of electric
power services to the NPC and therefore sufficient to
substantiate petitioners’ claim for refund.
ISSUE: WON the judicial claim of petitioner should be
disallowed
HELD: Yes. Petitioner belatedly filed its judicial claims with
the CTA; having filed the appeal 319 days after the expiration
of the 30-day period and having failed to observe the 120-day
waiting period. The right to appeal is a mere statutory
privilege that requires strict compliance with the conditions
attached by the statute for its exercise. Petitioner failed to
comply with the statutory conditions and must therefore bear
the consequences. It already lost its right to claim a refund or
credit of its alleged excess input VAT attributable to zero-
rated or effectively zero-rated sales for the 3rd and the
4th quarters of taxable year 1999 by virtue of its own failure to
observe the prescriptive periods.
Pursuant to Section 112(D) of the NIRC of 1997, respondent
had one hundred twenty (120) days from the date of
submission of complete documents in support of the
application within which to decide on the administrative
claim. The burden of proving entitlement to a tax refund is on
the taxpayer. Absent any evidence to the contrary, it is
presumed that in order to discharge its burden, petitioner
attached to its applications complete supporting documents
necessary to prove its entitlement to a refund. 12 Thus, the
120-day period for the CIR to act on the administrative claim
commenced on 20 June 2000 and 25 July 2001.
As laid down in San Roque, judicial claims filed from 1 January
1998 until the present should strictly adhere to the 120+30-
day period referred to in Section 112 of the NIRC of 1997. The
only exception is the period 10 December 2003 until 6
October 2010. Within this period, BIR Ruling No. DA-489-03 is
recognized as an equitable estoppel, during which judicial
claims may be filed even before the expiration of the 120-day
period granted to the CIR to decide on a claim for a refund.
CHINA BANKING CORPORATION V. CIR
G.R. No. 172509 February 4, 2015
TAXPAYER: China Banking Corporation is engaged in
transactions involving sales of foreign exchange to the Central
Bank of the Philippines, commonly known as SWAP
Transactions. CBC did not pay tax on the SWAP transactions
for the years 1982-1986 and was thus assessed by the BIR for
deficiency DST on the sales of foreign bills of exchange to the
Central Bank. CBC protested asserting five defenses: double
taxation, absence of liability, due process violation, validity of
assessment and tax exemption. On appeal to the CTA, CBC
also raised the issue of prescription.
GOVERNMENT: More than 12 years after the CBC filed a
protest, the CIR rendered a decision in which it ordered CBC
to pay its tax deficiency. Thereafter, CBC filed a Petition for
Review with the CTA which denied CBC’s petition ruling that
the SWAP transaction is a telegraphic transfer subject to DST;
thus, CBC is liable to pay the alleged deficiency. The BIR did
not address the issue of prescription.
ISSUE: Whether the right of the BIR to collect the assessed
DST from CBC is barred by prescription.
HELD: Yes, the BIR’s claim is barred by prescription. Following
Sec. 319(c) of the 1977 NIRC assessed tax must be collected
by distraint or levy and/or court proceeding within three
years from the date when the BIR mails/releases/sends the
assessment notice to the taxpayer.
The attempt of the BIR to collect the tax through its Answer
with a demand for CBC to pay the assessed DST in the CTA did
not comply with Section 319(c) of the 1977 Tax Code. The
demand was made almost thirteen years from the date from
which the prescriptive period is to be reckoned. Thus, the
attempt to collect the tax was made way beyond the three-
year prescriptive period.
The principle of estoppel likewise applies. As a general rule,
the principle of estoppel and waiver does not prevent the
government from collecting taxes as the BIR is not bound by
the mistake or negligence of its agents. Nonetheless, the
Supreme Court enunciated that the principle is not absolute.
The Court ruled that estoppel cannot apply in this case as the
CIR failed to raise the issue of prescription in its Comment.
The 12-year delay in collecting the assessed tax further
convinced the Court that estoppel could not apply in this
case.
VISAYAS GEOTHERMAL POWER COMPANY vs. CIR
G.R. No. 197525 June 4, 2014
TAXPAYER: Petitioner VGPC is a special limited partnership
principally engaged in the business of power generation
through geothermal energy and the sale of generated power
to the Philippine National Oil Company, pursuant to the
Energy Conversion Agreement. VGPC filed with the BIR its
Original Quarterly VAT Returns for the first to fourth quarters
of taxable year 2005. On 2006, it filed an administrative claim
for refund of P14,160,807 with the BIR District Office of
Ormoc City on the ground that it was entitled to recover
excess and unutilized input VAT payments for the four
quarters of taxable year 2005, pursuant to Republic Act R.A.
No. 9136, which treated sales of generated power subject to
VAT to a 0%.
Nearly one month later, while its administrative claim was
pending, VGPC filed its judicial claim via a petition for review
with the CTA praying for a refund or the issuance of a tax
credit certificate covering the 4 quarters of taxable year 2005.
On appeal, petitioner argues that the CIR should have been
estopped from questioning the jurisdiction of the CTA after
actively participating in the proceedings before the CTA
Second Division.
GOVERNMENT: CTA Second Division found that only the
amount of 7,699,366.37 was duly substantiated by the
required evidence. Both VGPC and the CIR appealed to the
CTA En Banc. The CTA En Banc reversed and set aside the
decision and resolution of the CTA Second Division and
dismissed the original petition for review for having been filed
prematurely.
ISSUE: WON the CIR should have been estopped from
questioning the jurisdiction of the CTA.
RULING: No. It is a well-settled rule that the government
cannot be estopped by the mistakes, errors or omissions of its
agents.  It has been specifically held that estoppel does not
apply to the government, especially on matters of taxation.
Taxes are the nation’s lifeblood through which government
agencies continue to operate and with which the State
discharges its functions for the welfare of its
constituents. Thus, the government cannot be estopped from
collecting taxes by the mistake, negligence, or omission of its
agents. Upon taxation depends the ability of the government
to serve the people for whose benefit taxes are collected. To
safeguard such interest, neglect or omission of government
officials entrusted with the collection of taxes should not be
allowed to bring harm or detriment to the people.
 BIR v. HON. ERNESTO D. ACOSTA, ET AL
G.R. No. 195320, April 23, 2018
TAXPAYER: Chevron Philippines, Inc. filed an administrative
claim for refund or credit with the BIR, with the amount
representing alleged overpayment of excise taxes on
imported finished unleaded premium gasoline and diesel fuel
withdrawn from its refinery in San Pascual, Batangas in 2003.
After inaction from the BIR, Chevron elevated the case to CTA
Special First Division. Chevron asserted that the BIR's motion
for reconsideration was a pro forma motion because the BIR
failed to set the motion for hearing pursuant to Sections 3
and 6 of Rule 15 of the Revised Rules of the CTA. Chevron
further maintained that non-compliance with the notice of
hearing requirement was a fatal defect that rendered its
motion a mere scrap of paper. As such, it is not entitled to
judicial cognizance and the filing of such defective motion did
not toll the reglementary period to appeal.
GOVERNMENT: CTA First Division partially granted the
petition, ordering BIR to refund petitioner only part of the
requested amount of Chevron. CTA denied BIR’s motion for
reconsideration, being pro forma and for lack of merit.
ISSUE: WON the CTA gravely abused its discretion in declaring
the motion for reconsideration filed by the BIR on October 14,
2010 to be a pro forma motion
HELD: No. The BIR was unable to show that the resolutions of
the CTA-Special First Division were patent and gross to
warrant striking them down through a petition for certiorari.
No argument was advanced to establish that the CTA-Special
First Division exercised its judgment capriciously, whimsically,
arbitrarily, or despotically by reason of passion and hostility.
It is not disputed that the BIR's Motion for Reconsideration
dated August 3, 2010 failed to comply with the provisions
provided for by the Revised Rules of the CTA. Specifically, the
motion filed by the BIR did not include a notice for hearing
and necessarily, the BIR likewise failed to set the motion for
hearing. In denying the motion, the CTA-Special First Division
cited Sections 335 and 636 of the Revised Rules of the CTA37 as
its basis. It is clear therefore that the CTA-Special First
Division simply applied the applicable rules which the BIR
concededly failed to observe. Accordingly, CTA-Special First
Division's dismissal of the motion for reconsideration was
discretion duly exercised, not misused or abused.
PROTECTORS’ SERVICES, INC. v. CIR
GR No. 118176, April 12, 2000
TAXPAYERS: Petition Protector’s Services, Inc., (PSI) is a
contractor engaged in recruiting security guards for clients.
After an audit investigation, the BIR assessed PSI deficiency
percentage taxes including surcharges, penalties and
interests.
PSI protested, claiming that gross receipts subject to
percentage tax should exclude salaries of the security guards,
employer’s share of SSS, SIF and Medicare contributions. CIR
sent demand letters for payment of said assessments, plus
additional documentary stamp taxes and deficiency expanded
withholding tax. PSI paid the same but filed its second protest
the next day. BIR denied the protests stating that salaries of
security guards are part of taxable gross receipts for
determination of contractor’s tax.
PSI filed a petition for review with the CTA averring that the
assessments were without basis, and that the period for
collection has lapsed, the assessment letter having been sent
beyond 3 years from filing the quarterly returns.
GOVERNMENT: The CTA dismissed the petition stating that:
(1) the assessments were made within the 3-year prescriptive
period which should be reckoned from January 20, 1985, the
date of filing the final return; (2) receipt of the 1985
assessment cannot be denied as all assessments were sent in
1 envelope, as testified to by BIR personal; and (3) the protest
letter having filed only on January 12, 1988, or 33 days from
December 10, 1987, the request for reinvestigation was filed
out of time. On review by the CA, the CTA’s decision was
affirmed.
ISSUE: Whether or not the assessments were made within
the prescriptive period.
HELD: An assessment maybe administratively protested
within 30 days from receipt thereof; otherwise, the
assessment shall become final and unappealable. In this case,
PSI received the assessments on December 10, 1987 and
protested the 1983 and 1984 assessments on January 12,
1988, or 33 days thereafter. Hence, the protests were filed
out of time and PSI can no longer dispute the correctness of
assessment. The CTA correctly dismissed the appeal for lack
of jurisdiction.
Petitioner’s contention that the Government’s right
to assess and collect the 1983, 1984 and 1985 assessments
had already prescribed in view of BP700, which reduced the
prescriptive period for assessment and collection of internal
revenue taxes to 3 yrs, lacks merit BP700 was approved on
April 5, 1984. The 3-year prescriptive period for assessment
and collection of revenue taxes applied to taxes paid
beginning 1984. Clearly, the tax assessment made on
December 10, 1987, for the par 1983 was still covered by the
5-year statutory prescriptive period.