HIMLAYANG PILIPINO v.

COMMISSIONER OF INTERNAL REVENUE

GR No. 241848; May 14, 2021
CARANDANG, J.

FACTS:
On September 29, 2010, LOA was issued by the BIR to authorize examination of petitioner’s books
of accounts. Petitioner received the LOA on October 12, 2010.

The BIR issues a PAN and eventually issued a FAN/FLD. Petitioner protested the FAN but denied
by the BIR. Petitioner then filed an appeal before the CTA Division, but was dismissed due to lack
of jurisdiction saying that there is no disputed assessment for being filed late. This dismissal was
likewise affirmed by CTA en banc.

Petitioner filed a Petition for Review on Certiorari before the SC saying that the assessment was
null and void. He explains that the revenue officers in the LOA were Cacdac and Andaya. However,
it was Baguisan and Nacar who personally examined petitioner’s books.

ISSUE:
Whether the assessment was null and void?

RULING:
YES. Revenue officer Baguisan who conducted the audit of petitioner’s books of accounts was not
authorized pursuant to the valid LOA. Section 13 of the NIRC requires that a revenue officer must
be validly authorized before conducting an audit of a taxpayer.

The lack of valid LOA authorizing Revenue Officer Baguisan to conduct an audit on petitioner
makes the assessment void. A LOA is the authority given to the appropriate revenue officer
assigned to perform assessment functions. It empowers or enables said revenue officer to examine
books of account and other accounting records of a taxpayer for the purpose of collecting the
correct amount of tax.

METROPOLITAN WATERWORKS AND SEWAGE SYSTEM v. CENTRAL BOARD

GR No. 215955
LOPEZ, J:

FACTS:
MWSS received a real property tax assessment from Pasay City Treasurer for taxable year 2008.
With this, MWSS filed a protest letter arguing that it is a public utility and a government
instrumentality, and its properties and facilities are exempt from real property tax anchored upon
the case of MIAA v. CA.

Due to inaction of Pasay City Treasurer, MWSS filed an appeal to the LBAA. LBAA dismissed the
case due to MWSS’s failure to file a protest with the City Treasurer, making the assessment final
and executory. Nonetheless, LBAA resolved the issue on whether MWSS is liable to pay real
property taxes. It ruled that it is a GOCC and not a government instrumentality, hence the doctrine
of tax exemption in the MIAA case is inapplicable.
MWSS filed an appeal before the CBAA, which was also denied. It affirmed the LBAA’s ruling.
Upon appeal to CA, the CA likewise dismissed MWSS appeal for failure to exhaust administrative
remedies.

ISSUE:
Whether CA is correct in dismissing MWSS’s appeal due to failure to exhaust administrative
remedies?

RULING:
YES. Administrative remedies are inapplicable when the issue presented is a pure question of law.
The CA palpably erred in dismissing MWSS's appeal solely on the ground of the alleged non-
exhaustion of administrative remedies under the LGC.

Plainly, MWSS is assailing the authority of the city assessor and treasurer to assess and collect
real property taxes against it. The issue of whether a local government is authorized to assess and
collect real property taxes from a government entity is a pure question of law, which is beyond the
LBAA and CBAA's jurisdiction.

Thus, despite the alleged non-exhaustion of administrative remedies, we give due course to the
instant Petition on the ground that the controversy only involves a question of law.

COMMISSIONER OF INTERNAL REVENUE v. UNIOIL CORPORATION

GR No. 204405; August 4, 2021
HERNANDO, J:

FACTS:
On January 26, 2009, respondent received a FAN/FLD, 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 and submitted its supporting documents.

Thereafter, Unioil filed the instant Petition for Review on November 20, 2009, considering that
the CIR failed to act on its protest and the one hundred eighty (180) day period had already
expired.

The CIR offered in evidence a draft PAN and a PAN dated November 27, 2008 to establish that a
PAN was issued in compliance with existing revenue issuances; but the same failed to show that
they were sent to
petitioner, either through personal delivery or mail. No other documentary or testimonial
evidence was submitted by the CIR to disprove Unioil's alleged non-receipt of the PAN and the
CIR's failure to do so leads to the conclusion that no PAN was really issued.

The CTA Third Division, granted Unioil’s appeal saying that CIR did not issue a PAN. The CIR
filed an appeal to the CTA en banc, where the en banc affirmed CTA Division’s ruling.

ISSUE:
Whether the CTA is correct in finding that respondent was denied of its right to due process on
the purported failure to receive a PAN.
RULING:
YES. The CIR failed to establish the fact of issuance of the PAN to Unioil. The CIR's failure to
comply with the notice requirements under Section 228 of the 1997 NIRC effectively denied Unioil
of its right to
due process. Consequently, the CIR's assessment was void.

Tax collection must be preceded by a valid assessment to allow the taxpayer to protest the
assessment, present their case and adduce supporting evidence.37 Without complying with the
unequivocal mandate of first informing the taxpayer of the government's claim, there can be no
deprivation of property, because no effective protest can be made.

COMMISSIONER ON INTERNAL REVENUE v. MACQUARIE OFFSHORE

SERVICES
GR No. 225169; October 6, 2021

FACTS:
Respondent is a multinational company organized and existing under the laws of Australia. In the
course of its operation as a Regional Operating Headquarters (ROHQ) rendering services in the
Philippines to its foreign clients, respondent, a VAT-registered taxpayer, purchased goods and
services for which it paid input VAT. When the BIR failed to act on its administrative claims,
respondent filed two separate petitions for review before the CTA.

The CTA granted respondents petition directing BIR to refund or issue a tax credit certificate.
Petitioner filed a petition for review before the CTA En Banc, alleging that respondent failed to
prove that MFHL, the recipient of its services, was doing business outside the Philippines so that
such sale of services would qualify as zero-rated transactions.

CTA en banc denied CIR’s petition for review and affirmed CTA Division’s decision saying that
respondent presented more than just a SEC Certificate of Non-Registration to prove that MFHL,
the recipient of its services, was doing business outside the Philippines.

Consequently, filed a petition for review before the Supreme Court, raising the sole issue of
whether MFHL, the recipient of respondent's services, is doing business outside the Philippines
so that the sale of such services may qualify as zero-rated transactions.

ISSUE:
Whether the respondent is qualified to have zero-rated transactions?

RULING:
YES. Notably, respondent presented a certification of non-registration of company issued by the
SEC to establish that MFHL, the sole recipient of respondent's services, is a foreign corporation.
It further submitted (a) consular authentication of annexed documents, which include the
certificate of change of name from Macquarie Group Holdings to MFHL, certificate of registration
of MFHL, and constitution of MFHL, all issued by the ASIC; and (b) consular authentication of
ASIC Company Extracts of MFLH showing the latter's registration details, current organization
details, registered office, and principal place of business, all of which, taken together, prove that
MFLH is registered to operate in Australia.
As declared in DKS, these authenticated corporate documents from ASIC are enough to constitute
prima facie evidence that MFHL is not engaged in trade or business in the Philippines. Since there
is sufficient evidence herein to substantiate both components for the NRFC status of MFHL, then
respondent's sale of services to MFHL qualify as zero-rated transactions.

CITY GOVERNMENT OF TAGUIG v. SHOPPERS PARADISE REALTY &

DEVELOPMENT CORPORATION
GR No. 246179; July 14, 2021
LOPEZ, J:

FACTS:
Shoppers Paradise Realty & Development Corporation (SPRDC) and SPFC4 are affiliate
corporations engaged in the construction, development, maintenance, and lease of commercial
buildings. The 1997 Asian Financial Crisis inflicted financial setbacks on SPRDC and SPFC,
prompting them to file a joint Petition for Rehabilitation heard by the RTC-Makati as a
rehabilitation court. The CGT is among the creditors claiming unpaid realty taxes due on the
operation of the Sunshine Plaza Mall.

SPFC was motivated to file the Urgent Motion for Collection, praying that the CGT be directed to
pay its unpaid rentals, CUSA fees, and utilities over the areas it leased in the Sunshine Plaza Mall.
The CGT submitted its Comment and Opposition faulting SPFC for flip-flopping on the amounts
supposedly due it, that the Urgent Motion for Collection contained perjurious statements, and
arguing that the RTC-Makati had no jurisdiction to act on said motion.

ISSUE:
Whether the RTC-Makati, acting as a rehabilitation court can act on matters subject of the Urgent
Motion for Collection?

RULING:
YES. The RTC-Makati could very well act on the Urgent Motion for Collection, and grant the
motion in the Order dated December 8, 2015, is well-entrenched in jurisprudence. As the Court
held in Bureau of Internal Revenue v. Lepanto Ceramics, lnc., the "inherent purpose of
rehabilitation is to find ways and means to minimize the expenses of the distressed corporation
during the rehabilitation period by providing the best possible framework for the corporation to
gradually regain or achieve a sustainable operating form." Further, the Court emphasized in Allied
Banking Corporation v. Equitable PCI Bank, Inc., that "once jurisdiction is acquired, the court can
subject all those affected to orders consistent with the rehabilitation of the insolvent debtor,
including the reversal of any transfer, payment, or sale made after the filing of the petition."