Tax Remedies

Tax Remedies
Remedies under the NIRC

How to contest a ruling of the BIR?
1.a. File a request for ruling review with the Secretary of Finance
(“SOF”) within thirty (30) days from receipt of the CIR’s ruling. (DOF
Department Order No. 7-2002 dated May 7, 2002 implementing Sec. 4
of the Tax Code)
1.b. Appeal to the SOF is in compliance with the rule on exhaustion of

administrative remedies. Thus, appeal to the SOF may be dispensed
with if any of the exceptions to the rule on exhaustion of
administrative remedies are present.
1.c. The exceptions, among others, are the following:
(1) exhaustion would be futile – The SOF requesting a ruling from the
CIR and later on adopting the ruling as his own;
(2) issue is purely legal – Tax implications of the PEACe Bonds; and,
(3) when there are circumstances indicating the urgency of judicial
intervention – impending maturity of the PEACe Bonds. (BDO vs.
Republic, GR No. 198756 dated January 13, 2015)
2. Next Remedy: Regional Trial Court or the Court of Tax Appeals

(“CTA”)?
3. The CTA has exclusive appellate jurisdiction to review, on certiorari,

the constitutionality or validity of revenue issuances, even without a
prior issuance of an assessment. (Confederation for Unity,
Recognition and Advancement of Government Employees vs.
Commissioner - BIR, GR No. 213446 dated July 3, 2018, J. Caguioa)
4.a. Within the judicial system, the law intends the Court of Tax
Appeals to have exclusive jurisdiction to resolve all tax problems.
Petitions for writs of certiorari against the acts and omissions of the
said quasi-judicial agencies should, thus, be filed before the Court of
Tax Appeals.
4.b. Statutory Basis of the jurisdiction of the CTA, Section 7(a)(1) of RA

9282:
“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 or other laws administered by the
Bureau of Internal Revenue.” CARPO
4.c. The Court of Tax Appeals has undoubted jurisdiction to pass upon
the constitutionality or validity of a tax law or regulation when raised
by the taxpayer as a defense in disputing or contesting an assessment
or claiming a refund. It is only in the lawful exercise of its power to
pass upon all matters brought before it, as sanctioned by Section 7 of
Republic Act No. 1125, as amended.
This Court, however, declares that the Court of Tax Appeals may
likewise take cognizance of cases directly challenging the
constitutionality or validity of a tax law or regulation or administrative
issuance (revenue orders, revenue memorandum circulars, rulings).
(BDO vs. Republic, GR No. 198756 dated August 16, 2016)
Assessment Process:
Final
Letter Notice of
Preliminary Final
Decision on
Assessment Assessment
of Discrepancy
Notice Notice
Disputed
(“NOD”) Assessment
(“LOA”) (“PAN”) (“FAN”)
(“FDDA”)
Letter of Authority – Is it required?
1. Section 6. Power of the Commissioner to Make Assessments and

Prescribe Additional Requirements for Tax Administration and
Enforcement. –
(A) Examination of Returns and Determination of tax Due. – After a

return has been filed as required under the provisions of this Code, the
Commissioner or his duly authorized representative may authorize the
examination of any taxpayer and the assessment of the correct
amount of tax: Provided, however, That failure to file a return shall not
prevent the Commissioner from authorizing the examination of any
taxpayer. x x x [Emphases supplied]
2.a. The result of the absence of a Letter of Authority (“LOA”) is the

nullity of the examination and assessment based on the violation of
the taxpayer's right to due process.
2.b. Due process requires that taxpayers must have the right to know
that the revenue officers are duly authorized to conduct the
examination and assessment, and this requires that the LOAs must
contain the names of the authorized revenue officers. In other words,
identifying the authorized revenue officers in the LOA is a jurisdictional
requirement of a valid audit or investigation by the BIR, and therefore
of a valid assessment. (CIR vs. McDonald’s Philippines Realty Corp., GR
No. 242670 dated May 10, 2021)
3. An LOA cannot be dispensed with just because none of the financial

books or records being physically kept by MEDICARD was examined. To
begin with, Section 6 of the NIRC requires an authority from the CIR or
from his duly authorized representatives before an examination "of a
taxpayer" may be made. The requirement of authorization is therefore
not dependent on whether the taxpayer may be required to physically
open his books and financial records but only on whether a taxpayer is
being subject to examination. (Medicard Philippines, Inc. vs. CIR, GR
No. 222743 dated April 5, 2017)
Letter of Authority – Other Issues?
1.a. Clearly, there must be a grant of authority before any revenue

officer can conduct an examination or assessment. Equally important is
that the revenue officer so authorized must not go beyond the
authority given. In the absence of such an authority, the assessment
or examination is a nullity. (CIR vs. Sony Philippines, Inc., GR No.
178697 dated November 17, 2010)
1.b. Sample problem:
LOA covers the year 2002 and for all internal revenue taxes. Taxpayer
receives a deficiency VAT assessment for the year 2003.
Is the assessment valid?

2.a. The practice of reassigning or transferring revenue officers, who

are the original authorized officers named in the LOA, and
subsequently substituting them with new revenue officers who do not
have a separate LOA issued in their name, is in effect a usurpation of
the statutory power of the CIR or his duly authorized representative.
(CIR vs. McDonald’s Philippines Realty Corp., GR No. 242670 dated May
10, 2021)
2.b. Here, as comprehensively discussed, there was no new LOA issued

by the CIR or his duly authorized representative giving revenue officer
Bagauisan the power to conduct an audit on petitioner's books of
accounts for taxable year 2009. The importance of the lack of the
revenue officer's authority to conduct an audit cannot be
overemphasized because it goes into the validity of the assessment.
The lack of authority of the revenue officers is tantamount to the
absence of a LOA itself which results to a void assessment. Being a
void assessment, the same bears no fruit. (Himlayang Pilipino Plans,
Inc. vs. CIR, GR No. 241848 dated May 14, 2021)
3. The failure of petitioner to raise at the earliest opportunity, the lack

of the revenue officer's authority, does not preclude the Court from
considering the same because the said issue goes into the intrinsic
validity of the assessment itself. (Himlayang Pilipino Plans, Inc. vs. CIR,
GR No. 241848 dated May 14, 2021)
Notice of Discrepancy Stage – Due Process?
1. In Pilipinas Shell Petroleum Corporation vs. Commissioner of Internal

Revenue, the BIR ignored RR No. 12-99 and did not issue to the
taxpayer, Pilipinas Shell Petroleum Corporation (“PSPC”), a notice for
informal conference and a PAN as required; and as a result, deprived
PSPC of due process in contesting the formal assessment levied against
it. The Court pronounced therein that "[w]hile PSPC indeed protested
the formal assessment, such does not denigrate the fact that it was
deprived of statutory and procedural due process to contest the
assessment before it was issued.“ (CIR vs. Yumex, GR No. 222476 dated
May 5, 2021)
Notice of Discrepancy Stage – Due Process?
2. The petitioners contend that the BIR issued the PAN without first
sending a Notice of Informal Conference (“NIC”) to petitioners. One of
the first requirements of Section 3 of Revenue Regulations No. 12-99,
the then prevailing regulation on the due process requirement in tax
audits and/or investigation, is that an NIC be first accorded to the
taxpayer. The use of the word "shall" in subsection 3.1.1 describes the
mandatory nature of the service of a NIC. As with the other notices
required under the regulation, the purpose of sending a NIC is but
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. (Spouses Pacquiao vs. CTA,
GR No. 213394 dated April 6, 2016)
PAN Stage – Procedure?
Taxpayer may protest the Preliminary Assessment Notice within 15

days from receipt. The Final Assessment Notice shall be issued within
15 days from date of receipt by the taxpayer of the PAN, whether the
same was protested or not. (RR No. 18-2013 dated November 28, 2013
and RMO No. 26-2016 dated June 13, 2016)
PAN Stage – Due Process?
1.a. Section 228 of the Tax Code clearly requires that the taxpayer
must first be informed that he is liable for deficiency taxes through the
sending of a PAN. He must be informed of the facts and the law upon
which the assessment is made. The law imposes a substantive, not
merely a formal, requirement. To proceed heedlessly with tax
collection without first establishing a valid assessment is evidently
violative of the cardinal principle in administrative investigations - that
taxpayers should be able to present their case and adduce supporting
evidence.
1.b. The use of the word shall in subsection 3.1.2 of RR No. 12-99
describes the mandatory nature of the service of a PAN. The
persuasiveness of the right to due process reaches both substantial
and procedural rights and the failure of the CIR to strictly comply with
the requirements laid down by law and its own rules is a denial of
Metro Star’s right to due process.
Thus, for its failure to send the PAN stating the facts and the law on
which the assessment was made as required by Section 228 of R.A. No.
8424, the FAN made by the CIR is void. (CIR vs. Metro Star Superama,
Inc., GR No. 185371 dated December 8, 2010)
2.a. Clearly from the aforequoted provisions, the taxpayer has fifteen
(15) days from date of receipt of the PAN to respond to the said notice.
Only after receiving the taxpayer's response or in case of the
taxpayer's default can respondent issue the FLD/FAN.
2.b. Per the evidence on record, the BIR issued a PAN dated December
16, 2010, which it posted by registered mail the next day, December
17, 2010. It then issued and mailed the FLD/FAN on January 10, 2011.
Although posted on different dates, the PAN and FLD/FAN were both
received by the Post Office of Dasmariñas, Cavite, on January 17, 2011,
and served upon and received by respondent on January 18, 2011.
Under the circumstances, respondent was not given any notice of the
preliminary assessment at all and was deprived of the opportunity to
respond to the same before being given the final assessment. (CIR vs.
Yumex, GR No. 222476 dated May 5, 2021)
FAN Stage – Requirements for Validity – Demand to Pay?
1. An assessment contains not only a computation of tax liabilities, but

also a demand for payment within a prescribed period. It also signals
the time when penalties and protests begin to accrue against the
taxpayer. To enable the taxpayer to determine his remedies thereon,
due process requires that it must be served on and received by the
taxpayer. (CIR vs. Pascor Realty, GR No. 128315 dated June 29, 1999)
2.a.1. Part of the assessment reads as follows:
“The complete details covering the aforementioned discrepancies

established during the investigation of this case are shown in the
accompanying Annex 1 of this Notice. The 50% surcharge and 20%
interest have been imposed pursuant to Sections 248 and 249(B) of
the [National Internal Revenue Code], as amended. Please note,
however, that the interest and the total amount due will have to be
adjusted if paid prior or beyond April 15, 2004.”

2.a.2. The assessment is not valid. It lacks the definite amount of tax
liability for which respondent is accountable. It does not purport to be
a demand for payment of tax due, which a final assessment notice
should supposedly be. Although the disputed notice provides for the
computations of respondent's tax liability, the amount remains
indefinite. It only provides that the tax due is still subject to
modification, depending on the date of payment.
2.b.1. Part of the Assessment reads as follows:
“In view thereof, you are requested to pay your aforesaid deficiency
internal revenue tax liabilities through the duly authorized agent bank
in which you are enrolled within the time shown in the enclosed
assessment notice.” - date in the assessment notice is in blank or
unaccomplished

2.b.2. Assessment is not valid. There are no due dates in the Final
Assessment Notice. This negates petitioner's demand for payment.
Petitioner's contention that April 15, 2004 should be regarded as the
actual due date cannot be accepted. The last paragraph of the Final
Assessment Notice states that the due dates for payment were
supposedly reflected in the attached assessment. However, based on
the findings of the Court of Tax Appeals First Division, the enclosed
assessment pertained to remained unaccomplished. (CIR vs. Fitness By
Design, GR No. 215957 dated November 9, 2016)
FAN Stage – Prescription – Preliminary Considerations:
1. General Rule: BIR has 3 years from: (a) the date of actual filing of the
return or (b) the last date prescribed by law for the filing of such
return, whichever comes later to issue the Final Assessment Notice
(“FAN”). (Sec. 203 of the Tax Code; CIR vs. Transitions Optical Phils., GR
No. 227544 dated November 22, 2017)
2.a. Exception: The BIR has ten (10) years from discovery of: (a) filing of
a false return; (b) filing of a fraudulent return with intent to evade
taxes; and, (c) omission to file a return to issue the FAN. (Sec. 222(a) of
the Tax Code)
2.b. Under Section 248(B) of the NIRC, failure to report sales, receipts
or income in an amount exceeding thirty percent (30%) of that
declared per return, and a claim of deduction in an amount exceeding
thirty (30%) of actual deductions, shall constitute prima facie evidence
of false or fraudulent return.
Failure of the taxpayer to refute the presumption warrants the

application of the ten (10)-year prescriptive period for assessment
under Section 222(a) of the NIRC. (CIR vs. Asalus Corporation, GR No.
221590 dated February 22, 2017)
FAN Stage – Prescription – Waiver Issues:
Illustration:
Filing of the Return Last Day to Make an Assessment Expiry Date of Waiver
3-year period to assess Prescriptive period extended by a Waiver

(BIR issues the FAN during the extended period)
1. Similar to the case of Standard Chartered Bank, the waivers in this

case did not specify the kind of tax and the amount of tax due. It is
established that a waiver of the statute of limitations is a bilateral
agreement between the taxpayer and the BIR to extend the period to
assess or collect deficiency taxes on a certain date. Logically, there can
be no agreement if the kind and amount of the taxes to be assessed
or collected were not indicated. Hence, specific information in the
waiver is necessary for its validity. (CIR vs. Systems Technology
Institute, Inc., GR No. 220835 dated July 26, 2017, J. Caguioa)
2.a. No longer a requirement of a Valid Waiver:
1. The delegation of authority to a representative be in writing and

notarized;
2. The date of acceptance by the BIR Officer is no longer required to be
indicated for the Waiver's validity.
3. Notarization of the Waiver is not a requirement for its validity.
4. Must be in three (3) copies and the taxpayer must be given a copy of
the waiver.
2.b. Requisites of a Valid Waiver:
1. Must be executed and accepted before the expiration of the period

to assess or collect taxes (or before the lapse of the period agreed
upon in case a subsequent agreement is executed);
2. The waiver must be signed by the taxpayer himself or his duly

authorized representative. In the case of a corporation, the waiver
must be signed by any of its responsible officials;
3. The expiry date of the period agreed upon to assess/collect the tax
after the regular three-year period of prescription should be indicated;
4. Waiver of prescriptive period to collect must indicate the particular

taxes assessed. Waiver of prescriptive period to assess may simply
state “all internal revenue taxes;” and,
5. Two material dates must appear on the waiver:
a) The date of execution; and,

b) The expiry date of the period the taxpayer waives the statute of
limitations. (Revenue Memorandum Order No. 14-2016 dated April 4,
2016; Revenue Memorandum Circular No. 141-19 dated December 20,
2019)
FAN Stage – Prescription – Waiver Issues – Estoppel – General Rule:
1. General Rule: Doctrine of Estoppel not applicable, as a rule, to

validate a defective waiver. Failure to strictly comply with the
requirements of a valid waiver invalidates the waiver and does not
extend the prescriptive period to assess or collect.
The BIR cannot hide behind the doctrine of estoppel to cover its failure
to comply with RMO No. 20-90 and RDAO No. 05-01, which the BIR
itself issued. Having caused the defects in the waivers, the BIR must
bear the consequence. It cannot shift the blame to the taxpayer. To
stress, a waiver of the statute of limitations, being a derogation of the
taxpayer’s right to security against prolonged and unscrupulous
investigations, must be carefully and strictly construed. (CIR vs. Kudos
Metal, GR No. 178087 dated May 5, 2010)
FAN Stage – Prescription – Waiver Issues – Estoppel – Exceptions:
2.a. Partial payment of an assessment which is covered by a defective

waiver. RCBC, through its partial payment of the assessment impliedly
admitted the validity of those waivers. Had RCBC truly believed that
the waivers were invalid and that the assessments were issued beyond
the prescriptive period, then it should not have paid the reduced
amount of taxes in the revised assessment. RCBC’s subsequent action
effectively belies its insistence that the waivers are invalid. (RCBC vs.
CIR, GR No. 170257 dated September 7, 2011)
2.b. However, as clarified by the Supreme Court, not mere partial

payment of an assessment. It must be coupled by a benefit obtained
by the taxpayer in the form of a drastic reduction in the assessment.
(CIR vs. Avon Products Manufacturing, Inc., GR Nos. 201398-99 dated
October 3, 2018)
3. When the application of estoppel would promote the administration

of the law, prevent injustice and avert the accomplishment of a wrong
and undue advantage. In this case, the taxpayer executed five (5)
waivers and delivered them to the BIR, one after the other when the
signatory of the waiver was not authorized to sign the same. It allowed
the BIR to rely on them and did not raise any objection against their
validity until the BIR assessed taxes and penalties against it. Moreover,
the application of estoppel is necessary to prevent the undue injury
that the government would suffer because of the cancellation of
petitioner's assessment of respondent's tax liabilities. (CIR vs. Next
Mobile, Inc., GR No. 212825 dated December 7, 2015)
4. When the taxpayer never raised the invalidity of the waivers at the
earliest opportunity and the waivers were necessary to give the
taxpayer time to fully comply with the BIR notices for audit
examination and to respond to its Informal Conference request to
discuss the discrepancies. Thus, having benefitted from the waivers
executed at its instance, the taxpayer is estopped from claiming that
they were invalid and that prescription had set in. (CIR vs. Transitions
Optical Phils., GR No. 227544 dated November 22, 2017)
FAN Stage – Prescription – Suspension of the Prescriptive Period:
1.a. When the taxpayer requests for a reinvestigation which is granted

by the Commissioner;
1.b. Request for reconsideration. – refers to a plea for a re-evaluation

of an assessment on the basis of existing records without need of
additional evidence. It may involve both a question of fact or of law or
both.
Request for reinvestigation. – refers to a plea for re-evaluation of an

assessment on the basis of newly-discovered or additional
evidence that a taxpayer intends to present in the reinvestigation. It
may also involve a question of fact or law or both.
1.c. The act of filing a request for reinvestigation alone does not
suspend the prescriptive period. Such request must be granted. A
request for reconsideration even if granted, does not suspend the
prescriptive period. (BPI vs. CIR, GR No. 139736 dated October 17,
2005)
2.a. When the taxpayer cannot be located in the address given by him
in the return filed upon which a tax is being assessed or collected:
Provided, that, if the taxpayer informs the Commissioner of any change
in address, the running of the Statute of Limitations will not be
suspended;
2.b. The suspension of the three-year period to assess applies only if

the BIR Commissioner is not aware of the whereabouts of the
taxpayer.
Hence, despite the absence of a formal written notice of the taxpayer's

change of address, the fact remains that the BIR became aware of the
taxpayer's new address as shown by documents replete in the
records. As a consequence, the running of the three-year period to
assess the taxpayer was not suspended and has already prescribed.
(CIR vs. BASF Coating + Inks Phils., GR No. 198677 dated November 26,
2014)
FAN and FDDA Stage – Due Process:
1. The taxpayers shall be informed in writing of the law and the facts
on which the assessment is made; otherwise, the assessment shall be
void. (Sec. 228 of the Tax Code)
2.a. Considering the foregoing exchange of correspondence and

documents between the parties, we find that the requirement of
Section 228 was substantially complied with. Respondent had fully
informed petitioner in writing of the factual and legal bases of the
deficiency taxes assessment, which enabled the latter to file an
"effective" protest, much unlike the taxpayer's situation in Enron.
Petitioner's right to due process was thus not violated. (Samar-I
Electric Cooperative v. CIR, GR No. 193100 dated December 10, 2014)
3.a. The Details of Discrepancy attached to the Preliminary Assessment

Notice, as well as the Formal Letter of Demand with the Final
Assessment Notices, did not even comment or address the defenses
and documents submitted by Avon. Thus, Avon was left unaware on
how the Commissioner or her authorized representatives appreciated
the explanations or defenses raised in connection with the
assessments. There was clear inaction of the Commissioner at every
stage of the proceedings.
3.b. It is true that the Commissioner is not obliged to accept the

taxpayer's explanations, as explained by the Court of Tax Appeals.
However, when he or she rejects these explanations, he or she must
give some reason for doing so. He or she must give the particular
facts upon which his or her conclusions are based, and those facts
must appear in the record. Indeed, the Commissioner's inaction and
omission to give due consideration to the arguments and evidence
submitted before her by Avon are deplorable transgressions of Avon's
right to due process. The right to be heard, which includes the right to
present evidence, is meaningless if the Commissioner can simply
ignore the evidence without reason.
3.c. In this case, Avon was able to amply demonstrate the

Commissioner's disregard of the due process standards raised in Ang
Tibay and subsequent cases, and of the Commissioner's own rules of
procedure. Her disregard of the standards and rules renders the
deficiency tax assessments null and void. (Avon Products
Manufacturing, Inc., GR Nos. 201398-99 dated October 3, 2018)
4.a. The FDDA shall state the: (i) facts, the applicable law, rules and
regulations, or jurisprudence on which such decision is based,
otherwise, the decision shall be void, and (ii) that the same is his final
decision. (RR No. 18-2013 dated November 28, 2013)
4.b. The FDDA must state the facts and law on which it is based to
provide the taxpayer the opportunity to file an intelligent appeal. An
FDDA which contains a taxpayer’s supposed tax liabilities, without
providing any details on the specific transactions which gave rise to its
supposed tax deficiencies is void. While it provided for the legal bases
of the assessment, it fell short of informing the taxpayer of the factual
bases thereof.
4.c. However, a void FDDA does not ipso facto render the assessment
void.
Clearly, a decision of the CIR on a disputed assessment differs from the

assessment itself. Hence, the invalidity of one does not necessarily
result to the invalidity of the other—unless the law or regulations
otherwise provide. The nullity of the FDDA does not extend to the
nullification of the entire assessment. As if there was no decision
rendered by the CIR. It is tantamount to a denial by inaction by the
CIR, which may still be appealed before the CTA and the assessment
evaluated on the basis of the available evidence and documents. (CIR
vs. Liquigaz Phils. Corporation, GR No. 215534 dated April 18, 2016)
FAN and FDDA Stage – Protest Procedure against the FAN:
1.a. File protest within 30 days from receipt of the FAN, otherwise the
FAN becomes final and executory. In case of a request for
reinvestigation, the taxpayer has 60 days to submit relevant
supporting documents.
1.b. The taxpayer shall state in his protest (i) the nature of the protest
whether reconsideration or reinvestigation, specifying newly
discovered or additional evidence he intends to present if it is a
request for reinvestigation, (ii) date of the assessment notice, and (iii)
the applicable law, rules and regulations, or jurisprudence on which his
protest is based, otherwise, his protest shall be considered void and
without force and effect.
1.c. Flaws in taxpayer’s protest. Did not state:
1. The assessment notice's date; Attaching copies of the audit

results/assessment notices is not stating the date of the
assessment notice, any more than attaching copies of assailed
judgments to a petition without stating them in the petition itself
complies with the rule on statements of material dates;
2. The applicable law, rules and regulations, or jurisprudence on
which its protest was based; and,
1.c. Flaws in taxpayer’s protest. Did not state:
3. Nature of the protest; While respondent's declaration that it was

"in the process of compiling the necessary documentation to
support [its] protest to said assessments" could imply that it was
requesting a reinvestigation, its failure to explicitly state this
means that petitioner had no way of knowing whether it should
monitor the 60-day period stated in Revenue Regulations No. 18-
2013.
1.d. Section 228 of the National Internal Revenue Code is clear. The
administrative protest must be filed not only within the stated period,
but also "in such form and manner as may be prescribed by
implementing rules and regulations." Respondent's April 29, 2015
letter did not comply with the three requirements of Revenue
Regulations No. 18-2013. (CIR vs. CTA, GR No. 239464 dated May 10,
2021)
2.a. Within sixty (60) days from filing of the protest, all relevant
supporting documents shall have been submitted; otherwise, the
assessment shall become final.
2.b. The term "relevant supporting documents" should be understood

as those documents necessary to support the legal basis in disputing a
tax assessment as determined by the taxpayer. The BIR can only inform
the taxpayer to submit additional documents. The BIR cannot demand
what type of supporting documents should be submitted. Otherwise, a
taxpayer will be at the mercy of the BIR, which may require the
production of documents that a taxpayer cannot submit. (CIR vs. First
Express Pawnshop, GR Nos. 172045-46 dated June 16, 2009)
2.c. Failure to submit relevant supporting documents renders the

assessment final. The term “the assessment shall become final” shall
mean the taxpayer is barred from disputing the correctness of the
issued assessment by introduction of newly discovered or additional
evidence, and the Final Decision on the Disputed Assessment shall
consequently be issued. (RR No. 18-2013 dated November 28, 2013)
FAN and FDDA Stage – BIR issues a Decision:
1.a. Taxpayer has 30 days within which to appeal to the CTA from
receipt of the FDDA. Otherwise, the FDDA becomes final and
executory.
1.b. If the FDDA was issued by the CIR’s duly authorized representative,
the taxpayer may file an appeal with the CIR within 30 days from
receipt of the FDDA. The administrative appeal is limited to a request
for reconsideration. Taxpayer has fresh 30 days to appeal to the CTA
from receipt of the decision on the administrative appeal. (RR No. 18-
1.c. Jurisdictional basis is:
“Decisions of the CIR 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 or other laws administered by the Bureau of Internal
Revenue.” (Sec. 7(a)(1) of RA No. 9282)
1.d. The word "decisions" in the aforementioned provision of R.A. No.

9282 has been interpreted to mean the decisions of the CIR on the
protest of the taxpayer against the assessments. Definitely, said word
does not signify the assessment itself. Where a taxpayer questions an
assessment and asks the Collector to reconsider or cancel the same
because he (the taxpayer) believes he is not liable therefor, the
assessment becomes a "disputed assessment" that the Collector must
decide, and the taxpayer can appeal to the CTA only upon receipt of
the decision of the Collector on the disputed assessment. (CIR vs. V.Y.
Domingo Jewellers, Inc., GR No. 221780 dated March 25, 2019)
FAN and FDDA Stage – BIR does not issue a Decision:
2.a. The taxpayer has two options, either:
a) File a petition for review with the CTA within 30 days after the
expiration of the 180-day period; or
b) Await the final decision of the Commissioner on the disputed
assessment and appeal such final decision to the CTA within 30 days
after the receipt of a copy of such decision, these options are
mutually exclusive and resort to one bars the application of the
other. (Lascona Land vs. CIR, GR No. 171251 dated March 5, 2012;
RCBC vs. CIR, GR No. 168498 dated April 24, 2007)
2.b. There is no mention of an appeal to the CIR from the failure to act
by the CIR's authorized representative. (PAGCOR vs. BIR, GR No.
208731 dated January 27, 2016)
1.c. Jurisdictional basis is:
Inaction by the Commissioner of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties in relations thereto, or other matters arising under
the National Internal Revenue Code or other laws administered by the
Bureau of Internal Revenue, where the National Internal Revenue
Code provides a specific period of action, in which case the inaction
shall be deemed a denial. (Sec. 7(a)(2) of RA No. 9282)
2. Actions of the BIR considered as a denial of a pending protest:
a) Issuance of a Warrant of Distraint of Levy. (CIR vs. Algue, GR No. L-

28896 February 17, 1988; CIR vs. South Entertainment Gallery, Inc., GR
No. 225809 dated March 17, 2021)
b) Filing of Collection Case. (Yabes vs. Flojo, GR No. L-46954 dated July
20, 1982)
c) Issuance of a Final Notice before Seizure. (CIR vs. Isabela Cultural
Corp., GR No. 135210 dated July 11, 2001)
d) Issuance of Collection Letter. (CIR vs. Avon Products Manufacturing,
Inc., GR Nos. 201398-99 dated October 3, 2018)
FAN and FDDA Stage – Summary:
To further clarify the three options:
a. A whole or partial denial by the CIR's authorized representative may

be appealed to the CIR or the CTA;
b. A whole or partial denial by the CIR may be appealed to the CTA;
and,
c. The CIR or the CIR's authorized representative's failure to act may be
appealed to the CTA. (PAGCOR vs. BIR, GR No. 208731 dated January
27, 2016)
Collection Stage - Prescription:
1. General Rule: The BIR has 5 years from FAN to collect any deficiency
tax. (Sec. 222(c) of the Tax Code)
Collection Stage - Prescription:
2. Exception: The BIR may collect a deficiency tax liability within 10

years from discovery of: (a) filing of a false return; (b) filing of a
fraudulent return with intent to evade taxes; and, (c) omission to file a
return. However, this involves collection without an assessment and is
limited to a judicial collection. (Sec. 222(a) of the Tax Code)
Collection Stage – Prescription:
3. Options available to the BIR in case there is a false return, a

fraudulent return or omission to file a return:
a. Option 1: Assess within 10 years and collect within 5 years; and,

b. Option 2: Collect within 10 years without an assessment.
Collection Stage - Doctrines:
1. The taxpayer may still question the BIR’s right to collect with the CTA
even if the assessment has already become final and executory. The
same falls under: “other matters arising under the National Internal
Revenue Code or other law as part of law administered by the Bureau
of Internal Revenue under RA No. 9282.”
Collection Stage - Doctrines:
2. To be sure, the fact that an assessment has become final for failure
of the taxpayer to file a protest within the time allowed only means
that the validity or correctness of the assessment may no longer be
questioned on appeal. However, the validity of the assessment itself is
a separate and distinct issue from the issue of whether the right of the
CIR to collect the validly assessed tax has prescribed. This issue of
prescription, being a matter provided for by the NIRC, is well within
the jurisdiction of the CTA to decide. (CIR vs. Hambrecht & Quist
Philippines, Inc., GR No. 169225 November 17, 2010)
Refunds in General:
1. The taxpayer must file a written claim for refund with the CIR prior
to filing a judicial claim for refund with the CTA. (Sec. 204(C) of the Tax
Code)
Both the administrative claim for refund with the CIR and the judicial
claim for refund with the CTA must be filed within 2 years from the
date of payment regardless of any supervening event. (Sec. 229 of the
Tax Code)
Refunds in General:
2. A claimant for refund must first file an administrative claim for

refund before the CIR, prior to filing a judicial claim before the CTA.
Notably, both the administrative and judicial claims for refund should
be filed within the two (2)-year prescriptive period indicated therein,
and that the claimant is allowed to file the latter even without waiting
for the resolution of the former in order to prevent the forfeiture of its
claim through prescription. (Metrobank vs. CIR, GR No. 182582 dated
April 17, 2017)
Refunds in General:
3. Jurisdictional basis is:
Decisions/Inaction by the Commissioner of Internal Revenue in cases

involving disputed assessments, refunds of internal revenue taxes,
fees or other charges, penalties in relations thereto, or other matters
arising under the National Internal Revenue Code or other laws
administered by the Bureau of Internal Revenue, where the National
Internal Revenue Code provides a specific period of action, in which
case the inaction shall be deemed a denial. (Sec. 7(a)(1)(2) of RA No.
9282)
Refunds in General – Sample Problem:
When is the last day to file the judicial claim for refund in the following
instances?
Filing of Annual Date of Filing of Decision

ITR for calendar Claim with the denying the
year 2015 BIR claim for
refund
1. 4/15/2016 4/15/2017 3/1/2018
2. 4/10/2016 4/15/2017 4/1/2018
3. 4/20/2016 4/15/2017 4/25/2018
Refunds in General – Sample Problem:
When is the last day to file the judicial claim for refund in the following
instances?
Filing of Annual Date of Filing Decision

ITR for calendar of Claim with denying the Answer
year 2015 the BIR claim for
refund
1. 4/15/2016 4/15/2017 3/1/2018 3/31/2018
2. 4/10/2016 4/15/2017 4/1/2018 4/10/2018
3. 4/20/2016 4/15/2017 4/25/2018 No judicial
remedy
Refunds in General:
4.a. The period to file a claim for refund under Sec. 229 is two (2)
years counted from the date of payment regardless of any
supervening event and not from the date of discovery of the
erroneous payment.
Refunds in General:
4.c. In the case of erroneously paid withholding taxes, the six (6) year
prescriptive period under Art. 1145 of the Civil Code on solutio indebiti
is not applicable because the first requisite of solutio indebiti is not
present, i.e., 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. Also, the provisions of the Tax Code, being a
special law prevails over the provisions of the Civil Code, being a
general law. (CIR vs. Meralco, GR No. 181459 dated June 9, 2014)
Illustration of the Creditable Withholding Tax System:
Lease contract with a monthly lease of P10,000.00, withholding tax

rate is 5%:
Particulars ITR of the Lessor
Sales 120,000.00
Cost of Sales 80,000.00
Gross Income 40,000.00
Allowable Deductions 100,000.00
Taxable Income (60,000.00)
Tax Rate 30%
Tax Due -
Creditable Withholding Tax 6,000.00
Tax Payable (6,000.00)
Irrevocability Rule:
1.a. Section 76. Final Adjustment Return. - Every corporation liable to

tax under Section 27 shall file a final adjustment return covering the
total taxable income for the preceding calendar or fiscal year. If the
sum of the quarterly tax payments made during the said taxable year is
not equal to the total tax due on the entire taxable income of that
year, the corporation shall either:
(A) Pay the balance of tax still due; or

(B) Carry-over the excess credit; or
(C) Be credited or refunded with the excess amount paid, as the case
may be.
Irrevocability Rule:
1.b. In case the corporation is entitled to a tax credit or refund of the

excess estimated quarterly income taxes paid, the excess amount
shown on its final adjustment return may be carried over and credited
against the estimated quarterly income tax liabilities for the taxable
quarters of the succeeding taxable years. Once the option to carry-
over and apply the excess quarterly income tax against income tax
due for the taxable quarters of the succeeding taxable years has been
made, such option shall be considered irrevocable for that taxable
period and no application for cash refund or issuance of a tax credit
certificate shall be allowed therefor.
Irrevocability Rule – Doctrines:
1. Under the cited law, there are two options available to the
corporation whenever it overpays its income tax for the taxable year:
(1) to carry over and apply the overpayment as tax credit against the
estimated quarterly income tax liabilities of the succeeding taxable
years (also known as automatic tax credit) until fully utilized (meaning,
there is no prescriptive period); and (2) to apply for a cash refund or
issuance of a tax credit certificate within the prescribed period. Such
overpayment of income tax is usually occasioned by the over-
withholding of taxes on the income payments to the corporate
taxpayer. (University Physicians Services, Inc. vs. CIR, GR No. 205955
dated March 7, 2018)
Irrevocability Rule – Doctrines:
2. The phrase "for that taxable period" merely identifies the excess
income tax, subject of the option, by referring to the taxable period
when it was acquired by the taxpayer.
The phrase "for that taxable period" is not a prescriptive period for the
irrevocability rule. This construal effectively renders nugatory the
irrevocability rule. The evident intent of the legislature, in adding the
last sentence to Section 76, is to keep the taxpayer from flip-flopping
on its options, and avoid confusion and complication as regards said
taxpayer's excess tax credit. The interpretation of the Court of Appeals
only delays the flip-flopping to the end of each succeeding taxable
period. (CIR vs. BPI, GR No. 178490 dated July 7, 2009)
Irrevocability Rule – Illustration:
2010 ITR of 2011 ITR of the 2012 ITR of the
Particulars
the Lessor Lessor Lessor
Gross Income 20,000.00 30,000.00 45,000.00
Allowable Deductions 100,000.00 100,000.00 100,000.00
Taxable Income (80,000.00) (70,000.00) (55,000.00)
Tax Rate 30% 30% 30%
Tax Due - - -
Prior Year CWT - 5,000.00 5,000.00
Current Year CWT 5,000.00 10,000.00 7,000.00
Tax Payable (5,000.00) (15,000.00) (12,000.00)
Taxpayer files a claim for refund for P15,000.00. Should it be granted?

ITRs in the University Physicians Case:
Particulars 2005 ITR 2006 ITR 2007 ITR - Original 2007 ITR - Amended
Gross Income 20,000.00 30,000.00 40,000.00 40,000.00
Allowable Deductions 100,000.00 100,000.00 100,000.00 100,000.00
Taxable Income (80,000.00) (70,000.00) (60,000.00) (60,000.00)
Tax Rate 30% 30% 30% 30%
Tax Due - - - -
Prior Year CWT - 5,000.00 15,000.00 5,000.00
Current Year CWT 5,000.00 10,000.00 4,000.00 4,000.00
Tax Payable (5,000.00) (15,000.00) (19,000.00) (9,000.00)
Choice Carryover Refund - P10,000 Carryover Carryover
Filed a claim for refund of P10,000.00 for the year 2006.

Irrevocability Rule – Does it Apply to the Option to Refund?
1. We cannot subscribe to the suggestion that the irrevocability rule

enshrined in Section 76 of the National Internal Revenue Code (NIRC)
applies to either of the options of refund or carry-over. Our reading of
the law assumes the interpretation that the irrevocability is limited
only to the option of carry-over such that a taxpayer is still free to
change its choice after electing a refund of its excess tax credit. But
once it opts to carry over such excess creditable tax, after electing
refund or issuance of tax credit certificate, the carry-over option
becomes irrevocable. Accordingly, the previous choice of a claim for
refund, even if subsequently pursued, may no longer be granted.
2. A perfunctory reading of the law unmistakably discloses that the

irrevocable option referred to is the carry-over option only. There
appears nothing therein from which to infer that the other choice, i.e.,
cash refund or tax credit certificate, is also irrevocable. If the intention
of the lawmakers was to make such option of cash refund or tax credit
certificate also irrevocable, then they would have clearly provided so.
Law and jurisprudence unequivocally support the view that only the
option of carry-over is irrevocable.
3. The CTA was correct in considering UPSI-MI to have constructively

chosen the option of carry-over, for which reason, the irrevocability
rule forbade it to revert to its initial choice. It does not matter that
UPSI-Ml had not actually benefited from the carry-over on the ground
that it did not have a tax due in its 2007 short period. Neither may it
insist that the insertion of the carry-over in the 2007 FAR was by mere
mistake or inadvertence. As we previously laid down, the
irrevocability rule admits of no qualifications or conditions.
(University Physicians Services, Inc. vs. CIR, GR No. 205955 dated
March 7, 2018)
VAT Refund under Sec. 112:
Grounds:
1. Excess input VAT attributable to a zero-rated transaction (Sec. 112(A)

of the Tax Code); and,
2. Excess input VAT at time of cancellation of VAT registration (Sec.
112(B) of the Tax Code).
1.a. Administrative Claim for Refund under Sec. 112(A) – Period to the
file the refund:
Two (2) years from the close of the taxable quarter when the zero-
rated sales were made.
1.b. Administrative Claim for Refund under Sec. 112(A) – Illustration:
During the 1st Quarter of 2018, X a VAT-registered person purchased

P10,000.00 (VAT exclusive) worth of goods from Z, also a VAT-
registered person and subsequently sold the same for P30,000.00 to
the Asian Development Bank (VAT exclusive).
1st Quarter VAT return:
Output Tax: (P30,000.00 x 0%) P -

Input Tax: 1,200.00
VAT payable: P(1,200.00)
2.a. Administrative Claim for Refund under Sec. 112(B) – Period to the
file the refund:
Two (2) years from cancellation of VAT registration. The date of

cancellation is the date of issuance of tax clearance by the BIR, after
full settlement of all tax liabilities relative to cessation of business or
change of status of the concerned taxpayer. (Revenue Regulations No.
13-2018 dated March 15, 2018)
2.b. Administrative Claim for Refund under Sec. 112(B) – Illustration:
During the 1st Quarter of 2018, X a VAT-registered person purchased

P10,000.00 (VAT exclusive) worth of goods from Z, also a VAT-
registered person and subsequently sold the same to Y for P5,000.00
(VAT exclusive).
1st Quarter VAT return:
Output Tax: (P5,000.00 x 12%) P 600.00

Input Tax: 1,200.00
VAT payable: P (600.00)
3. Judicial Claim for Refund under Sec. 112(C):

NIRC TRAIN Law
In proper cases, the Commissioner shall In proper cases, the Commissioner shall
grant a refund or issue the tax credit grant a refund for creditable input taxes
certificate for creditable input taxes within ninety (90) days from the date of
within one hundred twenty (120) days submission of the official receipts or
from the date of submission of complete invoices and other documents in
documents in support of the application support of the application filed in
filed in accordance with Subsections (A) accordance with Subsections (A) and (B)
and (B) hereof. hereof: Provided, That should the
Commissioner find that the grant of
refund is not proper, the Commissioner
must state in writing the legal and
factual basis for the denial.
3. Judicial Claim for Refund under Sec. 112(C):

NIRC TRAIN Law
In case of full or partial denial of the In case of full or partial denial of the
claim for tax refund or tax credit, or the claim for tax refund, the taxpayer
failure on the part of the Commissioner affected may, within thirty (30) days
to act on the application within the from the receipt of the decision denying
period prescribed above, the taxpayer the claim, appeal the decision with the
affected may, within thirty (30) days Court of Tax Appeals: Provided, however,
from the receipt of the decision denying That failure on the part of any official,
the claim or after the expiration of the agent, or employee of the BIR to act on
one hundred twenty day-period, appeal the application within the ninety (90)-
the decision or the unacted claim with day period shall be punishable under
the Court of Tax Appeals. Section 269 of this Code.
4. Doctrines under Sec. 112(C):
1. The 90-day period to decide will always start from the filing of the
claim for refund since the claim for refund must be accompanied by
complete supporting documents. (Revenue Regulations No. 13-2018
4. Doctrines under Sec. 112(C):
2. The judicial claim for refund or appeal with the CTA need not be
made within the 2-year period under Secs. 112(A) and (B). (CIR vs. San
Roque Power, GR No. 187485 dated February 12, 2013)
4. Doctrines under Sec. 112(C) – Gray Area:
3.a. No provision allowing the taxpayer to appeal to the CTA by way of

inaction:
In case of full or partial denial of the claim for tax refund, the taxpayer
affected may, within thirty (30) days from the receipt of the decision
denying the claim, appeal the decision with the Court of Tax
Appeals: Provided, however, That failure on the part of any official,
agent, or employee of the BIR to act on the application within the
ninety (90)-day period shall be punishable under Section 269 of this
Code.
3.b. However, under RA No. 9282, the CTA has jurisdiction over
inaction(s) of the CIR in claims for refund where the National Internal
Revenue Code provides a specific period of action, in which case the
inaction shall be deemed a denial. The lapse of the 90-day period may
be deemed a denial of the pending claim for refund. Accordingly, it
may be argued that the taxpayer has 30 days to appeal to the CTA from
lapse of the 90-day period.
3.c. On the other hand, according to RR No. 26-2018: “Provided

further, That, in the event that the 90-day period has lapsed without
having the refund released to the taxpayer-claimant, the VAT refund
claim may still continue to be processed administratively. Provided
however, That the BIR official, agent, or employee who was found to
have deliberately caused the delay in the processing of the VAT refund
claim may be subjected to penalties imposed under said section.”
5. Possible problems under Sec. 112(C):
Problem No. 1:
Claim for refund filed on March 1, 2020 Taxpayer files an appeal to the CTA on April 1, 2020
90-day period for the BIR to decide

Problem No. 2:
Claim for refund filed on March 1, 2020 Taxpayer files an appeal to the CTA on June 15, 2020
90-day period for the BIR to decide 30 days after the lapse of the 90-day period
Problem No. 3:
Claim for refund filed on March 1, 2020 Taxpayer files an appeal to the CTA on August 15, 2020
90-day period for the BIR to decide 30 days after the lapse of the 90-day period
Remedies under the LGC
Constitutionality or Legality of a Tax Ordinance – What is covered?
1. Section 187 of the LGC, which outlines the procedure for

questioning the constitutionality of a tax ordinance, is inapplicable to
an ordinance imposing regulatory fees, rendering unnecessary the
resolution of the issue on non-exhaustion of administrative remedies.
(Smart vs. Municipality of Malvar, Batangas, GR No. 204429 dated
February 18, 2014)
Constitutionality or Legality of a Tax Ordinance – What is covered?
2. The phrase “revenue measures” in Section 187 of the LGC also refers
to tax ordinances. The word "or" in Section 187 should be used in a
non-disjunctive sense. It should be construed in a way that the phrase
"revenue measures" is read as another way of expressing "tax
ordinances." Both refer to one and the same thing.
Proceeding to the question of non-exhaustion, the Court rules that

ordinances that impose regulatory fees do not need to be challenged
before the Secretary of Justice. (City of Cagayan De Oro v. CEPALCO,
GR No. 224825 dated October 17, 2018)
Constitutionality or Legality of a Tax Ordinance – How to contest?
Procedure:
a. Appeal to the Secretary of Justice (“SOJ”) within 30 days from the

effectivity of the ordinance.
b. SOJ shall render a decision within 60 days from receipt of appeal.
c. Appeal shall not have the effect of suspending the effectivity of the
ordinance and the accrual and payment of the tax, fee, or charge
levied therein.
d. Within 30 days after receipt of the decision or the lapse of the 60
period without the SOJ acting upon the appeal, the aggrieved party
may file the appropriate proceedings with the court of competent
jurisdiction. (Sec. 187 of the LGC)
Constitutionality or Legality of a Tax Ordinance – Court of Competent
Jurisdiction?
1. Considering that the subject matter of review is an exercise of quasi-

judicial power by the Secretary of Justice, the latter's decision on the
legality or constitutionality of tax ordinances and revenue measures
under Section 187 of the LGC is a proper subject of appeal through a
petition for review under Rule 43.
Constitutionality or Legality of a Tax Ordinance – Court of Competent
Jurisdiction?
2. The proper venue for the foregoing actions however is the Court of
Appeals (“CA”) and not the Regional Trial Court in accordance with
Section 4, Rule 65 of the Rules of Court. In the consolidated cases of
Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) vs.
GCC Approved Medical Centers Association, Inc., et al., the Court
emphasized that the "acts or omissions by quasi-judicial agencies,
regardless of whether the remedy involves a Rule 43 appeal or a Rule
65 petition for certiorari, is cognizable by the CA.“ (De Lima vs. City of
Manila, GR No. 222886 dated October 17, 2018)
Constitutionality or Legality of a Tax Ordinance – Failure to avail?
1. These three separate periods under Section of the LGC are clearly
given for compliance as a prerequisite before seeking redress in a
competent court. Such statutory periods are set to prevent delays as
well as enhance the orderly and speedy discharge of judicial functions.
For this reason the courts construe these provisions of statutes as
mandatory. (CEPALCO, Inc. vs. City of Cagayan de Oro, GR No. 191761
dated November 14, 2012)
2. The doctrine of exhaustion of administrative remedies, like the

doctrine on hierarchy of courts, is not an iron-clad rule. It admits of
several well-defined exceptions. (Aala vs. Uy, GR No. 202781 dated
January 10, 2017)
3. In the following cases, the Supreme Court, as an exception to the

general rule and exception to the rule on exhaustion of administrative
remedies, held that failure to comply with Sec. 187 of the LGC is not
fatal:
1. Ongsuco vs. Malones, GR No. 182065 dated October 27, 2009 – pure
questions of law;
2. CEPALCO vs. City of Cagayan de Oro, GR No. 191761 dated
November 14, 2012 – more substantive matters; and,
3. Alta Vista Golf and Country Club vs. City of Cebu, GR No. 180235
dated January 20, 2016 – pure questions of law and substantive
matters imperative for the Court to resolve.
Protest and Refund Cases in Local Tax Cases except RPT – Scenario 1:
1. Scenario contemplated:
Taxpayer receives a notice of assessment but does not pay the tax
2. Procedure – local treasurer and trial courts:
a. File protest within 60 days from receipt of the protest. Otherwise,

the assessment becomes final and executory;
b. Treasurer decides within 60 days from receipt of the protest; and,
c. The taxpayer shall have 30 days from the receipt of the denial of the
protest or from the lapse of the 60 day period in letter c. within which
to appeal with the MTC/RTC, otherwise, the assessment becomes
conclusive and unappealable. (Sec. 195 of the LGC)
Taxpayer does not receive a notice of assessment but erroneously pays

the tax or claims that the tax has been illegally collected from him
2. Procedure – local treasurer and trial courts:
a. Taxpayer files a written claim for refund with the local treasurer
within 2 years from date of payment, or from the date the taxpayer is
entitled to a refund or credit.
b. The subsequent appeal of the decision or inaction of the MTC/RTC

must be within 2 years from date of payment, or from the date the
taxpayer is entitled to a refund or credit.
3. Doctrines related to the procedure – period to decide the refund?
Unlike Section 195, however, Section 196 does not expressly provide a
specific period within which the local treasurer must decide the
written claim for refund or credit. It is, therefore, possible for a
taxpayer to submit an administrative claim for refund very early in the
two-year period and initiate the judicial claim already near the end of
such two-year period due to an extended inaction by the local
treasurer. In this instance, the taxpayer cannot be required to await
the decision of the local treasurer any longer, otherwise, his judicial
action shall be barred by prescription. (City of Manila vs. Cosmos
Bottling Corporation, GR No. 196681 dated June 27, 2018)
4. Doctrines related to the procedure - May the written claim for

refund with the local treasurer be dispensed with?
a. The doctrine of exhaustion of administrative remedies requires

recourse to the pertinent administrative agency before resorting to
court action. When there is an adequate remedy available with the
administrative remedy, then courts will decline to interfere when the
party refuses, or fails, to avail of it. Nonetheless, the failure to exhaust
administrative remedies is not always fatal to a party's cause. The
Supreme Court has admitted of several exceptions to the doctrine.
4. Doctrines related to the procedure - May the written claim for

refund with the local treasurer be dispensed with?
b. If the party can prove that the resort to the administrative remedy
would be an idle ceremony such that it will be absurd and unjust for it
to continue seeking relief that evidently will not be granted to it, then
the doctrine would not apply. The filing of written claims with
respondent City Treasurer for every collection of tax under the
subject ordinance, would have yielded the same result every time.
Furthermore, the issue raised by the taxpayer legal and there is no
question concerning the reasonableness of the amount assessed, then
there is no need to exhaust administrative remedies. (ICTSI vs. City of
Manila, GR No. 185622 dated October 17, 2018)
Taxpayer receives a notice of assessment but opts to pay the tax

2. Procedure:
a. File protest within 60 days from receipt of the protest. Otherwise,

the assessment becomes final and executory;
b. In its protest, the taxpayer should request for a refund in compliance
with Sec. 196 of the LGC;
c. Treasurer decides within 60 days from receipt of the protest; and,
d. The taxpayer shall have 30 days from the receipt of the denial of the
protest or from the lapse of the 60 day period in letter c. within which
to appeal with the MTC/RTC, otherwise, the assessment becomes
conclusive and unappealable. (Secs. 195 and 196 of the LGC)
3. Doctrines related to the procedure:
a. To stress, where an assessment is issued, the taxpayer cannot

choose to pay the assessment and thereafter seek a refund at any
time within the full period of two years from the date of payment as
Section 196 may suggest. If refund is pursued, the taxpayer must
administratively question the validity or correctness of the assessment
in the 'letter-claim for refund' within 60 days from receipt of the notice
of assessment, and thereafter bring suit in court within 30 days from
either decision or inaction by the local treasurer. (City of Manila vs.
Cosmos Bottling Corporation, GR No. 196681 dated June 27, 2018)
3. Doctrines related to the procedure:
b. If the taxpayer opts to pay the assessed tax, fee, or charge, it must
still file the written protest within the 60-day period, and then bring
the case to court within 30 days from either the decision or inaction of
the local treasurer. In its court action, the taxpayer may, at the same
time, question the validity and correctness of the assessment and seek
a refund of the taxes it paid. "Once the assessment is set aside by the
court, it follows as a matter of course that all taxes paid under the
erroneous or invalid assessment are refunded to the taxpayer.“ (ICTSI
vs. City of Manila, GR No. 185622 dated October 17, 2018)
3. Doctrines related to the procedure – What if the taxpayer fails to

request for a refund?
Where protest against assessment was first made, then later payment
of the assessed tax, substantial justice or procedural economy, at the
very least, demands that the prior letter-protest be treated as having
the same effect and import as a written claim for refund for purposes
of satisfying the requirement of exhaustion of administrative
remedies. (City of Manila vs. Cosmos Bottling Corporation, GR No.
196681 dated June 27, 2018)
Protest and Refund Cases in Local Tax Cases except RPT:
Procedure in the appellate courts common to the three (3) scenarios:
a. If the MTC has original jurisdiction over the case, its decision is
appealable to the RTC. The decision of the RTC is appealable to CTA En
Banc then to the Supreme Court.
b. If the RTC has original jurisdiction over the case, its decision is
appealable to the CTA Division, then to the CTA En Banc then to the
Supreme Court.
Protest and Refund Cases in Local Tax Cases except RPT:
Procedure in the appellate courts common to the three (3) scenarios:
c. The jurisdictional basis of the CTA’s appellate jurisdiction is:
“Decisions, orders or resolutions of the Regional Trial Courts in local

tax cases originally decided or resolved by them in the exercise of their
original or appellate jurisdiction.” (Sec. 7(a)(3) of RA No. 9282)
Real Property Tax Assessments:
Two (2) kinds of Real Property Tax Assessments:
1. Erroneous Assessment - An erroneous assessment presupposes

that the taxpayer is subject to the tax but is disputing the correctness
of the amount assessed. With an erroneous assessment, the taxpayer
claims that the local assessor erred in determining any of the items for
computing the real property tax, i.e., the value of the real property or
the portion thereof subject to tax and the proper assessment levels.
2. Illegal Assessment - an assessment is illegal if it was made without

authority under the law. (City of Lapu-Lapu vs. PEZA, GR No. 184203
Real Property Tax Assessments:
Two (2) kinds of Real Property Tax Assessments:
Erroneous Assessment Illegal Assessment

excessiveness, reasonableness legality, power, validity or
and correctness authority (of the assessor)
Payment under protest is Payment under protest not
required necessary
Must exhaust administrative May immediately avail of a
remedies judicial remedy
Factual Issues Legal Issues
How to contest an Erroneous Assessment:
1. Pay under protest; (Sec. 252 of the LGC)

2. File a written protest with the treasurer within 30 days from
payment; (Sec. 252 of the LGC)
3. Treasurer to decide within 60 days; (Sec. 252 of the LGC)
4. If protest is denied or upon lapse of the 60 day period to decide the
protest, file a verified petition with the Local Board of Assessment
Appeals (“LBAA”) within 60 days from receipt of the written notice of
assessment/decision of the treasurer or from lapse of the 60 day
period to decide. (Sec. 226 of the LGC)
5. LBAA to decide the appeal/petition within 120 days from receipt of
the appeal; (Sec. 229 of the LGC)
How to contest an Erroneous Assessment:
6. If the taxpayer is not satisfied with the decision of the LBAA, an

appeal may be taken to the Central Board of Assessment Appeals
(“CBAA”) by filing a notice of appeal within 30 days from receipt
thereof. (Sec. 229 of the LGC)
7. From the CBAA, appeal to the CTA EB within 30 days via Petition for
review under Rule 43. (CTA Rules)
8. The decision of the CTA EB is appealable to the SC within 15 days
under Rule 45 raising pure questions of law. (CTA Rules)
Erroneous Assessment Doctrines – Surety Bond Allowed?
1. Posting of surety bond (instead of payment in cash), may be

considered substantial compliance with Section 252 of the LGC
Government Code for the said bond already guarantees the payment
to the alleged real property tax. (Meralco vs. The City Assessor and City
Treasurer of Lucena City, GR No. 166102 dated August 5, 2015)
Erroneous Assessment Doctrines – Claim of Exemption?
2.a. A claim for exemption from payment of real property taxes does
not actually question the assessor's authority to assess and collect
such taxes but pertains to the reasonableness or correctness of the
assessment by the local assessor, a question of fact which should be
resolved, at the very first instance, by the LBAA. This may be inferred
from Section 206 of the LGC.
Erroneous Assessment Doctrines – Claim of Exemption?
2.b. Sec. 206, by providing that real property not declared and proved
as tax-exempt shall be included in the assessment roll, the above-
quoted provision implies that the local assessor has the authority to
assess the property for realty taxes, and any subsequent claim for
exemption shall be allowed only when sufficient proof has been
adduced supporting the claim.
Therefore, if the property being taxed has not been dropped from the
assessment roll, taxes must be paid under protest if the exemption
from taxation is insisted upon. (Camp John Hay vs. CBAA, GR No.
169234 dated October 2, 2013)
Erroneous Assessment Doctrines – Who should file the protest?
3.a. Section 226 of the LGC lists down the two entities vested with the
personality to contest an assessment: (1) the owner and, (2) the
person with legal interest in the property. A person legally burdened
with the obligation to pay for the tax imposed on a property has legal
interest in the property and the personality to protest a tax
assessment on the property.
Erroneous Assessment Doctrines – Who should file the protest?
3.b. Contractual stipulation to assume payment of the real property

tax does not clothe the party legal interest for purposes of contesting
an assessment. Corollary thereto, the local government units can
neither be compelled to recognize the protest of a tax assessment
from an entity against whom it cannot enforce the tax liability. (NPC vs.
Quezon, GR No. 171586 dated July 15, 2009)
Erroneous Assessment Doctrines – Jurisdictional Basis?
4. Jurisdictional basis for appeal to the CTA EB from the CBAA’s

decision is:
“Decisions of the Central Board of Assessment Appeals in the exercise

of its appellate jurisdiction over cases involving the assessment and
taxation of real property originally decided by the provincial or city
board of assessment appeals.” (Sec. 7(a)(5) of RA No. 9282)
How to contest an Illegal Assessment:
1. Taxpayer shall file a complaint for injunction before the Regional

Trial Court to enjoin the Local Government Unit from collecting real
property taxes;
2. The party unsatisfied with the decision of the RTC shall file an
appeal, not a petition for certiorari, before the CTA, the complaint
being a local tax case decided by the RTC case decided by the RTC. The
appeal shall be filed within 30 days; and,
3. Decision of the CTA is appealable to the SC under Rule 45 raising
pure questions of law. (City of Lapu-Lapu vs. PEZA, GR No. 184203
Illegal Assessment Doctrines:
1. Cases wherein the Supreme Court held that payment under protest
was not necessary:
a. If the taxpayer questions the authority of the assessor to make the

assessment and collect the tax. (Ty vs. Trampe, GR No. 117577 dated
December 1, 1995)
b. If the issue is who should pay the tax? (Testate Estate of Concordia
Lim vs. City of Manila, GR No. 90639 dated February 21, 1990)
1. Cases wherein the Supreme Court held that payment under protest
was not necessary:
c. Amount of protest to be paid is huge and the properties were

already levied and to be auctioned-off. In this sense, appeal to the
LBAA is not a plain, adequate and speedy remedy. (City Government of
Quezon City vs. Bayan Telecommunications, Inc., GR No. 162015 dated
March 6, 2006)
d. Claim of exemption under Sec. 234 of the LGC that was considered a
pure question of law. (Metropolitan Waterworks and Sewerage System
vs. CBAA, GR No. 215955 dated January 13, 2021)
2.a. The jurisdictional basis for appeal from the RTC to the CTA Division
is:
“Decisions, resolutions or orders of the Regional Trial Courts in local

tax cases decided or resolved by them in the exercise of their original
xxx jurisdiction.” (Sec. 7(a)(3) of RA No. 9282)
2.b. The term "local taxes" in the aforementioned provision should be

considered in its general and comprehensive sense, which embraces
real property tax assessments in line with the precept Generalia verba
sunt generaliter inteligencia — what is generally spoken shall be
generally understood. (NPC vs. Municipal Government of Navotas, GR
No. 192300 dated November 24, 2014)
Action to Invalidate a Tax Sale:
Section 267. Action Assailing Validity of Tax Sale. - No court shall

entertain any action assailing the validity or any sale at public auction
of real property or rights therein under this Title until the taxpayer
shall have deposited with the court the amount for which the real
property was sold, together with interest of two percent (2%) per
month from the date of sale to the time of the institution of the
action. The amount so deposited shall be paid to the purchaser at the
auction sale if the deed is declared invalid but it shall be returned to
the depositor if the action fails. Neither shall any court declare a sale
at public auction invalid by reason of irregularities or informalities in
the proceedings unless the substantive rights of the delinquent owner
of the real property or the person having legal interest therein have
been impaired.
Doctrines under Sec. 267 – Preliminary Considerations:
1. Applies only to real property tax delinquency;

2. Real property must have already been sold at public auction;
3. Owner or person having legal interest in the subject real property
may file a complaint in court to assail the validity of the tax sale;
4. Deposit with the court the amount for which the real property was
sold, together with interest of two percent (2%) per month from the
date of sale to the time of the institution of action;
5. If the sale is declared invalid, the amount deposited is returned to
the purchaser; and,
6. If the sale is declared valid, the amount deposited is returned to the
owner or person having legal interest.
Doctrines under Sec. 267 – Rationale?
1. The deposit requirement is an ingenious legal device to guarantee

the satisfaction of the tax delinquency, with the local government unit
keeping the payment on the bid price whether the tax sale be nullified
or not by the court. (Solco vs. Megaworld Corporation, GR No. 213669
Doctrines under Sec. 267 – Who May File?
2. The second paragraph limits the invalidation of tax delinquency

sales on the basis of "irregularities or informalities in the proceedings."
Section 267 permits such invalidations only when "substantive rights . .
. have been impaired." These substantive rights may pertain to "the
delinquent owner of the real property or the person having legal
interest therein." Stated otherwise, a person having legal interest
over such property, even a non-owner, may bring an action under
Section 267, for as long as his or her substantive rights have been
impaired. The right to file an action under Section 267 is not barred
merely on account of a plaintiff's not being the owner of the property
sold. (Alvarado vs. Ayala Land, Inc., GR No. 208426 dated September
20, 2017)
Doctrines under Sec. 267 – When Deposit Not Required?
3.a. Deposit is not required or applicable if:
a. The property is current in its realty tax or not realty tax delinquent.
It should not be the subject of a sale at public auction as contemplated
in Section 267. - but there must be competent evidence that the
realty tax due on the property subject of the tax sale has been
seasonably and fully paid.
b. The plaintiff is the government or any of its agencies as it is
presumed to be solvent, and more so where the tax exempt status of
such plaintiff as basis of the suit is acknowledged.
Doctrines under Sec. 267 – When Deposit Not Required?
3.b. The required deposit under Section 267 becomes jurisdictional

only if there is no dispute that the real property is tax delinquent. In
that instance, the deposit will serve its intended purpose. However,
where the property sold at a public auction sale is not tax delinquent,
then the envisioned purpose becomes irrelevant, if not oppressive.
(Beaumont Holdings vs. Reyes, GR No. 203706 dated August 7, 2017,
J. Caguioa)
Doctrines under Sec. 267 – Appellate Jurisdiction:
4.a. Does the CTA have appellate jurisdiction over a Section 267 case?
“Decisions, resolutions or orders of the Regional Trial Courts in local

tax cases decided or resolved by them in the exercise of their original
xxx jurisdiction.” (Sec. 7(a)(3) of RA No. 9282)
4.b. The Court of Appeals (“CA”) correctly asserted its jurisdiction in

this case. Here, the dispute arose from the alleged non-compliance of
the respondents with the pertinent provisions of the LGC on tax
delinquency sale. A plain reading of Magpile's petition before the RTC
would show that he did not assail the legality or validity and
reasonableness or correctness of the real property tax assessment
and collection. In fact, he categorically and repeatedly admits in his
pleadings that he failed to pay the real property tax from 1998 up to
2006.
5.c. As the CA ruled, what he is questioning is the alleged denial of due

process in the levying of his property. Basic is the rule that the
allegations in the complaint and the character of the relief sought
determine the nature of an action. In order for the trial court to
resolve Magpile's petition, the issues regarding the legality/validity or
reasonableness/correctness of the real property tax assessment and
collection need not be dealt with. At bar, the issue of the validity and
legality of the tax sale is not essentially related to the issue of the
demandability of the real property tax. Therefore, the non-dismissal
of Magpile's appeal by the CA was in order. (Salva vs. Magpile, GR No.
6.a. It is apparent that the CTA's appellate jurisdiction over decisions,

orders, or resolutions of the RTCs becomes operative only when the
RTC has ruled on a local tax case.
6.b. Cases decided by the RTC which involve issues relating to the
power of the local government to impose real property taxes are
considered as local tax cases, which fall under the appellate
jurisdiction of the CTA. To note, these issues may, inter alia, involve
the legality or validity of the real property tax assessment; protests of
assessments; disputed assessments, surcharges, or penalties; legality
or validity of a tax ordinance; claims for tax refund/credit; claims for
tax exemption; actions to collect the tax due; and even prescription of
assessments.
6.c. In this case, a reading of the Annulment Complaint shows that

Teresa's action before the RTC is essentially one for recovery of
ownership and possession of the property, with damages, which is
not anchored on a tax issue, but on due process considerations. In
other words, the Annulment Complaint's allegations do not contest
the tax assessment on the property, as Ignacio only bewails the
alleged lack of due process which deprived her of the opportunity to
participate in the delinquency sale proceedings. As such, the RTC’s
ruling thereon could not be characterized as a local tax case over
which the CTA could have properly assumed jurisdiction on appeal. In
fine, the case was correctly elevated to the CA. (Ignacio vs. Office of
the City Treasurer of Quezon City, GR No. September 11, 2017)
Refund of RPT – Refund Provision under Sec. 253:
1. When an assessment of basic real property tax, or any other tax

levied under this Title, is found to be illegal or erroneous and the tax
is accordingly reduced or adjusted, the taxpayer may file a written
claim for refund or credit for taxes and interests with the provincial or
city treasurer within two (2) years from the date the taxpayer is
entitled to such reduction or adjustment.
The provincial or city treasurer shall decide the claim for tax refund or
credit within sixty (60) days from receipt thereof. In case the claim for
tax refund or credit is denied, the taxpayer may avail of the remedies
as provided in Chapter 3, Title II, Book II of this Code. (Sec. 253 of the
LGC)
2. As the real property tax assessments issued in the name of MWSS

are declared void, MWSS's claim for refund of the real property taxes
erroneously paid based on void assessments cannot be ignored. This
entitlement to a tax refund, however, is not automatic. The amount
is a factual matter that must be threshed out with certainty in the
normal course and in accordance with the administrative procedure
provided under Sec. 253 of the LGC.
MWSS's claim for tax refund should, therefore, be filed with the city
treasurer within two (2) years from the finality of this Decision, as it
is only then that the invalidity of the Pasay City assessment is finally
settled. (Metropolitan Waterworks and Sewerage System vs. CBAA, GR
No. 215955 dated January 13, 2021)
3. Scenario contemplated under Sec. 253 of the LGC:
a. Refund of tax paid pursuant to an erroneous assessment; and,

b. Refund of tax paid pursuant to an illegal assessment.
4. Procedure:
1. Taxpayer pays the erroneous/illegal assessment under protest;

2. Court declares assessment null and void;
3. Taxpayer files a claim for refund within two (2) years from the
finality of the decision;
4. Treasurer decides within 60 days;
5. Decision of the Treasurer may be appealed to the LBAA;
6. Decision of the LBAA may be appealed to the CBAA;
7. Decision of the CBAA may be appealed to the CTA EB; and,
8. Decision of the CTA EB may be appealed to the SC.
Refund of RPT – Scenario not covered by Sec. 253:
1. The fact that a taxpayer paid through error or mistake, and the
government accepted the payment gave rise to the application of the
principle of solutio indebiti under Article 2154 of the New Civil Code.
Refund of RPT – Scenario not covered by Sec. 253:
2. The prescriptive period to file the claim for refund would be six (6)
years from the date of payment. (Ramie Textiles, Inc. vs. Mathay, GR
No. L-32364 dated April 30, 1979; National Development Co. vs. Cebu
City, GR No. 51593 dated November 5, 1992)
Court of Tax Appeals
Selected Civil Cases within the Jurisdiction of the CTA:
1.a. Decisions of the CIR in cases involving disputed assessments,

relation thereto, or other matters arising under the National Internal
Revenue or other laws administered by the Bureau of Internal
Revenue;
1.a.1. Cases covered:
a. Decisions on disputed assessments (Sec. 228 of the Tax Code);

b. Decisions on refunds (Secs. 204(C), 229, 112(A), 112(B) and 112(C) of
the Tax Code); and,
c. Other matters.
1.a.2. Cases under “other matters” arising under the NIRC or other
laws administered by the BIR:
a) Whether or not the BIR was able to collect the deficiency tax within
the 5-year period under Sec. 222(c). (CIR vs. Hambrecht & Quist
Philippines, Inc., GR No. 169225 November 17, 2010)
b) Validity of a waiver of the statute of limitations. (Philippine

Journalists, Inc. vs. CIR, GR No. 162852 dated December 16, 2004)
c) Whether or not the CIR may be compelled to issue an assessment.

(Meralco Securities Corporation, Inc. vs. Savellano, GR No. L-36181
dated October 23, 1982)
d) Unfavorable BIR Rulings/Decision of the SOF on appeals of BIR

Rulings. (Philamlife vs. SOF, GR No. 210987 dated November 24, 2014;
BDO vs. Republic, GR No. 198756 dated January 13, 2015)
e) In any case, even if this Court were to disregard the Collection Letter
as a final decision of the Commissioner on Avon's protest, the
Collection Letter constitutes an act of the Commissioner on "other
matters" arising under the NIRC, which, pursuant to Philippine
Journalists, Inc. v. CIR, may be the subject of an appropriate appeal
before the Court of Tax Appeals. (CIR vs. Avon Products Manufacturing,
Inc., GR Nos. 201398-99 dated October 3, 2018)
2.a. Inaction by the CIR in cases involving disputed assessments,

relations thereto, or other matters arising under the National Internal
Revenue Code or other laws administered by the Bureau of Internal
Revenue, where the National Internal Revenue Code provides a
specific period of action, in which case the inaction shall be deemed a
denial;
2.b. Cases covered:
a. Inactions on disputed assessments (Sec. 228 of the Tax Code);

b. Inactions on refunds (Secs. 204(C), 229, 112(A) and (B) of the Tax
Code);
c. Inactions on Other matters;
2.c. Not covered:
BIR vs. a government agency or instrumentality except the Congress,

the Supreme Court, the Constitutional Commissions, and local
governments.
To be resolved by way of arbitration with the Security of Justice or

Solicitor General pursuant to Secs. 66 to 70 of the Revised
Administrative Code. (Power Sector Assets and Liabilities Management
vs. CIR, GR No. 198146 dated August 8, 2017)
3.a. Decisions, orders or resolutions of the Regional Trial Courts in local

tax cases in the exercise of their original jurisdiction;
Selected Civil Cases within the jurisdiction of the CTA:
3.b. Cases covered:
a. Protest cases of local taxes excluding RPT (Sec. 195 of the LGC);
b. Refund cases of local taxes excluding RPT (Sec. 196 of the LGC); and,
c. Illegal Assessment Cases (NPC vs. Municipal Government of Navotas,
GR No. 192300 dated November 24, 2014).
3.c. Cases covered:
To note, these issues may, inter alia, involve the legality or validity of
the real property tax assessment; protests of assessments; disputed
assessments, surcharges, or penalties; legality or validity of a tax
ordinance; claims for tax refund/credit; claims for tax exemption;
actions to collect the tax due; and even prescription of assessments.
(Ignacio vs. Office of the City Treasurer of Quezon City, GR No.
September 11, 2017)
4.a. Decisions of the Central Board of Assessment Appeals in the

exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals (referring to the LBAA).
4.b. Cases covered:
a. Erroneous Real Property Tax Assessments (Secs. 252 and 226 of the
LGC); and,
b. Refund of Real Property Tax (Sec. 253 of the LGC).
5. Exclusive original jurisdiction in tax collection cases involving final

and executory assessments for taxes, fees, charges and penalties,
where the principal amount of taxes and fees, exclusive of charges and
penalties, claimed is One million pesos (P1,000,000.00) or more.
Original and Exclusive Jurisdiction of the CTA in Criminal Cases:
1.a. Exclusive original jurisdiction over all criminal offenses arising from
violations of the National Internal Revenue Code or Tariff and Customs
Code and other laws administered by the Bureau of Internal Revenue
or the Bureau of Customs: Provided, however, That offenses or
felonies mentioned in this paragraph where the principal amount of
taxes and fees, exclusive of charges and penalties, claimed is less than
One million pesos (P1,000,000.00) or where there is no specified
amount claimed shall be tried by the regular Courts and the
jurisdiction of the CTA shall be appellate.
1.b. Any provision of law or the Rules of Court to the contrary

notwithstanding, the criminal action and the corresponding civil action
for the recovery of civil liability for taxes and penalties shall at all times
be simultaneously instituted with, and jointly determined in the same
proceeding by the CTA, the filing of the criminal action being deemed
to necessarily carry with it the filing of the civil action, and no right to
reserve the filling of such civil action separately from the criminal
action will be recognized. (Sec. 7(b)(2) of RA No. 9282)
2.a. SEC. 11. Inclusion of civil action in criminal action. — In cases

within the jurisdiction of the Court, the criminal action and the
corresponding civil action for the recovery of civil liability for taxes and
penalties shall be deemed jointly instituted in the same proceeding.
The filing of the criminal action shall necessarily carry with it the filing
of the civil action. No right to reserve the filing of such civil action
separately from the criminal action shall be allowed or recognized.
(Rule 9, Section 11 of the Revised Rules of the CTA)
2.b.1. Rule 111, Section 1 (a) of the Rules of Court provides that what
is deemed instituted with the criminal action is only the action to
recover civil liability arising from the crime. Civil liability arising from a
different source of obligation, such as when the obligation is created
by law, such civil liability is not deemed instituted with the criminal
action.
It is well-settled that the taxpayer's obligation to pay the tax is an

obligation that is created by law and does not arise from the offense of
tax evasion, as such, the same is not deemed instituted in the criminal
case. (Gaw, Jr. vs. CIR, GR No. 222837 dated July 23, 2018)
2.b.2. Gaw, Jr. Case Illustration:
Information for Tax

Evasion (non-payment of
income tax for the year
CTA
2020)
CTA?
FAN (deficiency
income tax for Protest FDDA
the year 2020)
2.b.3. While the tax evasion case is pending, the BIR is not precluded
from issuing a final 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.
2.b.4. 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. 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. (Gaw, Jr. vs. CIR, GR No. 222837 dated July 23,
2018)
Cases directly filed with the CTA En Banc:
1. Decisions by the Central Board of Assessment Appeals in Real

Property Tax Cases;
2. Decisions by the Regional Trial Court in the exercise of its appellate
jurisdiction in local tax cases;
jurisdiction in tax collection cases; and,
jurisdiction in criminal cases.
Certiorari Jurisdiction:
1. the Court of Tax Appeals, not the Court of Appeals, has the exclusive
original jurisdiction over petitions for certiorari assailing interlocutory
orders issued by Regional Trial Courts in a local tax case. We explained
in The City of Manila vs. Hon. Grecia-Cuerdo that while the Court of Tax
Appeals has no express grant of power to issue writs of certiorari
under Republic Act No. 9282, as amended, the tax court's judicial
power as defined in the Constitution includes the power to determine
"whether or not there has been grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of the [Regional Trial Court]
in issuing an interlocutory order of jurisdiction in cases falling within
the exclusive appellate jurisdiction of the tax court."
2.a. Indeed, in order for any appellate court to effectively exercise its
appellate jurisdiction, it must have the authority to issue, among
others, a writ of certiorari. In transferring exclusive jurisdiction over
appealed tax cases to the CTA, it can reasonably be assumed that the
law intended to transfer also such power as is deemed necessary, if
not indispensable, in aid of such appellate jurisdiction. There is no
perceivable reason why the transfer should only be considered as
partial, not total.
2.b.1. If this Court were to sustain petitioners' contention that

jurisdiction over their certiorari petition lies with the CA, this Court
would be confirming the exercise by two judicial bodies, the CA and
the CTA, of jurisdiction over basically the same subject matter –
precisely the split-jurisdiction situation which is anathema to the
orderly administration of justice. Thus, the Court agrees with the
ruling of the CA that since appellate jurisdiction over private
respondents' complaint for tax refund is vested in the CTA, it follows
that a petition for certiorari seeking nullification of an interlocutory
order issued in the said case should, likewise, be filed with the same
court.
2.b.2. To rule otherwise would lead to an absurd situation where one

court decides an appeal in the main case while another court rules on
an incident in the very same case.
2.c. It is more in consonance with logic and legal soundness to

conclude that the grant of appellate jurisdiction to the CTA over tax
cases filed in and decided by the RTC carries with it the power to issue
a writ of certiorari when necessary in aid of such appellate jurisdiction.
The supervisory power or jurisdiction of the CTA to issue a writ of
certiorari in aid of its appellate jurisdiction should co-exist with, and be
a complement to, its appellate jurisdiction to review, by appeal, the
final orders and decisions of the RTC, in order to have complete
supervision over the acts of the latter. (City of Manila vs. Grecia-
Cuerdo, GR No. 175723 dated February 4, 2014)
3. The CTA has exclusive appellate jurisdiction to review, on certiorari,

the constitutionality or validity of revenue issuances, even without a
prior issuance of an assessment. Petitions for writs of certiorari against
the acts and omissions of the said quasi-judicial agencies should, thus,
be filed before the Court of Tax Appeals. (Confederation for Unity,
Recognition and Advancement of Government Employees vs.
Commissioner - BIR, GR No. 213446 dated July 3, 2018, J. Caguioa).
Doctrines on Procedure in the CTA:
1. General Rule: An appeal to the CTA from the decision of the BIR will
not suspend the payment, levy, distraint, and/or sale of any property
of the taxpayer for the satisfaction of his tax liability as provided by
existing law.
Exception: The CTA may order suspension of collection by the BIR if

collection may jeopardize the interest of the Government and/or the
taxpayer.
Additional Requirement: Require the taxpayer either to deposit the

amount claimed or to file a surety bond for not more than double the
amount with the Court.
Doctrines on Procedure in the CTA – May the Bond Requirement be
dispensed with?
2.a. Bond should be dispensed with whenever it is determined by the

courts that the method employed by the Collector (Commissioner) of
Internal Revenue in the collection of tax is not sanctioned by law just
like when prescription has already set in.
dispensed with?
2.b. The purpose of the rule is not only to prevent jeopardizing the
interest of the taxpayer, but more importantly, to prevent the absurd
situation wherein the court would declare “that the collection by the
summary methods of distraint and levy was violative of law, and then,
in the same breath require the petitioner to deposit or file a bond as a
prerequisite for the issuance of a writ of injunction.”
dispensed with?
3.c. Though it may be true that it would have been premature for the
CTA to immediately determine whether the assessment made against
the petitioners was valid or whether the warrants were properly issued
and served, still, it behooved upon the CTA to properly determine, at
least preliminarily, whether the CIR, in its assessment of the tax
liability of the petitioners, and its effort of collecting the same,
complied with the law and the pertinent issuances of the BIR itself. The
CTA should have conducted a preliminary hearing and received
evidence so it could have properly determined whether the
requirement of providing the required security under Section 11, R.A.
No. 1125 could be reduced or dispensed with pendente lite. (Spouses
Pacquiao vs. The CTA, GR No. 213394 dated April 6, 2016)
Doctrines on the Procedure in the CTA:
1. No decision of the CTA Division may be elevated to the Supreme

Court under Rule 45 of the 1997 Rules of Civil Procedure without
passing through the CTA En Banc. (Duty Free Phils. vs. BIR, GR No.
197228 dated October 8, 2014)
Doctrines on the Procedure in the CTA – Requirement of a Motion for
Reconsideration?
2. An amended decision is a different decision and is a proper subject

of a motion for reconsideration. Thus, if an amended decision is
rendered by the CTA Division disposing of the motions for
reconsideration filed by the taxpayer and the CIR, the amended
decision must also be contested by way of a motion for
reconsideration before any appeal can be made to the CTA En Banc.
(CIR vs. Asiatrust Development Bank, GR Nos. 201680-81 dated April
19, 2017)
General Procedure on appeals to the CTA Division in Civil Cases:
CTA Division Appeal by

Petition for CTA En Banc Certiorari with
BIR / RTC in Petition for the Supreme
its Original Review under
R42 Review under Court under R45
Jurisdiction R43 (15 days)
(30 days) (15 days)
Mandatory Optional Motion

Motion for for
Reconsideration Reconsideration
or New Trial or New Trial
(15 days) (15 days)
General Procedure on appeals to the CTA Division in Civil Cases:
CTA En Banc Petition for Appeal by Certiorari with

CBAA / RTC in its the Supreme Court under
Appellate Review under R43
R45
Jurisdiction (30 days)
(15 days)
Optional Motion for

Reconsideration or New
Trial
(15 days)
Good luck and God bless!
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Tax Remedies

Remedies under the NIRC

1.b. Appeal to the SOF is in compliance with the rule on exhaustion of

1.c. The exceptions, among others, are the following:

2. Next Remedy: Regional Trial Court or the Court of Tax Appeals

3. The CTA has exclusive appellate jurisdiction to review, on certiorari,

4.b. Statutory Basis of the jurisdiction of the CTA, Section 7(a)(1) of RA

“Decisions of the Commissioner of Internal Revenue in cases involving

1. Section 6. Power of the Commissioner to Make Assessments and

(A) Examination of Returns and Determination of tax Due. – After a

2.a. The result of the absence of a Letter of Authority (“LOA”) is the

3. An LOA cannot be dispensed with just because none of the financial

1.a. Clearly, there must be a grant of authority before any revenue

1.b. Sample problem:

Is the assessment valid?

2.a. The practice of reassigning or transferring revenue officers, who

2.b. Here, as comprehensively discussed, there was no new LOA issued

3. The failure of petitioner to raise at the earliest opportunity, the lack

1. In Pilipinas Shell Petroleum Corporation vs. Commissioner of Internal

Taxpayer may protest the Preliminary Assessment Notice within 15

1. An assessment contains not only a computation of tax liabilities, but

2.a.1. Part of the assessment reads as follows:

“The complete details covering the aforementioned discrepancies

Is the assessment valid?

2.b.1. Part of the Assessment reads as follows:

Is the assessment valid?

Failure of the taxpayer to refute the presumption warrants the

3-year period to assess Prescriptive period extended by a Waiver

1. Similar to the case of Standard Chartered Bank, the waivers in this

2.a. No longer a requirement of a Valid Waiver:

1. The delegation of authority to a representative be in writing and

2.b. Requisites of a Valid Waiver:

1. Must be executed and accepted before the expiration of the period

2. The waiver must be signed by the taxpayer himself or his duly

2.b. Requisites of a Valid Waiver:

4. Waiver of prescriptive period to collect must indicate the particular

2.b. Requisites of a Valid Waiver:

5. Two material dates must appear on the waiver:

a) The date of execution; and,

1. General Rule: Doctrine of Estoppel not applicable, as a rule, to

2.a. Partial payment of an assessment which is covered by a defective

2.b. However, as clarified by the Supreme Court, not mere partial

3. When the application of estoppel would promote the administration

1.a. When the taxpayer requests for a reinvestigation which is granted

1.b. Request for reconsideration. – refers to a plea for a re-evaluation

Request for reinvestigation. – refers to a plea for re-evaluation of an

2.b. The suspension of the three-year period to assess applies only if

Hence, despite the absence of a formal written notice of the taxpayer's

2.a. Considering the foregoing exchange of correspondence and

3.a. The Details of Discrepancy attached to the Preliminary Assessment

3.b. It is true that the Commissioner is not obliged to accept the

3.c. In this case, Avon was able to amply demonstrate the

Clearly, a decision of the CIR on a disputed assessment differs from the

1.c. Flaws in taxpayer’s protest. Did not state:

1. The assessment notice's date; Attaching copies of the audit

1.c. Flaws in taxpayer’s protest. Did not state:

3. Nature of the protest; While respondent's declaration that it was

2.b. The term "relevant supporting documents" should be understood

2.c. Failure to submit relevant supporting documents renders the

1.c. Jurisdictional basis is:

“Decisions of the CIR in cases involving disputed assessments,

1.d. The word "decisions" in the aforementioned provision of R.A. No.

2.a. The taxpayer has two options, either:

1.c. Jurisdictional basis is: