[THE RECKONING OF THE 180-DAY PERIOD FOR THE CIR TO ACT ON THE PROTEST SHOULD BE ON THE EXTENDED PERIOD TO FILE SUPPORTING DOCUMENTS, SHOULD THERE BE ANY] [CIR OR HIS DULY AUTHORIZED REPRESENTATIVE IS DUTY BOUND TO WAIT FOR THE EXPIRATION OF 15 DAYS FROM THE DATE OF RECEIPT OF THE PAN BEFORE ISSUING THE FLD & ASSESSMENT NOTICE] [THE MANDATORY 15-DAY PERIOD IS RECKONED FROM THE DATE OF ACTUAL RECEIPT OF THE PAN & NOT THE DATE OF ISSUANCE OF THE PAN]

Petitioner Commissioner of Internal Revenue (CIR) seeking to reverse the CTA 1^st Division’s Decision and Resolution canceling the assessment issued to the Respondent Solutions Using Renewable Energy, Inc. Petitioner maintained that the earlier Petition was not timely filed before the Court in Division. Likewise, the reckoning period of the start of the 180-day period for the CIR to decide cannot be made to depend on the Respondent’s date of submission of documents when the same is outside the 60-day period provided by law. Further, the issuance of the assessment notices did not violate the right of the Respondent to due process, as the assessment notices were duly served and received. In ruling, the Court discussed that in cases of a request for reinvestigation, the taxpayer is given 60 days from the filing of a request for reinvestigation to submit the relevant supporting documents in support of the protest. Upon submission of relevant supporting documents, the period of action on the part of the CIR or his duly authorized representative is 180 days. In case of inaction, the taxpayer may either appeal to the Court in Division within 30 days after expiration of the 180-day period or await the final decision of the CIR’s duly authorized representative on the disputed assessment. Here, Respondent was able to timely file the relevant supporting documents. However, Respondent received a letter from the Revenue Officer (RO) stating that the 60-day period within which to submit relevant supporting documents had lapsed and gave Respondent an additional period of 15 days to file the documents. On this score, the Court agreed that the reckoning of the 180-day period for the CIR to act on the protest should be on the extended period given by the RO. It cannot be ignored that it was because of the Letter, issued by RO, which prompted Respondent to re-submit its relevant supporting documents despite the fact that it had already submitted the same earlier. On the due process requirements, a taxpayer has 15 days from receipt of the Preliminary Assessment Notice (PAN) to file a protest with the BIR. If during the said period, the taxpayer fails to file a protest to the PAN, it is only then that the CIR, or his duly authorized representative, can consider the taxpayer in default, and correspondingly cause the issuance of a Formal Letter of Demand (FLD) and Assessment Notice. Here, the PAN was received by Respondent on January 7, 2014, and the FLDs and Assessments Notices were prematurely issued and received on January 13, 2014. The CIR, in failing to await the lapse of the 15-day period, disregarded the mandatory due process requirement thereby denying Respondent of its right to due process. Consequently, the Petition was DENIED. [COMMISSIONER OF INTERNAL REVENUE VS. SOLUTIONS USING RENEWABLE ENERGY, INC., CTA EN BANC CASE NO. 2387, JUNE 23, 2022]

[THE COLLECTION OF DEFICIENCY TAX CANNOT BE MADE IN A CRIMINAL CASE WITHOUT FORMAL ASSESSMENT] [THE BURDEN TO PROVE THE TAXPAYER'S ACTUAL RECEIPT OF THE ASSESSMENT NOTICES LIES WITH THE CIR]

Petitioner People of the Philippines filed a Petition for Review seeking partial reconsideration of the earlier Decision and Resolution of the CTA 1^st Division finding Respondent Rebecca Tiotangco guilty beyond reasonable doubt on two (2) counts of violation of Section 255 of the Tax Code, as amended, and ordered to pay a fine. Petitioner argued that the CTA 1^st Division erred in holding that a tax deficiency cannot be collected in a criminal proceeding in court without an assessment. In ruling, while the law explicitly mandates the inclusion of civil liability for the payment of taxes in judgment in the criminal case, it is also clear that there must be a final determination of such civil liability by the Commissioner of Internal Revenue (CIR) before they may be included in the judgment. This determination of civil liability for the payment of internal revenue taxes by the CIR refers to a formal assessment. Petitioner was mistaken in assuming that the civil liability for the payment of taxes and penalties is already deemed instituted upon the filing of the criminal action for tax evasion. The Court held untenable the contention of the Petitioner that Respondent received the assessment notices that were duly mailed to her. Petitioner was only able to prove that the assessment notices were mailed as evidenced by registry receipts. There was no proof that these notices were actually received by Respondent. Consequently, the Petition was DENIED. [PEOPLE OF THE PHILIPPINES V. REBECCA S. TIOTANGCO, CTA EN BANC CRIMINAL CASE NO. 086, JUNE 9, 2022]

[IF THE TAXPAYER DENIES HAVING RECEIVED AN ASSESSMENT FROM THE BIR, IT THEN BECOMES INCUMBENT UPON THE LATTER TO PROVE BY COMPETENT EVIDENCE THAT SUCH NOTICE WAS INDEED RECEIVED BY THE ADDRESSEE] [ONLY THE TAXPAYER OR HIS AUTHORIZED REPRESENTATIVE MAY RECEIVE THE ASSESSMENT FROM THE BIR & MERE PRESENTATION OF THE REGISTRY RECEIPTS IS INSUFFICIENT]

Accused Shirley Yang (President of Cardona Apparel, Inc.), Raquel Villarante (Corporate Secretary), and Zaldy Trinidad (Accounting Manager) were charged for violations of Section 255 of the 1997 Tax Code, as amended. The Prosecution asserted that despite repeated demands and notices, Cardona and/or Accused failed to pay Cardona’s deficiency taxes knowing fully well that the tax assessment has already become final, due and demandable. The Accused countered that there was no proper service of the Preliminary Assessment Notice (PAN). In ruling, the Prosecution must establish and prove that the requirements in the issuance of the assessment notices were complied with. To prove the fact of mailing of the PAN, the Prosecution presented a Registry Return Receipt. However, only the back side of the Registry Return Receipt was presented and offered in evidence, which only contains the name of the addressee. The Memorandum of the Prosecution likewise provides that the PAN was issued and was sent to the registered office address of Cardona, but the same was returned unserved as the company was alleged to have moved out. However, the Revenue Officer testified that the PAN was mailed to the office of the Accused Raquel Villarante. In ruling, the Court held that there was no valid service of the PAN. It may be the duty of the taxpayer to notify the BIR of the change of its registered business address or closure of business. However, its failure to do the same does not necessarily negate the BIR’s strict obligation to inform the taxpayer in writing of the facts and the law on which the assessment is made. Thus, for failure of the BIR to inform the taxpayer, the Court held that the subject assessment is VOID. [PEOPLE OF THE PHILIPPINES VS. SHIRLEY YANG (PRESIDENT), RAQUEL VILLARANTE (CORPORATE SECRETARY) & ZALDY G. TRINIDAD (ACCOUNTING MANAGER), (CARDONA APPAREL, INC.), CTA CRIMINAL CASE NOS. O-202, O-203, O-204, AND O-205, JUNE 1, 2022]