TAX REMEDIES

18 MAY 2020
TOPIC OUTLINE (5-18)

Court of Tax Appeals

2
The Tenor of the demand letter exception to the GR on
exhaustion on administrative remedies
• Allied Banking Corporation vs. Commissioner of Internal Revenue (February 5, 2010)

It appears from the foregoing demand letter that the CIR has already made a final decision on the
matter and that the remedy of petitioner is to appeal the final decision within 30 days.

Portions of the Formal demand letter read as follows:

“Based on your letter-protest dated May 26, 2004, you alleged the following:

xxx The said assessment has already prescribed in accordance with the provisions of Section
203 of the Tax Code.

xxx Contrary to your allegation, the assessments covering GRT and DST for taxable year 2001
has not prescribed for [sic] simply because no returns were filed, thus, the three year
prescriptive period has not lapsed. xxx
 
The 25% surcharge and 20% interest have been imposed pursuant to the provision of Section
248(A) and 249(b), respectively, of the National Internal Revenue Code, as amended

It is requested that the above deficiency tax be paid immediately upon receipt hereof, inclusive
of penalties incident to delinquency. This is our final decision based on investigation. If you
disagree, you may appeal the final decision within thirty (30) days from receipt hereof, otherwise
said deficiency tax assessment shall become final, executory and demandable”

3
The Tenor of the demand letter exception to the GR on
exhaustion on administrative remedies
• Allied Banking Corporation vs. Commissioner of Internal Revenue (February 5, 2010)-
continued

What we are saying in this particular case is that, the Formal Letter of Demand with
Assessment Notices which was not administratively protested by the petitioner can
be considered a final decision of the CIR appealable to the CTA because the words
used, specifically the words final decision and appeal, taken together led petitioner to
believe that the Formal Letter of Demand with Assessment Notices was in fact the
final decision of the CIR on the letter-protest it filed and that the available remedy
was to appeal the same to the CTA. 

4
The filing of the MR on the FDDA does not toll the 30 day period to file a Petition for Review before the CTA.

• Fishwealth Canning Corporation vs. Commissioner of Internal Revenue (January 21, 2010)

Respondent thereafter issued a Final Decision on Disputed Assessment dated August 2, 2005,
which petitioner received on August 4, 2005, denying its letter of protest

Instead of appealing to the CTA, petitioner filed, on September 1, 2005, a Letter of

Reconsideration dated August 31, 2005. By a Preliminary Collection Letter dated September
6, 2005, respondent demanded payment of petitioners tax liabilities, drawing petitioner to file
on October 20, 2005 a Petition for Review before the CTA

The SC held that : Since petitioner received the denial of its administrative protest on August
4, 2005, it had until September 3, 2005 to file a petition for review before the CTA Division. It
filed one, however, on October 20, 2005, hence, it was filed out of time. For a motion for
reconsideration of the denial of the administrative protest does not toll the 30-day period to
appeal to the CTA.

***Take note that the under RR 18-2013, once the MR is filed with the Office of the
Commissioner, the taxpayer must wait for the decision of the OCOM before elevating the said
decision to the CTA via an appeal. However an appeal on the denial of the MR by the OCOM
does NOT toll the 30 day period for filing an appeal before the CTA. This only means that if you
file a Pet Review without waiting for the decision of the OCOM and the 30 day period to file
with the CTA has lapsed, the Petition for Review will be dismissed
5
The filing of a Petition for Review before the CTA En Banc is not the
proper remedy to question an interlocutory order by the CTA Division

• Judy Anne L. Santos vs. People of the Philippines and Bureau of Internal Revenue (August 26,
2008)

ISSUE: Whether a resolution of a CTA division denying a motion to quash is a proper subject of
an appeal to the CTA En banc under Section 11 of Republic Act No.9282, amending Section 18
of Republic Act No. 1125

SC HELD: Recourse to a petition for certiorari to assail an interlocutory order is now expressly
recognized in the ultimate paragraph of Section 1, Rule 41 of the Revised Rules of Court on the
subject of appeal, which states:

In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.

A writ of certiorari is not intended to correct every controversial interlocutory ruling:  it is resorted
to only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to
lack of jurisdiction.  Its function is limited to keeping an inferior court within its jurisdiction and to
relieve persons from arbitrary acts acts which courts or judges have no power or authority in law
to perform.  It is not designed to correct erroneous findings and conclusions made by the courts

In sum, the CTA en banc did not err in denying petitioners Motion for Extension of Time to File
Petition for Review. Petitioner cannot file a Petition for Review with the CTA en banc to appeal
the Resolution of the CTA First Division denying her Motion to Quash. The Resolution is
interlocutory and, thus, unappealable. Even if her Petition for Review is to be treated as a
petition for certiorari, it is dismissible for lack of merit. 6
Jurisdiction of the CTA- “Other matters”

• Philippine Journalists Inc. vs. Commissioner of Internal Revenue (December

16, 2004)

FACTS: Petitioner filed a Petition for Review with the Court of Tax Appeals (CTA)
which was amended on May 12, 2000. Petitioner complains: (a) that no assessment
or demand was received from the BIR; (b) that the warrant of distraint and/or levy
was without factual and legal bases as its issuance was premature; (c) that the
assessment, having been made beyond the 3-year prescriptive period, is null and
void; (d) that the issuance of the warrant without being given the opportunity to
dispute the same violates its right to due process; and (e) that the grave prejudice
that will be sustained if the warrant is enforced is enough basis for the issuance of
the writ of preliminary injunction.

ISSUE: Whether CTA had jurisdiction to entertain the Petition for Review?

7
Jurisdiction of the CTA- “Other matters”

• Philippine Journalists Inc. vs. Commissioner of Internal Revenue (December 16, 2004)

SC Ruled: The petitioner now argue that the case was brought to the CTA because the
warrant of distraint or levy was illegally issued and that no assessment was issued
because it was based on an invalid waiver of the statutes of limitations.

We agree with petitioner. Under Section 7 of RA 9282, the Court of Tax Appeals shall
exercise exclusive appellate jurisdiction to review by appeal, as herein provided

“(1) Decisions of the Commissioner of Internal Revenue in cases involving disputed

assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed
in relation thereto, or other matters arising under the National Internal Revenue Code or
other laws or part of law administered by the Bureau of Internal Revenue; (Emphasis
supplied)”

The appellate jurisdiction of the CTA is not limited to cases which involve decisions
of the Commissioner of Internal Revenue on matters relating to assessments or refunds.
The second part of the provision covers other cases that arise out of the NIRC or related
laws administered by the Bureau of Internal Revenue. The wording of the provision is
clear and simple. It gives the CTA the jurisdiction to determine if the warrant of distraint
and levy issued by the BIR is valid and to rule if the Waiver of Statute of Limitations was
validly effected.

8
Jurisdiction of the CTA- “Other matters”

• Commissioner of Internal Revenue vs. Leal (November 18, 2002)

The Commissioner of Internal Revenue issued Memorandum Order (RMO) No. 15-91 dated
March 11, 1991, imposing five percent (5%) lending investor’s tax on pawnshops based on their
gross income and requiring all investigating units of the Bureau to investigate and assess the
lending investor’s tax due from them.

Adversely affected by those revenue orders, herein respondent Josefina Leal, owner and
operator of Josefina’s Pawnshop in San Mateo, Rizal, asked for a reconsideration of both RMO
No. 15-91 and RMC No. 43-91 but the same was denied with finality by petitioner in its BIR
Ruling No. 221-91 dated October 30, 1991

Consequently, on March 18, 1992, respondent filed with the Regional Trial Court (RTC), Branch
75, San Mateo, Rizal, a petition for prohibition.

The Respondent filed with the RTC a petition for prohibition seeking to prohibit petitioner from
implementing the revenue orders. The BIR filed a Motion to Dismiss before the RTC which was
later dismissed. The BIR then filed a Petition for Certiorari (under Rule 65) before the Court of
Appeals, which was also dismissed by the Court of Appeals

The SC Held: Anent the first issue, petitioner contends that the Court of Appeals has "original
jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus and quo warranto,
and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction," pursuant to
Section 9(1) of Batas Pambansa Blg. 129. Petitioner thus claims that his petition
for certiorari filed with the Court of Appeals pursuant to Rule 65 of the Rules of Court is the
proper recourse to assail the RTC order denying his motion to dismiss.9
Jurisdiction of the CTA- “Other matters”

• Commissioner of Internal Revenue vs. Leal (November 18, 2002)

Petitioner’s contention is meritorious. The Court of Appeals erred in holding that it

has no jurisdiction over petitioner’s special civil action for certiorari under Rule 65 of
the Rules. While this Court exercises original jurisdiction to issue the extraordinary
writ of certiorari (as well as the writs of prohibition, mandamus, quo warranto, and
habeas corpus), such power is not exclusive to this Court but is concurrent with the
Court of Appeals and the Regional Trial Courts.

While the Court of Appeals correctly took cognizance of the petition for certiorari,
however, let it be stressed that the jurisdiction to review the rulings of the
Commissioner of Internal Revenue pertains to the Court of Tax Appeals, not to the
RTC.

The questioned RMO and RMC are actually rulings or opinions of the Commissioner
implementing the Tax Code on the taxability of the Pawnshops.

10
Jurisdiction of the CTA- “Other matters”

• Asia International Auctioneers, Inc. vs. Parayno (December 18, 2007)

Petitioners filed a complaint before the RTC of Olongapo City, praying for the nullification
of RMC No. 31-2003 for being unconstitutional and an ultra vires act. Consequently,
respondents CIR, the BIR Regional Director of Region III, the BIR Revenue District
Officer of the SSEZ, and the OSG filed with the CA a petition for certiorari under Rule 65
of the Rules of Court with prayer for the issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction to enjoin the trial court from exercising jurisdiction
over the case.

Meantime, BIR Regional Director Danilo A. Duncano sent a Preliminary Assessment

Notice[18] to the President of AIAI, informing him of the VAT due from the company for
the auction sales conducted on June 6-8, 2003 as per RMC No. 32-2003

Petitioners contend that jurisdiction over the case at bar properly pertains to the regular
courts as this is an action to declare as unconstitutional, void and against the provisions
of [R.A. No.] 7227 the RMCs issued by the CIR. They explain that they do not challenge
the rate, structure or figures of the imposed taxes, rather they challenge the authority of
the respondent Commissioner to impose and collect the said taxes. They claim that the
challenge on the authority of the CIR to issue the RMCs does not fall within the
jurisdiction of the Court of Tax Appeals (CTA).
11
Jurisdiction of the CTA- “Other matters”

• Asia International Auctioneers, Inc. vs. Parayno (December 18, 2007)- continued

The SC Ruled that: We have held that RMCs are considered administrative rulings
which are issued from time to time by the CIR. In the case at bar, the assailed
revenue regulations and revenue memorandum circulars are actually rulings or
opinions of the CIR on the tax treatment of motor vehicles sold at public auction
within the SSEZ.

They were issued pursuant to the power of the CIR under Section 4 of the National
Internal Revenue Code.

Section 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax
Cases.-- The power to interpret the provisions of this Code and other tax laws
shall be under the exclusive and original jurisdiction of the Commissioner,
subject to review by the Secretary of Finance.

The power to decide disputed assessments, refunds of internal revenue taxes,

fees or other charges, penalties imposed in relation thereto, or other matters
arising under this Code or other laws or portions thereof administered by the
Bureau of Internal Revenue is vested in the Commissioner, subject to the
exclusive appellate jurisdiction of the Court of Tax Appeals.
12
Jurisdiction of the CTA- “Other matters”

• Asia International Auctioneers, Inc. vs. Parayno (December 18, 2007)- continued

Petitioners point out that the CA based its decision on Section 7 of R.A. No. 1125 that the CTA
shall exercise exclusive appellate jurisdiction to review by appeal decisions of the CIR. They
argue that in the instant case, there is no decision of the respondent CIR on any disputed
assessment to speak of as what is being questioned is purely the authority of the CIR to
impose and collect value-added and excise taxes.

But the SC said: Petitioners failure to ask the CIR for a reconsideration of the assailed revenue
regulations and RMCs is another reason why the instant case should be dismissed. It is settled
that the premature invocation of the court's intervention is fatal to one's cause of action. If a
remedy within the administrative machinery can still be resorted to by giving the administrative
officer every opportunity to decide on a matter that comes within his jurisdiction, then such
remedy must first be exhausted before the courts power of judicial review can be sought. The
party with an administrative remedy must not only initiate the prescribed administrative
procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial
intervention in order to give the administrative agency an opportunity to decide the matter itself
correctly and prevent unnecessary and premature resort to the court.

13
What is the recourse of the Taxpayer for rulings denied by
the Secretary of Finance?
• Philippine American Life and General Insurance Company vs. Secretary of Finance
(November 24, 2014)

On January 4, 2012, however, respondent Commissioner on Internal Revenue

(Commissioner) denied Philamlife’s request through BIR Ruling No. 015-12. As
determined by the Commissioner, the selling price of the shares thus sold was lower
than their book value based on the financial statements of Philam Care as of the end
of 2008.6 As such, the Commisioner held, donor’s tax became imposable on the
price difference pursuant to Sec. 100 of the National Internal Revenue Code (NIRC)

Aggrieved, petitioner requested respondent Secretary of Finance (Secretary) to

review BIR Ruling No. 015-12, but to no avail. For on November 26, 2012,
respondent Secretary affirmed the Commissioner’s assailed ruling in its entirety.

The SC Ruled that “Admittedly, there is no provision in law that expressly provides
where exactly the ruling of the Secretary of Finance under the adverted NIRC
provision is appealable to. However, we find that Sec. 7(a)(1) of RA 1125, as
amended, addresses the seeming gap in the law as it vests the CTA, albeit impliedly,
with jurisdiction over the CA petition as “other matters” arising under the NIRC or
other laws administered by the BIR.

14
The appellate power of the CTA includes certiorari

• Philippine American Life and General Insurance Company vs. Secretary of Finance
(November 24, 2014)- continued

The appellate power of the CTA includes certiorari (under Rule 43 or rule 45)

Petitioner also avers that there is now a trend wherein both the CTA and the CA disclaim
jurisdiction over tax cases: on the one hand, mere prayer for the declaration of a tax measure’s
unconstitutionality or invalidity before the CTA can result in a petition’s outright dismissal, and
on the other hand, the CA will likewise dismiss the same petition should it find that the primary
issue is not the tax measure’s validity but the assessment or taxability of the transaction or
subject involved.

Petitioner’s above submission is specious.

In the recent case of City of Manila v. Grecia-Cuerdo, the Court en banc has ruled that the CTA
now has the power of certiorari in cases within its appellate jurisdiction. Evidently, City of
Manila can be considered as a departure from Ursal in that in spite of there being no express
grant in law, the CTA is deemed granted with powers of certiorari by implication. Moreover, City
of Manila diametrically opposes British American Tobacco to the effect that it is now within the
power of the CTA, through its power of certiorari, to rule on the validity of a particular
administrative rule or regulation so long as it is within its appellate jurisdiction. Hence, it can
now rule not only on the propriety of an assessment or tax treatment of a certain transaction,
but also on the validity of the revenue regulation or revenue memorandum circular on which
the said assessment is based. 15
The appellate power of the CTA includes certiorari.
Jurisdiction of RTC/ CTA
• City of Manila vs. Grecia-Cuerdo (February 4, 2014)

FACTS: Local business taxes collected by the City of Manila on the basis of Section
21 of the LGC. Because payment of the taxes assessed was a precondition for the
issuance of their business permits, private respondents were constrained to pay the
P19,316,458.77 assessment under protest.

Aggrieved, the taxpayer filed a refund and asked for an injunction before the RTC.
The RTC granted private respondents' application for a writ of preliminary injunction.

Petitioners then filed a special civil action for certiorari with the CA assailing the July
9, 2004 and October 15, 2004 Orders of the RTC.

ISSUE: . The basic question posed before this Court is whether or not the CTA has
jurisdiction over a special civil action for certiorari assailing an interlocutory order
issued by the RTC in a local tax case.

16
The appellate power of the CTA includes certiorari.
Jurisdiction of RTC/ CTA
• City of Manila vs. Grecia-Cuerdo (February 4, 2014)- continued

This Court ruled in the affirmative.

While there is no express grant of such power, with respect to the CTA, Section 1,
Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall
be vested in one Supreme Court and in such lower courts as may be established by
law and that judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.

On the strength of the above constitutional provisions, it can be fairly interpreted that
the power of the CTA includes that of determining whether or not there has been
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the RTC in issuing an interlocutory order in cases falling within the exclusive
appellate jurisdiction of the tax court. It, thus, follows that the CTA, by constitutional
mandate, is vested with jurisdiction to issue writs of certiorari in these cases.

17
The appropriateness of the Remedy of Certiorari under
Rule 65. There must be a decision
• Clark Investors and Locators Association, Inc. vs. Secretary of Finance (July 6, 2015)

This is a petition for certiorari with a prayer for the issuance of a temporary restraining
order and/or writ of preliminary injunction filed before the SC to annul and set aside
Revenue Regulations No. 2-2012 (RR 2-2012) issued by the Department of Finance
(DOF) on February 17, 2012 upon recommendation of the Bureau of Internal Revenue
(BIR).

For a special civil action for certiorari to prosper, the following requisites must concur: (1)
it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial
functions; (2) the tribunal, board, or officer must have acted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction;
and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law.

Conformably with our ruling in BPI Leasing Corporation that the application of Section 244
of the NIRC is an exercise of quasi-legislative or rule-making powers of the Secretary of
Finance, and since RR 2-2012 was issued by the Secretary of Finance based on Section
244 of the NIRC, such administrative issuance is therefore quasi-legislative in nature
which is outside the scope of a petition for certiorari. Secondly, while this case is styled as
a petition for certiorari, there is, however, no denying the fact that, in essence, it seeks the
declaration by this Court of the unconstitutionality and illegality of the questioned rule,
thus partaking the nature, in reality, of one for declaratory relief over which this Court has
only appellate, not original, jurisdiction. 18
The appropriateness of the Remedy of Certiorari under
Rule 65. There must be a decision
• Clark Investors and Locators Association, Inc. vs. Secretary of Finance (July 6, 2015)-
continued

Accordingly, this petition must fail because this Court does not have original jurisdiction over a
petition for declaratory relief even if only questions of law are involved.The special civil action
of declaratory relief falls under the exclusive jurisdiction of the Regional Trial Courts.

Although this Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus
and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of
court forum.

Also, In the case at bar, petitioner failed to allege such exceptional and compelling
circumstances which justify a direct resort to this Court. In view of the serious procedural and
technical defects of the petition, we see no need for this Court to resolve the other issues
raised by the petitioner.

19
Interlocutory Order-Mode of Appeal

• Commissioner of Internal Revenue vs. CBK Power Company Limited (July 29, 2015)

ISSUE: Private respondent claims that petitioner chose an erroneous remedy when it filed
a petition for certiorari with us since the proper remedy on any adverse resolution of any
division of the CTA is an appeal by way of a petition for review with the CTA en banc.

Petitioner's counsel, Atty. Sandico, who was then assigned to handle the consolidated
cases, filed his consolidated pre-trial brief on November 15, 2011. However, on the
December 1, 2011 pre-trial conference, Atty. Sandico failed to appear, thus private
respondent moved that petitioner be declared in default.

On December 23, 2011, the CTA issued the first assailed Resolution, the dispositive
portion of which reads:

WHEREFORE, petitioner is hereby allowed to present its evidence ex parte.

On April 19, 2012, the CTA issued the second assailed Resolution denying the motion to
lift order of default.

20
Interlocutory Order-Mode of Appeal

• Commissioner of Internal Revenue vs. CBK Power Company Limited (July 29, 2015)

RULING: The SC held that “since the CTA Orders are merely interlocutory, no appeal can
be taken therefrom. Section 1, Rule 41 of the 1997 Rules of Civil Procedure, as amended,
which applies suppletorily to proceedings before the Court of Tax Appeals, provides:

“Section 1. Subject of appeal. - An appeal may be taken from a judgment or final

order that completely disposes of the case, or of a paiticular matter therein when
declared by these Rules to be appealable.

No appeal may be taken from:

xxxx

(c) An interlocutory order”

In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.

Hence, petitioner's filing of the instant petition for certiorari assailing the interlocutory
orders issued by the CTA is in conformity with the above-quoted provision

21
What are local tax cases decided by RTC for the purpose
of an appeal to the CTA?
• Smart Communications, Inc. vs. Municipality of Malvar (February 18, 2014)

On 30 July 2003, the Municipality passed Ordinance No. 18, series of 2003, entitled
"An Ordinance Regulating the Establishment of Special Projects.“

On 24 August 2004, Smart received from the Permit and Licensing Division of the
Office of the Mayor of the Municipality an assessment letter with a schedule of
payment for the total amount of P389,950.00 for Smart’s telecommunications tower.

Due to the alleged arrears in the payment of the assessment, the Municipality also
caused the posting of a closure notice on the telecommunications tower. , Smart filed
a protest, claiming lack of due process in the issuance of the assessment and
closure notice. In the same protest, Smart challenged the validity of Ordinance No.
18 on which the assessment was based.

On 17 November 2004, Smart filed with Regional Trial Court of Tanauan City,
Batangas, Branch 6, an "Appeal/Petition" assailing the validity of Ordinance No. 18.

On 8 July 2009, Smart filed a petition for review with the CTA First Division, docketed
as CTA AC No. 58 in relation to the decision of the RTC.

22
What are local tax cases decided by RTC for the purpose of an
appeal to the CTA?
• Smart Communications, Inc. vs. Municipality of Malvar (February 18, 2014)- continued

Jurisdiction is conferred by law. Republic Act No. 1125, as amended by Republic Act No. 9282,
created the Court of Tax Appeals. Section 7, paragraph (a), sub-paragraph (3) of the law vests
the CTA with the exclusive appellate jurisdiction over "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."

The question now is whether the trial court resolved a local tax case in order to fall within the
ambit of the CTA’s appellate jurisdiction This question, in turn, depends ultimately on whether
the fees imposed under Ordinance No. 18 are in fact taxes.

The Court finds that the fees imposed under Ordinance No. 18 are not taxes.

In Progressive Development Corporation v. Quezon City, the Court declared that "if the
generating of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax; but if regulation is the primary purpose, the fact that incidentally revenue is
also obtained does not make the imposition a tax.“

Since the main purpose of Ordinance No. 18 is to regulate certain construction activities of the
identified special projects, which included "cell sites" or telecommunications towers, the fees
imposed in Ordinance No. 18 are primarily regulatory in nature, and not primarily revenue-
raising. While the fees may contribute to the revenues of the Municipality, this effect is merely
incidental. Thus, the fees imposed in Ordinance No. 18 are not taxes. 23
15 day extension to file a Petition and Procedural infirmities
may lead to dismissal of the appeal.
• City of Manila vs. Coca-Cola Bottlers Philippines, Inc. (August 4, 2009)

It is crystal clear from the afore-quoted provisions that to appeal an adverse decision or
ruling of the RTC to the CTA, the taxpayer must file a Petition for Review with the CTA
within 30 days from receipt of said adverse decision or ruling of the RTC.

Following by analogy Section 1, Rule 42 of the Revised Rules of Civil Procedure, the 30-
day original period for filing a Petition for Review with the CTA under Section 11 of
Republic Act No. 9282, as implemented by Section 3(a), Rule 8 of the Revised Rules of
the CTA, may be extended for a period of 15 days. No further extension shall be allowed
thereafter, except only for the most compelling reasons, in which case the extended
period shall not exceed 15 days.

Failure to attach certified true copy of the decision fatal to the decision. Section 2, Rule 6
of the Revised Rules of the CTA further necessitates that: A clearly legible duplicate
original or certified true copy of the decision appealed from shall be attached to the
petition.

Petitioners never offered an explanation for their non-compliance with Section 4 of Rule
5, and Section 2 of Rule 6 of the Revised Rules of the CTA. Hence, although the Court
had, in previous instances, relaxed the application of rules of procedure, it cannot do so
in this case for lack of any justification.
24
Other cases

• Commissioner of Customs vs. Marina Sales, Inc. (November 22, 2010)

The Commissioner failed to comply with the mandatory provisions of Rule 8, Section
1 of the Revised Rules of the Court of Tax Appeals requiring that the petition for
review of a decision or resolution of the Court in Division must be preceded by the
filing of a timely motion for reconsideration or new trial with the Division. The word
"must" clearly indicates the mandatory -- not merely directory -- nature of a
requirement

• Philippine British Assurance Company, Inc. vs. Republic of the Philippines (February
2, 2010)

In the instant case, the original complaint filed with the trial court was in the nature of
a collection case, purportedly to collect on the obligation of petitioner by virtue of the
bonds executed by it in favor of respondent, essentially a contractual obligation.

As petitioner correctly points out, an action to collect on a bond used to secure the
payment of taxes is not a tax collection case, but rather a simple case for
enforcement of a contractual liability.

Verily, the instant case is not a tax collection case; hence, the CA has jurisdiction
25
over the case
Other cases- Fixing of Surety Bond

• Tridmaha Marketing Corporation v. CTA (G.R. No. 215950, June 20, 2016)

Issue: Did the CTA in Division commit grave abuse of discretion in requiring the petitioner
to file a surety bond despite the supposedly patent illegality of the assessment that was
beyond the petitioner's net worth but equivalent to the deficiency assessment for IT and
VAT? The assessment was 4 Billion while the bond fixed was 16 Billion.

SC Ruled:  Section 11 of R.A. 1125, as amended, indicates that the requirement of the
bond as a condition precedent to suspension of the collection applies only in cases where
the processes by which the collection sought to be made by means thereof are carried
out in consonance with the law, not when the processes are in plain violation of the law
that they have to be suspended for jeopardizing the interests of the taxpayer.

The surety bond amounting to P4,467,391,881.76 imposed by the CTA was within the
parameters delineated in Section 11 of R.A. 1125, as amended. The Court holds,
however, that the CTA in Division gravely abused its discretion under Section 11 because
it fixed the amount of the bond at nearly five times the net worth of the petitioner without
conducting a preliminary hearing to ascertain whether there were grounds to suspend the
collection of the deficiency assessment on the ground that such collection would
jeopardize the interests of the taxpayer

26
Other cases- Bond requirement and suspension of
collection of tax
• Sps. Emmanuel D. Pacquiao v. Court of Tax Appeals (G.R. No. 213394, April 6, 2016)

Section 11 of R.A. No. 1125, as amended by R.A. No. 9282, embodies the rule that an appeal
to the CTA from the decision of the CIR 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. When, in the view of the CTA, the collection may jeopardize the interest of the
Government and/or the taxpayer, it may suspend the said collection and require the taxpayer
either to deposit the amount claimed or to file a surety bond.

It is clear that the authority of the courts to issue injunctive writs to restrain the collection of tax
and to dispense with the deposit of the amount claimed or the filing of the required bond is not
simply confined to cases where prescription has set in. As explained by the Court in those
cases, whenever it is determined by the courts that the method employed by the
Collector of Internal Revenue in the collection of tax is not sanctioned by
law, the bond requirement under Section 11 of R.A. No. 1125 should be dispensed with. 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

As the CTA is in a better, position to make such a preliminary determination, a remand to the
CTA is in order. To resolve the issue of whether the petitioners should be required to post the27
security bond under Section 11 of R.A. No. 1125, and, if so, in what, amount,
Jurisdiction on other matters

• Commissioner of Internal Revenue v. Lancaster, Inc. (G.R. No. 183408, July 12, 2017)

Is the question on the authority of revenue officers to examine the books and records of
any person cognizable by the CTA?

Yes. The issue on whether the revenue officers who had conducted the examination on
Lancaster exceeded their authority pursuant to LOA No. 00012289 may be considered as
covered by the terms "other matters" under Section 7 of R.A. No. 1125 or its amendment,
R.A. No. 9282. The authority to make an examination or assessment, being a matter
provided for by the NIRC, is well within the exclusive and appellate jurisdiction of the
CTA.

The CTA Division was well within its authority to consider in its decision the question on
the scope of authority of the revenue officers who were named in the LOA even though
the parties had not raised the same in their pleadings or memoranda pursuant to Section
1, Rule 14 of A.M. No. 05-11-07-CTA

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Doctrine of exhaustion of administrative remedies

• Commissioner of Internal Revenue v. V.Y. Domingo Jewellers, Inc. (G.R. No. 221780,
March 25, 2019)

In this case, records show that on August 11, 2011, V.Y. Domingo received the Preliminary
Collection Letter (PCL) issued by petitioner CIR informing it of Assessment Notice Nos. 32-06-
IT-0242 and 32-06-VT-0243 dated November 18, 2010. On September 12, 2011, the former
sent a letter request to the BIR requesting for certified true copies of the said Assessment
Notices.

In the PCL, the taxpayer was informed of the existence of Assessment Notice No. 32-06-IT-
0242 and Assessment Notice No. 32-06-VT-0243, both dated November 18, 2010, for
collection of its tax liabilities in the amounts of P1,798,889.80 and P1,365,727.63, respectively,
for a total amount of P3,164,617.43. The PCL likewise stated:

“If you want to know the details and/or settle this assessment, may we invite you to come
to this office, within ten (10) days from receipt of this notice. However, if payment had
already been made, please send or bring us copies of the receipts of payment together
with this letter to be our basis for canceling/closing your liability/ies.

We will highly appreciate if you can give this matter your preferential attention, otherwise
we shall be constrained to enforce the collection thereof thru Administrative Summary
Remedies provided for by the law, without further notice”

29
Doctrine of exhaustion of administrative remedies

• Commissioner of Internal Revenue v. V.Y. Domingo Jewellers, Inc. (G.R. No. 221780,
March 25, 2019) - continued

The SC ruled that “instead of filing an administrative protest against the assessment notice
within thirty (30) days from its receipt of the requested copies of the Assessment Notices on
September 15, 2011, V.Y. Domingo elected to file its petition for review before the CTA First
Division on September 16, 2011, ratiocinating that the issuance of the PCL and the alleged
finality of the terms used for demanding payment therein proved that its Request for Re-
evaluation/Re-investigation and Reconsideration had been denied by the CIR.

Under the doctrine of exhaustion of administrative remedies, before a party is allowed to seek
the intervention of the court, he or she should have availed himself or herself of all the means
of administrative processes afforded him or her. Section 228 of the Tax Code requires
taxpayers to exhaust administrative remedies by filing a request for reconsideration or
reinvestigation within 30 days from receipt of the assessment.

What is evident in this case is that Assessment Notices have not been disputed by VY.
Domingo at the administrative level without any valid basis therefor, in violation of the doctrine
of exhaustion of administrative remedies.”

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Amended Assessment Notice is not equivalent to FDDA

• Misnet v. Commissioner of Internal Revenue (G.R. No. 210604, June 03,

2019)   

FACTS: On June 1, 2007, petitioner sent a letter to RO Josephine L. Paralejas

reiterating its protest to the PAN and the FAN.

On April 28, 2008, the CIR again wrote a letter to petitioner informing it that it
found additional deficiency taxes due. On May 8, 2008, petitioner protested this
letter.

On March 28, 2011, petitioner received an Amended Assessment Notice

reflecting an amended deficiency EWT after reinvestigation. On the same date,
petitioner received a Final Decision on Disputed Assessment (FDDA) stating
that after reinvestigation, there was still due from petitioner the amount of
P14,564,323.34

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Amended Assessment Notice is not equivalent to FDDA

• Misnet v. Commissioner of Internal Revenue (G.R. No. 210604, June 03,

2019)   

The SC Held:

With petitioner's pending protest with the Regional Director on the amended
EWT, then technically speaking, there was yet no final decision that was issued
by the CIR that is appealable to the CTA. And only when there is a final
decision of the CIR, would the prescriptive period to appeal with the CTA begin
to run.

32