CTAvoidsP508-M BIR tax demand over invalid date
THE Court of Tax Appeals (CTA) said it granted a motion for reconsideration sought by Grand Plaza Hotel Corp., in effect cancelling the company’s 2008 tax deficiency of over P508 million, citing the absence of a valid payment deadline.
The court’s Special Second Division found on Oct. 29 that the 2008 tax deficiency of P508,101,387.12 tax deficiency was cited in Final Assessment Notices issued by the Bureau of Internal Revenue (BIR) had due dates of “January 00, 1900” which it said “is not a valid date.”
It added that the lack of valid due date negates BIR’s demand for payment, citing previous Supreme Court decisions.
“To stress, an assessment contains not only a computation of tax liabilities, but also a demand for payment within a prescribed period. The requirement to indicate a fixed and definite period within which a taxpayer must pay the tax deficiencies is vital to the validity of the assessment,” it said.
“Therefore, the invalid date in the Formal Letter of Demand and Assessment Notices negates respondent’s demand for payment and makes the assessment void,” it added.
It also claimed jurisdiction over the petition for review of Grand Plaza after the latter appealed the tax assessment on Feb. 20, 2015, or within 30 days of receipt of the Final Notice on Feb. 16, 2015.
In a July 4, 2018, decision the CTA had ruled that the tax assessment had become “final, executory and demandable” due to Grand Plaza’s failure to protest the Formal Letter of Demand within the appointed.
In its motion for reconsideration, Grand Plaza claimed that the CTA has jurisdiction to review the collection proceedings of the BIR under the term “other matters” on rules pertaining to cases within the jurisdiction of the CTA.
The decision stated that “other matters” include but are not limited to “review of the BIR’s authority and decision to compromise; prescription of the CIR’s right to collect taxes; determination of the validity of a warrant of distraint and levy issue by the CIR and the validity of a waiver of the statute of limitations.” —