By Jun Ramirez
The Court of Tax Appeals (CTA) has cancelled the P160 million deficiency tax assessment slapped by the Bureau of Internal Revenue (BIR) against an industrial and manufacturing firm for the failure of the former to complete its audit before serving the final assessment notice (FAN).
Court of tax Appeals (MANILA BULLETIN)
The court's Second Division stated the FAN served to the First Philippine Industrial Corporation (FPIC) is not valid because it did not contain a definite due date for the payment of the tax as required in the Tax Code.
It added that the waivers issued by FPIC asking for more time to present additional supporting documents and which were subsequently approved by the BIR were also void.
In a 50-page resolution, the court stated that the waivers failed to indicate the specific tax involved and the exact amount of the tax to be assessed and collected as required in the Tax Code.
"These requirements are mandatory and must be strictly followed," said Associate Justice Cielito Mindaro-Grulla who penned decision.
The deficiency assessment covered 2009 with the taxpayer signing three waivers in 2012 and 2013.
The court said the waivers did not extend the three-year prescriptive period of audit under Section 203 of the Tax Code on account of their invalidity.