Belated serving of a Letter of Authority (LA) to investigate has caused the Bureau of Internal Revenue (BIR) to lose more than P21 million in income, value-added and expanded withholding taxes.
The Court of Tax Appeals (CTA) said Joselito Ramada Laroya from Pila, Laguna was not liable to pay the tax allegedly incurred in 2009 because the LA served on him had already expired.
The 22-page resolution issued by the court's Third Division stated that an LA has a lifespan of only 30 days upon issuance by a responsible revenue official.
It explained the duration of the investigation could be extended beyond the 30-day period if the LA has been revalidated as prescribed under revenue rules and regulations.
But Associate Justice Ma. Belen Ringpis-Liban who penned the decision said there was no evidence that the LA in this particular case had been revalidated.
Records showed that the LA was issued to the manpower service operator by the Southern Tagalog revenue region on May 15, 2009.
The revenue officer handling the case gave the LA to the taxpayer on June 30, or 46 days after the deadline.