The Court of Tax Appeals (CTA) has stopped the Bureau of Internal Revenue (BIR) from collecting more than P512 million in deficiency taxes from a real estate company after it turned out that the investigation on the case was conducted by unauthorized revenue officers.
The court's Third Division stated that the letter of authority (LA) to investigate Sm Synergy Properties Holding was issued by a mere division head of the BIR's Large Taxpayers Service (LTS).
The 29-page decision stated that only the head of the LTS has the power to issue an LA under Revenue Memorandum Order No. 29-07.
"Therefore the tax examiners assigned to the case were not authorized to conduct the investigation," said Associate Justice Ma. Belen M. Ringpis-Liban, who penned the resolution.
The alleged tax liabilities covered income, value-added, expanded withholding, and documentary stamp taxes for the whole year of 2009.