The Court of Tax Appeals (CTA) has cancelled the P3-million belated deficiency tax assessment slapped by the Bureau of Internal Revenue (BIR) againts a car parking company.
In an 18-page resolution, the court's third division stated that the BIR's final assessment notice (FAN) and the warrant of distraint and levy (WDL) have already prescribed.
The deficiency tax assessment covered income, value-added, expanded, withholding, and documentary stamp taxes for 2007, or 14 years ago.
The court noted that the BIR had only three years to enforce the collection of the deficiency taxes as prescribed under Section 223 of the Tax Code.
Associate Justice Erlinda P. Uy who wrote the 18-page decision stated that the law provides a statute of limitation on the assessment and collection of taxes to protect the interest of taxpayers from protracted investigation.
"The court cannot allow tax authorities indefinite period to collect taxes, despite the fact that taxes are the lifeblood of the nation," she noted.