The Court of Tax Appeals (CTA) has scrapped the more P229-million deficiency tax assessment slapped by the Bureau of Internal Revenue (BIR) against a vehicle spare parts manufacturer.
The court en banc sustained the decision of one of its divisions that the audit on the financial records of Eds Manufacturing Inc. of Imus, Cavite was void as it was done by unauthorized revenue officers (ROs).
In a brief resolution, the full court noted the investigation was conducted by examiners from the bureau's large taxpayers service (LTS) armed only with memorandum of assignment (MOA) signed by a division head.
It said the audit was tantamount to the usurpation of the authority of the BIR commissioner to order the examination of the books of accounts of taxpayers.
Court records showed an LTS division head issued the MOA to continue the investigation of the company after a group of ROs who had the letter of authority (LA) handling the case was transferred elsewhere.
The decision written by Associate Justice Marian Ivy F. Reyes-Fajardo stated that the new LA should have been issued to the new examiners with their names on it as required under Sections 6 and 13 of the Tax Code.
The LA, she said, should be signed by the LTS chief and not by a mere division who is not authorized by revenue rules and regulations to issue LA.