The Court of Tax Appeals (CTA) has voided the P21 million tax collection case filed by the Bureau of Internal Revenue's (BIR) against an individual taxpayer in Pila, Laguna for using an expired letter of authority (LA) to investigate his tax liabilities.
In affirming the decision of its Third Division, the full court said the Joselito R. Laraya received the LA more than 30 days from it's issuance in violation of Revenue Memorandum Order 43-90.
It said the expired LA should have been revalidated before serving it again to Laraya.
"Since there is no showing that the subject LA has been revalidated, the same has already become void and was already without force and effect for the BIR's failure to observe the 30-day mandatory period," the 17-page resolution read.
Likewise, it said the revenue officers who examined the financial records of the taxpayer was no longer qualified to do so.
The BIR insisted on the validity of the LA, arguing it was accepted by the taxpayer despite it's expiration.
Associate Justice Lanee S. Cui-David, who penned the decision, said the LA was still void even if the taxpayer accepted it after the deadline.
The deficiency taxes covered income, value-added and expanded withholding for 2006.