CTA denies BIR's petition vs Philusa Corporation
The Court of Tax Appeals (CTA) has affirmed its division's ruling that cancelled the order for the payment of over P902 million taxes and compromise penalty, and more than P182 million in deficiency taxes issued by the Bureau of Internal Revenue (BIR) against Philusa Corporation, a firm engaged in marketing and distribution of home and health products.
On May 31, 2021, the CTA's first division cancelled and set aside the deficiency income tax (IT), value added tax (VAT), expanded withholding tax (EWT), and compromise penalty in the amount of P902,560,270.47 for 2009. It also set aside the P182,629,162.62 for deficiency IT, VAT, EWT, and compromise penalty.
BIR's motion for reconsideration was denied on Ded. 7, 2021. It then filed a petition before the CTA as a full court and claimed it was denied due process because the tax court's division ruled on an issue that was never raised by the taxpayer, never joined by the pleadings, never raised during pre-trial, and never defined by the court's division.
Its petition was denied by the CTA as a full court in a decision handed down last Sept. 13. The CTA's full court said that no reversible error was committed when the court a quo (division) resolved the issue that was neither raised by the taxpayer in the petition nor stipulated or tried by the parties.
"Petitioner should note that the prescription of his right to assess the taxpayer for deficiency income tax, VAT, and EWT for taxable year 2009 was, in fact, the very first point raised in the petition filed with the court a quo," the decision said. "This issue, based on the Pre-Trial Order, was also stipulated by the parties," it said.
"Based on the foregoing discussion, petitioner Commissioner of Internal Revenue failed to raise any issue that has convinced the Court En Banc to modify or reverse the assailed decision and resolution of the court a quo," it ruled.
The 27-page decision was written by Associate Justice Ma. Belen M. Ringpis-Liban with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Catherine T. Manahan, Jean Marie A. Bacorro-Villena, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes Fajardo, and Lanee S. Cui-David.