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Manila Bulletin devider Philippines devider National devider CTA denies petition of E-Power Security on tax liabilities

CTA denies petition of E-Power Security on tax liabilities

Published Feb 26, 2025 04:02 am

The Court of Tax Appeals (CTA) has denied the petition of E-Power Security and Investigation Services, Inc. which sought the suspension of the collection of the disputed tax liability for taxable year 2015 by the Bureau of Internal Revenue (BIR).

On Nov. 21, 2022, the CTA's first division dismissed the case filed by E-Power Security for lack of jurisdiction.  The firm, engaged in providing security guard services, filed a petition for review before the CTA as a full court.

E-Power Security said the CTA as a full court should reverse and set aside the adverse decision it earlier received as the Formal Letter of Demand (FLD) issued was not validly served. 

It also said that a significant portion of the amounts received from clients constitutes security guards' salaries and should not be classified as income, and the assessed basic taxes are erroneous and lack both legal and factual bases.

Case records showed that the BIR issued a FLD against E-Power Security with details of discrepancies and four assessment notices (ANs), demanding the payment of deficiency income taxes and compromise penalties in the amounts of P10,374,311.05, P4,517,976.89, P26,930.90, and P37,000 or a total amount of P14,956,218.84, inclusive of interest on or before Jan. 14, 2019 for the period Jan. 1, 2015 to Dec. 31, 2015.

The CTA's first division ruled that E-Power Security should have filed an administrative protest within 30 days of receipt of the FLD. Since the firm filed its letter-protest on April 12, 2019, it said that it gave the CTA no jurisdiction over the case.

The CTA as a full court agreed as it stressed that E-Poer Security's claims were full of "inconsistencies."  It also agreed that the protest was belatedly filed, and as a result, the assessments became final, executory, and demandable.

"Given the absence of a valid administrative protest and no decision on a disputed assessment to assail, the Court in Division is correct in concluding that it lacked jurisdiction over the case," it said. 

The 16-page decision was written by Associate Justice Lanee S. Cui-David with the concurrence of Presiding Justice Roman G. Del Rosario and Associates Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Jean Marie A. Bacorro-Villena, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes-Fajardo, Corazon G. Ferrer-Flores, and Henry S. Angeles.

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