MANILA – The Court of Tax Appeals (CTA) has ruled in favor of Quezon City-based realty firm New Farmers Plaza, Inc. in a case involving over PHP137 million in taxes dating back to 2006.
In a 17-page decision dated Jan. 27 and made public Friday, the tax court’s Third Division granted the petition for review filed by the firm for denial of due process.
The ruling nullifies the Bureau of Internal Revenue's (BIR) notice of denial dated June 1, 2016, against the firm involving PHP25.78 million.
It also set aside the formal letter of demand (FLD) dated April 27, 2011, assessing the firm of the deficiency income tax, VAT (value-added tax), and EWT (expanded withholding tax) with interests in the aggregate amount of PHP112 million for the calendar year 2006 for being void.
“Tax assessments issued in violation of the due process rights of a taxpayer are null and void,” the court said.
Among other things, the firm claimed that the BIR officials who conducted the audit on the firm were not armed with a valid letter of authority (LOA), issued an assessment and FLD beyond the prescriptive period, failed to properly serve the FLD on the petition and issued the same merely 13 days after the receipt of a preliminary assessment notice (PAN) or within the period to file a reply to the said PAN.
“Due process requires the Bureau of Internal Revenue to consider defenses and evidence submitted by the taxpayer and to render a decision based on these submissions. Failure to adhere to these requirements constitutes a denial of due process and taints the administrative proceedings with invalidity,” the court said in its ruling. (PNA)
