[FAILURE OF OSG DEPUTIZATION RENDERS PETITION FOR REVIEW DISMISSIBLE DESPITE TIMELY FILING] [ONLY THE OSG OR ITS DULY DEPUTIZED OFFICERS MAY REPRESENT THE GOVERNMENT IN APPELLATE CRIMINAL TAX PROCEEDINGS]

The Plaintiff Bureau of Internal Revenue (BIR) filed a Petition for Review seeking to reverse and set aside the Joint Resolution which upheld the dismissal of the criminal cases against the Accused Shirley Domingo Chu for her deficiency Income Tax (IT) and Value-Added Tax (VAT) assessments for taxable year (TY) 2011. The Plaintiff argued that the jurisdiction should be determined per tax type, not in aggregate, since each deficiency was below ₱1,000,000, and that the penalty of one (1) to ten (10) years imprisonment under Section 255 of the Tax Code supported the Regional Trial Court (RTC) jurisdiction. On the other hand, the Accused countered that failure to pay multiple tax types in one taxable year is a single violation under Section 255, and since the aggregate exceeded ₱1,000,000, only the Court of Tax Appeals (CTA) had jurisdiction. In ruling, the Court held that while the Petition was filed on time, the BIR’s legal officers lacked authority to appeal without deputization from the Office of the Solicitor General (OSG). Citing further Commissioner of Internal Revenue (CIR) v. La Suerte Cigar and CIR v. East Asia Utilities, the Court stressed that the BIR's officers may initiate tax cases, but only the OSG or duly deputized counsel can represent the government in appellate proceedings. Thus, the Petition was DISMISSED for lack of authority. [BUREAU OF INTERNAL REVENUE VS. SHIRLEY DOMINGO CHU, CTA CRIMINAL CASE NO. A-23, MAY 22, 2026]

[AUTHORITY TO AUDIT MUST BE EXPRESSLY GRANTED BY LETTER OF AUTHORITY (LOA); MEMORANDUM OF ASSIGNMENT (MOA) IS INSUFFICIENT] [ABSENCE OF A VALID LOA RENDERS TAX ASSESSMENT VOID FOR LACK OF AUTHORITY] [REASSIGNMENT OF REVENUE OFFICERS REQUIRES NEW LOA; FAILURE INVALIDATES ASSESSMENT]

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking to reverse the Court in Division’s Amended Decision and Resolution which cancelled the deficiency tax assessments against respondent Central Luzon Drug Corporation (CLDC). The Petitioner argued that the assessments were valid, that an LOA was not required for audits by the Large Taxpayers Service, and that reassignment of Revenue Officers (ROs) via Memorandum of Assignment (MOA) did not invalidate the audit. On the other hand, the Respondent argued that the assessments were void because the ROs who conducted the audit were not the same individuals named in the LOA, and no new LOA was issued to authorize their examination. Thus, the audit was conducted without proper authority, rendering the resulting assessments invalid. In ruling, the Court emphasized that a valid LOA is a statutory requirement before any RO can examine a taxpayer’s books. It held that only the ROs specifically named in the LOA are authorized to conduct the audit, and any reassignment of ROs requires the issuance of a new LOA. Citing, Medicard Philippines v. CIR, the Court affirmed that absence of proper authority renders the assessment void. Although an initial LOA was issued, the actual audit was conducted by ROs not named therein, and their authority was based only on an MOA issued by an official not authorized to issue LOAs. Consequently, such MOA did not validly confer authority to conduct the audit. Hence, the assessments issued were VOID for lack of valid LOA. [COMMISSIONER OF INTERNAL REVENUE VS. CENTRAL LUZON DRUG CORPORATION, CTA CASE EN BANC CASE NO. 3111, MAY 8, 2026]

[SUMMONS MUST BE DULY ISSUED IN ACCORDANCE WITH THE TAX CODE & RMO NO. 10-2013] [FAILURE TO PROVE COMPLIANCE WITH THE REQUIREMENTS FOR ISSUANCE OF AN SDT CREATES REASONABLE DOUBT & WARRANTS ACQUITTAL]

Petitioner, Niang-Niang Lim Dong, filed a Petition for Review assailing the Judgment and Order rendered by the Regional Trial Court of Cagayan (RTC-Cagayan) and the Metropolitan Trial Court in Cities of Tuguegarao City (MTCC Tuguegarao City), which found the Petitioner guilty of violating Section 266 of the Tax Code for Failure to Obey Summons. Petitioner argued that the Mission Order (MO) was improperly issued under an unrelated Revenue Memorandum Order (RMO) and only covered the main branch, making the request for eSales Journals of other branches invalid. She also asserted that no Formal Letter of Notice was served. Further, she questioned the validity of the Post Evaluation Guide (PEG) Forms, noting that the first was unsigned and unacknowledged while a different PEG Form was later issued. Petitioner likewise contended that the Subpoena Duces Tecum (SDT) was void due to the absence of the required Memorandum Report and Demand Letter. She maintained that the Prosecution failed to justify the demand for the eSales Journal and that she had already submitted the required documents. In ruling, the Court held that while the BIR has the authority to require taxpayers to produce records and penalize noncompliance with a duly issued summons, the Prosecution failed to prove that the SDT was properly issued in accordance with RMO No. 10-2013. The Court found that the BIR did not issue a written demand specifically requiring the submission of the eSales Journal for 2018 and the first two quarters of 2019, relying instead on verbal reminders. Moreover, the documents identified in the SDT did not match those stated in the prior written notice, creating doubt as to compliance with the required procedures. Thus, the Petition was GRANTED, and the Petitioner was ACQUITTED, as the validity of the summons was uncertain and an essential element of the offense under the Tax Code was not proven beyond reasonable doubt. [NIANG-NIANG LIM DONG VS. HON. MARIVIC CACATIAN-BELTRAN, A. PRESIDING JUDGE OF REGIONAL TRIAL COURT BRANCH 03 CARIG, TUGUEGARAO, BUREAU OF INTERNAL REVENUE, CTA EN BANC CRIMINAL CASE NO. 173, APRIL 30, 2026]