[THE 180-DAY PERIOD IS RECKONED FROM SUBMISSION OF SUPPORTING DOCUMENTS & IF AN ADMINISTRATIVE APPEAL IS MADE TO THE CIR, THE TAXPAYER MUST AWAIT THE FINAL DECISION] [NO NEW OR SEPARATE 180-DAY PERIOD ARISES FROM THE FILING OF AN ADMINISTRATIVE APPEAL]

Petitioner Friendlycare Foundation Inc. filed a Petition for Review challenging the Decision and Resolution of the Court of Tax Appeals (CTA) First Division, which dismissed the case for lack of jurisdiction on the ground that it failed to lodge its appeal within the reglementary period. The Petitioner argued that the rule governing the reckoning of the 180-day period was confusing, misleading, and unclear at the time it filed its Petition for Review. It contended that the 180-day period should commence from the filing of its administrative appeal of the Respondent Commissioner of Internal Revenue (CIR)’s Final Decision on Disputed Assessment (FDDA), rather than from the initial protest already decided by the Regional Director (RD). It further maintained that the ruling in Nueva Ecija II Electric Cooperative, Inc. Area II vs. Commissioner of Internal Revenue (NEECO II AREA II), which held that no separate 180-day period is given to the CIR to act on an administrative appeal, should not be applied retroactively. In ruling, the Court held that the Petitioner failed to comply with the mandatory periods under Section 228 of the Tax Code of 1997, as amended. The Court emphasized that the 180-day period is a single, continuous period reckoned from the submission of supporting documents, and no new period arises if the taxpayer files an administrative appeal. In such a case, the taxpayer must await the final decision of the CIR before appealing to the CTA. Citing the NEECO II AREA II case, it ruled that this interpretation applies retroactively. Since the Petitioner erroneously reckoned a new 180-day period despite the lapse of the original one, its Petition was filed out of time, depriving the Court of jurisdiction over the case. Thus, the Petition was DENIED for lack of Merit. Consequently, the Decision and Resolution were AFFIRMED. [FRIENDLYCARE FOUNDATION, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 3056, MARCH 17, 2026]

EXCISE TAX ON PETROLEUM PRODUCTS IS A PROPERTY TAX & BECOMES REFUNDABLE UPON SALE TO INTERNATIONAL CARRIERS

This case involves an Amended Decision on the Motions for Reconsideration and Motion for  Partial Reconsideration filed by both the Respondent, Commissioner of Internal Revenue (CIR), and the Petitioner, Pilipinas Shell Petroleum Corporation, in relation to a prior ruling of the Court on refund/tax credit of excise taxes paid on Jet A-1 fuel sold to international air carriers. The Respondent argues that the Motion for Reconsideration should be granted, but the Court denies it and affirms that the Petitioner is entitled to a refund under Section 135 of the Tax Code of 1997, as amended, as excise taxes on petroleum products sold to international carriers are considered erroneously collected once the exemption applies. The Court reiterates that the exemption is an impersonal tax exemption benefiting the manufacturer or importer as the statutory taxpayer, not the purchaser, and the Republic Act No. 12066, also known as the CREATE MORE Act, supports the refundability of such taxes. Therefore, the Motion for Reconsideration is DENIED for lack of merit. On the other hand, the Petitioner argues that its Motion for Partial Reconsideration should be granted despite missing signed Mandaue Official Register Books (ORBs) and Foreign Air Carrier’s Permits (FACPs). While the Court upholds the disallowance of unsupported ORBs due to lack of proof of concurrence, it finds merit in the Petitioner’s claim that Aviation Service Returns (ASRs) and Civil Aviation Authority of the Philippines (CAAP) certifications sufficiently establish compliance with refund requirements, clarifies that an FACP is not required under Section 135 of the Tax Code, and thus partially grants the Motion with a recomputation of the refundable amount from Php 207,765,676.00 to Php 209,789,304.00. Consequently, the Motion for Partial Reconsideration is PARTIALLY GRANTED. [PILIPINAS SHELL PETROLEUM CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10611, FEBRUARY 27, 2026]

FAILURE TO PROVE ACTUAL RECEIPT OF PAN CONSTITUTES A VIOLATION OF DUE PROCESS, RENDERING THE ENTIRE TAX ASSESSMENT VOID

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking to reverse and set aside the Decision of the Court of Tax Appeals (CTA) Special Third Division declaring the Formal Letter of Demand with corresponding Final Assessment Notices (FLD/FAN), Final Decision on Disputed Assessment (FDDA), Preliminary Collection Letter (PCL) and Final Notice Before Seizure (FNBS) issued to the Respondent JTKC Land, Inc. null. The Petitioner argues that due process was not violated since the Preliminary Assessment Notice (PAN) was validly served at the Respondent’s registered address and no change of address was reported to the BIR. It asserts that due process was satisfied when the Respondent was given the opportunity to contest the assessment through a request for reinvestigation, which led to the payment of deficiencies. Thus, it contends that the CTA Division erred in cancelling the assessments and declaring the FLD/FAN, FDDA, PCL, and FNBS null. On the other hand, the Respondent argues that the Petition lacks merit, asserting that the alleged service of the PAN is false and that the failure to serve it at the pre-assessment stage constitutes a violation of due process, which was not cured by the subsequent grant of a request for reinvestigation. Likewise, the period to assess has already lapsed and that non-compliance with due process requirements cannot be remedied by estoppel. In ruling, the Court held that the Petitioner failed to prove that the Respondent actually received the PAN, a fundamental requirement of due process under the law. Mere proof of mailing is insufficient and that actual receipt must be established, especially when denied by the taxpayer. Failure to properly serve the PAN is not a minor defect but a serious violation that invalidates the entire assessment process, and such defect is not cured by the taxpayer’s subsequent protest. Therefore, the FLD/FAN, FDDA, PCL, and FNBS were correctly declared NULL. [COMMISSIONER OF INTERNAL REVENUE VS. JTKC LAND INC., CTA EN BANC CASE NO. 2914, FEBRUARY 26, 2026]

PROCEDURAL LAPSES ON SERVICE OF ASSESSMENT UNDERMINES PROSECUTION

Petitioner People of the Philippines filed an Information indicting Accused The Property Forum Phils., Inc. and its President, Manuel M. Alleje, for willful failure to pay taxes under Section 255 of the Tax Code, in relation to Sections 253(d) and 256 of the same Code. Petitioner argued that the assessment is valid since the Preliminary Assessment Notice (PAN) and Formal Letter of Demand and Final Assessment Notice (FLD/FAN) were served, and no protest was filed; thus, making the assessment final. Also, the Accused did not settle despite multiple notices which made the non-payment willful. Lastly, the case is filed within the prescription period since the Department of Justice (DOJ) resolution dated November 27, 2019 tolled the prescriptive period. On the other hand, the Accused countered that there was no proper service of notices because the security guard is not authorized to receive tax notices; thus, assessment was void. Also, there was no willful intent since they were unaware of assessment because notices were sent improperly. Lastly, when the case was filed in 2021, the 5‑year period, running from December 23, 2015, had already lapsed. In ruling, the Court cited the Supreme Court landmark case of People v. Consebido, which clarified that for the offense of Willful Failure to Pay Taxes, the prescriptive period commences only when the assessment becomes final and demandable. The offense has not prescribed since the filing before the DOJ for preliminary investigation interrupts prescription. DOJ resolution dated November 27, 2019 occurred before the 5‑year period expired on December 24, 2020. Thus, the filing of the Information in 2021 was timely. In addition, the Accused is not guilty because the Prosecution failed to prove willful failure to pay. The assessment notices were received only by a building guard, who was not an employee, not authorized, and not a person “in charge” of the office. Thus, this constitutes violation of Section 228 of the Tax Code and Revenue Regulation (RR) No. 18-2013. Without valid assessment notice, Accused had no knowledge of tax liability. Willfulness requires a deliberate violation of a known duty. Because they were not properly notified, Accused could not have willfully refused to pay and since assessment never attained finality, no civil liability attaches leading to the ACQUITTAL. Likewise, the assessments are deemed VOID, without having reached any finality, and without any force and effect. [PEOPLE OF THE PHILIPPINES VS. THE PROPERTY FORUM PHILS., INC. & MANUEL M. ALLEJE, CTA CRIMINAL CASE NO. 0-876, FEBRUARY 24, 2026]

[UNDER FRIA LAW, WAIVER OF TAXES IS STRICTLY LIMITED TO THE PERIOD BETWEEN COMMENCEMENT ORDER & PLAN APPROVAL] [REHABILITATION STAY/SUSPENSION ORDERS DO NOT ERASE TAX LIABILITIES; THEY ONLY SUSPEND ENFORCEMENT]

Petitioner Calfurn Manufacturing Philippines Incorporated and Aweca Cargo Services, Inc. filed a Petition for Review impugning the Decision and Resolution, both rendered by the Court of Tax Appeals (CTA) Special Third Division holding it liable to the Local Business Tax (LBT) assessment issued by the Respondent Juliet Quinsaat, Treasurer of Angeles City, Pampanga. Petitioners argued that Section 19 of the Financial Rehabilitation and Insolvency Act of 2010 (FRIA) should be read in conjunction with Sections 15, 16, 17, and 21, which provide for the stay or suspension of claims, including government claims. They claimed that limiting the waiver only until plan approval defeats the purpose of rehabilitation, as it would burden the rehabilitated corporation with tax liabilities during its recovery phase. Likewise, the continuing Stay Order effectively prevents Local Government Units (LGUs) from collecting or enforcing taxes even after plan approval, thereby resulting in practical exemption. Furthe, good faith and substantial payments made under protest, asserting that equity and the rehabilitative intent of FRIA demand broader tax relief. On the other hand, Respondent insisted that Section 19 of FRIA is clear and explicit: tax waiver applies only from the issuance of the Commencement Order until approval of the Rehabilitation Plan or dismissal of the Petition, whichever comes first. A Stay or Suspension Order merely suspends enforcement of claims, and it does not extinguish or waive tax liabilities. After the Plan approval, local taxes legally accrue, and LGUs retain the right to impose and collect them absent an express statutory waiver. In ruling, the Court held that the waiver applies only from the issuance of the commencement order until approval of the Rehabilitation Plan. In this case, only local taxes accruing from December 17, 2008 to December 16, 2009 are deemed waived. All taxes accruing from taxable years (TY) 2010 up to 2022 are not waived. Also, Stay Order merely causes a temporary stoppage of enforcement of claims, including tax claims. It does not amount to abandonment or relinquishment of the taxing authority’s right to impose taxes.  Only an express statutory waiver, such as that in Section 19 of FRIA, can result in tax waiver—and only within its clear temporal limits. Hence, the Petition is DENIED, and the Decision and Resolution of the CTA Division are AFFIRMED. [CALFURN MANUFACTURING PHILIPPINES INC. & AWECA CARGO SERVICES INC. VS. JULIETA G. QUINSAAT, IN HER CAPACITY AS CITY TREASURER OF ANGELES CITY, PAMPANGA, CTA EN BANC CASE NO. 2953, JANUARY 15, 2026]