[CTA HAS JURISDICTION TO REVIEW DECISIONS OF THE CIR ON OTHER MATTERS ARISING FROM THE TAX CODE, WHICH INCLUDES THE BIR’S EXERCISE OF AUTHORITY TO COLLECT TAXES THROUGH DISTRAINT, LEVY, OR GARNISHMENT] [THE LATE FILING OF AN APPEAL DIVESTS THE COURT IN DIVISION OF THE JURISDICTION TO RESOLVE THE CASE]

Petitioner AGM Ventures Enterprises filed a Petition for Review seeking to overturn the Decision of CTA 2^nd Division, which dismissed the case for lack of jurisdiction. The Petitioner argued that the issuance of Warrant of Distraint and/or Levy (WDL) and Warrant of Garnishment (WOG) is premature and unlawful, having been issued pending resolution of the administrative appeal or determination of the final tax liability filed before the Respondent Commissioner of Internal Revenue (CIR). In ruling, the Court held that the CTA 2^nd Division has jurisdiction to review the actions or decisions of the CIR or his duly authorized representative over matters arising from the Tax Code. This includes the BIR’s authority to collect national taxes, which may be made by means of distraint and/or levy of property, and garnishment of bank accounts. Thus, the Petitioner could have validly challenged the issuance of WDL and WOG via appeal with the CTA 2nd Division. However, the law also provides that such an appeal must be filed within 30 days from receipt of the WDL and WOG. In this case, the Petitioner received the WDL and WOG on March 10, 2023, but did not appeal until April 28, 2023, which is beyond the prescriptive period to appeal. Thus, the appeal was belatedly filed, divesting the CTA 2^nd Division of the authority to entertain the case. Consequently, the dismissal of the case was proper, and the Petition was DENIED. [AGM VENTURES ENTERPRISES, INC. VS COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2829, APRIL 24, 2025]

DECIDING ON THE VALIDITY OF THE WARRANT OF DISTRAINT AND/OR LEVY REQUIRES THE COURT TO LOOK INTO THE VALIDITY OF THE ASSESSMENT ON WHICH IT IS FOUNDED

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking to reverse the decision of the CTA Special First (1^st) Division. The Petitioner argued that the CTA 1^st Division lacked jurisdiction, citing the Respondent Julio R. De Quinto’s failure to file an administrative protest to the Final Assessment Notice (FAN)/Formal Letter of Demand (FLD) prior to elevating the matter to the CTA. Failure to file a valid protest against the FAN/FLD within 30 days from receipt renders it undisputed, final, executory and demandable. Likewise, it argued that assailing the validity of Warrant of Distraint and/or Levy (WDL) is not covered by the “other matters” provision in Republic Act (R.A.) No. 1125, or An Act Creating the CTA, for purposes of acquiring jurisdiction. On the other hand, the Respondent countered that the issue on jurisdiction is only being raised for the first time on appeal and maintained that the FAN/FLD was not personally served to him, thereby violating his right to due process. In ruling, the CTA En Banc held that the Petition was not timely filed. It emphasized that the timely filing of a Motion for Reconsideration (MR) or New Trial before the CTA Division is a prerequisite to an appeal to the CTA En Banc, and failure to comply is a ground for dismissal. The Court noted that the 15-day reglementary period to file an appeal is reckoned from the date of service to the Office of the Solicitor General (OSG), which received the denial of the MR on October 31, 2023. Accordingly, the Motion for Extension of Time to File Petition for Review, filed on November 21, 2023, was beyond the prescribed period. On the issue of jurisdiction over the WDL, the Court held that CTA is not confined to appellate review of CIR decisions. It also has jurisdiction over “other matters” in relation to the Tax Code. Thus, the CTA Division properly exercised jurisdiction over the case involving the validity of the WDL. Moreover, it states that to rule on the validity of the WDL, it had to rule on the legality of the assessments on which it is based, which were found to be based on mere presumptions and lack factual basis. Consequently, the Petition was DENIED.  [COMMISSIONER OF INTERNAL REVENUE VS JULIO R. DE QUINTO, CTA EN BANC CASE NO. 2830, APRIL 22, 2025]

[AN ASSESSMENT PURSUANT TO AN INVESTIGATION BY A REVENUE OFFICER CONDUCTED WITHOUT THE AUTHORITY GRANTED THROUGH A LETTER OF AUTHORITY (LOA) IS NULL & VOID] [AN ASSESSMENT MUST BE BASED ON ACTUAL FACTS & NOT ON PRESUMPTIONS, NO MATTER HOW LOGICAL IT MAY BE]

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review Ad Cautelam, assailing the decision of the Court of Tax Appeals (CTA) First (1^st) Division which declared the deficiency tax assessment issued against the Respondent Ermilo Tan Ng Hua as void. The Petitioner alleged that the assessment is valid and that the Respondent’s right to due process was not violated. He maintains that the assessment is presumed correct and made in good faith, and thus, the collection of taxes should not be enjoined, especially since the Respondent still has the option to appeal. On the other hand, the Respondent argued that he did not receive a Letter of Authority (LOA) in relation to the assessment; instead, a Letter Notice (LN) was issued, which he received concurrently with the Preliminary Assessment Notice (PAN). He claimed that due to the absence of a valid LOA, the Petitioner lacked the legal authority to conduct an audit. He further argued that the assessment had no factual or legal basis, as it was merely based on a comparison of data provided by the supplier against the Respondent's tax returns, leading to a presumption that there were unreported sales and purchases. In ruling, the CTA En Banc held that the assessment is void for violation of the Respondent’s right to due process. Assessment without authority granted through the LOA is null and void. The Court emphasized that the audit process normally begins with the issuance of the LOA, which gives notice to the taxpayer that it is under investigation for a possible tax assessment. It authorizes the Revenue Officer (RO) to examine, verify, and scrutinize a taxpayer’s books and records. Without an LOA, the RO is bereft of authority to examine a taxpayer, and a notice through an LN is insufficient. In addition, an assessment must be grounded on concrete facts supported by credible evidence. An assessment must be based on actual facts and not on presumptions, no matter how logical they may be. Due to the absence of a valid LOA and a factual basis, the assessment was declared VOID, and the Petition for Review Ad Cautelam is DENIED for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS ERMILO TAN NG HUA, CTA EN BANC CASE NO. 2734, APRIL 14, 2025]