Linden Suites, Inc. v. Commissioner of Internal Revenue

FIRST DIVISION [C.T.A. CASE NO. 9360. May 20, 2021.] LINDEN SUITES, INC., as represented by EUGENE U. BALCOS , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION DEL ROSARIO , P.J p : Before this Court is a Petition for Review filed on May 27, 2016 by petitioner Linden Suites, Inc., as represented by Eugene U. Balcos, praying that judgment be rendered: (i) setting aside the Preliminary Assessment Notice dated December 4, 2015, Assessment Notices dated December 22, 2015, and the Formal Letter of Demand dated December 22, 2015; and, (ii) declaring the assessments for deficiency income tax, value added tax, and documentary stamp tax for fiscal year ending September 30, 2012, in the aggregate amount of Eleven Million One Hundred Eighty-Five Thousand Eighty-Two Pesos and 78/100 (P11,185,082.78), inclusive of increments, void. THE PARTIES Petitioner Linden Suites, Inc. is a domestic corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with registered address at No. 37 San Miguel Avenue, Ortigas Center, Pasig City. 1 Respondent is the duly appointed Commissioner of Internal Revenue (CIR) who holds office at the 5th Floor, Bureau of Internal Revenue (BIR) National Office Building, Agham Road, Diliman, Quezon City. 2 He is vested with authority to administer and enforce all laws pertaining to internal revenue taxes and has jurisdiction to decide on disputed tax assessments in accordance with law and the rules and regulations related thereto. 3 THE FACTS On October 2, 2013, petitioner received a Letter of Authority No. LOA-43A-213-00000719 dated September 26, 2013 authorizing Revenue Officer (RO) Carmencita Villanueva, under the supervision of Group Supervisor (GS) Antonino Ilagan, of Revenue District No. 43A-East Pasig to examine/audit petitioner's internal revenue taxes for the period from October 1, 2011 to September 30, 2012. 4 As a result of the audit and examination of petitioner's records, respondent allegedly issued on December 4, 2015, a Preliminary Assessment Notice 5 (PAN), with attached Details of Discrepancies, 6 which proposed to assess petitioner for deficiency income tax, value-added tax (VAT), and documentary stamp tax (DST) for the fiscal year ending September 30, 2012, in the aggregate amount of Eleven Million Seventy Thousand Nine Hundred Ninety-Seven Pesos and 50/100 (P11,070,997.50), inclusive of interest and penalties. Respondent claims that petitioner received the aforesaid PAN on December 4, 2015. 7 CAIHTE On December 22, 2015, petitioner received a Formal Letter of Demand (FLD), 8 with attached Details of Discrepancies, 9 and Assessment Notices, 10 all dated December 22, 2015, which requested petitioner to pay the alleged deficiency income tax, VAT, and DST for fiscal year ending September 30, 2012, in the total amount of Eleven Million One Hundred Eighty Five Thousand Eighty Two Pesos and 78/100 (P11,185,082.78), inclusive of interest and surcharge, broken down as follows: Tax Type Amount Income Tax 6,044,231.19 VAT 2,712,863.43 DST 2,427,988.16 Total: P11,185,082.78 On January 8, 2016, petitioner filed a Letter Protest 11 to the FLD, requesting Officer-in-Charge/Assistant Chief of the Assessment Division, Analyn S. Chu, to re-investigate the assessment issued against it. On February 5, 2016, petitioner received a Letter 12 from Regional Director Alfredo V. Misajon of Revenue Region No. 7, stating that its failure to state the applicable laws, rules and regulations, or jurisprudence on which its administrative protest is based rendered the assessment final, executory and demandable. On February 29, 2016, petitioner sent a Letter 13 addressed to the then Commissioner of Internal Revenue, Kim S. Jacinto-Henares, requesting her to reconsider the denial of its protest, and to strike out the FLD she issued on December 22, 2015. On April 28, 2016, petitioner received a Letter 14 from Regional Director Misajon, reiterating that the assessment against petitioner has become final, executory and demandable, and notifying petitioner that the entire tax docket of the case together with its Letter will be forwarded to the Collection Division. Aggrieved, the present Petition for Review 15 was filed on May 27, 2016 and was raffled to the Third Division of this Court. On August 8, 2016, respondent filed his Answer 16 setting forth special and affirmative defenses that: (i) the Assessment Notices, FLD, and Details of Discrepancies were served to petitioner on December 22, 2015, and that no valid protest was filed from the lapse of thirty (30) days therefrom; (ii) the pro forma request for reinvestigation filed by petitioner failed to comply with the requirements of a valid protest under Section 228 of the National Internal Revenue Code (NIRC) of 1997, as amended and Revenue Regulations (RR) No. 12-99, as amended by RR No. 18-2013; and, (iii) without a valid protest, the assessment against petitioner became final, executory and demandable; thus, depriving the Court of jurisdiction over the present case. On November 4, 2016, petitioner and respondent filed their respective Pre-Trial Briefs. 17 DETACa The Pre-Trial Conference was held on November 8, 2016. 18 The parties filed their Joint Stipulation of Facts and Issues on December 8, 2016. 19 The Pre-Trial Order 20 was issued on January 3, 2017. The Court also terminated the Pre-Trial Conference in the same Order. During trial, petitioner presented documentary evidence. Petitioner also offered in evidence the testimonies of its witnesses, namely, Ronaldo C. Ramos, 21 Eugene C. Balcos, 22 and Atty. Epifania Navarro-Mendoza, 23 together with their corresponding Judicial Affidavits. Petitioner's formally offered exhibits, as contained in its Formal Offer of Evidence filed on August 24, 2018, 24 were admitted in evidence in the Resolution 25 dated October 29, 2018. On September 19, 2018, this case was transferred to the First Division of this Court pursuant to Court of Tax Appeals (CTA) Administrative Circular No. 02-2018 dated September 18, 2018 which reorganized the three (3) Divisions of the CTA. On December 3, 2018, respondent filed a Motion to Dismiss 26 asserting that the Court has no jurisdiction over the present case. The Court denied the same in the Resolution 27 dated July 29, 2019 holding that respondent's objection on the Court's jurisdiction has already been barred by laches as he voluntarily participated in the proceedings and submitted his cause to the jurisdiction of the Court. The Court also ruled that the issue on jurisdiction involves factual matters which can be better threshed out after a full-blown trial. Respondent proceeded to present his evidence. Respondent offered the testimony of RO II Wilhelmina Rosario D. Pandit, together with her Judicial Affidavit. 28 Respondent's formally offered exhibits, as contained in his Formal Offer of Evidence filed on October 11, 2019, 29 were admitted in the Resolution dated February 5, 2020. 30 Petitioner filed its Memorandum 31 on July 20, 2020, while respondent failed to file his memorandum 32 despite due notice. The case was submitted for decision on July 30, 2020. 33 THE ISSUES 34 The issues for consideration of the Court, as stipulated by the parties, are the following: 1. Whether the CTA has jurisdiction over the present Petition for Review; 2. Whether respondent has complied with the due process requirement as prescribed under RR No. 12-99 with regard to the issuance of deficiency tax assessments against petitioner; 3. Whether the assessment for alleged VAT deficiency has prescribed; hence, barred by law; 4. Whether the assessment is valid and petitioner is liable for the alleged tax deficiency assessment in the total amount of Eleven Million One Hundred Eighty-Five Thousand Eighty Two Pesos and Seventy-Eight Centavos (P11,185,082.78), inclusive of increments; 5. Whether respondent's denial of petitioner's Request for Reinvestigation dated 08 January 2016 and Request for Reconsideration dated 26 February 2016 are erroneous, unmeritorious, unprocedural, and invalid; and, 6. Whether the tax assessments have become final, executory and demandable. THE PARTIES' ARGUMENTS Petitioner puts forth the following arguments: (i) Respondent failed to comply with the due process requirement as prescribed under RR No. 12-99, as amended, with regard to the issuance of deficiency tax assessment; (ii) Respondent failed to issue a PAN before the issuance of the FLD; (iii) There was disregard of petitioner's right to due process when the FLD was not served on petitioner's responsible officers, as required under the Rules of Court, or, at the very least, on petitioner's duly authorized representative; (iv) Petitioner is not liable for the tax deficiency assessment as it is void for lack of factual and legal basis; (v) Petitioner is a diligent taxpayer and the assessments have no sound and valid basis, both in fact and in law; ATICcS (vi) The assessments made against petitioner have not become final and executory; therefore, the alleged tax deficiencies of petitioner, if any, are not yet demandable and in fact, had already prescribed; (vii) Since interest and total amount due are still subject to modification if paid beyond the date specified therein, the Assessment Notices are made null and void as the amount of tax liabilities are indefinite; (viii) The period for assessment of the alleged tax deficiencies already prescribed; (ix) Respondent's lone witness neither had personal knowledge of the contents nor the preparation of the documents submitted and offered in evidence; and, (x) Petitioner's arguments and evidence remain unrebutted by respondent; hence, they are deemed admitted by respondent's silence and should stand as true, even on its own. Respondent, on the other hand, advances the following counter-arguments: (i) The PAN was received by petitioner on December 4, 2015 as it was served through personal service. The PAN was also served by registered mail on December 9, 2015 at petitioner's registered business address at No. 37 San Miguel Avenue, San Antonio, Ortigas Center, Pasig City; (ii) The Assessment Notices sent to petitioner contained the facts and law on which the assessments were based pursuant to Section 228 of the NIRC of 1997; (ii) The Assessment Notices, FLD, and the Details of Discrepancies were personally sent to petitioner on December 22, 2015 and received by a certain Jane Benemerito; and, they were also served through registered mail and received on December 29, 2015 based on the Registry Return Receipt; (iv) There was a blanket denial of the protest; thus, no valid protest was ever filed by petitioner; (v) The request for reconsideration is not a valid recourse as the assessment has already become final, executory and demandable; (vi) A Notice of Informal Conference is no longer required to be sent to petitioner pursuant to RR No. 18-2013 which amended RR No. 12-99; and, (vii) The assessment against petitioner has already become final, executory and demandable since petitioner's request for reinvestigation is not a valid protest; hence, the Court has no jurisdiction over the present case. TIADCc THE COURT'S RULING The Petition for Review was timely filed Before delving into the merits of the case, the Court shall first determine whether the Petition for Review was filed within the prescribed period under the NIRC of 1997, as amended. Section 228 of the NIRC of 1997, as amended, provides for the procedure and manner upon which tax deficiency assessments should be issued and protested, viz. : " SEC. 228. Protesting of Assessment . When the Commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his findings: Provided, however , That a pre-assessment notice shall not be required in the following cases: xxx xxx xxx The taxpayers shall be informed in writing of the law and the facts on which the assessment is made; otherwise, the assessment shall be void. Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to said notice . If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an assessment based on his findings. Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules and regulations. Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been submitted; otherwise, the assessment shall become final . cSEDTC If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of one hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable . (Boldfacing supplied) Corollary thereto, Section 3 of RR No. 12-99, as amended by RR No. 18-13, provides: " SECTION 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment . 3.1 Mode of procedure in the issuance of a deficiency tax assessment: 3.1.1 Preliminary Assessment Notice (PAN) . If after review and evaluation by the Commissioner or his duly authorized representative, as the case may be, it is determined that there exists sufficient basis to assess the taxpayer for any deficiency tax or taxes, the said Office shall issue to the taxpayer a Preliminary Assessment Notice (PAN) for the proposed assessment. It shall show in detail the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based (see illustration in ANNEX "A" hereof). If the taxpayer fails to respond within fifteen (15) days from date of receipt of the PAN, he shall be considered in default, in which case, a Formal Letter of Demand and Final Assessment Notice (FLD/FAN) shall be issued calling for payment of the taxpayer's deficiency tax liability, inclusive of the applicable penalties. If the taxpayer, within fifteen (15) days from date of receipt of the PAN, responds that he/it disagrees with the findings of deficiency tax or taxes, an FLD/FAN shall be issued within fifteen (15) days from filing/submission of the taxpayer's response, calling for payment of the taxpayer's deficiency tax liability, inclusive of the applicable penalties. xxx xxx xxx 3.1.4 Disputed Assessment . The taxpayer or its authorized representative or tax agent may protest administratively against the aforesaid FLD/FAN within thirty (30) days from date of receipt thereof. The taxpayer protesting an assessment may file a written request for reconsideration or reinvestigation defined as follows: (i) Request for reconsideration refers to a plea of re-evaluation of an assessment on the basis of existing records without need of additional evidence. It may involve both a question of fact or of law or both. (ii) Request for reinvestigation refers to a plea of re-evaluation of an assessment on the basis of newly discovered or additional evidence that a taxpayer intends to present in the reinvestigation. It may also involve a question of fact or of law or both. SDAaTC xxx xxx xxx If the protest is denied, in whole or in part, by the Commissioner's duly authorized representative, the taxpayer may either: (i) appeal to the Court of Tax Appeals (CTA) within thirty (30) days from date of receipt of the said decision; or (ii) elevate his protest through request for reconsideration to the Commissioner within thirty (30) days from date of receipt of the said decision. No request for reinvestigation shall be allowed in administrative appeal and only issues raised in the decision of the Commissioner's duly authorized representative shall be entertained by the Commissioner. If the protest is not acted upon by the Commissioner's duly authorized representative within one hundred eighty (180) days counted from the date of filing of the protest in case of a request reconsideration; or from date of submission by the taxpayer of the required documents within sixty (60) days from the date of filing of the protest in case of a request for reinvestigation, the taxpayer may either: (i) appeal to the CTA within thirty (30) days after the expiration of the one hundred eighty (180)-day period; or (ii) await the final decision of the Commissioner's duly authorized representative on the disputed assessment. If the protest or administrative appeal, as the case may be, is denied, in whole or in part, by the Commissioner, the taxpayer may appeal to the CTA within thirty (30) days from date of receipt of the said decision. Otherwise, the assessment shall become final, executory and demandable. A motion for reconsideration of the Commissioner's denial of the protest or administrative appeal, as the case may be, shall not toll the thirty (30)-day period to appeal to the CTA. xxx xxx xxx" (Boldfacing supplied) In Philippine Amusement and Gaming Corporation vs. Bureau of Internal Revenue , 35 the Supreme Court enumerated the remedies a taxpayer may avail when the CIR or his authorized representative wholly or partially denies its protest, viz. : 1. If the protest is wholly or partially denied by the CIR or his authorized representative, then the taxpayer may appeal to the CTA within 30 days from receipt of the whole or partial denial of the protest. 2. If the protest is wholly or partially denied by the CIR's authorized representative, then the taxpayer may appeal to the CIR within 30 days from receipt of the whole or partial denial of the protest . 3. If the CIR or his authorized representative failed to act upon the protest within 180 days from submission of the required supporting documents, then the taxpayer may appeal to the CTA within 30 days from the lapse of the 180-day period. Relatedly, Section 11 of Republic Act No. 1125, 36 as amended, in relation to Section 3 (a), Rule 8 of the Revised Rules of the CTA, 37 provides that a party adversely affected by the decision or inaction of the CIR may appeal to the CTA by a petition for review within thirty (30) days after the expiration of the period fixed by law for the CIR to act on the disputed assessment. acEHCD In this case, the following relevant events transpired: 1. Petitioner received the FLD on December 22, 2015. 38 2. It timely filed a Letter Protest to Officer-in-Charge/Assistant of the Assessment Division Chief Analyn S. Chu on January 8, 2016 or within the thirty (30)-day period from the receipt of the FLD. 39 3. On February 5, 2016, petitioner received a Letter signed by Regional Director Alfredo V. Misajon denying its Letter Protest. 40 4. Within the thirty (30)-day period or on February 29, 2016, petitioner chose to elevate the denial of its Letter Protest to the CIR. 41 5. On March 2, 2016, the CIR herself, referred petitioner's Letter requesting reconsideration of the denial of petitioner's earlier request for reconsideration/reinvestigation to Regional Director Misajon of Revenue Region No. 7-Quezon City for necessary action. 42 6. On April 28, 2016, petitioner received a Letter from Regional Director Misajon denying its appeal. 43 Based on the foregoing, petitioner had thirty (30) days from April 28, 2016 or until May 28, 2016 within which to file a Petition for Review before this Court. The Petition for Review filed on May 27, 2016 was filed within the reglementary period. Thus, the Court has acquired jurisdiction to take cognizance of the present case. The PAN was not duly served on petitioner Petitioner claims that the BIR's issuance of the FLD with Details of Discrepancies, and Assessment Notices is premature, irregular, and unprocedural, as it did not first issue a PAN. As aforequoted, Section 228 of the NIRC of 1997, as amended not only provides for the procedure and manner upon which a taxpayer may protest an assessment but also mandates that a taxpayer be notified of the CIR's findings after audit. This notification is embodied in the form of the PAN. The PAN is mandated by Section 3.1.1 of RR No. 12-99 44 to be served by personal delivery or through registered mail. Personal Service of PAN In the present case, petitioner denies having received the PAN addressed to its then President, Mr. Carlos G. Dominguez. Petitioner's witness, Mr. Ronaldo C. Ramos, who was the Chief Accountant of petitioner, testified that petitioner's then incumbent President, Mr. Dominguez, did not authorize the hotel's security guard or anyone else, for that matter, to receive documents for and in his behalf. 45 Respondent, on the other hand, insists that the PAN was served through personal service and received by petitioner, and that it was also sent through registered mail. In Barcelon, Roxas Securities, Inc. (now known as UBP Securities, Inc.) vs. Commissioner of Internal Revenue , 46 the Supreme Court held that when a taxpayer denies receiving an assessment from the BIR, it is incumbent upon the latter to prove by competent evidence that such notice was indeed received by the taxpayer, viz. : "Jurisprudence is replete with cases holding that if the taxpayer denies ever having received an assessment from the BIR, it is incumbent upon the latter to prove by competent evidence that such notice was indeed received by the addressee . x x x" (Boldfacing and underscoring supplied) SDHTEC Once there is a denial by the taxpayer, it is incumbent upon the BIR to prove by competent evidence that the taxpayer received the notice. The burden of proof in establishing the fact of receipt of the assessment notice has shifted from the taxpayer to the BIR. Relatedly, in Estate of the Late Juliana Diez Vda. de Gabriel vs. Commissioner of Internal Revenue , 47 the Supreme Court reiterated its pronouncement that due process requires that the assessment must be served on and received by the taxpayer, viz. : "(D)ue process requires at the very least that such notice actually be received. In Commissioner of Internal Revenue v. Pascor Realty and Development Corporation , we had occasion to say: An assessment contains not only a computation of tax liabilities, but also a demand for payment within a prescribed period. It also signals the time when penalties and interests begin to accrue against the taxpayer. To enable the taxpayer to determine his remedies thereon, due process requires that it must be served on and received by the taxpayer ." (Boldfacing supplied) Upon evaluating the evidence formally offered by respondent, it reveals that the PAN 48 was received by a certain Ms. Aeo-Jean Tanyag on December 4, 2015 as evidenced by the receiving stamp appearing thereon. In the BIR records, an Affidavit of Service of Preliminary Assessment Notice (PAN) 49 executed by RO II Carmencita G. Villanueva and GS Antonino L. Ilagan was found attesting that they personally served the PAN to petitioner at its business address at No. 37 San Miguel Ave., San Antonio, Ortigas Center, Pasig City, and that it was received by Ms. Jean Tanyag, a staff of said corporation. The Court, however, finds that these pieces of evidence are not sufficient to establish that the PAN was duly served upon and received by petitioner. While respondent insists that RO II Villanueva and GS Ilagan personally served the PAN to petitioner at its address, for reasons only known to him, he decided not to present them as witnesses, albeit they are indicated as his witnesses in the Pre-Trial Order, 50 to wit: "JUSTICE VICTORINO: All right. ATTY. VICENTE: Your Honors, Ms. Padit is our sole witness for this case. JUSTICE VICTORINO: Ah, your sole witness. So, you are dispensing the two (2) other witnesses? ATTY. VICENTE: Yes, your Honors." 51 AScHCD Interestingly, respondent's lone witness, RO II Wilhelmina Rosario D. Padit, only testified on the fact that she examined the BIR Records, and the PAN contained therein, and has no personal knowledge regarding the service of the PAN, much more petitioner's receipt of the PAN. Anent the Affidavit of Service of Preliminary Assessment Notice (PAN) signed by both RO II Villanueva and GS Ilagan, the Court cannot give evidentiary weight thereon as it is hearsay evidence. Section 36, Rule 130 of the Rules of Evidence states that: "A witness can testify only to those facts which he knows of his personal knowledge; that is, which are derived from his own perception, except as otherwise provided in these rules." It is essential that a witness testify only to those facts that he or she has personal knowledge, not facts which he or she learned, read or heard from others. In Fernando Mancol, Jr. vs. Development Bank of the Philippines , 52 the Supreme Court defined hearsay evidence and held that it is not only applicable to oral statements but written statements as well, viz. : "It is a basic rule in evidence that a witness can testify only on the facts that he knows of his own personal knowledge, i.e. , those which are derived from his own perception. A witness may not testify on what he merely learned, read or heard from others because such testimony is considered hearsay and may not be received as proof of the truth of what he has learned, read or heard. Hearsay evidence is evidence, not of what the witness knows himself but, of what he has heard from others; it is not only limited to oral testimony or statements but likewise applies to written statements ." The said Affidavit of Service of Preliminary Assessment Notice (PAN) signed by both RO II Villanueva and GS Ilagan, being a written statement, is hearsay evidence due to the lack of authentication from its makers. The Supreme Court categorically held in Rogelio Dantis vs. Julio Maghinang, Jr. , 53 that it is hearsay evidence when the affidavit of a witness was offered in evidence but the affiant or maker did not take the witness stand, to wit: "To begin with, Exhibit '3,' the affidavit of Ignacio, is hearsay evidence and, thus, cannot be accorded any evidentiary weight. Evidence is hearsay when its probative force depends on the competency and credibility of some persons other than the witness by whom it is sought to be produced. The exclusion of hearsay evidence is anchored on three reasons: 1) absence of cross-examination ; 2) absence of demeanor evidence ; and 3) absence of oath . Jurisprudence dictates that an affidavit is merely hearsay evidence where its affiant/maker did not take the witness stand . x x x" (Boldfacing supplied and citations omitted.) As borne by the records, affiants RO II Villanueva and GS Ilagan were never presented as witnesses. They neither took the oath nor were they cross-examined. In addition, the Court was not able to observe their demeanor. It is vital for respondent to present the testimonies of RO II Villanueva and GS Ilagan as they are the only persons who are competent to testify on their signed Affidavit. Moreover, they have personal knowledge on the circumstances surrounding the service of the PAN and petitioner's receipt thereof. Thus, without them taking the witness stand, their Affidavit is mere hearsay evidence which whether objected to or not, cannot be given credence for it has no probative value. 54 caITAC Service of PAN by mail Anent respondent's claim that it sent the PAN through registered mail, the Court has weighed respondent's evidence, and finds the same wanting. Section 13 or Rule 13 of the Rules of Court provides: " Section 13. Proof of Service . Proof of personal service shall consist of a written admission of the party served, or the official return of the server, or the affidavit of the party serving, containing a full statement of the date, place and manner of service. If the service is by ordinary mail, proof thereof shall consist of an affidavit of the person mailing of facts showing compliance with section 7 of this Rule. If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office . The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together with the certified or sworn copy of the notice given by the postmaster to the addressee." (Boldfacing supplied) In Republic of the Philippines vs. Resins, Incorporated , 55 the Supreme Court laid down the doctrine that the person alleging that the notice was served must prove the fact of service by presenting the registry receipt issued by the mailing office and the affidavit of the person mailing. The relevant portions of the aforecited case reads: "When service of notice is an issue, the rule is that the person alleging that the notice was served must prove the fact of service. The burden of proving notice rests upon the party asserting its existence. In civil cases, service made through registered mail is proved by the registry receipt issued by the mailing office and an affidavit of the person mailing of facts showing compliance with Section 13, Rule 13 of the 1997 Rules on Civil Procedure. xxx xxx xxx Receipts for registered letters and return receipts do not prove themselves, they must be properly authenticated in order to serve as proof of receipt of the letters. Resins, Inc. also did not show a certification from the postmaster that notice was duly issued and delivered to the OSG such that service by registered mail may be deemed completed. It cannot be stressed enough that ' it is the registry receipt issued by the mailing office and the affidavit of the person mailing , which proves service made through registered mail.' Absent one or the other, or worse both, there is no proof of service. (Emphasis not ours) As oft-repeated, petitioner denied receipt of the PAN, hence, it was incumbent upon respondent to prove that the PAN was issued, mailed, and actually received by petitioner, or its authorized representative. Respondent utterly failed in this regard. In Commissioner of Internal Revenue vs. GJM Philippines Manufacturing, Inc. , 56 it was enunciated that if the taxpayer denies receiving an assessment from the CIR, which was allegedly sent by mail, it becomes incumbent upon the CIR to prove by competent evidence that such assessment was received by the taxpayer in the due course of the mail, viz. : "If the taxpayer denies having received an assessment from the BIR, it then becomes incumbent upon the latter to prove by competent evidence that such notice was indeed received by the addressee. Here, the onus probandi has shifted to the BIR to show by contrary evidence that GJM indeed received the assessment in the due course of mail . It has been settled that while a mailed letter is deemed received by the addressee in the course of mail, this is merely a disputable presumption subject to controversion, the direct denial of which shifts the burden to the sender to prove that the mailed letter was, in fact, received by the addressee. ICHDca To prove the fact of mailing, it is essential to present the registry receipt issued by the Bureau of Posts or the Registry return card which would have been signed by the taxpayer or its authorized representative. And if said documents could not be located, the CIR should have, at the very least, submitted to the Court a certification issued by the Bureau of Posts and any other pertinent document executed with its intervention. The Court does not put much credence to the self-serving documentations made by the BIR personnel, especially if they are unsupported by substantial evidence establishing the fact of mailing. x x x" (Boldfacing supplied and citations omitted) In a more recent case, Commissioner of Internal Revenue vs. T-Shuttle Services, Inc. , 57 the Supreme Court categorically held that the mere presentation of the Registry Receipt Card was insufficient to prove a taxpayer's receipt of the PAN and the FAN. The presentation of the Registry Receipt Card must also be identified by a competent witness and the signature appearing thereon must be authenticated. In the present case, while respondent formally offered the Registry Return Receipt 58 for the Service of the PAN as evidence, he failed to offer as evidence the testimony of the person who mailed the PAN. No witness was presented to identify the Registry Receipt and even authenticate the signature appearing thereon. Even a certification from the postmaster was neither offered as evidence. To be sure, the Supreme Court has consistently nullified tax assessments that were issued in violation of the taxpayer's right to due process. The eloquent disquisition of the Honorable Marvic M.V.F. Leonen in Commissioner of Internal Revenue vs. Avon Products Manufacturing, Inc. 59 and Avon Products Manufacturing, Inc. vs. The Commissioner of Internal Revenue 60 relative to the utmost importance of observing due process in issuing deficiency tax assessments is edifying, viz. : " Tax assessments issued in violation of the due process rights of a taxpayer are null and void . While the government has an interest in the swift collection of taxes, the Bureau of Internal Revenue and its officers and agents cannot be overreaching in their efforts, but must perform their duties in accordance with law, with their own rules of procedure, and always with regard to the basic tenets of due process . The 1997 National Internal Revenue Code, also known as the Tax Code, and revenue regulations allow a taxpayer to file a reply or otherwise to submit comments or arguments with supporting documents at each stage in the assessment process. Due process requires the Bureau of Internal Revenue to consider the 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. xxx xxx xxx This Court has, in several cases, declared void any assessment that failed to strictly comply with the due process requirements set forth in Section 228 of the Tax Code and Revenue Regulations No. 12-99. In Commissioner of Internal Revenue v. Metro Star Superama, Inc. , this Court held that failure to send a Preliminary Assessment Notice stating the facts and the law on which the assessment was made as required by Section 228 of the Tax Code rendered the assessment made by the Commissioner as void . This Court explained: TCAScE Indeed, Section 228 of the Tax Code clearly requires that the taxpayer must first be informed that he is liable for deficiency taxes through the sending of a PAN. He must be informed of the facts and the law upon which the assessment is made. The law imposes a substantive, not merely a formal, requirement. To proceed heedlessly with tax collection without first establishing a valid assessment is evidently violative of the cardinal principle in administrative investigations that taxpayers should be able to present their case and adduce supporting evidence. (Citation omitted) In Commissioner of Internal Revenue v. Reyes , this Court ruled as void an assessment for deficiency estate tax issued by the Commissioner for failure to inform the taxpayer of the law and the facts on which the assessment was made, in violation of Section 228 of the Tax Code. In Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue , this Court ruled, among others, that the taxpayer was deprived of due process when the Commissioner failed to issue a notice of informal conference and a Preliminary Assessment Notice as required by Revenue Regulations No. 12-99, in relation to Section 228 of the Tax Code. Hence, the assessment was void. Compliance with strict procedural requirements must be followed in the collection of taxes as emphasized in Commissioner of Internal Revenue v. Algue, Inc. : Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. It is therefore necessary to reconcile the apparently conflicting interests of the authorities and the taxpayers so that the real purpose of taxation, which is the promotion of the common good, may be achieved. xxx xxx xxx It is said that taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one's hard-earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. The government for its part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power. But even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it is not, then the taxpayer has a right to complain and the courts will then come to his succor. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate . . . that the law has not been observed . (Emphasis supplied) cTDaEH In this case, Avon was able to amply demonstrate the Commissioner's disregard of the due process standards raised in Ang Tibay and subsequent cases, and of the Commissioner's own rules of procedure. Her disregard of the standards and rules renders the deficiency tax assessments null and void. x x x" (Citations omitted) In fine, respondent's failure to prove that he issued and sent a PAN to petitioner, and that the same was actually received by the latter, violated petitioner's right to due process; as such the assessment issued against petitioner, being void, bears no fruit 61 and may be slain at sight. In light of the foregoing, the Court need not belabor the other issues raised by the parties. WHEREFORE , premises considered, the Petition for Review filed on May 27, 2016 by petitioner Linden Suites, Inc., as represented by Eugene U. Balcos is hereby GRANTED . Accordingly, the Letter dated January 27, 2016 and the Letter dated April 28, 2016, both signed by Regional Director Alfredo V. Misajon of Revenue Region No. 7 are hereby SET ASIDE . The Formal Letter of Demand with attached Details of Discrepancies dated December 22, 2015, and the Assessment Notices assessing petitioner for deficiency income tax, value-added tax, and documentary stamp tax for fiscal year ending September 30, 2012 in the total amount of ELEVEN MILLION ONE HUNDRED EIGHTY-FIVE THOUSAND EIGHTY-TWO PESOS AND SEVENTY-EIGHT CENTAVOS (P11,185,082.78) , inclusive of interest and surcharge are CANCELLED and WITHDRAWN . Respondent Commissioner of Internal Revenue or any person acting on his behalf is ENJOINED from proceeding with the collection of the taxes subject of the present case. ITAaHc SO ORDERED. (SGD.) ROMAN G. DEL ROSARIO Presiding Justice Catherine T. Manahan, J. , concurs. Footnotes 1. Par. 1, The Parties, Petition for Review, CTA Docket, Vol. I, p. 13. 2. Par. 1, Joint Stipulation of Facts and issues (JSFI), CTA Docket, Vol. I, p. 366. 3. Par. 2, Id. 4. Exhibit R-1, BIR Records, p. 1. 5. Exhibit R-2, BIR Records, pp. 238-239. 6. Exhibit R-2, BIR Records, pp. 235-237. 7. Affidavit of Service of Preliminary Assessment Notice (PAN) executed by Revenue Officer II Carmencita G. Villanueva and Group Supervisor Antonino L. Ilagan. 8. Exhibit P-6, CTA Docket, Vol. I, pp. 35-36; Exhibit R-2, BIR Records, pp. 258-259. 9. Exhibit P-7, CTA Docket, Vol. I, pp. 37-39; Exhibit R-2, BIR Records, pp. 255-257. 10. Par. 4, JSFI, CTA Docket, Vol. I, p. 367; Exhibit P-9, CTA Docket, Vol. I, p. 367; Exhibits P-3, P-4, and P-5, CTA Docket, Vol. I, pp. 32-34; Exhibit R-3, BIR Records, pp. 260-262. 11. Par. 6, JSFI, CTA Docket, Vol. I, p. 367; Exhibit P-9, CTA Docket, Vol. I, p. 41; Exhibit P-8, CTA Docket, Vol. I, p. 40; Exhibit R-4, BIR Records, p. 266. 12. Par. 8, JSFI, CTA Docket, Vol. I, p. 367; Exhibit P-9, CTA Docket, Vol. 1, p. 41; Exhibit R-5, BIR Records, p. 267. 13. BIR Records, pp. 363-368. 14. Exhibit P-11, CTA Docket, Vol. I, p. 140; BIR Records, unpaginated. 15. CTA Docket, Vol. I, pp. 10-30. 16. CTA Docket, Vol. I, pp. 150-164. 17. Petitioner's Pre-Trial Brief, CTA Docket, Vol. I, pp. 185-192; Respondent's Pre-Trial Brief, CTA Docket, Vol. I, pp. 193-197. 18. Minutes of the Hearing dated November 8, 2016, CTA Docket, Vol. I, p. 198; Order dated November 8, 2016, CTA Docket, Vol. I, pp. 201-202. 19. CTA Docket, Vol. I, pp. 366-377. 20. CTA Docket, Vol. I, pp. 372-379. 21. Exhibits P-29 and P-29-A, Judicial Affidavit dated December 2, 2016, CTA Docket, Vol. I, pp. 300-309. 22. Exhibits P-30 and P-30-A, Judicial Affidavit dated December 2, 2016, CTA Docket, Vol. I, pp. 327-336; Exhibits P-63 and P-63-A, Supplemental Judicial Affidavit dated July 11, 2018, CTA Docket, Vol. I, pp. 483-489. 23. Exhibits P-31 and P-31-A, Judicial Affidavit dated December 2, 2016, CTA Docket, Vol. I, pp. 213-223. 24. CTA Docket, Vol. II, pp. 539-554. 25. CTA Docket, Vol. II, pp. 888-889. 26. CTA Docket, Vol. II, pp. 898-904. 27. CTA Docket, Vol. II, pp. 929-934. 28. Exhibits R-8 and R-8-a, Judicial Affidavit dated November 29, 2018, CTA Docket, Vol. II, pp. 892-897. 29. CTA Docket, Vol. II, pp. 957-962. 30. CTA Docket, Vol. II, pp. 976-977. 31. CTA Docket, Vol. II, pp. 989-1043. 32. Records Verification dated July 6, 2020, CTA Docket, Vol. II, p. 984. 33. CTA Docket, Vol. II, p. 1045. 34. JSFI, CTA Docket, Vol. I, pp. 366-370; Pre-Trial Order, CTA Docket, Vol. I, pp. 372-379. 35. G.R. No. 208731, January 27, 2016. 36. SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7 (a) (2) herein. x x x 37. SEC. 3. Who may appeal; period to file petition. (a) A party adversely affected by a decision, ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claims for refund of internal revenue taxes, or by a decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secretary of Agriculture, or a Regional Trial Court in the exercise of its original jurisdiction may appeal to the Court by petition for review filed within thirty days after receipt of a copy of such decision or ruling, or expiration of the period fixed by law for the Commissioner of Internal Revenue to act on the disputed assessments. In case of inaction of the Commissioner of Internal Revenue on claims for refund of internal revenue taxes erroneously or illegally collected, the taxpayer must file a petition for review within the two-year period prescribed by law from payment or collection of the taxes. (n) 38. Supra Note 8. 39. Supra Note 11. 40. Supra Note 12. 41. Supra Note 13. 42. Reference Slip dated March 2, 2016, BIR Records, p. 567. 43. Supra Note 14. 44. "SECTION 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment. xxx xxx xxx The same shall be sent to the taxpayer only by registered mail or by personal delivery. If sent by personal delivery, the taxpayer or his duly authorized representative shall acknowledge receipt thereof in the duplicate copy of the letter of demand, showing the following: (a) His name; (b) signature; (c) designation and authority to act for and in behalf of the taxpayer, if acknowledged received by a person other than the taxpayer himself; and (d) date of receipt thereof." (Boldfacing supplied) 45. Judicial Affidavit of Ronaldo C. Ramos dated December 2, 2016, CTA Docket, p. 303. 46. G.R. No. 150764, August 7, 2006. 47. G.R. No. 155541, January 27, 2004. 48. Exhibit R-2, BIR Records, pp. 235-239. 49. Exhibit R-2-a, BIR Records, p. 240. 50. Hearing Dates, Pre-Trial Order, CTA Docket, Vol. I, p. 377. 51. Minutes of the Hearing dated September 17, 2019, CTA Docket, Vol. II, pp. 943-946; Order dated September 17, 2019, CTA Docket, Vol. II, pp. 947-948; TSN, September 17, 2019, p. 19. 52. G.R. No. 204289, November 22, 2017. 53. G.R. No. 191696, April 10, 2013. 54. People of the Philippines vs. Abelardo Parungao , G.R. No. 125812, November 28, 1996. 55. G.R. No. 175881, January 12, 2010. 56. G.R. No. 202695, February 29, 2016. 57. G.R. No. 240729, August 24, 2020. 58. Exhibit R-3-b, BIR Records, p. 233. 59. G.R. Nos. 201398-99, October 3, 2018. 60. G.R. Nos. 201418-19, October 3, 2018. 61. Metro Star Superama, Inc. vs. Commissioner of Internal Revenue , G.R. No. 185371, December 8, 2010.