Global Fresh Products Inc. v. Commissioner of Internal Revenue

THIRD DIVISION [C.T.A. CASE NO. 9718. June 30, 2020.] GLOBAL FRESH PRODUCTS, INC. , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION UY , J p : Before this Court is a Petition for Review 1 filed by Global Fresh Products, Inc. against the Commissioner of Internal Revenue, praying that the assessments for deficiency Income Tax (IT), Value-Added Tax (VAT), Expanded Withholding Tax (EWT), Withholding Tax on Compensation (WTC) and Documentary Stamp Tax (DST) for the taxable year (TY) 2013 in the aggregate amount of P91,625,615.90 be cancelled and withdrawn. THE FACTS Petitioner is a domestic corporation duly organized and existing under the laws of the Republic of the Philippines, with principal place of business at Lot 91-A Bagsakan Road, FTI Complex, Taguig City. 2 Petitioner is duly registered with the Bureau of Internal Revenue with Tax Identification Number (TIN) 200-413-397-00000. 3 Respondent is the duly-appointed Commissioner of Internal Revenue, vested under the appropriate laws with the authority to carry out the functions, duties and responsibilities of said office, including, inter alia , the power to decide disputed assessments, grant tax refunds and issue tax credit certificates, pursuant to the provisions of the NIRC and other tax laws, rules and regulations. Respondent may be served with summons, notices and other processes of this Honorable Court at the Legal Division, Bureau of Internal Revenue, Revenue Region No. 8, 2nd Floor, BIR Bldg., 313 Sen, Gil Puyat Ave., Makati City. 4 On January 17, 2017, petitioner received a Preliminary Assessment Notice (PAN) 5 with Details of Discrepancies dated December 28, 2016, representing alleged deficiency IT, VAT, EWT, WTC and DST. On January 27, 2017, petitioner received Assessment Notices 6 and a Formal Assessment Notice, 7 all dated January 13, 2017, on the following alleged deficiency taxes for taxable year 2013, to wit: CAIHTE Period Tax Type Amount Exhibit 2013 Income Tax P57,451,544.37 "P-33" 2013 Value Added Tax 45,227.86 "P-34" 2013 Expanded Withholding Tax 5,662,715.33 "P-35" 2013 Withholding Tax on Compensation 28,405,017.37 "P-36" 2013 Documentary Stamp Tax 61,110.97 "P-37" TOTAL P91,625,615.90 In the letter dated February 23, 2017, 8 petitioner protested the subject assessment notices and FAN, for being devoid of any legal and factual bases. Subsequently, petitioner reiterated its protest in its letter dated April 24, 2017, 9 and submitted additional documents in support thereof. In view of respondent's inaction, petitioner filed the instant Petition for Review 10 on November 21, 2017. Respondent filed his Answer 11 on February 6, 2018, interposing the following special and affirmative defenses: 1) assessments are prima facie presumed correct and made in good faith, and the taxpayer has the duty of proving otherwise; 2) upon reinvestigation, some of the assessments were cancelled upon the submission of supporting documents, and were considered by the examiner in the preparation of the Final Decision on Disputed Assessment; and 3) taxes are the lifeblood of the government and so should be calculated without unnecessary hindrance. Thereafter, pre-trial was held on May 15, 2018. 12 The parties filed their Joint Stipulation of Facts and Issues on May 24, 2018. 13 Pursuant thereto, the Court issued a Pre-Trial Order 14 on June 19, 2018, and the Pre-Trial Conference was deemed terminated. During trial, petitioner presented its sole witness, Rosalie Tanguanco, 15 Thereafter, petitioner filed its Formal Offer of Evidence 16 on August 20, 2018, which were all admitted in the Resolution dated November 5, 2018. 17 For his part, respondent also presented a lone witness, Revenue Officer Villaflor A. Lagundi. 18 Respondent then filed his Formal Offer of Evidence 19 on March 19, 2019, to which petitioner filed its Comment (To Respondent's Formal Offer of Evidence) 20 on March 27, 2019. In the Resolution dated April 22, 2019, 21 this Court admitted respondent's evidence except for Exhibits "R-6" to "R-8." On May 24, 2019, petitioner filed its Memorandum , 22 while respondent failed to file his Memorandum per Records Verification Report dated June 20, 2019. 23 In the Resolution 24 dated June 25, 2019, this case was submitted for decision. Hence, this Decision. THE ISSUES The parties stipulated the following issues for this Court's resolution, to wit: "1. Whether the present assessment is null and void for violating petitioner's right to be heard, in violation of the due process requirements mandated under Section 228 of the NIRC of 1997, as amended, and Revenue Regulations No. 12-99, as amended by RR No. 18-2013. DETACa 2. Whether petitioner is liable to pay the aggregate amount of P91,625,615.90 representing alleged income tax (IT) IT-ELA36576/LN103-13-17-260; value added tax (VAT) VT-ELA36576/LN103-13-17-260; expanded withholding tax (EWT) WE-ELA36576/LN103-13-17-260; withholding tax on compensation (WTC) WC-ELA36576/LN103-13-17-260; and documentary stamp tax (DST) DS-ELA36576/LN103-13-17-260, for the taxable year 2013. 3. Whether the FAN dated January 13, 2017 issued against petitioner representing alleged tax deficiencies for taxable year 2013 has prescribed pursuant to Sections 203 and 222 of the 1997 Tax Code, as amended." 25 Petitioner's arguments: Petitioner argues that the absence of a validly issued Letter of Authority (LOA) to conduct the audit renders the present assessment void. Allegedly, this Court has the power to resolve the issue on the authority of revenue examiners to conduct the audit leading to the present assessment. Moreover, petitioner maintains that the non-observance of the 15-day period to protest the PAN violates petitioner's right to due process which renders the present assessment void. Finally, petitioner insists that the present assessment is barred by prescription. Respondent's counter-arguments: Respondent counters that the Assessment Notices issued on January 13, 2017, reflects the internal revenue liabilities of the petitioner for the taxable year 2013 representing deficiency IT, VAT, EWT, WTC, and DST, inclusive of statutory increments. These assessments are prima facie presumed correct and made in good faith. The taxpayer has the duty of proving otherwise. In the absence of proof of any irregularities in the performance of official duties, an assessment will not be disturbed. aDSIHc Allegedly, after reinvestigation, some of the assessments were cancelled upon the submission of supporting documents by petitioner, and said assessments were already considered by the examiner in the preparation of the Final Decision on Disputed Assessment. Finally, respondent argues that taxes are the lifeblood of the government and so should be calculated without unnecessary hindrance. THE COURT'S RULING Respondent has a period of three (3) years to assess petitioner for deficiency taxes, pursuant to Section 203 of the NIRC of 1997, as amended. Petitioner contends that the FAN dated January 13, 2017, relative to the alleged VAT, EWT, and WTC, are already barred by prescription, pursuant to Section 203 of the NIRC of 1997, as amended. We partially agree. The period of limitation upon the assessment of deficiency taxes is provided for under Section 203 of the NIRC of 1997, to wit: " SEC. 203. Period of Limitation Upon Assessment and Collection . Except as provided in Section 222, internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided, That in a case where a return is filed beyond the period prescribed by law, the three (3)-year period shall be counted from the day the return was filed. For purposes of this Section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day." (Emphasis supplied) Based on the foregoing provision, except as provided under Section 222 of the NIRC of 1997, Sec. 203 of the same Code mandates the government to assess internal revenue taxes within three years from the last day prescribed by law for the filing of the tax return or the actual date of filing of such return, whichever comes later. Hence, an assessment notice issued after the three-year prescriptive period is no longer valid and effective. 26 The instant case pertains to the assessment of the following deficiency taxes: 1) income tax; 2) VAT; 3) WTC; 4) EWT; and 5) DST. We shall now determine the validity of said assessments. ETHIDa Income Tax Assessment Section 77 (B) of the NIRC of 1997 27 states that the final adjusted income tax return of a corporate taxpayer is due to be filed on or before April 15 of the following calendar year, or on or before the 15th day of the 4th month following the close of the fiscal year, as the case may be. Petitioner in this case filed its Annual Income Tax Return for TY 2013 on April 12, 2014. 28 Thus, respondent had until April 15, 2017 , within which to validly issue the deficiency tax assessment. Considering that the Formal Assessment Notice 29 and Assessment Notices 30 were issued by the respondent on January 13, 2017 , it is clear that the same falls within the three-year prescriptive period provided for under Section 203 of the NIRC of 1997, as amended. VAT Assessment Pursuant to Section 114 (a) of the NIRC of 1997, 31 as amended, every person liable to pay VAT, shall file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter. In this case, the date of filing of petitioner's Quarterly VAT Returns (BIR Form No. 2550-Q) for the 1st to 4th quarters of TY 2013, and the end of the three (3)-year prescriptive period as provided for in Section 203 of the NIRC of 1997, as amended, is summarized as follows: Exhibit TY 2013 Due Date for Filing Date of Filing Prescriptive Period "P-4" 1st Quarter Apr. 25, 2013 Apr. 25, 2013 Apr. 25, 2016 "P-5" 2nd Quarter Jul. 25, 2013 Jul. 24, 2013 Jul. 25, 2016 "P-6" 3rd Quarter Oct. 25, 2013 Oct. 24, 2013 Oct. 25, 2016 "P-7" 4th Quarter Jan. 25, 2014 Jan. 25, 2014 Jan. 25, 2017 Based on the foregoing, it is clear that the Formal Assessment Notice 32 and Assessment Notices 33 sent by the respondent on January 13, 2017 , with respect to the assessment for deficiency VAT, is void with respect to the 1st to 3rd Quarters of TY 2013. In other words, only the deficiency VAT assessment for the 4th Quarter of TY 2013 was issued within the three-year prescriptive period under Section 203 of the NIRC of 1997, as amended. WTC and EWT Assessments Anent petitioner's deficiency tax assessments for WTC and EWT, reference is made to Section 7 of Revenue Regulations No. 9-2001, 34 as amended by RR No. 26-02, 35 withholding tax returns for Group C, shall be filed and the tax due thereon shall be paid, within thirteen (13) days after the end of each month. cSEDTC In this case, the dates of filing of petitioner's WTC Month Remittance Tax Returns (BIR Form No. 1601-C) for TY 2013, and the end of the three (3)-year prescriptive period as provided for in Section 203 of the NIRC of 1997, as amended, are hereby summarized as follows: WTC Monthly Remittance Tax Returns Exhibit Period Due Date for Filing Actual Date of Filing Prescriptive Period "P-20" Jan-13 Feb. 13, 2013 Feb. 8, 2013 Feb. 13, 2016 "P-21" Feb-13 Mar. 13, 2013 Mar. 4, 2013 Mar. 13, 2016 "P-22" Mar-13 Apr. 13, 2013 Apr. 4, 2013 "P-22-a" Amended Jul. 4, 2013 Jul. 4, 2016 "P-23" Apr-13 May 13, 2013 May 6, 2013 "P-23-a" Amended Jul. 4, 2013 Jul. 4, 2016 "P-24" May-13 Jun. 13, 2013 Jun. 4, 2013 "P-24-a" Amended Jul. 4, 2013 Jul. 4, 2016 "P-25" Jun-13 Jul. 13, 2013 Jul. 4, 2013 Jul. 13, 2016 "P-26" Jul-13 Aug. 13, 2013 Aug. 6, 2013 Aug. 13, 2016 "P-27" Aug-13 Sept. 13, 2013 Sept. 9, 2013 Sept. 13, 2016 "P-28" Sep-13 Oct. 13, 2013 Oct. 9, 2013 Oct. 13, 2016 "P-29" Oct-13 Nov. 13, 2013 Nov. 6, 2013 Nov. 13, 2016 "P-30" Nov-13 Dec. 13, 2013 Dec. 7, 2013 Dec. 13, 2016 "P-31" Dec-13 Jan. 13, 2014 Jan. 10, 2014 Jan. 13, 2017 On the other hand, the dates of filing of petitioner's EWT Monthly Remittance Tax Returns (BIR form No. 1601-E) for TY 2013, and the end of the three (3)-year prescriptive period as provided for in Section 203 of the NIRC of 1997, as amended, are as follows: EWT Monthly Remittance Tax Returns Exhibit Period Due Date for Filing Actual Date of Filing Prescriptive Period "P-8" Jan-13 Feb. 13, 2013 Feb. 12, 2013 Feb. 13, 2016 "P-9" Feb-13 Mar. 13, 2013 Mar. 12, 2013 Mar. 13, 2016 "P-10" Mar-13 Apr. 13, 2013 Apr. 12, 2013 Apr. 13, 2016 "P-11" Apr-13 May 13, 2013 May 13, 2013 May 13, 2016 "P-12" May-13 Jun. 13, 2013 Jun. 13, 2013 Jun. 13, 2016 "P-13" Jun-13 Jul. 13, 2013 Jul. 11, 2013 Jul. 13, 2016 "P-14" Jul-13 Aug. 13, 2013 Aug. 13, 2013 Aug. 13, 2016 "P-15" Aug-13 Sept. 13, 2013 Sept. 11, 2013 Sept. 13, 2016 "P-16" Sept-13 Oct. 13, 2013 Oct. 12, 2013 Oct. 13, 2016 "P-17" Oct. 13 Nov. 13, 2013 Nov. 13, 2013 Nov. 13, 2016 "P-18" Nov-13 Dec. 13, 2013 Dec. 13, 2013 Dec. 13, 2016 "P-19" Dec-13 Jan. 13, 2014 Jan. 14, 2014 Jan. 13, 2017 From the foregoing, it is clear that the Formal Assessment Notice 36 and Assessment Notices 37 for WTC and EWT sent by the respondent on January 13, 2017 , have already prescribed for the period from January 2013 to November 2013. In other words, only the deficiency WTC and EWT assessments for December 2013 were issued within the three-year prescriptive period under Section 203 of the NIRC of 1997, as amended. SDAaTC DST Assessment As for the deficiency DST assessment, the same may be assessed within ten (10) years from the discovery of such omission, based on Section 222 (a) of the NIRC of 1997, as amended. 38 Thus, the Formal Assessment Notice 39 and Assessment Notices 40 sent by the respondent on January 13, 2017 , falls within the prescriptive period under Section 222 (a) of the NIRC of 1997, as amended. The subject tax assessments are void as examining Revenue Officer Villaflor A. Lagundi was not duly authorized by an LOA to conduct the audit of the petitioner. Petitioner argues that RO Villaflor A. Lagundi is not authorized to examine the books of account and other accounting records of petitioner for internal revenue taxes for TY 2013. We are convinced. In the case of Medicard Philippines, Inc. vs. Commissioner of Internal Revenue , 41 the Supreme Court emphasized the import and significance of an LOA, and the authority it confers upon a revenue officer, relative to the performance of assessment functions, to wit: " An LOA is the authority given to the appropriate revenue officer assigned to perform assessment functions. It empowers or enables said revenue officer to examine the books of account and other accounting records of a taxpayer for the purpose of collecting the correct amount of tax. An LOA is premised on the fact that the examination of a taxpayer who has already filed his tax returns is a power that statutorily belongs only to the CIR himself or his duly authorized representatives . Section 6 of the NIRC clearly provides as follows: SEC. 6. Power of the Commissioner to Make Assessments and Prescribe Additional Requirements for Tax Administration and Enforcement . (A) Examination of Return and Determination of Tax Due . After a return has been filed as required under the provisions of this Code, the Commissioner or his duly authorized representative may authorize the examination of any taxpayer and the assessment of the correct amount of tax: Provided, however, That failure to file a return shall not prevent the Commissioner from authorizing the examination of any taxpayer. acEHCD xxx xxx xxx Based on the afore-quoted provision, it is clear that unless authorized by the CIR himself or by his duly authorized representative, through an LOA , an examination of the taxpayer cannot ordinarily be undertaken. The circumstances contemplated under Section 6 where the taxpayer may be assessed through best-evidence obtainable, inventory-taking, or surveillance among others has nothing to do with the LOA. These are simply methods of examining the taxpayer in order to arrive at the correct amount of taxes. Hence, unless undertaken by the CIR himself or his duly authorized representatives, other tax agents may not validly conduct any of these kinds of examinations without prior authority . xxx xxx xxx In the case of Commissioner of Internal Revenue v. Sony Philippines, Inc. , the Court said that: Clearly, there must be a grant of authority before any revenue officer can conduct an examination or assessment. Equally important is that the revenue officer so authorized must not go beyond the authority given. In the absence of such an authority, the assessment or examination is a nullity . xxx xxx xxx Contrary to the ruling of the CTA en banc , an LOA cannot be dispensed with just because none of the financial books or records being physically kept by MEDICARD was examined. To begin with, Section 6 of the NIRC requires an authority from the CIR or from his duly authorized representatives before an examination "of a taxpayer" may be made . The requirement of authorization is therefore not dependent on whether the taxpayer may be required to physically open his books and financial records but only on whether a taxpayer is being subject to examination. xxx xxx xxx That the BIR officials herein were not shown to have acted unreasonably is beside the point because the issue of their lack of authority was only brought up during the trial of the case. What is crucial is whether the proceedings that led to the issuance of VAT deficiency assessment against MEDICARD had the prior approval and authorization from the CIR or her duly authorized representatives. Not having authority to examine MEDICARD in the first place, the assessment issued by the CIR is inescapably void ." (Emphasis supplied.) On the basis of the foregoing jurisprudential pronouncement, it is specifically necessary that a revenue officer be authorized by a valid LOA, in order to exercise assessment functions. In the absence of a valid LOA issued in favor of a specific revenue officer, the tax assessments issued by the BIR against such taxpayer shall be void. SDHTEC Corollary thereto, Section 13 of the NIRC of 1997, as amended, provides as follows: " SEC. 13. Authority of a Revenue Officer . Subject to the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner, a Revenue Officer assigned to perform assessment functions in any district may, pursuant to a Letter of Authority issued by the Revenue Regional Director, examine taxpayers within the jurisdiction of the district in order to collect the correct amount of tax, or to recommend the assessment of any deficiency tax due in the same manner that the said acts could have been performed by the Revenue Regional Director himself." Accordingly, in order that a Revenue Officer may validly examine taxpayers within the jurisdiction of his district, perform tax assessment and collection functions, the said Revenue Officer must first be clothed with authority pursuant to a Letter of Authority issued by the Revenue Regional Director. Relative thereto, RMO No. 43-90 prescribes the revised policy guidelines for the audit/investigation and issuance of letters of authority to audit. To be specific, it requires that all audits/investigations should be conducted under a Letter of Authority, and requires the issuance of a new LOA in case of any reassignment or transfer of cases to another Revenue Officer, to wit: "C. Other policies for issuance of L/As. 1. All audits/investigations, whether field audit or office audit, should be conducted under a Letter of Authority. xxx xxx xxx 5. Any re-assignment/transfer of cases to another RO(s), and revalidation of L/As which have already expired, shall require the issuance of a new L/A, with the corresponding notation thereto, including the previous L/A number and date of issue of said L/As." In this case eLA201200036576 42 dated December 8, 2015, authorizes RO Ian Caymo/GS Ruben Fuerte of RDO No. 044-Taguig-Pateros, to examine petitioner's books of accounts and other accounting records for all internal revenue taxes for the period from January 1, 2013 to December 31, 2013, pursuant to Secs. 6 (A) & 10 (C) of the NIRC of 1997, as amended. According to RO Villaflor A. Lagundi, however, she was directed to continue the audit and investigation of petitioner's internal revenue tax liabilities for TY 2013, 43 through a Memorandum of Assignment 44 dated April 6, 2016, issued by Revenue District Officer Florante R. Aninag. Thus, RO Lagundi was the one who audited and examined the documents of the petitioner, and came up with the report as a result of the examination. 45 AScHCD As testified to by RO Lagundi, and as borne by the records, RO Lagundi was not validly authorized by a new LOA, when she exercised assessment functions. Rather, she was admittedly authorized only by a mere Memorandum of Assignment. 46 Considering that RO Lagundi, who examined and audited petitioner's tax case, was not properly clothed with authority through the requisite LOA, the subject tax assessments, resulting from the said investigation, audit, and report of RO Lagundi is void. As it is void, the same bears no valid fruit. 47 Violation of petitioner's right to due process Petitioner argues that the non-observance of the 15-day period to protest the PAN violated its right to due process, which renders the present assessment void. We agree. Section 228 of the NIRC of 1997 provides: " 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 : x x x 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 ." (Emphasis supplied) xxx xxx xxx." Based on the foregoing provision, a taxpayer is required to respond to the PAN, within a period to be prescribed by implementing rules and regulations. Corollary thereto, Section 3.1.2 of Revenue Regulations (RR) No. 12-99 states: " SECTION 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment . xxx xxx xxx 3.1.2 Preliminary Assessment Notice (PAN) . If after review and evaluation by the Assessment Division or 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, at least by registered mail, a Preliminary Assessment Notice (PAN) for the proposed assessment, showing in detail, the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based x x x. 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 assessment notice shall be caused to be issued by the said Office, calling for payment of the taxpayer's deficiency tax liability, inclusive of the applicable penalties ." (Emphasis supplied) AcICHD According to Section 3.1.2 of RR No. 12-99, a taxpayer has fifteen (15) days within which to reply to the PAN. If the taxpayer fails to respond to the PAN within the said 15-day period, the taxpayer shall be considered in default and the BIR shall then issue the FLD and assessment notice. In the case of Commissioner of Internal Revenue vs. Metro Star Superama, Inc. , 48 it was held that the strict compliance with the requirements laid down by law and its own rules is considered a denial of a taxpayer's right to due process, to wit: "From the provision quoted above, it is clear that the sending of a PAN to taxpayer to inform him of the assessment made is but part of the 'due process requirement in the issuance of a deficiency tax assessment,' the absence of which renders nugatory any assessment made by the tax authorities. The use of the word 'shall' in subsection 3.1.2 describes the mandatory nature of the service of a PAN. The persuasiveness of the right to due process reaches both substantial and procedural rights and the failure of the CIR to strictly comply with the requirements laid down by law and its own rules is a denial of Metro Star's right to due process ." (Emphasis supplied) In other words, the CIR is mandated to strictly comply with the requirements laid down by law and its own rules. The failure to do is equated with a denial of the taxpayer's right to due process. Pursuant to the above-quoted Section 3.1.2 of RR No. 12-99, respondent needs to wait for the lapse of the 15-day period, before issuing the pertinent FLD and Assessment Notices. In this case, records show that petitioner received the PAN 49 on January 17, 2017 and it had until February 1, 2017, within which to file its protest thereto. On January 27, 2017, however, petitioner received the subject Assessment Notices 50 and Formal Assessment Notice, 51 all dated January 13, 2017. From the foregoing, it is clear that even prior to petitioner's receipt of the subject PAN on January 17, 2017, the CIR already issued the subject Assessment Notices and Formal Assessment Notice on January 13, 2017. This essentially deprived the taxpayer of the opportunity to file its protest to the PAN. It is an elementary rule enshrined in the 1987 Constitution that no person shall be deprived of property without due process of law. In balancing the scales between the power of the State to tax and its inherent right to prosecute perceived transgressors of the law on one side, and the constitutional rights of a citizen to due process of law and the equal protection of the laws on the other, the scales must tilt in favor of the individual, for a citizen's right is amply protected by the Bill of Rights under the Constitution. 52 Considering that petitioner was not given the requisite opportunity to respond to the PAN and to explain its side, its right to due process was violated by respondent. Consequently, the subject Formal Assessment Notice and the Assessment Notices are void, and bear no valid fruit. 53 TAIaHE Thus, the subject assessments for deficiency income tax, VAT, EWT, WTC, and DST, all dated January 13, 2017, must be cancelled. WHEREFORE , in light of the foregoing considerations, the instant Petition for Review is hereby GRANTED . Accordingly, the subject assessment for deficiency income tax, VAT, EWT, WTC, and DST for taxable year 2013 issued against petitioner is hereby CANCELLED and SET ASIDE . SO ORDERED. (SGD.) ERLINDA P. UY Associate Justice Maria Rowena Modesto-San Pedro, J. , concurs. Ma. Belen M. Ringpis-Liban, J. , with separate concurring opinion. Footnotes 1. Docket, pp. 10 to 27. 2. Exhibit "P-2", Amended Articles of Incorporation, Docket, pp. 159 to 172. 3. Exhibit "P-1", Certificate of Registration, Docket, pp. 157 to 158. 4. Facts Admitted, Joint Stipulation of Facts and Issues (JSFI), par. 1, Docket, p. 100. 5. Exhibit "P-32", Docket pp. 234 to 240. 6. Exhibit "P-33" to "P-37", Docket, pp. 241 to 245. 7. Exhibit "P-38" to "P-38-A", Docket, pp. 246 to 250. 8. Exhibit "P-39", Docket, pp. 251 to 257. 9. Exhibit "P-40", Docket, pp. 258 to 260. 10. Docket, pp. 10 to 27. 11. Docket, pp. 62 to 66. 12. Docket, pp. 91 to 92. 13. Docket, pp. 100 to 105. 14. Docket, pp. 107 to 113. 15. Judicial Affidavit, Exhibit "P-41," Docket, pp. 261 to 269; Amended Judicial Affidavit, Exhibit "P-42," Docket, pp. 270 to 277. 16. Docket, pp. 145 to 156. 17. Docket, pp. 291 to 292. 18. Judicial Affidavit, Exhibit "R-9," Docket, pp. 293 to 299. 19. Docket, pp. 304 to 307. 20. Docket, pp. 310 to 312. 21. Docket, pp. 314 to 315. 22. Docket, pp. 316 to 345. 23. Docket, p. 347. 24. Docket, p. 349. 25. Issues, JSFI, Docket, p. 101; Issues, Pre-Trial Order, Docket, pp. 108 to 109. 26. Commissioner of Internal Revenue vs. Kudos Metal Corporation , G.R. No. 178087, May 5, 2010. 27. SEC. 77. Place and Time of Filing and Payment of Quarterly Corporate Income Tax . xxx xxx xxx (B) Time of Filing the Income Tax Return . The corporate quarterly declaration shall be filed within sixty (60) days following the close of each of the first three (3) quarters of the taxable year. The final adjustment return shall be filed on or before the fifteenth (15th) day of April, or on or before the fifteenth (15th) day of the fourth (4th) month following the close of the fiscal year, as the case may be. 28. Exhibit "P-3," Docket, pp. 173 to 183. 29. Exhibit "P-38" to "P-38-A," Docket, pp. 246 to 250. 30. Exhibit "P-33" to "P-37," Docket, pp. 241 to 245. 31. SEC. 114. Return and Payment of Value Added Tax . (A) In General . Every person liable to pay the value-added tax imposed under this Title shall file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter prescribed for each taxpayer: Provided, however, That VAT-registered persons shall pay the value-added tax on a monthly basis. 32. Exhibit "P-38" to "P-38-A", Docket, pp. 246 to 250. 33. Exhibit "P-33" to "P-37", Docket, pp. 241 to 245. 34. SUBJECT: Electronic Filing of Tax Returns and Payment of Taxes. 35. SUBJECT: Amending Further Revenue Regulations No. 9-2001, as Amended by Revenue Regulations No. 2-2002 and Revenue Regulations No. 9-2002, Providing for the Staggered Filing of Returns of Taxpayers Enrolled in the Electronic Filing and Payment System (EFPS) Based on Industry Classification. 36. Exhibit "P-38" to "P-38-A," Docket, pp. 246 to 250. 37. Exhibit "P-33" to "P-37," Docket, pp. 241 to 245. 38. SEC. 222. Exceptions as to Period of Limitation of Assessment and Collection of Taxes . (a) In the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be filed without assessment, at any time within ten (10) years after the discovery of the falsity, fraud or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof. 39. Exhibit "P-38" to "P-38-A", Docket, pp. 246 to 250. 40. Exhibit "P-33" to "P-37", Docket, pp. 241 to 245. 41. G.R. No. 222743, April 5, 2017. 42. Exhibit "R-2", BIR Records. 43. Judicial Affidavit, Exhibit "R-9", Docket, pp. 293 to 299, at 294 (Q&A 7). 44. Exhibit "R-1", BIR Records. 45. TSN dated March 7, 2019, p. 9. 46. Exhibit "R-1", BIR Records. 47. Commissioner of Internal Revenue vs. Metro Star Superama, Inc. , G.R. No. 185371, December 8, 2010. 48. Supra . 49. Exhibit "P-32", Docket pp. 234 to 240. 50. Exhibit "P-33" to "P-37", Docket, pp. 241 to 245. 51. Exhibit "P-38" to "P-38-A", Docket, pp. 246 to 250. 52. Commissioner of Internal Revenue vs. Metro Star Superama, Inc., supra . 53. Samar-I Electric Cooperative vs. Commissioner of Internal Revenue , G.R. No. 193100, December 10, 2014.