Covanta Energy Philippine Holdings, Inc. vs. Commissioner of Internal Revenue

SECOND DIVISION [C.T.A. CASE NOS. 7338 & 7365. December 13, 2010.] COVANTA ENERGY PHILIPPINE HOLDINGS, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION MINDARO-GRULLA , J p : This resolves respondent's Motion for Reconsideration of this Court's Decision dated July 27, 2010, together with petitioner's Comment which was filed on September 15, 2010. The pertinent dispositive portion of the Decision dated July 27, 2010, reads: " WHEREFORE , the instant Petitions for Review are hereby PARTIALLY GRANTED . Accordingly, the deficiency value-added tax and deficiency minimum corporate income tax assessments for taxable year 2001 issued against petitioner are CANCELLED and WITHDRAWN . xxx xxx xxx" Respondent alleges that ''THE HONORABLE COURT ERRED IN HOLDING THAT PETITIONER VALIDLY AVAILED OF THE TAX AMNESTY GRANTED UNDER RA 9480." Respondent maintains that this Court erred when it concluded that petitioner complied with the requirements of Republic Act (RA) No. 9480. 1 Respondent argues that petitioner failed to comply with Section 8 of Department Order No. 29-07, 2 when it did not disclose and leave blank in its SALN and Amended SALN the columns for "Reference" and "Basis of Valuation", a requirement of the tax amnesty law and its implementing rules. Hence, respondent concluded that petitioner cannot be deemed to be in full compliance with the provision of RA No. 9480 and it is not entitled to the one-year period of limitation. Respondent further asserts that the one-year period of limitation applies only to administrative proceedings and not to judicial proceedings. Respondent further argues that petitioner not only failed to have the alleged withholding tax certificates identified by the withholding agents but also failed to prove the remittance of the amounts withheld, considering that the fact of withholding of taxes is one thing and the fact of remittance is another. We find no merit in the Motion. Unless the amounts stated in the SALN is understated to the extent of thirty percent (30%) or more as may be established in proceedings initiated within one year following the date of the filing of the tax amnesty return and the SALN or there is a finding of or admission in congressional hearings, other administrative agencies of government, and/or courts that prove a thirty percent (30%) under-declaration, the SALN shall be presumed CORRECT. This is the clear import of Sec. 4 of R.A. No. 9480 3 and Sec. 9 of Department Order No. 29-07. 4 cHCIEA While the Reference and basis of valuation was left blank in its SALN and Amended SALN, it does not controvert the fact that there was a presumption of compliance with the provisions of the tax amnesty law as there was payment of the amnesty tax and submission of Acceptance of Payment Form, the Notice of Availment, the SALN, and the Tax Amnesty Return. Mere omission of filling up the reference and basis of valuation column in the SALN in the absence of proof to defraud the government or underdeclaration of at least 30% will not deny petitioner in having complied with the requirements of the tax amnesty law. Absent any evidence to prove that there is at least a 30% underdeclaration, to dispute the presumption given by the law on petitioner's SALN, the same is presumed correct. Concomitantly, there is no legal basis for respondent to conclude that petitioner failed to comply with the tax amnesty law. To reiterate: "A tax amnesty is a general pardon or intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law. It partakes of an absolute forgiveness or waiver by the government of its right to collect what is due it and to give tax evaders who wish to relent a chance to start with a clean slate. A taxpayer desiring to avail of the benefits of a tax amnesty must conform with the requirements specified under Section 2 of Republic Act (RA) No. 9480, effective May 24, 2007, which provides: "SECTION 2. Availment of the Amnesty. any person, natural or juridical, who wishes to avail himself of the tax amnesty authorized and granted under this Act shall file with the Bureau of Internal Revenue (BIR) a notice and Tax Amnesty Return accompanied by a Statement of Assets, Liabilities and Networth (SALN) as of December 31, 2005, in such form as may be prescribed in the implementing rules and regulations (IRR) of this Act, and pay the applicable amnesty tax within six months from the effectivity of the IRR." Revenue Memorandum Circular (RMC) No. 19-2008, entitled "Circularizing the Full Text of A Basic Guide on the Tax Amnesty Act of 2007 for Taxpayers Who Wish to Avail of the Tax Amnesty Pursuant to Republic Act No. 9480 (Tax Amnesty Act of 2007)", specified the forms required to be submitted, to wit: 1. Notice of Availment of Tax Amnesty; 2. Statement of Assets, Liabilities and Networth (SALN); 3. Tax Amnesty Return (BIR Form No. 2116); and 4. Payment Form (BIR Form No. 0617)." The payment of the amnesty tax and the submission and accomplishment of the pertinent forms by the taxpayer shall be deemed full compliance with the provisions of RA No. 9480. A careful examination of the records shows that petitioner duly complied with the requirements enumerated in RA No. 9480 as implemented by RMC No. 19-2008. xxx xxx xxx." As to the deficiency expanded withholding tax, a careful examination of respondent's arguments thereon reveals that no novel issue was raised. Respondent failed to present any valid or compelling reason to warrant the reconsideration sought. Moreover, the matter had already been sufficiently considered and passed upon in the assailed Decision. In fine, we find no valid justification to compel a modification or reversal of our Decision dated July 27, 2010. WHEREFORE , premises considered, respondent's "Motion for Reconsideration" is hereby DENIED for lack of merit. SaIHDA SO ORDERED. (SGD.) CIELITO N. MINDARO-GRULLA Associate Justice Juanito C. Castaeda, Jr. and Caesar A. Casanova, JJ., concur. Footnotes 1. An Act Enhancing Revenue Administration and Collection by granting an Amnesty on all unpaid Internal Revenue Taxes imposed by the National Government for taxable year 2005 and prior years. 2. Rules and Regulations to Implement Republic Act No. 9480. 3. SEC. 4. Presumption of Correctness of the SALN. The SALN as of December 31, 2005 shall be considered as true and correct except where the amount of declared networth is understated to the extent of thirty percent (30%) or more as may be established in proceedings initiated by, or at the instance of, parties other than the BIR of its agents: Provided, That such proceedings must be initiated within one year following the date of the filing of the tax amnesty return and the SALN. Findings of or admission in congressional hearings, other administrative agencies of government, and/or courts shall be admissible to prove a thirty percent (30%) under-declaration . (Emphasis supplied) 4. Sec. 9. Presumption of Correctness of SALN. The corresponding SALN as of December 31, 2005 filed by the taxpayer desiring to avail of the tax amnesty shall be presumed true and correct, except in the following cases: 1. Where the amount of the declared networth is understated to the extent of thirty percent (30%) or more as may be established in proceedings initiated within one (1)-year following the date of filing of the Tax Amnesty Return and the SALN, by, or the instance of parties other than the BIR or its agents, as when any person, entity or government agency informs the BIR, with sufficient evidence, that the amount of the declared networth is understated to the extent of thirty percent (30%) or more. 2. When findings of or admission in congressional hearings or proceedings in administrative agencies of the government, and in courts, prove that there is a least thirty percent (30%) underdeclaration.