Commissioner of Internal Revenue v. Next Mobile, Inc.

EN BANC [C.T.A. EB CASE NO. 1001. May 28, 2014.] (C.T.A. Case No. 7965) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . NEXT MOBILE, INC. (FORMERLY NEXTEL COMMUNICATIONS PHILS., INC.) , respondent . DECISION COTANGCO-MANALASTAS , J p : This Petition for Review 1 filed by the Commissioner of Internal Revenue (CIR) on May 2, 2013, pursuant to Section 18 of Republic Act No. 1125, as amended by Section 11 Republic Act No. 9282 and Republic Act No. 9503, 2 seeks the reversal of the December 11, 2012 Decision 3 and March 14, 2013 Resolution 4 promulgated by the former First Division of the Court of Tax Appeals (CTA) in CTA Case No. 7965, entitled " Next Mobile, Inc. (Formerly Nextel Communications Phils., Inc.) vs. Commissioner of Internal Revenue ". Quoted below are the dispositive portions of the assailed Resolution and Decision : Resolution dated March 14, 2013: " WHEREFORE , premises considered, respondent's " MOTION FOR RECONSIDERATION (Re: Decision promulgated 11 December 2012) " is hereby DENIED for lack of merit." Decision dated December 11, 2012: " WHEREFORE , premises considered, the instant Petition for Review is GRANTED . Accordingly, the Formal Letter of Demand dated October 17, 2005 and the Assessment Notices/Demand No. 43-734 dated October 17, 2005 are both hereby CANCELLED and WITHDRAWN for being issued beyond the prescriptive period allowed by law. Consequently, the "1st Notice" dated July 24, 2009 demanding payment of assessed deficiency income tax, final withholding tax, expanded withholding tax, increments for late remittance of taxes withheld, and compromise penalty in the total amount of Php313,339,610.41 for taxable year ending December 31, 2001 is hereby SET ASIDE . SO ORDERED. " FACTS OF THE CASE The relevant antecedents are narrated in the challenged Decision 5 as follows: IHEaAc Petitioner is a domestic corporation organized under Republic Act (RA) No. 7301 and RA No. 7940, with principal office address at Next Mobile Building, 2244 Espaa Avenue, Sampaloc, Manila. In 2003, petitioner changed its name from Nextel Communications Philippines, Inc. to Next Mobile, Inc. Respondent Commissioner of Internal Revenue (CIR) is the head of the Bureau of Internal Revenue (BIR), holding office at the BIR National Office, Diliman, Quezon City. On April 15, 2002, petitioner filed with the BIR its Annual Income Tax Return (ITR) for taxable year ending December 31, 2001. Petitioner filed its Monthly Remittance Returns of Final Income Taxes Withheld (BIR Form No. 1601-F) for taxable year ending December 31, 2001 on the following dates: MONTH DATE OF FILING January 2001 February 12, 2001 February 2001 March 12, 2001 March 2001 April 10, 2001 April 2001 *June 10, 2001 May 2001 June 11, 2001 June 2001 July 10, 2001 July 2001 August 10, 2001 August 2001 September 10, 2001 September 2001 October 10, 2001 October 2001 November 12, 2001 November 2001 December 10, 2001 December 2001 January 15, 2002 * As prescribed by law, the last day for filing was on May 10, 2001 Petitioner likewise filed its Monthly Remittance Returns of Expanded Withholding Tax (BIR Form No. 1601-E) for taxable year ending December 31, 2001 on the following dates: MONTH DATE OF FILING January 2001 February 12, 2001 February 2001 March 12, 2001 March 2001 April 10, 2001 April 2001 May 10, 2001 May 2001 June 11, 2001 June 2001 July 10, 2001 July 2001 August 10, 2001 August 2001 September 10, 2001 September 2001 October 10, 2001 October 2001 November 12, 2001 November 2001 December 10, 2001 December 2001 January 15, 2002 For taxable year ending December 31, 2001, petitioner filed its Monthly Remittance Return of Income Taxes Withheld on Compensation (BIR Form No. 1601-C) on the following dates: MONTH DATE OF FILING January 2001 *February 13, 2001 February 2001 March 12, 2001 March 2001 April 10, 2001 April 2001 May 10, 2001 May 2001 June 11, 2001 June 2001 July 10, 2001 July 2001 August 10, 2001 August 2001 September 10, 2001 September 2001 October 10, 2001 October 2001 November 12, 2001 November 2001 December 10, 2001 December 2001 January 15, 2002 * As prescribed by law, the last day for filing was on February 12, 2001 On September 24, 2003, petitioner received a copy of the Letter of Authority (LOA) dated September 8, 2003 signed by Regional Director Nestor S. Valeroso authorizing Revenue Officer Nenita L. Crespo of RDO No. 43 to examine petitioner's books of accounts and other accounting records for income and withholding taxes for the period covering January 1, 2001 to December 31, 2001. Ms. Ma. Lida Sarmiento, Director of Finance of petitioner, executed several waivers of the statute of limitations to extend the prescriptive period of assessment for taxes due in taxable year ending December 31, 2001 (Waivers), the details of which are summarized as follows: Waiver Extended Date of Date of Date of BIR Signatory Prescription Execution Acknowledgment First Waiver 30-Mar-05 26-Aug-01 30-Aug-01 Revenue District Officer Second Waiver 30-Jun-05 22-Oct-01 22-Oct-01 Revenue District Officer Third Waiver 30-Sep-05 12-Jan-05 18-Jan-05 Revenue District Officer Fourth Waiver 30-Sep-05 None 3-May-05 Revenue District Officer Fifth Waiver 31-Oct-05 17-Mar-05 3-May-05 Revenue District Officer On May 13, 2005, petitioner was furnished copies of the Fourth and the Fifth Waivers, which appeared to have been signed by the Revenue District Officer of RDO No. 43, Mr. Raul Vicente L. Recto. On September 26, 2005, petitioner received from the BIR, a Preliminary Assessment Notice (PAN) dated September 16, 2005 for which petitioner filed a Reply. On October 25, 2005, petitioner received a Formal Letter of Demand dated October 17, 2005 and Assessment Notices/Demand No. 43-734 dated October 17, 2005 from the BIR, demanding payment of deficiency income tax, FWT, EWT, increments for late remittance of taxes withheld, and compromise penalty for failure to file returns/late filing/late remittance of taxes withheld, in the total amount of Php313,339,610.41, for taxable year ending December 31, 2001, broken down as follows: NATURE OF TAX TOTAL Income Tax Php54,552,780.41 Expanded Withholding Tax 933,811.03 Final Withholding Tax 252,282,875.12 Increments for Late Remittance of Taxes Withheld (EWT/FWT/WTC) 5,376,143.85 Compromise Penalty (Failure to file 1604CF); 194,000.00 1604E; Inventory List and alphalist of income payments subjected to WT; Late filing and remittance of taxes withheld) Php313,339,610.41 ============== On November 23, 2005, petitioner filed its protest against the FLD and FAN and requested the reinvestigation of the assessments. DHEACI On February 27, 2007, petitioner transferred its business registration from RDO No. 43 to RDO No. 32. On July 28, 2009, petitioner received a letter from the BIR denying petitioner's protest. Thus, on August 27, 2009, petitioner filed the instant Petition for Review docketed as CTA Case No. 7965. In the challenged Decision , 6 the Court in Division granted the petition for review of Next Mobile, Inc. (Next Mobile) and declared the Formal Letter of Demand dated October 17, 2005 and Assessment Notices/Demand No. 43-734 dated October 17, 2005 cancelled and withdrawn for being issued beyond the prescriptive period allowed by law. ISSUES Petitioner interposed the following issues: I. WHETHER OR NOT THE FIRST DIVISION OF THE HONORABLE COURT OF TAX APPEALS ERRED IN RULING THAT THE WAIVERS EXECUTED BY RESPONDENT ARE NULL AND VOID, THUS, THE PETITIONER'S RIGHT TO ASSESS IS ALREADY BARRED BY PRESCRIPTION. II. WHETHER OR NOT THE FIRST DIVISION OF THE HONORABLE COURT OF TAX APPEALS ERRED IN RULING THAT THE TAX RETURNS FILED BY RESPONDENT ARE NOT FALSE OR FRAUDULENT. Arguments of Petitioner 7 The discussion of the petitioner CIR is hinged on the following main arguments: [i] that the Waivers of the Statute of Limitations, to extend the prescriptive period of assessment for taxes due of respondent in taxable year ending December 31, 2001 (Waivers), were executed by the respondent in compliance with all the requirements of the law and existing jurisprudence; [ii] respondent filed false or fraudulent returns; and [iii] the assessment of respondent for deficiency income tax, expanded withholding tax, final withholding tax, and increments for late remittance of taxes were issued with legal and factual bases. Concerning the first argument, petitioner points out that the Waivers were executed in the proper form prescribed by Revenue Memorandum Order No. 20-90; the Waivers were duly signed by Ma. Lida Sarmiento, Director for Finance and responsible officer of respondent; the Waivers were duly notarized; the Revenue District Officer (RDO) who signed the said Waivers was authorized to sign them and enter into agreement with the respondent in extending the period of assessment; the Waivers were executed and accepted before the expiration of the period of prescription; and the waivers were executed in the prescribed form and in the number of copies as required. Finally, petitioner contends that respondent is already estopped from questioning the validity of the subject Waivers, if respondent believed at the onset that the First Waiver was defective it should not have executed the subsequent Waivers. HSDCTA In support of the second argument, petitioner insists that from the Assessment Notice No. 43-734 and Formal Letter of Demand issued by the petitioner as well as the Supplemental Report of the court-appointed Independent Certified Public Accountant (ICPA) vis-a-vis the Annual Income Tax Return and accompanying Financial Statements for taxable year ending December 31, 2001 of the respondent, the latter filed a false return considering that there is substantial underdeclaration of income in its Annual Income Tax Return. Anent the third argument, petitioner asserts that Formal Letter of Demand with the attached Details of Discrepancies and Assessment Notice No. 43-734 were issued with legal and factual bases as they contain not only a detailed computation of respondent's tax deficiencies but also details of the specified discrepancies, explaining the legal and factual bases of the assessment. Arguments of Respondent 8 Respondent Next Mobile opposes petitioner CIR's arguments and submits that petitioner did not raise new matters sufficiently persuasive to induce the reversal of the assailed resolution of the First Division of this Court. According to respondent, the First Division of this Court correctly ruled that the purported Waivers are null and void, thus, petitioner CIR's right to assess deficiency taxes against respondent Next Mobile is already barred by prescription considering that the deficiency tax assessments were issued against Next Mobile beyond the 3-year prescriptive period, and the purported Waivers suffer from defects, i.e. , [i] the Waivers were executed by an officer of Next Mobile without any authority from the Board of Directors of respondent Next Mobile; [ii] the Waivers failed to indicate the date of acceptance by the Bureau of Internal Revenue (BIR); and [iii] Next Mobile was furnished a copy of the Waivers after the 3-year period prescribed under the National Internal Revenue Code of 1997, as amended, (1997 NIRC). Also, respondent Next Mobile avers that it is not estopped from impugning the validity of the purported waivers, claiming that the doctrine of estoppel is not applicable in the case of Next Mobile. Further, respondent Next Mobile posits that it did not file a false or fraudulent income tax return considering that: the pieces of evidence presented by the petitioner CIR during trial failed to prove that there is a substantial underdeclaration of Next Mobile's income in its Annual Income Tax Return (ITR); and that, petitioner CIR belatedly asserted that respondent Next Mobile filed false or fraudulent returns, including its withholding tax returns, in violation of Next Mobile's right to due process. Respondent explains that the pieces of evidence which petitioner claims to be the basis of applying the 10-year prescriptive period failed to prove that there is substantial underdeclaration of income because the Final Assessment Notice (FAN) relating to the deficiency income tax pertains to disallowance of the deductions claimed by Next Mobile due to non-withholding of tax, and not because of underdeclaration of Next Mobile's income. The FAN did not dispute the amount declared as sales, but rather disallowed certain expenses claimed due to non-withholding. Also, respondent Next Mobile reasons that even if the alleged falsity of its Annual ITR is premised on an overstatement of deductions, there is still no substantial overstatement of deductions within the contemplation of Section 248 (B) since the disallowed deductions due to non-withholding did not exceed thirty percent (30%) of the amount of actual deductions claimed by Next Mobile in its Annual ITR. RULING OF THE COURT EN BANC The Court has observed that the arguments in the instant Petition for Review were merely lifted from petitioner's Motion for Reconsideration 9 dated January 14, 2013. There is nothing in the instant Petition that was not considered and justifiably discussed and resolved in the assailed Decision 10 and Resolution . 11 On this point, the Court En Banc finds no compelling reason to disturb the conclusions arrived at by the Court in Division and hereby affirms the cancellation and withdrawal of the Formal Letter of Demand and Assessment Notices/Demand No. 43-734, both dated October 17, 2005, issued against respondent Next Mobile for deficiency income tax, final withholding tax, expanded withholding tax, increments for late remittance of taxes withheld, and compromise penalty in the total amount of Php313,339,610.41 for taxable year ending December 31, 2001. IASCTD The five Waivers of the Statute of Limitations are not valid and binding, thus, the 3-year period of limitation within which to assess deficiency taxes prescribed by law was not extended. On the matter of assessment, Section 203 of the 1997 NIRC states that internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, or from the day the return was filed, whichever is later. However, the aforementioned 3-year period of limitation can be extended, adjusted, or suspended in the following instances, to wit : [1] in the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the BIR has ten (10) years after the discovery of the falsity, fraud or omission to assess internal revenue tax pursuant to Section 222 of the 1997 NIRC; [2] 'by a valid waiver executed in accordance with paragraphs (b) and (d) of Section 222 of the 1997 NIRC; and [3] the existence of the circumstances enumerated in Section 223 of the same Code, which include a request for reinvestigation granted by the BIR Commissioner.' 12 For the proper execution of the above-mentioned Waivers of the Statute of Limitations, Revenue Memorandum Order No. (RMO) 20-90 and Revenue Delegation Authority Order (RDAO) No. 05-01 were issued on April 4, 1990 and August 2, 2001, respectively, to wit : "1. The waiver must be in the proper form prescribed by RMO 20-90. The phrase 'but not after _______ 19___', which indicates the expiry date of the period agreed upon to assess/collect the tax after the regular three-year period of prescription, should be filled up. 2. The waiver must be signed by the taxpayer himself or his duly authorized representative. In the case of a corporation, the waiver must be signed by any of its responsible officials. In case the authority is delegated by the taxpayer to a representative, such delegation should be in writing and duly notarized. 3. The waiver should be duly notarized. 4. The CIR or the revenue official authorized by him must sign the waiver indicating that the BIR has accepted and agreed to the waiver. The date of such acceptance by the BIR should be indicated. However, before signing the waiver, the CIR or the revenue official authorized by him must make sure that the waiver is in the prescribed form, duly notarized, and executed by the taxpayer or his duly authorized representative. 5. Both the date of execution by the taxpayer and date of acceptance by the Bureau should be before the expiration of the period of prescription or before the lapsed of the period agreed in case a subsequent agreement is executed. DaAETS 6. The waiver must be executed in three copies, the original copy to be attached to the docket of the case, the second copy for the taxpayer and the third copy for the Office accepting the waiver. The fact of receipt by the taxpayer of his/her file copy must be indicated in the original copy to show that the taxpayer was notified of the acceptance of the BIR and the perfection of the agreement." In this case, petitioner CIR insists that the Waivers of the Statute of Limitations to extend the prescriptive period of assessment for taxes due of respondent Next Mobile in taxable year ending December 31, 2001 (Waivers), which were executed by the respondent, complied with all the requirements of the law and existing jurisprudence. A scrutiny of the subject Waivers, 13 however, proves otherwise. As thoroughly discussed by the Court in Division, the subject Waivers suffer from fatal defects that render the same not valid and binding between the BIR and respondent Next Mobile, viz. : 1. The Waivers were signed by Ms. Ma. Lida Sarmiento, Director for Finance of respondent Next Mobile, without the notarized written authority of respondent's Board of Directors; 2. The Waivers failed to indicate the respective dates of their acceptance by the Revenue District Officer, Raul Vicente L. Recto; 3. The fact of receipt by respondent Next Mobile of its copy of the Second Waiver was not indicated on the face of the original Second Waiver; In view of the above-cited infirmities of the Waivers, the period to assess or collect taxes was not extended. Consequently, the assessments for deficiency income tax, FWT, EWT against respondent Next Mobile are deemed void for having been issued beyond the 3-year period of limitation to assess deficiency taxes prescribed by law. It bears to stress that "[a] waiver of the statute of limitations under the NIRC, to a certain extent, is a derogation of the taxpayer's right to security against prolonged and unscrupulous investigations and must therefore be carefully and strictly construed. The waiver of the statute of limitations is not a waiver of the right to invoke the defense of prescription . . . It is an agreement between the taxpayer and the BIR that the period to issue an assessment and collect the taxes due is extended to a date certain. The waiver does not mean that the taxpayer relinquishes the right to invoke prescription unequivocally particularly where the language of the document is equivocal. For the purpose of safeguarding taxpayers from any unreasonable examination, investigation or assessment, our tax law provides a statute of limitations in the collection of taxes. Thus, the law on prescription, being a remedial measure, should be liberally construed in order to afford such protection. As a corollary, the exceptions to the law on prescription should perforce be strictly construed." 14 caADSE Records belie the allegation that respondent filed false and fraudulent tax returns. Thus, the extension of the period of limitation within which to assess deficiency taxes from 3 years to 10 years does not apply. Petitioner CIR alleges that the 10-year period of limitation within which to assess deficiency taxes provided in Section 222 (a) of the 1997 NIRC is applicable in this case as respondent Next Mobile filed false and fraudulent returns. According to petitioner CIR, there was substantial underdeclaration of income in respondent Next Mobile's Annual ITR for taxable year ending December 31, 2001, which is tantamount to falsity of the Annual ITR filed by Next Mobile. As earlier discussed, under Section 203 of the 1997 NIRC, as amended, the right of petitioner CIR to assess deficiency taxes is limited to a period of three (3) years from the date of actual filing of the return or from the last day prescribed by law for the filing of such return, whichever comes later. 15 However, as mentioned, Section 222 (a) of the 1997 NIRC, as amended, provides for exceptions to the abovementioned 3-year period of limitation of assessment, one of which is in case of filing of false return, fraudulent return with intent to evade tax, and failure to file a return. The tax may be assessed or a proceeding in court for the collection of such tax may be begun without assessment at any time within 10 years after the discovery of the falsity, fraud or omission. Relative thereto, Section 248 (B) of the 1997 NIRC describes what constitute prima facie evidence of a false or fraudulent return. The said provision explains that to constitute prima facie evidence of false or fraudulent return, there must be a substantial underdeclaration of taxable sales, receipts or income in an amount exceeding thirty percent (30%) of that declared per return, or a substantial overstatement of claimed deductions in an amount exceeding thirty percent (30%) of actual deductions. Records failed to establish, even by prima facie evidence, that respondent Next Mobile filed false and fraudulent returns on the ground of substantial underdeclaration of income in respondent Next Mobile's Annual ITR for taxable year ending December 31, 2001. As can be gleaned from the records of this case, respondent Next Mobile was assessed for deficiency income tax because deductions were disallowed as deductible expense due to non-withholding and not because of underdeclaration of income in its Annual ITR. Thus, pursuant to Section 248 (B) of the NIRC of 1997, as amended, to constitute a prima facie evidence that respondent's Annual ITR is false, respondent must have made a substantial overstatement of claimed deductions in an amount exceeding 30% of actual deductions. However, as can be seen from the records and as justly found by the Court in Division, the disallowed deductions due to non-withholding of tax constitute less than 30% of the deductions claimed by respondent Next Mobile, viz. : AECacT Disallowed deductions due to non- withholding (Exhibit "G", Division Docket, Volume II, p. 000372) Php98,333,873.91 Deductions claimed per ITR (Exhibit "XX", line 103, Division Docket, Volume II, p. 000507) Php3,562,018,449 Percentage of disallowed deductions due to non-withholding over deductions claimed per ITR 2.77% Considering that the disallowed deductions constitute less than 30% of the deductions claimed, there is no prima facie evidence that respondent Next Mobile filed false and fraudulent returns; hence, the 10-year period of limitation to assess deficiency taxes, under Section 222 (a) of the NIRC of 1997, finds no application in this case. For emphasis, quoted below are the discussions of the Court in Division relevant to the issue on falsity of tax returns and period of limitation to assess deficiency taxes: Decision 16 dated December 11, 2012: "There is no merit in respondent's claim that the deficiency income tax assessment issued against petitioner beyond the three-year prescriptive period to assess is valid as it falls under the exception provided under Section 222 (a) of the NIRC of 1997, as amended. To warrant a ten-year period to assess taxpayer's tax deficiency liabilities, respondent must not only state with clarity the grounds therefor, but must also present substantial evidence in support thereto. Mere allegation in the pleadings, in this case in respondent's Answer and Memorandum, that the case falls under such exception will not suffice. xxx xxx xxx Considering that respondent failed to substantiate its allegation by clear and convincing proof that petitioner filed a false or fraudulent return, the Court finds the exception provided under Section 222 (a) of the NIRC of 1997, as amended, inapplicable in this case." Resolution 17 dated March 14, 2013: "Petitioner was assessed for deficiency income tax because deductions were disallowed as deductible expenses due to non-withholding of tax. Pursuant to Section 248 (B) of the National Internal Revenue Code (NIRC) of 1997, as amended, to constitute a prima facie evidence that petitioner's ITR is false, respondent should be able to establish that petitioner substantially overstated its deductions. However, a review of the pieces of evidence enumerated by respondent in her Motion for Reconsideration reveals otherwise. IAETDc Section 248 (B) of the 1997 NIRC, as amended, provides that a claim of deductions in an amount exceeding 30% of actual deductions, shall render the taxpayer liable for its overstatement. As borne by the records, the disallowed deductions due to non-withholding of tax constitute less than 30% of the deductions claimed by petitioner. Furthermore, as correctly pointed out by petitioner, the disallowed NOLCO should not be considered for purposes of computing the 30% threshold. Records show that the NOLCO in the amount of Php3,572,090,039.00 was disallowed by respondent. However, the NOLCO claimed as deduction by petitioner in its ITR for the taxable year 2001 amounts only to Php2,749,949,144.00. Respondent's witness, Ms. Margie Padre admitted that she disallowed the NOLCO in the amount of Php3,572,090,039.00 because she assumed, without presenting any evidence, that said NOLCO was carried over by petitioner to taxable year 2002. Well-settled is the rule that assessments should not be based on mere presumptions no matter how reasonable or logical said presumptions may be. Assessments must be based on actual facts. The presumption of correctness of assessment being a mere presumption cannot be made to rest on another presumption. Since respondent failed to establish, even by prima facie evidence, that petitioner's ITR was false, there is no basis to extend the prescriptive period to assess petitioner for deficiency income tax from three (3) years to ten (10) years. Anent respondent's claim that the right of the state to assess petitioner for deficiency EWT, FWT and increments for late remittance had not yet prescribed as the assessments were issued within the ten-year period, this Court finds the same without merit. Respondent did not raise in her Answer the falsity of petitioner's withholding tax returns and the extension of the government's right to assess petitioner for deficiency EWT, FWT, and increments for late remittance from three (3) years to ten (10) years. In paragraph twelve (12) of respondent's Answer, respondent alleged that "petitioner filed a false income tax return, hence, respondent's right to assess is within ten (10) years from the date of the discovery of the falsity." Furthermore, the parties never included as an issue in their approved Joint Stipulation of Facts and Issues dated November 25, 2009 the alleged falsity of petitioner's withholding tax returns. Similarly, in her Memorandum, respondent never bothered to allege and discuss the falsity of petitioner's withholding tax returns and the extension of the government's right to assess petitioner for deficiency EWT, FWT, and increments for late remittance to ten (10) years on account thereof. xxx xxx xxx Moreover, as the object of the pleadings is to draw the lines of battle between the litigants and to indicate fairly the nature of the claims or defenses of both parties, a party cannot subsequently take a position contrary to, or inconsistent, with his pleadings as respondent did in this case. It is also settled that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view. To permit a party to change his theory on appeal will be unfair to the adverse party." DCSETa WHEREFORE , premises considered, the instant Petition for Review is DENIED . The December 11, 2012 Decision 18 and March 14, 2013 Resolution 19 of the former First Division in CTA Case No. 7965, are hereby AFFIRMED . SO ORDERED. (SGD.) AMELIA R. COTANGCO-MANALASTAS Associate Justice Roman G. del Rosario, P.J., Juanito C. Castaeda, Jr., Lovell R. Bautista, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Ma. Belen Ringpis-Liban, JJ., concur. Erlinda P. Uy, J., is on leave. Footnotes 1. Rollo , pp. 5-20. 2. Otherwise known as "An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, as amended, Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes." 3. Rollo , pp. 22-56. 4. Rollo , pp. 58-63. 5. Rollo , pp. 22-56. 6. Supra , Note 3. 7. Rollo , pp. 139-145. 8. Rollo , pp. 93-123. 9. Division Rollo , pp. 1340-1346. 10. Supra Note 3. 11. Supra Note 4. 12. Bank of the Philippine Islands vs. Commissioner of Internal Revenue , G.R. No. 139736, October 17, 2005. 13. Exhibit "B," BIR Records, p. 267; Exhibit "C," Docket, p. 368; Exhibit "D", Docket, p. 369; Exhibit "E," Docket, p. 370; Exhibit "F", Docket, p. 371. 14. Philippine Journalists, Inc. vs. Commissioner of Internal Revenue , G.R. No. 162852, December 16, 2004. 15. Section 203 of the NIRC of 1997, as amended. 16. Rollo , pp. 43-44, Decision dated December 11, 2012 promulgated by the former First Division in CTA Case No. 7965, entitled " Next Mobile, Inc. (Formerly Nextel Communications Phils., Inc.) vs. Commissioner of Internal Revenue ". 17. Rollo , pp. 60-62, Resolution dated March 14, 2013 promulgated by the former First Division in CTA Case No. 7965, entitled " Next Mobile, Inc. (Formerly Nextel Communications Phils., Inc.) vs. Commissioner of Internal Revenue ". 18. Rollo , pp. 22-56. 19. Rollo , pp. 58-63.