Commissioner of Internal Revenue v. JGC Corp. Manila-ROHQ

EN BANC [C.T.A. EB CASE NO. 1026. September 2, 2014.] (C.T.A. Case No. 7983) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . JGC CORPORATION MANILA-ROHQ , respondent . RESOLUTION DEL ROSARIO , P.J p : This resolves petitioner's MOTION FOR RECONSIDERATION filed on May 6, 2014, with respondent's COMMENT (TO PETITIONER'S MOTION FOR RECONSIDERATION) filed on June 20, 2014. Petitioner assails the Decision promulgated by the Court En Banc on April 1, 2014, the dispositive portion of which states: " WHEREFORE , premises considered, the Petition for Review filed by the Commissioner of Internal Revenue on July 4, 2013 is hereby DENIED for lack of merit. SO ORDERED ." In the present Motion for Reconsideration, petitioner reiterates that the two (2) Waivers executed by respondent on March 22, 2007 and December 15, 2007, respectively, validly extended the prescriptive period to assess respondent for deficiency income tax for the calendar year ending December 31, 2003. On the other hand, respondent restates that the two (2) Waivers executed by respondent are void as they were not executed in accordance with the format specifically prescribed under Revenue Memorandum Order (RMO) No. 20-90. The Court En Banc finds that the contentions presented by petitioner in her Motion for Reconsideration were duly considered by the Court En Banc in the assailed Decision. The Court En Banc therefore finds no cogent reason to modify or reverse the assailed Decision. To reiterate, since respondent filed its Annual Income Tax Return (ITR) for the calendar year ending December 31, 2003 on April 13, 2004, sans any valid Waiver, the last day for petitioner to assess respondent for deficiency income tax for the calendar year ending December 31, 2003 was on April 16, 2007 . Records, however, show that respondent executed two (2) Waivers, pertinent portions of which read as follows: First Waiver (Exhibit "E", Exhibit "8") 1 "I, JGC CORPORATION-MANILA ROHQ , of 3/F, 4/F, 5/F of China Bank Center, Acacia Ave. MBP MC , request for approval of the Commissioner of Internal Revenue of my request for more time to submit the documents required in connection with the investigation/reinvestigation/re-evaluation/collection enforcement of my/its ALL INTERNAL REVENUE TAXES for the period January to December 2003 . I/We hereby waive the defense of prescription under the statute of limitations prescribed in Sections 203 and 223 and other related provisions of the National Internal Revenue Code, and consent to the assessment and/or collection of tax or taxes of the said year which may be found due after investigation/reinvestigation/re-evaluation at any time before or after the lapse of the period of limitations fixed by said sections of the National Internal Revenue Code, but not later than December 31, 2007 . aIAcCH xxx xxx xxx. Executed this 22nd day of March 20 07 in Alabang , Philippines" Second Waiver (Exhibit "F", Exhibit "10") 2 "I, Arceli Pascual , of JGC CORPORATION-MANILA ROHQ , request for approval by the Commissioner of Internal Revenue of my request for more time to submit the documents required in connection with the investigation/reinvestigation/re-evaluation/collection enforcement of my/its value added tax liability/refund for the period January to December 2003 . I/We hereby waive the defense of prescription under the statute of limitations prescribed in Sections 203 and 223 and other related provisions of the National Internal Revenue Code, and consent to the assessment and/or collection of tax or taxes of the said year which may be found due after investigation/reinvestigation/re-evaluation at any time before or after the lapse of the period of limitations fixed by said sections of the National Internal Revenue Code, but not later than December 31, 2008 . xxx xxx xxx. Executed this 15th day of December 20 07 in Alabang , Philippines" It is undisputed that on December 11, 2008 , respondent JGC received the Formal Assessment Notice 3 (FAN) dated December 8, 2008, with attached Assessment Notice and Details of Discrepancies, 4 issued by petitioner, assessing respondent for deficiency income tax for taxable year 2003. Indubitably, the First Waiver extended petitioner's right to assess respondent JGC for "all internal revenue taxes" until December 31, 2007 while the Second Waiver extended petitioner's right to assess respondent JGC for "value added tax liability/refund" only until December 31, 2008 . Petitioner CIR had until December 31, 2007 only within which to issue the FAN, Assessment Notice and Details of Discrepancies, for purposes of assessing respondent for deficiency income tax, together with other internal revenue taxes, for taxable year ending December 31, 2003 . The Second Waiver did not validly extend petitioner's right to assess respondent for deficiency income tax until December 31, 2008 as the extension was limited specifically to "value added tax liability/refund" . Clearly, the FAN dated December 8, 2008, with attached Assessment Notice and Details of Discrepancies, assessing petitioner for deficiency income tax for the calendar year ending December 31, 2003, are void for being issued beyond the extended period stated in the First Waiver. WHEREFORE , premises considered, petitioner's Motion for Reconsideration filed on May 6, 2014 is hereby DENIED for lack of merit. SO ORDERED . (SGD.) ROMAN G. DEL ROSARIO Presiding Justice Juanito C. Castaeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla, Amelia R. Cotangco-Manalastas and Ma. Belen M. Ringpis-Liban, JJ., concur. Footnotes 1. BIR Records, unpaginated. 2. BIR Records, p. 296. 3. Exhibit "12". 4. Exhibit "12-B".