Commissioner of Internal Revenue v. Viricson Corp.

EN BANC [C.T.A. EB CASE NO. 1647. July 30, 2018.] (C.T.A Case No. 8709) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs. VIRICSON CORPORATION , respondent . DECISION RINGPIS-LIBAN , J p : Before the Court En Banc is a Petition for Review filed by petitioner 1 Commissioner of Internal Revenue (CIR) under Sec. 3 (b), Rule 8 of the Revised Rules of the Court of Tax Appeals seeking nullification of the Decision 2 dated January 24, 2017 (Assailed Decision), the dispositive portion thereof reads: " WHEREFORE ,in light of the foregoing considerations, the instant Petition for Review is hereby PARTIALLY GRANTED .The deficiency income tax and EWT assessments issued by respondents against petitioner for taxable year 2009 are hereby CANCELLED and SET ASIDE .On the other hand, petitioner is ORDERED TO PAY the deficiency VAT for taxable year 2009 in the modified amount of P68,914.54, inclusive of the twenty-five percent (25%) surcharge imposed under Section 248(A)(3) of the NIRC of 1997, as amended, computed as follows: Basic VAT due P55,131.63 Add: 25% Surcharge 13,782.91 Total Deficiency VAT P68,914.54 In addition, petitioner is likewise ORDERED TO PAY delinquency interest at the rate of 20% per annum on the total amount of P68,914.54, computed from September 20, 2013 until full payment thereof pursuant to Section 249(C) of the NIRC of 1997. SO ORDERED. " and the Resolution 3 dated April 4, 2017 of the same First Division of the Court (Court in Division) denying the CIR's Motion for Reconsideration, the dispositive portion thereof reads: " WHEREFORE ,in the light of the foregoing considerations, the instant Motion for Reconsideration is DENIED for lack of merit. SO ORDERED. " THE FACTS The facts as stated in the assailed Decision are as follows: "Petitioner 4 Viricson is a corporation duly organized and registered under and by virtue of the laws of the Philippines. On the other hand, respondent Commissioner of Internal Revenue (CIR) is duly appointed and empowered to interpret the provisions of the National Internal Revenue Code (NIRC) and other tax laws, as well as the power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the NIRC or other laws or portions thereof administered by the Bureau of Internal Revenue (BIR). ASEcHI The CIR's co-respondent BIR Revenue Region No. 8-Makati City is attached to the CIR and is tasked and empowered to audit and investigate taxpayers for possible tax deficiencies, and to assess and collect the same, if any, from taxpayers. Additionally, co-respondent BIR Revenue District Office (RD) No. 52 is attached to the CIR and directly under the supervision of respondent BIR Revenue Region No. 8. The latter is tasked and empowered to audit and investigate taxpayers for possible tax deficiencies, and to assess and collect tax deficiencies, if any, from taxpayers. Petitioner received from respondent BIR Revenue Region No. 8-Makati City the Letter of Authority (LA) No. 00005862 dated May 20, 2010, authorizing several Revenue Officers to examine petitioner's books of accounts and other accounting records for all internal revenue taxes for taxable period January 1, to December 31, 2009. As stated in the said LA, petitioner was to be duly informed of the results of the examination upon approval of the report submitted by the Revenue Officers. xxx xxx xxx Petitioner then received the Second Request for Presentation of Records dated September 16, 2009. 5 The said Request asked for the presentation of accounting records as listed in the first request so that the conduct of the required examination for internal revenue tax purposes may be had. Subsequently, respondent BIR Revenue Region No. 8 sent to petitioner the Preliminary Assessment Notice (PAN) dated July 11, 2012, assessing it for alleged deficiency income tax in the amount of P311,912.97, deficiency value-added tax (VAT) of P220,243.05, and deficiency expanded withholding tax (EWT) of P8,410.01, for taxable year 2009. On December 10, 2012, BIR Revenue Region No. 8 issued a Formal Assessment Notice (FAN),assessing petitioner for deficiency income tax amounting to P352,813.04, deficiency VAT of P233,707.69, and deficiency EWT of P8,922.30, for taxable year 2009. Consequently, on January 10, 2013, petitioner filed its Protest before the Office of the Regional Director, BIR Revenue Region No. 8, disputing the tax assessments issued against it. In response thereto, respondent BIR Revenue Region No. 8 issued the Letter dated January 18, 2013, informing petitioner that the entire tax docket together with its Protest shall be forwarded to respondent BIR RDO No. 52, and to submit the necessary documents within sixty (60) days from the date of filing of the said Protest to the latter office. ITAaHc Thus, petitioner sent to respondent BIR RDO No. 52 a letter together with certain documents in support of its Protest on March 11, 2013. On July 3, 2013, petitioner received from respondent BIR RDO No. 52 the Letter dated June 25, 2013 requiring petitioner to submit the original receipts and documents that will justify the dropping of the assessment. On July 17, 2013, petitioner sent the Letter-Reply dated July 10, 2013 to respondent BIR RDO No. 52, signifying that it has decided not to submit the original receipts and documents as requested but is instead willing to present the originals for comparison, and to have the originals intact when needed for presentation before this Court, should BIR RDO No. 52 deny petitioner's Protest . Petitioner received, on August 21, 2013, the Final Assessment on Disputed Assessment (FDDA) dated August 16, 2013, sustaining the subject tax assessments issued against petitioner for taxable year 2009, for its failure to submit original documents as requested. However, in view of the interests that have accrued in the interim, the amounts of the assessed taxes were increased as follows: the deficiency income tax totaled P382,919.09, the deficiency VAT amounted to P253,103.18, and the deficiency EWT resulted to P9,660.23, respectively computed as follows: I. INCOME TAX Taxable Income (Loss) per Income Tax Return (ITR) P(148,550.00) Add: Adjustments/Disallowance Unrecorded gain on sale of motor vehicle P646,148.08 Disallowed professional fee due to non-withholding 55,650.00 Unaccounted rent expense 55,000.00 756,798.08 Total P608,248.08 Add: Net Operating Loss Carry-over (NOLCO) 148,550.00 Adjusted taxable income P756,798.08 Basic Income Tax due (30%) P227,039.42 Less: Tax Credits/payments per return Prior year's excess credits P23,711.67 Creditable Tax Withheld per return 22,000.00 Tax paid per ITR P45,711.67 Less: excess Minimum Corporate Income Tax (MCIT) carried over 8,800.00 Amount carried over to succeeding year 36,911.67 - Basic Tax Due P227,039.42 Add: Interest (4.16.10 to 9.20.13) 155,879.67 TOTAL AMOUNT DUE P382,919.09 II. VALUE ADDED TAX Gross Sales per VAT returns P440,000.00 Add: Income not subjected to VAT P904,467.00 Unaccounted rent expense 55,000.00 959,467.00 VATable sales per audit P1,399,467.00 Output tax P167,936.04 Less: Input tax P31,131.63 Less; Unsupported input tax 31,131.63 - VAT due P167,936.04 Less: Payment P21,668.37 Basic tax due: P146,267.67 Add: Interest (1.26.10 to 9.20.13) 106,835.51 TOTAL AMOUNT DUE P253,103.18 III. EXPANDED WITHHOLDING TAX (EWT) Basic tax due: P5,565.00 Add: Interest (1.26.10 to 9.20.13) 4,095.23 TOTAL AMOUNT DUE P9,660.23 Correspondingly, petitioner filed the instant Petition for Review before this Court on September 20, 2013." In the Answer, 6 the CIR interposed the following as Special and Affirmative Defenses: that a revenue regulation, the issuance of which is authorized by law, has the force and effect of law; that assessments are prima facie presumed correct and made in good faith; that the FDDA dated August 16, 2013 which adopted the findings as laid down in the FAN and its Details of Discrepancies both dated December 10, 2012, reflect the internal revenue liabilities of the Viricson for taxable year 2009 ended as a result of the failure of the Viricson to submit the original documents despite the considerable period of time given to the latter to support its protest and request for reinvestigation; that the failure of Viricson to submit relevant supporting documents made the assessment, against the Viricson final and executory pursuant to Section 228 of the Tax Code; that Viricson should be reminded that taxes are important because it is the lifeblood of the government and so should be calculated without unnecessary hindrance; and that taxes are enforced proportional contribution from persons and property levied by the state, thus no one is entitled to recover that which he must give up to another. 7 CHTAIc On February 7, 2014, Viricson filed its Reply, 8 stating that it admits it made an oversight mistake in paragraph 4 of its Petition for Review when it stated that BIR RDO No. 52 is under the supervision of Revenue Region 7; that nonetheless, the paragraph immediately preceding it shows that petitioner was well aware that BIR RDO No. 52 is under the BIR Revenue Region 8's jurisdiction; that it merely opted not to submit the original receipts and documents as insisted by the CIR; and that it is more than willing to present the originals for comparison. In the Joint Stipulation of Facts and Issues, 9 the parties agreed that the issue to be resolved by the Court in Division is "Whether or not petitioner is liable for the deficiency taxes, namely, income tax, value added tax and expanded withholding tax for taxable year 2009, as embodied in the final decision on disputed assessment dated August 16, 2013." Trial thereafter ensued wherein both parties presented their respective evidence. On December 1, 2015, Viricson filed its memorandum. The CIR failed to file his memorandum. In the Resolution 10 dated December 14, 2015, the Court in Division deemed the case submitted for decision. On January 24, 2017 and April 4, 2017, the Court in Division rendered the questioned Decision and Resolution. cHDAIS Aggrieved, the CIR filed before the Court En Banc this Petition for Review 11 on May 10, 2017. In the Resolution 12 dated June 20, 2017, Viricson was directed by the Court En Banc to file its comment in this case. On August 11, 2017, Viricson filed an "Urgent Motion for Extension of Time to File Comment to the Petition for Review" 13 praying that it be given additional fifteen (15) days or until August 28, 2017 within which to file its Comment. On August 17, 2017, the Court En Banc issued a Minute Resolution 14 granting Viricson's motion. On August 29, 2017, Viricson belatedly filed its "Comment (To the Petition for Review dated May 8, 2017)." 15 In the Resolution dated September 13, 2017, 16 the Court gave due course to the Petition for Review. In view thereof, the instant case was deemed submitted for decision. THE ISSUE The main issue in this case is whether or not the Court in Division erred in partially granting Viricson's Petition for Review, thereby cancelling the deficiency income tax and EWT assessments issued by the CIR against Viricson for taxable year 2009, and ordering Viricson to pay deficiency VAT for taxable year 2009 in the modified amount of P68,914.54, inclusive of 25% surcharge imposed under Section 248 (A) (3) of the NIRC of 1997, as amended. THE ARGUMENTS The CIR contends that the protest letter of Viricson dated January 10, 2013 is defective and void, hence, the assessment issued to Viricson has become final, executory and demandable; and that the exhibits of the respondent should not be given any probative value for being hearsay evidence. On the other hand, Viricson argued that the CIR's arguments that the protest letter is not valid has no basis since mere lapsus calami should not unduly prejudice its claim; that the CIR is estopped from questioning the protest letter because in the administrative proceedings, the CIR has acknowledged the protest letter thrice notwithstanding that the total amount in words was mistakenly indicated in the said protest letter; that it has faithfully complied with the statutory requirements of the Tax Code when it submitted all the documents it earnestly believed to be relevant and supportive of its allegations in the administrative tax protest within sixty days from filing; that the Court in Division has jurisdiction to take cognizance of the case; that nowhere in the Joint Stipulation of Facts and Issue does it appear that the jurisdiction of the Court was put in issue; that the exhibits of Viricson were properly given probative value by the Court in Division. THE RULING OF THE COURT EN BANC Timeliness of the Petition On January 27, 2017, the CIR received the Decision of the Court in Division. On February 9, 2017, the CIR filed a Motion for Reconsideration 17 of the said Decision. On April 4, 2017, the Court in Division issued the assailed Resolution denying the CIR's motion. Said Resolution was received by the CIR on April 11, 2017. From receipt of the said Resolution on April 11, 2017, the CIR has until April 26, 2017 within which to file the Petition for Review. On April 24, 2017, the CIR filed before this Court a "Motion for Extension of Time to File Petition for Review," 18 praying for an extension of fifteen (15) days from April 26, 2017 or until May 11, 2017, within which to file the Petition for Review. On May 10, 2017, this Court issued a Minute Resolution 19 granting the CIR's motion. On May 10, 2017, the CIR filed by registered mail the instant Petition for Review. 20 Hence, this Petition for Review was timely filed. The Court shall now proceed to determine the merits of the Petition for Review. ISHCcT After a careful review of the CIR's arguments and the records of the case, the Court En Banc finds no reason to reverse the assailed Decision and Resolution of the Court in Division. The records of the case show that the Court in Division had fully and exhaustively resolved the issues raised in the petition. The Court En Banc notes that the arguments presented herein are a mere rehash, in fact, quoted verbatim, of the arguments offered by the CIR in his Motion for Reconsideration before the Court in Division. Furthermore, the CIR failed to state any specific error committed by the Court in Division in the assailed Decision and Resolution. Nonetheless, the Court En Banc shall pass upon petitioner's arguments. The protest letter is not fatally defective The CIR insists that Viricson's protest letter is fatally defective because the protest letter relates to a FAN dated December 10, 2012, covering an amount involving "One Million Two Hundred Thirty Five Thousand Five Hundred Twenty One Pesos and Eighty Three Centavos (P595,443.03)." The deficiency Income Tax, VAT and EWT as shown in the FAN issued on December 10, 2012 involved the amounts of 352,813.04, 233,707.69 and 8,922.30 respectively and not One Million Two Hundred Thirty Five Thousand Five Hundred Twenty One and Eighty Three Centavos as stated in Viricson's supposed protest letter. The CIR argues that the discrepancy in the amount cannot be simply set aside by the Court because it affects the validity of the protest. After consideration, the Court En Banc finds the CIR's argument without merit. There is a valid protest to the FAN. The first paragraph of the body of the protest letter 21 dated January 10, 2013 reads: "This letter refers to the Formal Assessment Notice (FAN) addressed to VIRICSON CORPORATION, (Viricson) ,dated 10 December 2012, a copy of which our client received last 12 December 2012, for the collection of alleged internal revenue tax liabilities, amounting to One Million Two Hundred Thirty Five Thousand Five Hundred Twenty One Pesos and Eighty Three Centavos (PhP595,443.03). " A perusal of the protest letter shows that the amount written in the protest letter is merely a typographical error. Such error does not invalidate the protest letter. The said letter reflects the correct amount in numerals subject of the FAN being protested. It should be emphasized that there is only one FAN issued by the BIR with regard to the deficiency tax liabilities of Viricson for taxable year 2009 and this is the FAN alluded to by Viricson in its protest letter. Moreover, the CIR has recognized Viricson's protest letter three times in its reply letters dated January 18, 2013, June 25, 2013 and August 16, 2013. Hence, the CIR is estopped from questioning the validity of the protest letter. As stated in the Court in Division's Resolution: 22 "Respondent's 23 argument is untenable. Section 3.1.5 of Revenue Regulations No. 12-99 requires that " (t)he taxpayer shall state the facts, the applicable law, rules and regulations, or jurisprudence on which his protest is based, otherwise, his protest shall be considered void and without force and effect." A careful examination of petitioner's Protest Letter dated January 10, 2013 would reveal that it is substantially compliant with the said provision. We agree with petitioner 24 that the body of the said protest Letter correctly cites the amounts protested and provides in detail the reason and legal basis therefor. In any event, as correctly pointed out by petitioner, a mere lapsus calami should not prejudice the latter. CAacTH It must be noted that all throughout the administrative proceedings, respondents have acknowledged that the same Protest Letter dated January 10, 2013 from petitioner's counsel referred to the FAN dated December 10, 2012. This is apparent in the communications made by respondent Regional Director. In his letter dated January 18, 2013, respondent Regional Director acknowledged the same Protest Letter dated January 10, 2013 as follows: " This has reference to your letters both dated January 10, 2013 filed on your behalf by your, representative ,Dario, Reyes, Hocson & Viado Law Firm, relative to our Formal Assessment Notice (FAN) dated December 10, 2012, representing deficiency Income Tax, Value Added Tax and Expanded Withholding Tax in the amounts of P352,813.04, P233,707.69 and P8,922.30 respectively, inclusive of increments, for the year 2009. In reply, please be informed that the entire tax docket together with the protest letter will be forwarded to Revenue District Office, (RDO) No. 52-Paraaque City under 1st Indorsement dated Jan 18, 2013 for further evaluation and necessary action. x x x." ( Emphases supplied ) Furthermore, in the letter dated June 25, 2013 of respondent Regional Director, the following statements can be found, to wit: "This is in reference with your letter dated January 10, 2013 relative to the Formal Assessment Notice (FAN) addressed to Viricson Corporation (Viricson) dated December 10, 2012 representing deficiency income tax, value added tax and expanded withholding tax in the amount of P352,813.04, P233,707.69 and P8,922.30 respectively. Sometime(s) on June 2013, we discussed the alleged deficiency as stated in the Formal Assessment Notice (FAN) on your client Viricson Corporation (Viricson). Further, for purpose of verification please submit the original receipts and documents that will justify the dropping of the assessment and to discuss to allow your client to pay the adjusted deficiency taxes due as reflected in Annex 'F' hereof." ( Emphases supplied ) Moreover, the Final Decision on Disputed Assessment (FDDA) dated August 16, 2013, respondent Regional Director is unequivocal that one of the communications he is addressing is the same Protest Letter dated January 10, 2013, to wit: "This has reference to your letters dated January 10, 2013 and March 1, 2013 in reply to our Formal Assessment Notice (FAN) dated December 10, 2012 covering the deficiency Income Tax, Value Added Tax and Expanded Withholding Tax in the amounts of P352,813.04, P233,707,69 and P8,922.30 respectively inclusive of increments for taxable year 2009. In reply, please be informed that your request for reinvestigation has been given due action , however, you failed to submit the original documents as requested in our letter dated June 25, 2013 after a considerable period of time given to support your protest in violation of Section 228, of the Tax Code x x x." With the foregoing acknowledgements, respondents are guilty of estoppel. xxx xxx xxx When respondent Regional Director, acting for the Bureau of Internal Revenue (BIR),acknowledged, not only once, but thrice, that the Protest Letter dated January 10, 2013, as containing the protest of petitioner against the FAN dated December 10, 2012, notwithstanding that it has mistakenly indicated the wrong total amount in words, respondent Regional Director had effectively induced petitioner to believe that there is nothing erroneous in the said Protest Letter. This belief is acted upon by petitioner, and is manifested in the following subsequent communications made by its counsel to the BIR after the filing the same Protest Letter, to wit: CTIEac 1. Letter dated March 11, 2013 (in reply to respondent Regional Director's letter dated January 18, 2013),submitting certain documents in support of the Protest Letter dated January 10, 2013; and 2. Letter dated July 10, 2013 (in response to respondent Regional Director's letter dated June 25, 2013),informing the BIR that petitioner's counsel had advised its client (petitioner) to comply with its request, with a qualification that they will not submit the original receipts and documents. Thus, respondents cannot now assail such Protest Letter dated January 10, 2013 as fatally defective, that would have the effect of making the said FAN final, executory, and demandable." The documents were submitted by Viricson within the allowable period The CIR further argued that the assessment has become final because Viricson has failed to submit the required supporting documents, and that Viricson's reason that they did not submit the original documents for purposes of preserving the documentary exhibits and for future litigation, should not be accepted by the Court. The Court En Banc finds these arguments of petitioner without merit. Viricson has submitted the required documents within the allowable period. The non-submission of original documents to the Bureau of Internal Revenue during the administrative proceedings will not render the assessments final and executory. As correctly ruled by the Court in Division in its Decision: 25 "[P]etitioner 26 is mandated to submit the required documents in support of its protest within sixty (60) days from date of filing of the protest letter, otherwise, the assessment shall become final. Such being the case, since petitioner filed its Protest on January 10, 2013, it had until March 11, 2013 within which to submit the relevant supporting documents to its protest. Records show that on March 11, 2013, petitioner sent to respondent BIR RDO No. 52 a letter together with certain documents in support of its Protest .Petitioner, therefore, was able to submit relevant supporting documents within 60 days from the filing of the said Protest . Moreover, the Court finds that the failure of petitioner to submit original receipts and documents in support of its protest did not render the assessments final, executory, and demandable. Records further indicate that petitioner was not inclined to submit the original receipts and documents, but was willing to present them for purposes of comparison only as evidenced by its letter-reply dated July 10, 2013, x x x." Whether or not the exhibits of Viricson should not be given any probative value for being hearsay evidence Petitioner maintains that Viricson's evidence are hearsay, hence, the same should not be considered by the Court. The Court En Banc agrees with the findings of the Court in Division that Viricson's evidence with regard to the sale of motor vehicle, unaccounted rent expense, proof of general professional partnership, and the circumstances in the allowance of Net-Operating Loss Carry-Over (NOLCO),are in order. SaCIDT As aptly discussed in the assailed Resolution: "On the applicability of the hearsay evidence rule. I. Sale of motor vehicle Respondents assail the probative value of the Deed of Sale dated July 30, 2009, which supposedly reflected petitioners' sale of the 1996 Honda Accord 2.2 A/T, since the signatories thereto, namely, Ricardo T. Singson and Alfredo S. Marbella, were not presented to testify on such relevant and material matter. They point out that the testimony of petitioner's witness, Racquel Singson-Jugo, should have been limited only to those which she has personal knowledge. We disagree with respondents. Section 36 of Rule 130 of the Revised Rules of Court provides the rule on hearsay evidence, to wit: "SEC. 36. Testimony generally confined to personal knowledge; hearsay excluded . 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." Indeed, any evidence, whether oral or documentary, is hearsay if its probative value is not based on the personal knowledge of the witness but on the knowledge of another person who is not on the witness stand. Hearsay evidence, whether objected to or not, has no probative value unless the proponent can show that the evidence falls within the exceptions to the hearsay evidence rule. SCaITA Personal knowledge means those facts which are derived from one's own perception. In this case, however, it was established that Racquel Singson-Jugo has personal knowledge as to the transaction of petitioner in relation to this case. At the hearing held on October 7, 2014, upon cross-examination, Racquel Singson-Jugo testified as follows: "CROSS-EXAMINATION BY ATTY. CARL FITRI A. HUSSIN Q. Ms. witness, why are you here today? xxx xxx xxx MS. JUGO A. Because I wanted to present the judicial affidavit and confirm that it was mine. ATTY. HUSSIN Q. Isn't it the fact that the President of Viricson Corporation is Mr. Ricardo Singson? MS. JUGO A. Yes. ATTY. HUSSIN Q. And he is your father? MS. JUGO A. Yes. ATTY. HUSSIN Q. However, he could not testify today because he passed away last April of 2014? MS. JUGO A. Yes. ATTY. HUSSIN Q. And your knowledge as to the transaction of Viricson in relation to this case is because he is your father and you are familiar with his signature? MS. JUGO A. Yes." Correspondingly, witness Racquel Singson-Jugo is competent to testify as to the due execution and authenticity of the said Deed of Sale dated July 30, 2009. In any event, even granting that the same Deed of Sale dated July 30, 2009 lacks probative value, the same is of no significance insofar as the subject deficiency income tax is concerned. aTHCSE It must be remembered that in the assailed Decision, the Court ruled that respondents' finding that there was " Unrecorded Gain on Sale of Motor Vehicle " in the amount of P646,148.08 cannot be sustained because the same was erroneously arrived at. In other words, the basis for the disallowance of the said finding is not the testimony of Racquel Singson-Jugo vis--vis the contents of the said Deed of Sale dated July 30, 2009, but that the said finding is without foundation. To reiterate, it was error for respondents to treat the amount of P904,467.00 as "Proceeds from sale of motor vehicle," because the same actually represents the "Cost" of the "Retirement/disposals" of "Motor Vehicle" on the basis of petitioner's Audited Financial Statements. II. Unaccounted Rent Expense Respondent likewise raise the same argument, invoking the hearsay evidence rule, as regards the Contract of Lease entered into by petitioner with Hitoshi Sakamoto, and petitioner's BIR Form Nos. 1601-E and 1604-E, since they were never identified and testified to by a credible witness. Suffice it to state that while the said Contract of Lease may fall under the hearsay evidence rule because it was not identified by one who has personal knowledge thereof, the same is still of no consequence. This is because petitioner need not establish that the amount of P55,000.00 is its Rent Expense, since respondents themselves found that it was so, albeit it was allegedly "Unaccounted." Moreover, petitioner is not required to identify its BIR Form Nos. 1601-E and 1604-E, because it did not present the same in evidence. It must be emphasized that in the assailed Decision, reference to the said Forms was based on the BIR Records, not as petitioner's evidence. Nevertheless, even granting that the subject documents have no probative value for being hearsay, this Court's ruling on the matter would still prevail. It must be remembered that in the assailed Decision, the cancellation of the deficiency income tax and VAT assessments, insofar as the Unaccounted Rent Expense in the amount of P55,000.00 is concerned, rests on different grounds. For the deficiency income tax assessment, the same is cancelled because the elements on the imposition of income tax are not present; while the deficiency VAT assessment is cancelled upon the reason that VAT is imposed when one leases goods or properties and is paid therefor, not when one rents out and pays for the rental. III. " Entries in official records " are prima facie evidence of the facts therein stated Regarding the disallowed professional fee due to non-withholding of tax in the amount of P55,650.00, respondent submits that the mere presentation of the Amended Articles of Partnership and Withdrawal of Partner with Amended Articles of Partnership does not operate to give credence to the contents indicated in these documents. According to petitioner, it was incumbent on the part of petitioner to at least present a partner of Sicangco Menor Villanueva and Co.,to prove that such an entity was in fact and in truth a General Professional Partnership. cAaDHT We disagree. xxx xxx xxx In this case, to establish that Sicangco Menor Villanueva and Co. is a general professional partnership, petitioner presented in evidence certified copies of the said firm's amended contracts of partnership or specifically, their Amended Articles of Partnership and Withdrawal of Partner with Amended Articles of Partnership with corresponding certifications issued by the Securities and Exchange Commission that the said documents have been presented to, and entered into the records of, the said office. Thus, on the basis of the afore-quoted Section 44, Section 130, and Section 23, Rule 132, both of the Rules of Court, the contents of the said Amended Articles of Partnership and Withdrawal of Partner with Amended Articles of Partnership ,which effectively shows the formation of Sicangco Menor Villanueva and Co. as a general professional, are prima facie evidence thereof. In other words, there is no need to present as witness at least one of the partners of the said firm. The findings of fact by the CTA in Division are not to be disturbed without any showing of grave abuse of discretion considering that the members of the Division are in the best position to analyze the documents presented by the parties. 27 The Court En Banc notes, however, that the assailed Decision and Resolution failed to impose upon Viricson a deficiency interest at a rate of 20% per annum on the deficiency VAT for taxable year 2009. Section 249 (B) of the NIRC of 1997 provides: Deficiency Interest . Any deficiency in the tax due, as the term is defined in this Code, shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until full payment thereof. Thus, the Court shall impose Deficiency Interest at a rate of twenty percent (20%) on the deficiency VAT for taxable year 2009. WHEREFORE ,premises considered, the Petition for Review is DENIED for lack of merit .The Decision dated January 24, 2017 and Resolution dated April 4, 2017 are hereby AFFIRMED ,with the following modifications: " WHEREFORE ,in light of the foregoing considerations, the instant Petition for Review is hereby PARTIALLY GRANTED .The deficiency income tax and EWT assessments issued by respondents against petitioner for taxable year 2009 are hereby CANCELLED and SET ASIDE .On the other hand, petitioner is ORDERED TO PAY the deficiency VAT for taxable year 2009 in the modified amount of P68,914.54, inclusive of the twenty-five percent (25%) surcharge imposed under Section 248(A)(3) of the NIRC of 1997, as amended, computed as follows: Basic VAT due P55,131.63 Add: 25% Surcharge 13,782.91 Total Deficiency VAT P68,914.54 In addition, Viricson Corporation is ordered to pay: a) Deficiency interest at the rate of twenty percent (20%) per annum on the deficiency VAT computed from January 25, 2010 until December 31, 2017 pursuant to Section 249(B) of the NIRC of 1997, as amended. b) Delinquency interest at the rate of 20% per annum on the total amount of P68,914.54 and on the 20% deficiency interest which have accrued as afore-stated in (a),computed from September 20, 2013 until December 31, 2017 pursuant to Section 249 (C) of the NIRC of 1997, as amended; and HCaDIS c) Delinquency interest at the rate of 12% on the unpaid amount (basic tax plus surcharge plus interests computed in (a) from January 1, 2018 until the amount is fully paid pursuant to the relevant provisions of the Republic Act No. 10963 or more commonly known as the TRAIN law, which took effect on January 1, 2018. SO ORDERED." SO ORDERED. (SGD.) MA. BELEN M. RINGPIS-LIBAN Associate Justice Juanito C. Castaeda, Jr.,Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Catherine T. Manahan, JJ. ,concur. Roman G. del Rosario, P.J. ,with Concurring & Dissenting Opinion. Separate Opinions DEL ROSARIO , P.J.,concurring and dissenting opinion: I concur with the ponencia in denying for lack of merit the Petition for Review filed by the Commissioner of Internal Revenue. The ponencia holds that as of January 1, 2018, the date of effectivity of Republic Act No. 10963 (TRAIN Law),the imposable interest should be 12%, but that prior to January 1, 2018 or until December 31, 2017 , the rate of interest under the old law (the National Internal Revenue Code [NIRC] of 1997, as amended) in esse remains effective. With due respect, the unconditional application of the TRAIN Law upon its effectivity on January 1, 2018 may not be subjected to an interpretation that results in its modification nay subtle amendment. Section 249, as amended by the TRAIN Law, reads: "Sec. 75. Section 249 of the NIRC, as amended, is hereby further amended to read as follows: 'Sec. 249. Interest . '(A) In General . There shall be assessed and collected on any unpaid amount of tax, interest at the rate of double the legal interest rate for loans or forbearance of any money in the absence of an express stipulation as set by the Bangko Sentral ng Pilipinas from the date prescribed for payment until the amount is fully paid: Provided , That in no case shall the deficiency and the delinquency interest prescribed under Subsections (B) and (C) hereof, be imposed simultaneously. AHCETa '(B) Deficiency Interest . Any deficiency in the tax due, as the term is defined in this Code, shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof, or upon issuance of a notice and demand by the Commissioner of Internal Revenue, whichever comes earlier. (C) Delinquency Interest . x x x 'xxx xxx xxx.'"" Pursuant to Section 87 of the TRAIN Law, the TRAIN Law became effective on January 1, 2018. It must be emphasized that deficiency interest and delinquency interest on tax are based on law. When the law is amended during the pendency of a case, and there being a specific provision as to when the amendment becomes effective, there is no reason for the Court not to apply the law as amended. Parenthetically, the TRAIN Law made a substantial modification on the rate of deficiency interest and delinquency interest, and the mode by which such interests may be computed. A comparison of the provision of Section 249 on interest under the NIRC and its amendment under the TRAIN Law would readily highlight the radical incongruity, viz .: cHaCAS Section 249, NIRC of 1997, as amended Section 249, NIRC, as amended by the TRAIN Law Deficiency Interest 20% per annum ,from the date prescribed for its payment until the full payment thereof Deficiency Interest 12% per annum ,from the date prescribed for its payment until: (i) the full payment thereof; or (ii) upon issuance of a notice and demand by the Commissioner of Internal Revenue, whichever comes earlier Provided that in no case shall the deficiency and delinquency interest be imposed simultaneously Delinquency Interest 20% per annum ,until fully paid Delinquency Interest 12% per annum ,until fully paid The comparative provision of Section 249, before and after its amendment by the TRAIN Law vis--vis the imposition of interest in the ponencia ,is graphically shown hereunder: From the foregoing, it is readily apparent that Section 249 of the NIRC of 1997, as amended by the TRAIN Law, incorporates three (3) provisos that cannot be applied without setting aside the original version of Section 249 of the NIRC of 1997: First ,the TRAIN Law prescribes 12% interest, which is double the legal interest rate for loans or forbearance of money, while the old provision prescribes the rate of 20% per annum; Second ,under the TRAIN Law, the deficiency interest is computed from the date prescribed for its payment: (i) until the full payment thereof; or (ii) until the issuance of a notice and demand by the CIR, whichever comes earlier. The old version confined its computation strictly from the date prescribed for its payment until the full payment thereof; and Third ,the TRAIN Law proscribes the simultaneous imposition of deficiency interest and delinquency interest, which the old version allows. In other words, since the TRAIN Law clearly became effective on January 1, 2018 ,there can be no logical and practical approach than to apply it in accordance with its clear language. Thus, the computation of deficiency interest should now be in accordance with the TRAIN Law, that is at 12% and only until demand; while delinquency interest at the rate also of 12% should be from the due date appearing in the notice of demand until full payment. In computing deficiency and delinquency interests, the provisions of the TRAIN Law are not being applied retroactively. At the time that petitioner is adjudged liable to pay the deficiency taxes with corresponding deficiency interest and delinquency interest, the prevailing provisions are that of the TRAIN Law which specifically state that there shall be no simultaneous imposition of deficiency and delinquency interests. Thus, the Court has no recourse but to apply the same. To be sure, there is nothing in the TRAIN Law which provides that the rate and manner of computing deficiency and delinquency interests shall be applied only to assessments issued after TRAIN Law's effectivity. It is clearly and plainly provided that upon TRAIN Law's effectivity, "in no case shall the deficiency and delinquency interests be imposed simultaneously ." In view of the effectivity of the TRAIN Law on January 1, 2018, the amendatory provisions of the TRAIN Law on the imposition of deficiency and delinquency interests must be applied in determining the amount of petitioner's tax liability. All told, I VOTE to: (i) DENY the Commissioner of Internal Revenue's Petition for Review posted on May 10, 2018; (ii) MODIFY the January 24, 2017 Decision of the Court in Division; and (iii) ORDER Viricson Corporation to PAY the Bureau of Internal Revenue the amount of P68,914.54, inclusive of twenty-five percent (25%) surcharge imposed under Section 248(A)(3) of the NIRC of 1997, as amended, and to PAY the Bureau of Internal Revenue the following: (a) Deficiency interest at the rate of 12% per annum on the basic deficiency VAT, computed from January 25, 2010, the date prescribed for payment, until December 12, 2012 , the date of Viricson Corporation's receipt of the Final Assessment Notice dated December 10, 2012, pursuant to Section 249(B) of the NIRC of 1997, as amended by the TRAIN Law. (b) Delinquency interest at the rate of 12% per annum on the total amount of P68,914.54 and on the 12% deficiency interest which have accrued as aforestated in item (a) above, computed from January 10, 2013 , 1 until the amount is fully paid, pursuant to Section 249(C) of the NIRC of 1997, as amended. aICcHA Footnotes 1. Respondent in CTA Case No. 8709. 2. Rollo CTA EB Case No. 1647, pp. 16-44. 3. Rollo ,pp. 48-58. 4. Respondent in this case. 5. In the BIR Records (page 46),the Second Request for Presentation of Records was dated June 15, 2010. 6. Ibid .,pp. 163-181. 7. Citations omitted. 8. Docket, CTA Case No. 8709, pp. 111-118. 9. Filed by the parties on July 7, 2014. 10. Ibid .,p. 515. 11. Rollo CTA EB Case No. 1647, pp. 5-14, with Annexes. 12. Ibid .,pp. 68-69. 13. Ibid .,pp. 79-81. 14. Ibid .,p. 78. 15. Ibid .,pp. 85-109. 16. Ibid .,pp. 111-112. 17. Docket, CTA Case No. 8709, pp. 551-557. 18. Rollo ,CTA EB No. 1647, pp. 1-2. 19. Ibid .,p. 4. 20. Ibid .,pp. 5-14, with Annexes. 21. Docket, CTA Case No. 8709, pp. 351-354. 22. Resolution, pp. 3-6. Citations omitted. 23. Petitioner in this case. 24. Respondent in this case. 25. Decision, pp. 11-12. Citations omitted. 26. Respondent in this case. 27. Republic of the Philippines, represented by the Commissioner of Internal Revenue vs. Team (Phils.) Energy Corporation (formerly Mirant (Phils.) Energy Corporation) ,G.R. No. 188016, January 14, 2015, citing Sea-Land Service, Inc. vs. Court of Appeals , G.R. No. 122605, April 30, 2001. DEL ROSARIO, P.J.,concurring and dissenting opinion: 1. The due date appearing in the Assessment Notice dated December 10, 2012.