Amendment to Department Administrative Order No. 99-57

EN BANC [C.T.A. EB CASE NO. 613 . July 6, 2011.] (C.T.A. CASE NO. 6950) PHILIPPINE VETERANS BANK , petitioner , vs .COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION UY , J p : On May 25, 2011, petitioner filed its Manifestation alleging that despite repeated requests from the Office of the Assistant Commissioner of the Bureau of Internal Revenue for the issuance of the corresponding Authority to Cancel Assessment (ATCA),the same is yet to be issued considering that ATCAs are being issued by batches. Hence, petitioner alleges that it will just submit the said ATCA as soon as it receives the same. Although the said Manifestation was NOTED in the Resolution dated May 26, 2011, 1 the Court cannot indefinitely wait for the issuance of the required Authority to Cancel Assessment (ATCA). Thus, the Court is constrained to consider petitioner's Motion for Reconsideration filed on September 23, 2010, SUBMITTED for resolution, without respondent's comment despite notice. Hence, this resolution. A perusal of petitioner's Motion for Reconsideration shows that the issues and arguments raised therein are mere rehash of its Petition for Review which was sufficiently discussed and passed upon in the assailed Decision dated September 1, 2009. To reiterate, the issue in this case had already been settled by the Supreme Court in the case of China Banking Corporation vs. Commissioner of Internal Revenue , 2 which ruled that special savings account is subject to documentary stamp tax. Upon finding that petitioner's Special Savings Accounts (SSAs) are in fact certificates of deposits drawing interest, We rule that the same are subject to documentary stamp tax as provided for in Section 180 of the National Internal Revenue Code (NIRC) of 1997, as amended. CDTHSI As to petitioner's contention that its deficiency tax liability pertaining to stock dividends in the total amount of P5,324,975.00 covered by Assessment No. DST-97-000017 should be deemed paid already, We rule in the negative. Records show that a Termination Letter dated June 7, 2010 was issued by Assistant Commissioner Nestor Valeroso of the Large-Taxpayers Service-Regular, considering petitioner's tax liability for taxable year 1997 amounting to P5,324,975.00, among others, as closed and terminated in connection with its availment of the BIR's abatement program. However, although petitioner was able to present the original copy of the aforesaid Termination Letter, petitioner still failed to submit an Authority to Cancel Assessment (ATCA). A careful scrutiny of the provisions of Revenue Memorandum Order No. (RMO) 23-2006 issued on October 6, 2006 prescribing the guidelines and procedures on the one-time administrative abatement of all penalties/surcharges and interest on delinquent accounts and assessments (preliminary or final, disputed or not) as of June 30, 2006 as implemented by Revenue Regulations 15-2006, readily reveals that the procedures in the availment of the abatement program require the issuance of the ATCA. Section 4 of RMO 23-2006 categorically provides the following procedures to be observed: " SECTION 4. PROCEDURES IN THE AVAILMENT OF THE ABATEMENT PROGRAM. xxx xxx xxx 4.7 Within fifteen (15) days after payment of the basic tax, the following procedures shall be followed: 4.7.1 Attached proof of payment (Revenue Official Receipt/BIR Form 0605 with machine validation) and the application form to the docket of the case; 4.7.2 Prepare Termination Letter (Annex B) for every tax type for the signature of the Commissioner of Internal Revenue; 4.7.3 Prepare Authority to Cancel Assessment (Form 17.58-ATCA) to cancel assessments for penalties (surcharge, interest and compromise penalty),following the existing rules and procedures in RDAO 6-2001, to be signed only after the Termination Letter has been issued ; 4.7.4 Thereafter, the docket of the case, page numbered and with Table of Contents, shall be forwarded to the Office of the Commissioner for the signature of the Termination Letter, through the Deputy Commissioner Operations Group, Attention: The Assistant Commissioner for Collection;" (Emphasis Ours) DaEATc Furthermore, the importance of the issuance of ATCA was emphasized under subsequent regulations issued by the Secretary of Finance with the recommending approval of the Commissioner of Internal Revenue implementing Section 204 (B) of the National Internal Revenue Code (NIRC) of 1997, as amended. More particularly, RR 15-2007 was promulgated on November 29, 2007 containing an abatement of penalties/surcharges and interest on disputed/litigated assessments, covering assessment notices duly issued as of November 29, 2007, involving taxable year ending December 31, 2005 and prior years. Section 5 of said regulation states: " SEC. 5. APPROVAL OF ABATEMENT . ... Upon approval by the Commissioner, the tax case is accordingly terminated through the issuance of a Termination Letter (Annex "B"),and Authority to Cancel Assessment (ATCA) pertinent to that portion of the assessment (i.e.,the penalties/interest) abated. The Termination Letter and the Authority to Cancel Assessment shall be signed by the BIR Official who signs the same on audit cases that have been protested administratively or judicially." (Emphasis and italics Ours) Thus, without the issuance of the required ATCA, the application for abatement is not yet final. It must be noted that, in the interest of substantial justice, petitioner was given ample opportunity to obtain the required ATCA, but to no avail. Sad to note, this Court cannot wait indefinitely for the BIR to issue the required ATCA pending the resolution of this case, nor can it merely depend on the Termination Letter submitted by petitioner to grant said motion. Likewise, worthy to mention that in this Court's Decision promulgated on September 3, 2010, We affirmed in toto the ruling of the Court in Division in CTA Case No. 6950 ordering petitioner to pay respondent the total amount of P73,955,391.94, representing deficiency documentary stamp taxes (DSTs) on Special Savings Deposit and stock dividends for taxable year 1997, detailed as follows: Documentary Stamp Tax 1997 Special Savings Deposit P37,144,688.40 Stock Dividends 5,324,975.00 Basic Documentary Stamp Tax Due 42,469,663.40 Interest 31,485,728.54 TOTAL P73,955,391.94 ============ Considering that petitioner's availment of the abatement program as stated in the Termination Letter issued on June 7, 2010 only covers the basic tax for taxable year 1997 in the amount of P5,324,975.00 representing "DST-on Increase in Capitalization", 3 at most, only its corresponding penalties/surcharges and interest thereof are deemed cancelled in the present case. Therefore, since petitioner is definitely still liable to pay the amount of P37,144,688.40 (plus interest), representing DST of its Special Savings Deposit for taxable year 1997, petitioner cannot solely invoke the said Termination Letter as its basis in seeking a reversal of the Decision dated September 23, 2010 and a declaration that Assessment Notice No. DST-97-000017 as deemed already paid. aTEACS For all the foregoing, finding no compelling reason or substantial argument to merit a modification or reversal of our Decision dated September 3, 2010, this Court has no alternative but to deny petitioner's motion. WHEREFORE ,premises considered, petitioner's "Motion for Reconsideration" is hereby DENIED for lack of merit. SO ORDERED . (SGD.) ERLINDA P. UY Associate Justice Ernesto D. Acosta, P.J.,Juanito C. Castaeda, Jr.,Lovell R. Bautista, Caesar A. Casanova, Olga Palanca-Enriquez and Esperanza R. Fabon-Victorino, JJ., concur. Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., are on leave. Footnotes 1. Docket, p. 198. 2. G.R. No. 172359, October 2, 2009. 3. Described as Stock Dividends in Assessment Notice No. DST-97-000017, and in the Decision promulgated on September 1, 2009 in CTA Case No. 6950.