Victoria Manufacturing Corp. v. Commissioner of Internal Revenue

THIRD DIVISION [G.R. No. 217731. August 9, 2023.] VICTORIA MANUFACTURING CORPORATION , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . NOTICE Sirs/Mesdames : Please take notice that the Court, Third Division, issued a Resolution dated August 9, 2023 , which reads as follows: "G.R. No. 217731 (Victoria Manufacturing Corporation, Petitioner v. Commissioner of Internal Revenue, Respondent ). At the crosshairs of this Petition for Review on Certiorari 1 are the Decision 2 and the Resolution 3 of the Court of Tax Appeals (CTA) En Banc , which affirmed the liability of Victoria Manufacturing Corporation (petitioner) for deficiency income tax and expanded withholding tax (EWT) amounting to P2,178,187.91 for taxable year 2006 and denied the motion for reconsideration 4 thereof, respectively, in CTA EB Case No. 1094. The material operative facts of the case are indisputable. SDAaTC Petitioner is a domestic corporation organized and existing under Philippine laws, with principal office located at Ever-Gotesco Compound, Ortigas Avenue Extension, Barangay Sta. Lucia, Pasig City. On the other hand, the Commissioner of Internal Revenue (respondent) is the duly appointed head of the Bureau of Internal Revenue (BIR) vested with the authority to administer all laws pertaining to internal revenue taxes and has the jurisdiction to decide on disputed tax assessments. 5 On August 22, 2007, respondent issued Letter of Authority No. 00065134, which authorized Revenue Officer Lilibeth M. Nazario to examine petitioner's books of accounts and other accounting records. Subsequently, respondent sent petitioner a Notice for Informal Conference. 6 Thereupon, respondent issued a Preliminary Assessment Notice (PAN) 7 assessing petitioner for purported deficiency income tax, deficiency value-added tax (VAT), and deficiency EWT for taxable year 2006 I. DEFICIENCY INCOME TAX Amount Net income per return P3,030,054.00 Add: Adjustments per investigation Undeclared sales/income P17,475,424.92 Income payments not subjected withholding 2,414,051.00 Unaccounted sources of income 11,757,702.80 31,647,178.72 Taxable income per investigation P34,677,232.72 Income tax due thereon (35%) P12,137,031.45 Less: Allowable tax credits/payments: Prior years excess credits P520,611.00 Income tax payments per returns 88,108.00 Creditable tax withheld per BIR Form No. 2307 1,058,097.00 Total P1,666,816.00 Less: Excess tax credits carried-over to the succeeding year 652,861.00 1,013,955.00 Deficiency income tax P11,123,076.45 Add: 20% interest p.a. (04.17.07 to 12.04.09) 5,863,232.63 TOTAL AMOUNT DUE P16,986,309.08 =========== II. DEFICIENCY VALUE-ADDED TAX (VAT) Taxable sales/receipts per VAT returns P129,546,681.95 Add: Adjustments per investigation: Unaccounted sources of income 11,757,70220 Taxable sales/receipts per investigation P141,304,384.75 Output tax due thereon: January P11,305,006.2 10% 1,130,500.60 February-December 2006 129,999,378.78 12% P16,730,426.06 15,599,925.45 Less: Allowable tax credits/payments: VAT payments per ITS P2,427,807.00 Current input tax 13,603,071.19 Total P16,030,878.19 Less: Excess input tax credits carried over to the succeeding period 690,482.55 15,340,395.64 Deficiency value-added tax P1,390,030.42 Add: 20% Interest p.a. (01.26.07 to 12.04.09) 794,411.90 TOTAL AMOUNT DUE P2,184,442.32 ============ III. DEFICIENCY EXPANDED WITHHOLDING TAX (EWT) Amount EWT rate EWT due Superintendence P2,414,051.00 10% P241,405.10 Less: EWT remittances per returns - Deficiency EWT P241,405.10 Add: 20% Interest p.a. (01.16.07 to 12.04.09) 139,287.44 TOTAL AMOUNT DUE P380,692.54 ============ On December 21, 2009, petitioner protested the PAN. 8 Soon after, respondent issued a Formal Letter of Demand 9 against petitioner, attaching all the Assessment Notices dated January 4, 2010 for supposed deficiencies covering taxable year 2006 in income tax (i.e. , P17,364,188.94), VAT ( i.e. , P2,231,665.27), and EWT ( i.e. , P388,893.70), computed as follows: AIDSTE I. DEFICIENCY INCOME TAX Amount Net income per return P3,030,054.00 Add: Adjustments per investigation Undeclared sales/income P17,475,424.92 Income payments not subjected withholding 2,414,051.00 Unaccounted sources of income 11,757,702.80 31,647,178.72 Taxable income per investigation P34,677,232.72 Income tax due thereon (35%) P12,137,031.45 Less: Allowable tax credits/payments: Prior years excess credits P520,611.00 Income tax payments per returns 88,108.00 Creditable tax withheld per BIR Form No. 2307 1,058,097.00 Total P1,666,816.00 Less: Excess tax credits carried-over to the succeeding year 652,861.00 1,013,955.00 Deficiency income tax P11,123,076.45 Add: 20% interest p.a. (04.17.07 to 12.04.10) 6,241,112.49 TOTAL AMOUNT DUE P17,364,188.94 ============ II. DEFICIENCY VALUE-ADDED TAX (VAT) Taxable sales/receipts per VAT returns P129,546,681.95 Add: Adjustments per investigation: Unaccounted sources of income 11,757.702.80 Taxable sales/receipts per investigation P141,304,384.75 Output tax due thereon: January P11,305,006.02 10% 1,130,500.60 February-December 2006 129,999,378.78 12% 15,599,925.45 P16,730,426.06 Less: Allowable tax credits/payments: VAT payments per ITS P2,427,807.00 Current input tax 13,603,071.19 Total P16,030,878.19 Less: Excess input tax credits carried over to the succeeding period 690,482.55 15,340,395.64 Deficiency value-added tax P1,390,030.42 Add: 20% Interest p.a. (01.26.07 to 12.04.10) 841,634.85 TOTAL AMOUNT DUE P2,231,665.27 ============ III. DEFICIENCY EXPANDED WITHHOLDING TAX (EWT) Amount EWT rate EWT due Superintendence P2,414,051.00 10% P241,405.10 Less: EWT remittances per returns - Deficiency EWT P241,405.10 Add: 20% Interest p.a. (01.16.07 to 02.04.10) 147,488.60 TOTAL AMOUNT DUE P388,893.70 ============ Disclaiming against the aforementioned formal demand letter, petitioner filed a letter of protest. 10 cSEDTC On November 2, 2010, petitioner lodged a petition for review before the CTA arguing that respondent did not act on its protest letter within 180 days, as prescribed by law. The last day to act thereon fell on October 3, 2010. 11 Docketed as CTA Case No. 8187, the case was raffled off to the CTA Special First Division, which rendered a Decision 12 on June 28, 2013. The CTA Special First Division disposed in this wise: WHEREFORE , in view of the foregoing considerations, the instant Petition for Review is hereby PARTIALLY GRANTED . The deficiency VAT assessment issued by respondent against petitioner for taxable year 2006 in the amount of P2,231,665.27 is hereby CANCELLED and WITHDRAWN . However, the deficiency income tax and EWT assessments for taxable year 2006 are partially UPHELD in the modified amount of P2,178,187.91, inclusive of the 25% surcharge imposed under Section 248(A)(3) of the NIRC of 1997, as amended, computed as follows: Basic Tax 25% Surcharge Total Income Tax P1,501,145.22 P375,286.31 P1,876,431.52 EWT 241,405.10 60,351.28 301,756.38 Total P1,742,550.32 P435,637.59 P2,178,187.91 =========== =========== =========== In addition, petitioner is hereby ORDERED TO PAY the following: (a) deficiency interest at the rate of twenty percent (20%) per annum on the basic deficiency income tax of P1,501,145.22 computed from April 15, 2007 and EWT of P241,405.10 computed from January 15, 2007 until full payment thereof pursuant to Section 249(B) of the NIRC of 1997, as amended; and (b) delinquency interest at the rate of twenty percent (20%) per annum on the total amount of P2,178,187.91 and on the deficiency interest which have accrued as afore-stated in (a) computed from February 4, 2010 until full payment thereof, pursuant to Section 249(C) of the NIRC of 1997, as amended. SO ORDERED. 13 Both petitioner and respondent sought reconsideration of the foregoing adjudication. However, their pleas were denied for lack of merit. 14 Disgruntled, petitioner sought recourse 15 with the CTA En Banc , raising in issue its liability for deficiency income tax as well as the EWT for taxable year 2006. 16 In the impugned Decision, the CTA En Banc found petitioner's appeal bereft of merit. It ruled that the CTA Special First Division already fully and exhaustively resolved the issues it had raised, which were a mere rehash of the arguments in its motion for partial reconsideration. 17 As there were no new matters or issues raised by petitioner, the CTA En Banc found no reason to overturn the pronouncements of the Special First Division. Thus, the CTA En Banc resolved WHEREFORE , premises considered, the instant Petition for Review is hereby DENIED for lack of merit. SO ORDERED . 18 Still and all, petitioner's motion for a reconsideration of the foregoing Decision was denied in the assailed Resolution. 19 Now, petitioner seeks refuge before this Court via the instant Petition. At the vortex of petitioner's recourse is the question of whether it is liable for deficiency income tax and EWT. TIADCc Petitioner contends that it is not liable for deficiency income amounting to P1,876,431.53. For one , its superintendence expense should not have been disallowed as deductible expense. For another , its MERALCO refund is not a taxable income. Petitioner likewise argues that it is not liable for deficiency EWT. To be sure, its superintendence expense referred to salaries, 13th month pay, other compensation and the union dues of its supervisory employees, which were properly subjected to withholding tax on compensation. 20 In refutation, respondent filed its Comment 21 insisting petitioner's liability for deficiency income tax as a result of its underdeclaration of taxable income and overstatement of allowable deductions for taxable year 2006. Moreover, petitioner is equally liable for deficiency EWT owing to its failure to withhold the required tax on income payments to other persons recorded as superintendence expense. On February 24, 2016, petitioner filed its Reply. 22 We rule to deny the Petition. Both the CTA Special First Division and En Banc held petitioner to be liable for deficiency income tax and EWT. Petitioner failed to convince the tax court that the superintendence expense pertained to payments to its employees with supervisory responsibilities. 23 Moreover, it failed to prove that it treated the MERALCO refunds as reduction of its claimed deductible expense for electric consumption for the year 2006. 24 This Court maintains the factual findings of the tax court. To start with, in bringing forth the issues, petitioner raises a question of fact, which is not within the scope of review on certiorari under a Rule 45 petition. An appeal under Rule 45 must raise only questions of law. 25 Section 6 of the Rules of Court states that a review of appeals filed before this Court is "not a matter of right, but of sound judicial discretion." 26 The Rules of Court further requires that only questions of law should be raised in petitions filed under Rule 45 since factual questions are not the proper subject of an appeal by certiorari . It is not this Court's function to once again analyze or weigh evidence that has already been considered in the lower courts. 27 There is a question of law when it seeks to determine whether the legal conclusions of the lower courts from a given set of facts are correct, i.e. , what is the law, given a particular set of circumstances? On the other hand, there is a question of fact when the issue involves the truth or falsity of the parties' allegations. The test in determining if an issue is a question of law or fact is whether there is a need to evaluate evidence to resolve the issue. If there is a need to review the evidence or witnesses, it is a question of fact. If there is no need, it is a question of law. ETHIDa In addition, the factual findings of the lower courts are accorded respect and are beyond this Court's review. This rule, however, admits exceptions 1) when the conclusion is a finding grounded entirely on speculation, surmises or conjectures; 2) when the inference made is manifestly mistaken, absurd or impossible; 3) where there is a grave abuse of discretion; 4) when the judgment is based on a misapprehension of facts; 5) when the findings of fact are conflicting; 6) when the Court of Appeals (CA), in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; 7) the findings of the CA are contrary to those of the trial court; 8) when the findings of fact are conclusions without citation of specific evidence on which they are based; 9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and 10) the finding of fact of fact of the CA is premised on the supposed absence of evidence and is contradicted by the evidence on record. 28 These exceptions are equally applicable to petitions for review filed before this Court involving tax cases. However, a party filing the petition has the burden of showing convincing evidence that the appeal falls under one of the exceptions. A mere assertion is not sufficient. 29 This Court has consistently held that the findings of fact of the CTA are accorded respect and are deemed final and conclusive. 30 The CTA is a highly specialized body specifically created for the purpose of reviewing tax cases. 31 Because of this expertise, the findings of the CTA will not ordinarily be reviewed absent a showing of gross error or abuse on its part. The findings of fact of the CTA are binding on this Court and in the absence of strong reasons for this Court to delve into facts, only questions of law are open for determination. 32 In Commissioner of Internal Revenue v. Tours Specialists, Inc. , 33 the Court emphasized that "the well-settled doctrine is that the findings of facts of the [CTA] are binding on this Court and absent strong reasons for this Court to delve into facts, only questions of law are open for determination. x x x [t]he factual findings of the CTA are binding upon this court and can only be disturbed on appeal if not supported by substantial evidence." 34 In the case at bench, the CTA Special First Division ruled that petitioner failed to sufficiently prove that its superintendence expense pertained to payments to its employees with supervisory responsibilities and that it treated the MERALCO refunds as reduction of its claimed deductible expense for electric consumption for the year 2006. 35 This was affirmed by the CTA En Banc . 36 The CTA Special First Division ratiocinated: b. Income payments not subjected to withholding tax P2,414,051.00 Based on the finding that petitioner's "Superintendence" expense in the amount of P2,414,051.00 was not subjected to EWT as required under Revenue Regulations No. 2-98, as amended, respondent disallowed the amount of P2,414,051.00 as deduction from petitioner's gross income pursuant to Section 34 (K) of the NIRC of 1997, as amended. Petitioner argues that the account "Superintendence" pertains to payments to its employees with supervisory responsibilities and as such, was subjected to withholding tax on compensation. Petitioner's accountant, Alicia L. Acoba, and its Human Resources Department Personnel Assistant, Ria de Asis, explained that petitioner's payroll is divided into the following categories: 1. Direct Labor (DL); 2. Indirect Labor (IL); 3. Office Staff (OS); and 4. Supervisory Employees (X). As represented, the account "Superintendence" includes salaries, 13th month pay, other compensation, SSS and PhilHealth contributions, and union dues of petitioner's supervisory employees. Specifically, per alphalist of employees attached to the Annual Information of Income Taxes Withheld on Compensation for the year 2006, petitioner's employees who are paid for "Superintendence" are the following: ATICcS Name NON-TAXABLE TAXABLE TOTAL 13th Month, Other Benefits SSS/PHIC Other Cont. Salaries & Other Compensation Salaries & Other Compensation Romel Belarmino P19,432.97 P8,450.00 P5,222.31 P195,011.28 P228,116.56 Pablo Bilen 27,388.61 6,340.10 5,844.75 110,695.78 150,269.24 Leowill Domasing 25,791.44 5,806.70 3,773.80 102,929.89 138,301.83 Dominador Duenos 25,637.96 5,956.80 3,606.60 105,266.99 140,468.35 Wilfredo Espora 24,190.53 5,619.40 3,391.40 99,167.87 132,369.20 Mark Ian Figuracion 3,893.37 2,462.40 - 52,017.39 58,373.16 Cezar Florece 7,772.19 4,129.30 - 89,358.03 101,259.52 Antonio Gimao 27,673.99 6,315.00 3,896.50 112,679.25 150,564.74 Arleen Jurilla 24,234.70 5,460.90 3,576.40 95,657.74 128,929.74 Mario Liwanagan 25,330.81 5,877.50 3,526.40 104,440.21 139,174.92 Gino Lotino 25,561.08 6,589.90 3,404.00 117,225.52 152,780.50 Eduardo Medrano 24,635.67 5,744.20 5,289.60 99,483.80 135,153.27 Arturo Milano 27,812.38 6,677.60 3,896.50 120,252.26 158,638.74 Ma. Cecilia Navarroza 23,381.03 6,081.50 3,395.00 107,193.91 140,051.44 Rodolfo Rigor 23,601.59 5,381.70 3,416.40 94,215.35 126,615.04 Wilfredo Valera 28,019.98 6,494.30 3,896.60 116,947.93 155,358.81 Jeanne Vengua 23,656.83 5,735.90 3,395.00 100,553.34 133,341.07 Salvador Ramos - - - - - TOTAL P388,015.13 P99,123.20 P59,531.26 P1,823,096.54 P2,369,766.13 =========== =========== =========== =========== =========== It should be noted that the name of Salvador Ramos cannot be found in the alphalist of employees. Moreover, petitioner's Payroll Analysis, as summarized below, does not tally with the total amount recorded in the "Superintendence" account: aDSIHc Exhibit Period Salaries and Benefits X-E X-F X-H X-K Total BBB 12/22/05 to 1/7/06 P16,713.67 P44,487.69 P16,028.26 P25,781.19 P103,010.81 CCC 1/8/06 to 1/25/06 17,089.54 40,017.55 14,926.61 23,881.24 95,914.94 DDD 1/26/06 to 2/9/06 13,939.33 29,974.59 14,554.04 23,413.76 81,881.72 EEE 2/10/06 to 2/22/06 11,970.40 24,995.18 11,398.86 16,961.94 65,326.38 FFF 2/23/06 to 3/9/06 13,062.21 30,744.06 12,696.53 17,383.72 73,886.52 GGG 3/10/06 to 3/25/06 15,261.38 33,727.70 11,991.96 20,193.85 81,174.89 HHH 3/26/06 to 4/6/06 10,550.39 23,330.71 6,799.39 17,565.43 58,245.92 III 4/7/06 to 4/22/06 15,055.10 34,177.58 10,556.24 24,121.41 83,910.33 JJJ 4/23/06 to 5/9/06 14,159.65 34,183.41 9,881.59 21,505.97 79,730.62 KKK 5/10/06 to 5/25/06 13,766.52 34,921.47 8,982.43 26,535.28 84,205.70 LLL 5/26/06 to 6/8/06 13,179.35 30,093.77 8,152.90 18,725.72 70,151.74 MMM 6/9/06 to 6/24/06 14,544.32 31,444.07 12,668.64 18,274.00 76,931.03 NNN 6/25/06 to 7/8/06 9,737.04 26,880.18 11,330.01 15,890.99 63,838.22 OOO 7/9/06 to 7/25/06 13,681.25 29,101.90 8,619.51 17,377.22 68,779.88 PPP 6/26/06 to 8/9/06 12,989.10 32,813.41 11,365.98 12,176.94 69,345.43 QQQ 8/10/06 to 8/25/06 14,536.74 35,163.64 11,079.68 12,996.69 73,776.75 RRR 8/26/06 to 9/9/06 13,401.07 34,422.28 13,721.42 15,464.47 77,009.24 SSS 9/10/06 to 9/23/06 13,038.92 29,358.12 12,092.48 14,283.14 68,772.66 TTT 9/24/06 to 10/7/06 12,119.51 27,696.32 10,869.54 11,500.31 62,185.68 UUU 10/9/06 to 10/25/06 16,290.18 36,233.07 15,553.30 16,752.60 84,829.15 VVV 10/26/06 to 11/9/06 15,190.95 31,319.27 19,473.51 13,386.34 79,370.07 WWW 11/10/06 to 11/24/06 13,397.77 34,485.31 24,093.34 19,023.53 90,999.95 XXX 11/25/06 to 12/9/06 11,691.58 32,461.07 18,429.22 17,607.23 80,189.10 YYY 12/10/06 to 12/21/06 7,403.15 26,440.49 15,099.08 12,549.56 61,492.28 TOTAL P322,769.12 P768,472.84 P310,364.52 P433,352.53 P1,834,959.01 =========== =========== =========== =========== =========== The Court is not fully convinced by petitioner's explanation pertaining to its "Superintendence" account in the amount of P2,414,051.00. Thus, respondent's finding that the said amount is subject to the 10% EWT rate imposed on payments of professional fees under Section 2.57.2(A) of RR No. 2-98, as amended, shall be upheld in line with the well-settled rule that tax assessments by tax examiners are presumed correct and made in good faith, with the taxpayer having the burden of proving otherwise. Failure to present proof of error in the assessment will justify the judicial affirmance of said assessment. HEITAD Consequently, the amount of P2,414,051.00 shall be disallowed from petitioner's claimed deductible expenses pursuant to Section 34(K) of the NIRC of 1997, as amended, which states that: "(K) Additional Requirements for Deductibility of Certain Payments. Any amount paid or payable which is otherwise deductible from, or taken into account in computing gross income or for which depreciation or amortization may be allowed under this Section, shall be allowed as a deduction only if it is shown that the tax required to be deducted and withheld therefrom has been paid to the Bureau of Internal Revenue in accordance with this Section, Sections 58 and 81 of this Code." 37 xxx xxx xxx 2.) MERALCO refund P1,874,408.00 Respondent's examiner likewise assessed petitioner for unaccounted source of income for the monthly refunds it received from MERALCO in the aggregate amount of P1,874,408.00. Petitioner explains that the MERALCO refund was not made by any actual payment of cash to petitioner but through monthly deductions from its monthly MERALCO bills. The deducted refunds were net of 25% withholding taxes, which were remitted by MERALCO to the BIR. A summary of petitioner's MERALCO refunds for the year 2006 is shown hereunder: Exhibit Period Service ID No. Amount of Refund (net of 25% withholding tax) ZZ 1/18/06 to 2/17/06 800935801-5 P- YY 1/18/06 to 2/17/06 800935901-8 - XX 2/17/06 to 3/21/06 800935801-5 - WW 2/17/06 to 3/21/06 800935901-8 - VV 3/21/06 to 4/19/06 800935801-5 192,790.20 UU 3/21/06 to 4/19/06 800935901-8 - TT 4/19/06 to 5/19/06 800935801-5 32,131.70 SS 4/19/06 to 5/19/06 800935901-8 417,121.46 RR 5/19/06 to 6/19/06 800935801-5 32,131.70 QQ 5/19/06 to 6/19/06 800935901-8 59,588.78 PP 6/19106 to 7/19/06 800935801-5 32,131.70 OO 6/19/06 to 7/19/06 800935901-8 59,588.78 NN 7/19/06 to 8/19/06 800935801-5 32,131.70 MM 7/19/06 to 8/19/06 800935901-8 59,588.78 LL 8/19/06 to 9/19/06 800935801-5 32,131.70 KK 8/19/06 to 9/19/06 800935901-8 59,588.78 JJ 9/19/06 to 10/20/06 800935801-5 32,131.70 II 9/19/06 to 10/20/06 800935901-8 59,588.78 HH 10/20/06 to 11/20/06 800935801-5 32,131.70 GG 10/20/06 to 11/20/06 800935901-8 59,588.78 FE 11/20/06 to 12/20/06 800935801-5 32,131.70 EE 11/20/06 to 12/20/06 800935901-8 59,588.78 TOTAL P1,284,086.72 As indicated in petitioner's bills for Service ID Nos. 800935801-5 and 800935801-8 for the periods March 21, 2006 to April 19, 2006 and April 19, 2006 to May 19, 2006, respectively, petitioner had the option to claim the subject refund in the form of a check or through automatic credit to its next bill. Based on the monthly MERALCO bills submitted, petitioner opted for the latter. The refunds, net of 25% withholding tax, were deducted from the electric charges billed to petitioner for the current month. DETACa Petitioner points out that because of the MERALCO refund, its deductible expense for electricity was significantly reduced, thus, resulting in more income tax being paid by petitioner for the year 2006. However, petitioner failed to present documents, such as detailed general ledger, vouchers, trial balance, breakdown of its claimed expense for electricity as appearing in its annual income tax return and other documents which would establish that petitioner actually treated the MERALCO refunds as reduction of its claimed deductible expense for electric consumption for the year 2006. Hence, the MERALCO refund of P1,874,408.00 shall be considered as petitioner's taxable income pursuant to Section 32(A) of the NIRC of 1997, as amended. 38 xxx xxx xxx Deficiency Expanded Withholding Tax Respondent computed deficiency EWT assessment in the amount of P388,893.70 as follows: Amount EWT Rate EWT Due Superintendence P2,414,051.00 0.10 P241,405.10 Less: EWT remittance per returns - Deficiency EWT 241,405.10 Add: 20% Interest p.a. (1.16.07 to 12.4.09) 147,488.60 Total Amount Due P388 893.70 ========= As discussed earlier, petitioner has not sufficiently proven that its "Superintendence" account was indeed paid to its employees with supervisory positions. Moreover, it was not able to fully account for and reconcile the amount P2,414,051.00 supposedly subjected to withholding tax on compensation. Consequently, respondent's deficiency EWT assessment should be upheld. 39 The findings above were affirmed by the CTA En Banc , thusly: After a careful and thorough evaluation and consideration of the records of the case, the Court finds no merit in the Petition for Review. The records of the case show that the CTA Special First Division had already fully and exhaustively resolved the issues in relation to the arguments raised in the Petition which We noted are mere rehash of the arguments proffered by petitioner in its Motion for Partial Reconsideration dated July 23, 2013. aScITE There being no new matters or issues raised in the Petition for Review before us, the Court En Banc finds no cogent reason to reverse the Assailed Decision dated June 28, 2013 and the Assailed Resolution dated November 12, 2013 of the CTA Special First Division. 40 In questioning these findings of the CTA, petitioner poses questions of fact. To determine whether it is liable for deficiency income tax and EWT requires an evaluation of the documents and other evidence presented by the parties. Thus, it is incumbent upon them to prove that the exceptions previously mentioned are present in this case. Regrettably, the parties failed to show that this case falls under any of the exceptions mentioned. CAIHTE Veritably, the CTA Special First Division and En Banc based their findings after examining all the pieces of evidence presented by petitioner. This notwithstanding, petitioner failed to show that the CTA committed any gross error or abuse in making this factual determination. There is likewise no showing that the findings are conflicting or based on speculation, conjecture, or misapprehension or mistake of facts. Accordingly, this Court finds no cogent reason to disturb the factual findings of the CTA. However, in view of the passage of Republic Act No. 10963, otherwise known as the TRAIN 41 Law, and pursuant to the Court's ruling in the more-recent case in Aces Philippines Cellular Satellite Corporation v. The Commissioner of Internal Revenue , 42 the simultaneous imposition of deficiency and delinquency interests is no longer allowed. Instead, interest equal to the prevailing legal rate as set by the Bangko Sentral ng Pilipinas shall accrue on any amount of unpaid tax until it is fully paid. 43 Section 6 of Revenue Regulations No. 21-2018, 44 which implements the TRAIN Law provides: SECTION 6. Transitory Provision. In cases where the tax liability/ies or deficiency tax/es became due before the effectivity of the TRAIN Law on January 1, 2018, and where the full payment thereof will only be accomplished after the said effectivity date, the interest rates shall be applied as follows: Period Applicable Interest Type and Rate For the period up to December 31, 2017 Deficiency and/or delinquency interest at 20% For the period January 1, 2018 until full payment of the tax liability Deficiency and/or delinquency interest at 12% The double imposition of both deficiency and delinquency interest under Section 249 prior to its amendment will still apply insofar as the period between the date prescribed for payment until December 31, 2017. Taking these into account, deficiency and delinquency interests under the 1997 Tax Code 45 shall be imposed simultaneously but only until December 31, 2017. Beginning January 1, 2018 or upon the TRAIN Law's effectivity, only deficiency interest at the prevailing legal rate of 12% shall accrue on the unpaid amount of tax until fully paid. In sum, the CTA En Banc did not commit any error in upholding the assessment against petitioner. However, the computation of interests must be modified in accordance with the amendments introduced by the TRAIN Law, as implemented by Revenue Regulations No. 21-2018. HTcADC WHEREFORE , the Petition for Review on Certiorari is hereby DENIED for lack of merit. The Decision dated November 12, 2014 and the Resolution dated March 30, 2015 of the Court of Tax Appeals En Banc in CTA EB No. 1094 are AFFIRMED with MODIFICATION relative to the interest computation, in the petitioner Victoria Manufacturing Corporation is ORDERED TO PAY the following: (1) Deficiency interest at the rate of twenty percent (20%) per annum on the basic deficiency income tax of P1,501,145.22 computed from April 15, 2007 and expanded withholding tax of P241,405.10 computed from January 15, 2007 until December 31, 2017 pursuant to Section 249 (B) of the National Internal Revenue Code of 1997; and (2) Delinquency interest at the rate of twenty percent (20%) per annum on the total amount of P2,178,187.91 and on the deficiency interest which has accrued as stated in (1) above, computed from February 4, 2010 until December 31, 2017 pursuant to Section 249 (C) of the National Internal Revenue Code of 1997; and (3) Delinquency interest at the rate of twenty percent (20%) per annum on the total amount [ i.e. , basic tax plus surcharge and interests computed in paragraphs (1) and (2)] computed from January 1, 2018 until full payment thereof, pursuant to Section 249 (C) (3) of the 1997 Tax Code, as amended by Republic Act No. 10963. SO ORDERED." By authority of the Court: (SGD.) MISAEL DOMINGO C. BATTUNG III Division Clerk of Court Footnotes 1. Rollo , pp. 3-22. 2. Id . at 24-34. The November 12, 2014 Decision of the CTA En Banc was penned by Associate Justice Caesar A. Casanova, with the concurrence of Presiding Justice Roman G. del Rosario and Associate Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Cielito N. Mindaro-Grulla, Amelia R. Cotangco-Manalastas, and Ma. Belen M. Ringpis-Liban. Associate Justice Esperanza R. Fabon-Victorino was on leave. 3. Id . at 36-38. The March 30, 2015 Resolution of the CTA En Banc was penned by Associate Justice Caesar A. Casanova, with the concurrence of Presiding Justice Roman G. del Rosario and Associate Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Esperanza R. Fabon-Victorino, Amelia R. Cotangco-Manalastas, and Ma. Belen M. Ringpis-Liban. Associate Justice Cielito N. Mindaro-Grulla was on leave. 4. Id . at 36. 5. See id . at 25. 6. Id . See also the Decision dated June 28, 2013 of the CTA Special First Division in CTA Case No. 8187 penned by Associate Justice Erlinda P. Uy, with the concurrence of Associate Justice Esperanza R. Fabon-Victorino, id . at 198. 7. Id . at 25-26, 39-41; id . at 198-199. The Preliminary Assessment Notice was signed by OIC Assistant Regional Director Jonas D.P. Amora. 8. Id . at 26; id. at 199. 9. Id . at 26-27 and 42-44; id. at 199-200. 10. Id . at 27; id . at 200. 11. Id . at 28; id . 12. Id . at 197-225. The Decision dated June 28, 2013 was penned by Associate Justice Erlinda P. Uy, with the concurrence of Associate Justice Esperanza R. Fabon-Victorino. 13. Id . at 223-224. 14. Id . at 227-229. The November 12, 2013 Resolution of the Court of Tax Appeals Special First Division was penned by Associate Justice Erlinda P. Uy, with the concurrence of Associate Justice Esperanza R. Fabon-Victorino. 15. Id . at 31, CTA En Banc Decision dated November 12, 2014. 16. Id . at 32. 17. Id . at 33. 18. Id . 19. Id . at 36-38. 20. Id . at 9-15, Petition for Review on Certiorari . 21. Id . at 234-250, Comment. 22. Id . at 304-309, Reply. 23. Id . at 214-217, CTA Special First Division Decision. 24. Id . at 220, CTA Special First Division Decision. 25. Section 1. Filing of petition with Supreme Court . A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari . The petition shall raise only questions of law which must be distinctly set forth. 26. Section 6. Review discretionary . A review is not a matter of right, but of sound judicial discretion, and will be granted only when there are special and important reasons therefor. x x x 27. See Phil. Airlines, Inc. (PAL) v. Commissioner of Internal Revenue , 823 Phil. 1043, 1063 (2018). 28. See Sps. Miano v. Manila Electric Company , 800 Phil. 118, 123 (2016). 29. Phil. Airlines, Inc. (PAL) v. Commissioner of Internal Revenue , supra note 27 at 1065. 30. Id . 31. Phil. Refining Co. v. CA , 326 Phil. 680, 689 (1996). 32. Id . 33. 262 Phil. 437 (1990). 34. Id . at 442. Citations omitted. 35. Rollo , pp. 214-217, CTA Special First Division Decision dated June 28, 2014. 36. Id . at 33, CTA En Banc Decision dated November 12, 2014. 37. Id . at 214-217. 38. Id . at 219-220. 39. Id . at 223. 40. Id . at 33. 41. TAX REFORM FOR ACCELERATION AND INCLUSION. Took effect on January 1, 2018. 42. G.R. No. 226680, August 30, 2022. 43. Id . 44. Regulations Implementing Section 249 (Interest) of the NIRC of 1997, as Amended under Section 75 of the TRAIN Law, Revenue Regulations No. 21-2018 dated September 14, 2018. 45. SEC. 249. Interest . (A) In General. There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment until the amount is fully paid. (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. (C) Delinquency Interest. In case of failure to pay: (1) The amount of the tax due on any return to be filed, or (2) The amount of the tax due for which no return is required, or (3) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the tax.