Revised Implementing Rules and Regulations R.A. No. 9160, as Amended by R.A. No. 9194

EN BANC [C.T.A. EB CASE NO. 595 . February 16, 2011.] (C.T.A. Case No. 7947) TRIUMPH INTERNATIONAL (PHILIPPINES),INC. , petitioner , vs .COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION CASTAEDA, JR. , J p : For resolution is petitioner's Motion for Reconsideration filed by registered mail on October 14, 2010 seeking the reversal of the Court En Banc's Decision dated September 27, 2010 dismissing the Petition. The dispositive portion of the assailed decision reads: " WHEREFORE, premises considered, the Petition is hereby DISMISSED. The Resolutions dated October 5, 2009 and February 3, 2010 are AFFIRMED. SO ORDERED. " On October 22, 2010, petitioner filed an Urgent Motion to Set Hearing on Oral Arguments on the petitioner's Motion for Reconsideration. In a Resolution dated November 17, 2010, the Court En Banc resolved that instead of conducting a hearing on oral arguments of petitioner's motion for reconsideration, respondent is given a period of fifteen (15) days to file her Comment and upon filing of the comment of expiry of the period for filing the same, both parties shall file their respective memoranda also within a period of fifteen (15) days. However, on December 10, 2010, petitioner filed a Motion for Partial Reconsideration on the November 17, 2010 resolution reiterating that the case be set for oral arguments. In a resolution dated January 4, 2011, the Court En Banc resolved to deny the same. Hence, this Resolution. Petitioner's Motion is unmeritorious. Contrary to petitioner's contention, respondent's Formal Letter of Demand dated March 31, 2008 assessing it of 2004 income and VAT deficiencies of P319,912,118.35 is supported by factual and legal bases pursuant to Section 228 of the National Internal Revenue Code of 1997 (NIRC of 1997) as shown in the Details of Discrepancies attached to the assessment. The Final Disposition on Disputed Assessment is also anchored on factual and legal bases, specifically, petitioner's failure to submit additional documents, also under Section 228 of the NIRC of 1997 and affirmation of respondent's previous findings in the Formal Letter of Demand dated March 31, 2008 and Details of Discrepancies thereof. The fact that petitioner duly protested the assessment clearly bolsters the fact that it was informed of the reasons supporting respondent's findings on its alleged 2004 income and VAT liabilities. Petitioner further asserts in its protest and earlier in its reply to the informal conference that it was submitting additional documents; however, it failed to do so. Pertinent excerpts of the protest and reply to the informal conference read: HDCTAc ...Our objection is based on the ground that we have valid year 2004 supporting documents and returns filed and submitted to BIR. Disallowed Expenses, which constitute the huge part (412M) of Deficiency Income Tax, can be adequately substantiated and photocopies of supporting documents will be sent to your office as soon as we have completed filing and binding them in our working dockets. ... 1 Clearly, petitioner was afforded due process when it was ordered to present additional supporting documents to dispute the assessment. It cannot at this stage evade liability by asserting that it is not bound by the principle of exhaustion of administrative remedies for its failure to interpose as defenses the issues on prescription in the issuance of the final assessment notice for 2004 VAT deficiency and lack of factual and legal basis for 2004 income and VAT liabilities. The doctrine of exhaustion of administrative remedies holds that mistakes, abuses or negligence committed in the initial steps of an administrative activity or by an administrative agency may be corrected by higher administrative authorities, and not directly by courts. 2 Corollarily, the principle of exhaustion of administrative remedies requires that before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed of the means of administrative processes afforded to him. If a remedy is available within the administrative machinery of the administrative agency, then this alternative should first be utilized before resort can be made to the courts. This is to enable such body to review and correct any mistakes without the intervention of the court. 3 DCAEcS It bears stressing that the Commissioner of Internal Revenue should always indicate to the taxpayer in clear and unequivocal language what constitutes his final determination of the disputed assessment. 4 This would enable the taxpayer concerned to determine when his or her right to appeal to the tax court accrues. 5 In this case, the final decision on disputed assessment and not the final notice before seizure is the reckoning point to appeal before the Court of Tax Appeals. As a jurisdictional requirement, the taxpayer adversely affected by a decision of the Commissioner should file his appeal with the tax court. Otherwise, the failure to appeal within the prescribed period bars the same and renders the questioned decision, final and executory. 6 Considering that the other grounds invoked by the petitioner had already been extensively discussed in the assailed Decision, and no other new matters were raised in the Motion, the Court finds no cogent reason to modify, much less reverse the same. WHEREFORE, petitioner's Motion for Reconsideration is hereby DENIED for lack of merit. cDECIA SO ORDERED. (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Ernesto D. Acosta, P.J.,Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., concur. Footnotes 1. Docket, CTA Case No. 7947, pp. 30 & 222. 2. Leonardo U. Flores v. Honorable Raul S. Gonzalez ,G.R. No. 188197, August 3, 2010. 3. Acuzar v. Jorolan, et al. ,G.R. No. 178878, April 7, 2010, 617 SCRA 519, 527. 4. Oceanic Wireless Network, Inc. v. Commissioner of Internal Revenue ,G.R. No. 148380, December 9, 2005, 477 SCRA 205, 211. 5. Allied Banking Corporation v. Commissioner of Internal Revenue ,G.R. No. 175097, February 5, 2010, 611 SCRA 692, 702. 6. Surigao Electric Co. v. Court of Tax Appeals, L-25289, June 28, 1974, 57 SCRA 523, 528.