G.R. No. 263794 - COMMISSIONER OF INTERNAL REVENUE, VS. MARILY DEVELOPMENT CORPORATION.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , the instant Petition for Review is GRANTED . Accordingly, the assessment issued by respondent [CIR] against petitioner [MDC] for its alleged deficiency income tax, VAT, EWT and WTC for calendar year 2006 in the aggregate amount of [PHP] 8,104,781.30 is CANCELLED and SET ASIDE. SO ORDERED . [14] (Emphasis in the original) The CIR filed a Motion for Reconsideration and/or New Trial. [15] It argued that the issuance of the LoA was never raised as an issue during trial; hence, it dispensed with the presentation of the LoA as evidence. However, to prove that the 2006 assessment was based on a valid LoA, the CIR attached LOA No. 2000-000158676, which was received by MDC on July 12, 2007, in its motion. [16] The CIR prayed that the September 11, 2020 Decision be set aside, or in the alternative, that the case be re-opened to allow the CIR the opportunity to present the LoA. With respect to the issue of prescription, the CIR argued that the 10-year period should apply because MDC filed a false income tax return and failed to file a VAT return. On February 11, 2021, the CTA Division issued a Resolution [17] denying the Motion for Reconsideration and/or New Trial. It held that the CIR effectively waived its right to present evidence when it manifested that it would no longer offer any evidence or witness during the trial. At any rate, the LoA sought to be introduced was not identified by a witness or incorporated in the case records. Further, there was no compelling or persuasive reason to reopen the case as the LoA is neither newly discovered nor omitted due to fraud, accident, mistake, or excusable negligence. Finally, concerning prescription, the CTA Division reiterated that the CIR failed to present any evidence of fraud on the part of MDC; hence, the ordinary three-year period shall apply. Thus: WHEREFORE , premises considered, respondent's [CIR] Motion for Reconsideration and/or New Trial is DENIED for lack of merit. SO ORDERED . [18] (Emphasis in the original) Unperturbed, the CIR elevated the matter to the CTA En Banc. [19] The CIR argued that it enjoys the presumption of regularity in the performance of official duties and the presumption of correctness of a tax assessment. MDC did not present any evidence to overcome these presumptions; hence, the validity and correctness of the assessments shall stand. The CIR reiterated that MDC never raised the issue of the lack of a LoA for the taxable year 2006. The nonpresentation of evidence on its part cannot be taken against it because the State cannot be put in estoppel. At any rate, the FAN and Preliminary Collection Letter attached to MDC's Petition for Review before the CTA Division referred to a certain LOA No. 158676 dated July 5, 2007. The BIR records also confirm the issuance of LOA No. 158676 with proof of receipt by MDC's representative, Lourdes Pantola, on July 12, 2007. [20] As regards prescription, the CIR alleged that MDC failed to present and/or offer as evidence its income tax