G.R. No. 180390 - PRUDENTIAL BANK, VS. COMMISSIONER OF INTERNAL REVENUE.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , the instant petition is hereby PARTIALLY GRANTED. The subject Decision of the Commissioner of Internal Revenue dated December 28, 2001 assessing petitioner of deficiency documentary stamp taxes is hereby AFFIRMED insofar as the Savings Account Plus is concerned. The deficiency assessment on petitioner's repurchase agreements and treasury bills are hereby CANCELLED and SET ASIDE. Accordingly, petitioner is hereby ORDERED TO PAY respondent the reduced amount of P6,355,340.63 plus 20% delinquency interest from August 23, 1999 up to the time such amount is fully paid pursuant to Section 249 (c) of the [old] NIRC, as amended, covered by Assessment Notice No. ST-DST-95-0042-99 as deficiency documentary stamp tax for the taxable year 1995, recomputed as follows: Savings Account Plus P5,084,272.50 Add: 25% Surcharge 1,271,068.13 TOTAL P6,355,340.63 SO ORDERED . [12] Petitioner moved for partial reconsideration but the same was denied by the First Division of the CTA in its Resolution dated May 22, 2006. [13] Thus, petitioner appealed to the CTA En Banc. Ruling of the Court of Tax Appeals En Banc On March 30, 2007, the CTA En Banc denied the appeal for lack of merit. It affirmed the ruling of its First Division that petitioner's SAP is a certificate of deposit bearing interest subject to DST under Section 180 of the old National Internal Revenue Code (NIRC), as amended by Republic Act (RA) No. 7660. [14] Petitioner sought reconsideration but later moved to withdraw the same in view of its availment of the Improved Voluntary Assessment Program (IVAP) pursuant to Revenue Regulation (RR) No. 18-2006 [15] in relation to RR No. 15-2006 [16] and Revenue Memorandum Order (RMO) No. 23-2006. [17] On October 30, 2007, the CTA En Banc rendered a Resolution [18] denying petitioner's motion to withdraw for non-compliance with the requirements for abatement. It found that the amount paid for purposes of the abatement program was not in accordance with Revenue Memorandum Circular (RMC) No. 66-2006, [19] which provides that the amount to be paid should be based on the original assessment or the court's decision, whichever is higher. [20] It also noted that petitioner failed to comply with RMO No. 23-2006, specifically with the requirement to submit the letter of termination and authority to cancel assessment signed by the respondent. [21] In the same Resolution, the CTA En Banc denied petitioner's motion for reconsideration for lack of merit. [22] Issues Hence, the present recourse by petitioner raising the following issues: I. WHETHER X X X PETITIONER'S [SAP] WITH A HIGHER INTEREST IS SUBJECT TO DOCUMENTARY STAMP TAX. II. WHETHER X X X THE CTA EN BANC ERRED IN NOT ALLOWING THE WITHDRAWAL OF THE PETITION AND/OR CANCELLATION OF THE DST ASSESSMENT ON PETITIONER'S [SAP] ON THE GROUND THAT PETITIONER HAD ALREADY PAID AND SUBSTANTIALLY COMPLIED WITH RR NO. 15-2006 AND RMO NO. 23-2006. [23] Petitioner's Arguments Petitioner contends that its SAP is not subject to D