CONTENTS

a. Definition, Concept and purpose of Taxation..................1

Southern Luzon vs DSWD, GR 199669........................2
Drug Store Association v. National Council on Disability 2
b. Nature and Characteristic of Taxation............................2
d. Theory and Basis of Taxation.........................................3
e. Principles of a Sound Tax System...................................4
DIAZ vs Secretary of Finance and CIR.........................5
f. Scope and Limitations of Taxation..................................5
i. Planters Products, Inc. vs. Fertiphil Corporation, G.R. No. 66006, 14 March 2008 8
ii. ABAKADA Guro Party List vs. Ermita, GR No. 168056, 1 September 2005 8
iii. Gerochi vs. Department of Energy, G.R. No. 159796, 17 July 2007 8
iv. Tolentino vs. Sec. of Finance, GR No. 115455, 25 Aug 1994 8
v. PAGCOR vs. BIR, GR No. 172087, 15 March 2011. 8
vi. CIR vs. CA,YMCA Gr NO. 123043.........................9
vii. CIR VS. DLSU, GR NO,196596, 9 Nov 2016.........9
viii. La Sallian Educational Innovators Found. vs. CIR,GR No. 202792, 27 Feb 2019 9
ix. Abra Valley College Inc. vs. Aquino, GR No. L-39086, June 15, 1988; 9
x. Lung Center of the Philippines vs. QC, G.R. No. 144104. June 29, 2004 9
xi. Mandanas, et al. v. Executive Secretary, et al., GR Nos. 199802 and 208488, 3 July 2018;MR: 10 April 2019 9
g. Stages or Aspects of Taxation.......................................10
h. Definition, Nature and Characteristics of Taxes...........10
i. Requisites of a Valid Tax..............................................10
j. Tax vs. Other Forms of Exactions.................................10
i. Chevron Philippines, Inc. vs. BCDA, G.R. No. 173863, 15 September 2010 11
ii. Angeles University Foundation vs. Angeles City, G.R. No. 189999, 27 June 2012 11
k. Kinds of Taxes..............................................................12
l. Construction and Interpretation................................12
i. CIR vs. Puregold Duty Free, Inc. G.R. No. 202789, June 22, 2015 12
m. Doctrines in Taxation..................................................12
People v Judy Anne Santos Y Lumagui, CTA Crim Case No. O-012, January 16, 2012 15
i. CIR vs. Solidbank Corporation, GR No. 148191, 25 Nov. 2003; 17
ii. Swedish Match Philippines, Inc. vs. City of Manila, GR NO. 181277, 3 July 2013 17
iii. Nursery Care Corporation et al vs. Acevedo, G.R. No. 180651, July 30, 2014 18
iv. CIR v. S.C. Johnson and Son, Inc., GR No. 127105, 25 June 2009 18
v. Deutsche Bank AG Manila Branch vs. CIR, GR No. 188550, 19 Aug 2013 18
vi. CBK Power Company Limited vs. CIR, G.R. Nos. 193383-84, January 14, 2015; 18

Tabuzo, Tax Remedies

 vii. CIR vs. Estate of Toda, GR No. 147188, 14 Sept 2004 18
viii. Domingo vs. Carlitos 8 SCRA 443.......................19
ix. Air Canada vs. CIR, January 11, 2016, G.R. No. 169507 19
x. CS Garment, Inc., vs. CIR, G.R. No. 182399. March 12, 2014: 19
n. Taxpayer’s Suit.............................................................19
i. Remulla vs Maliksi, G.R. No. 171633, Sept. 18, 201319
ii. SOF, et al v. Lazatin And Ecozone Plastic Enterprises Corporation, G.R. No. 210588, November 29, 2016 20
B. ORGANIZATION AND FUNCTIONS OF THE BUREAU OF INTERNAL REVENUE 20
ii. Specific provisions to be contained in rules and regulations 20
ii. Power of the CIR to interpret tax laws and decide tax cases 22
i. Philamlife vs. DOF, G.R. No. 210987, November 24, 2014 22
ii. Clark Investors And Locators Association, Inc. vs SOF, G.R. No. 200670, July 06, 2015 22
iii. Banco De Oro vs. RP, 2015....................................23

A. DEFINITION, CONCEPT AND PURPOSE OF RA 9422 was enacted granting PWD a 20% discount on
TAXATION. purchase of medicine , tax deduction scheme and adopted
where the establishment may deduct discount granted from
 TAXATION
gross income based on net cost of goods sold.The petitioner
It is the inherent power by which the sovereign through its alleged that the mandate of the PWD discount is an invalid
law making body raises revenue to defray the necessary exercise of eminent domain
expenses of the government . It is a way to apportion the
cost of government among those who are privileged to The petitioners then filed a case questioning the law as the
experience its benefit. mandate of PSWD discount as it is an invalid exercise of
eminent domain. The 20% discount on the purchase of
SOUTHERN LUZON VS DSWD, GR 199669. medicine for senior citizen is a legitimate exercise of police
power. Police power is the power vested to the legislature
The petitioners, engaged in the drug store operation to make , ordain and establish laws that are not repugnant
questioned the constitutionality of RA 9257 assailing that to the constitution of general welfare of the public
the imposition of senior citizens discount is taking without
just compensation. The issue here is whether RA 9257 must
Eminent Domain Police Power
be declared as unconstitutional for it takes private property
without just compensation. Property rights of private 1. It is the right of the state 1. Property rights of
individuals are subject to the restraint of the state for the to take private property for individuals must yield to
public use with just the general welfare and
promotion of general welfare and safety among others.
compensation prosperity to the state . It
Here the senior citizen discount is aimed to improve the is the power of the state of
welfare of senior citizen who at their age are not likely to promote public welfare
be gainfully employed. The imposition of senior citizen through the restraint and
discount is an imposition of police power. In the exercise of regulation of liberty and
police power, the rights of private individuals are subject to prosperity
the restraint of the state and its purpose is to promote Here, the PWD mandatory discount is a valid exercise of
general welfare, public health and safety among others. police power. The term public welfare is not defined solely
Here, the twenty percent discount is intended to improve as to the use of the public but pertains to public benefit or
the lives of citizen convenience.

DRUG STORE ASSOCIATION V. NATIONAL B. NATURE AND CHARACTERISTIC OF

COUNCIL ON DISABILITY TAXATION

a. Inherent Attribute of Sovereignty

Tabuzo, Tax Remedies

1. The power of taxation is an essential and inherent
reasonable
attribute of sovereignty belonging as a matter of right to margin
every independent government . The power to tax is an
attribute of sovereignty it may be exercised without the Imposing Government Government or
authority under its private entity as
grant by the constitution.
sovereign an attribute of
authority ownership
2. The Constitutional provision relating to the power of
taxation do not operate as a grant of power of taxation to Effect of non- Business may be Prohibits use of
the Government but instead merely constitutes as limitation payment continued but facility.
the state may
upon the power which would otherwise be practically imposed penalty
without limit.

b. Legislative
As to Tax License Fee
1. Taxation is a power that is purely legislative in power.
This means that the legislature primarily lies the discretion Purpose Revenue Regulation
Purpose purpose
to determine the nature, kind, object , extent , coverage and
situs of taxation. Basis Power of Police power
taxation
2. However ,where tax measure becomes unconscionable Amount Unlimited Limited to cost
and unjust as to amount to the confiscation of property, the of license and
court will not hesitate to strike it down for despite all its expenses of
plentitude the power to tax cannot override constitutional surveillance and
proscriptions. regulation
Non- Does not Makes the
Purpose: Compliance necessarily business illegal
make the act
1. To raise revenue for the support and the existence of the business or
government profession as
illegal
2. Taxes may be levied with a regulatory purpose To Limitation Subject to Not subject to
provide a means for rehabilitation and stabilization of constitutional or such limitation
threatened industry which is imbued with public interest. inherent
limitation
3. Taxation may be used to reduce social inequality the Collecting National Local
progressive system of taxation prevents the concentration power Government and Government
of wealth in the hands of few individuals the LGU

4. Taxation promotes protectionism

5.The grant of tax exemption and incentives encourages Taxation Police Eminent
economic growth Power Domain
Purpose 1. Primarily Promote Facilitate the
The power of Taxation as the power to destroy to raise public state need of
revenue purpose property for
Taxation is the power that interferes with the personal and through public use
property rights of the people and takes from them a portion regulation
of their property for the support of the government. Hence, Amount of No limit Limited to No exaction
it must be exercised with caution and minimize injury to exaction the cost of private
the proprietary rights of the taxpayer. regulation property is
taken for
public
Tax Toll Fee purpose
Purpose 1. Raising 1. Benefits No direct No direct Direct
revenue to fund Reimbursement received benefit benefit a benefit
public for cost and merely healthy results in the
expenditures expenses plus

Tabuzo, Tax Remedies

 lifeblood of the nation through which the government
general economic form of just
benefit of standard of compensatio agencies continue to operate.
protection society is n
attended Further, the NIRC expressly provides that no court shall
have the authority to grant an injunction or restrain the
Impairment Contracts Contracts Contracts
collection of NIRC imposed by the Code.
may not be may be may be
impaired impaired impaired
Exception:
Transfer of Taxes paid No transfer Transfer is
property become a but only in effected in 1. When it jeopardize the interest of the
rights part of restraint of favor of the government and the taxpayer.
public exercise state
funds
2. When it pertains to the collection of local
Scope All person All person Only upon a taxes.
property property particular
and excises and property. b. Necessity theory- Taxation is a necessary burden to
privilege preserve the States sovereignty and a means to give the
Note: citizenry an army to resist aggression, a navy to defend its
shores from invasion, a corps of civil servants to serve,
1. The designation given by the municipal authorities do public improvements for the enjoyment of the citizenry,
not decide whether the imposition is properly a license fee and those which come within the State’s territory and
or a license tax facilities and protection which a government is supposed to
provide.
2. If the generation of revenue is the primary purpose and
regulation is merely incidental, the imposition is a tax, but Q: Can taxes be paid in cash or kind?
if the regulation is the primary purpose the fact that revenue A: There is no law payment of cash and in
is incidentally raised does not make the imposition a tax. kind ,then the law is valid. Therefore, the law is
valid
3. The amount may be so large as to itself show that the
purpose is to raise revenue and not to regulate c. Benefits Received theory- If an individual or
entity is being taxed by the government, there should
a. Useful and beneficial: Amount determines the services rendered in return. The relationship between the
purpose taxpayer and the government is reciprocal. Hence, the
government should provide some sort of service or return
b. Inimical and dangerous: The free may be very
from the payment made by the taxpayer.
large without it being necessarily a tax.
Basis: Reciprocal duties of protection and support. In return
D. THEORY AND BASIS OF TAXATION for contribution, the taxpayer receives general advantages
and protection which the government affords the taxpayer
1. Theory: The existence of a government is a necessity, it
and his property. ( why can the state impose)
cannot continue without means to pay its expenses, hence
it has the right to compel citizens to contribute. ( Why is Inherent Limitations
there a need.) ( LBN)

a. Lifeblood Theory: Taxes are the lifeblood of the
government and so should be collected without unnecessary
hindrance. On the other hand, such collection should be
made in accordance with law as any arbitrariness will
negate the very reason for government itself. It is therefore
necessary to reconcile the apparently conflicting
interests of the authorities and the taxpayers so that the
real purpose of taxation, which is the promotion of the
common good, may be achieved.
The government cannot and must not be estopped
particularly in matters that involve taxes. Taxes are the
1. Taxation must be for public purpose. It must be for the
support of the state, for some recognized objective of the
government to protect the welfare of the community.
2. Taxation is inherently legislative. Only the legislature
has the full discretion as to persons, property or occupation
or business to be axed.
3. Taxation is inherently territorial- This maybe
exercised within the territorial jurisdiction of the taxing
authority ( w/ exception income my Ph abroad and

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domestic corporations)Taxes are only to be imposed within
the jurisdiction of the taxing authority.
i. No state may tax anything not within its
jurisdiction without violating the due process clause of the
constitution. The taxing power of a state does not extend
beyond its territorial limits, but within such limit it may tax
person , property , income or business.
4. Taxation is subject to international comity- A state
must recognize the generally accepted tenets of
international law among which the principle of sovereign
inequality among state exit. : This is a limitation founded
on reciprocity designed to maintain productive relationship
between states. A state must accept generally accepted
tenets of international law, among which principles of
sovereign equality exist.
5. Taxation is exempt on Government’s part- Properties
of the estate or any of political subdivisions devoted for
government use and purpose are exempt from taxation.
6. Non – Delegability: As a general rule, the power of
taxation is purely legislative and which the central
legislative body cannot delegate either to the executive or
judicial department of the government without infringing
upon the theory of separation of powers.
Exceptions : Non- Delegability Rule:
a. Delegation to the Local Government Units
b. Delegation to the President
c. Delegation to Administrative Agencies
a. Completeness test
b. Sufficient standard test
Territoriality or Situs of Taxation
No state may tax anything not within its jurisdiction
without violating the due process clause of the constitution.
The taxing power of the state does not extend beyond its
territorial limits, but within such limits it may tax persons,
property, income or business.
4. International Comity
The principles of sovereign equality among states and of
their freedom from suit without their consent limit the
authority of a government to effectively imposes taxes in a
sovereign state and its instrumentalities as well as in its
property held, and activities undertaken in the capacity.
5. Tax Exemption of the Government
a. Property devoted to government use and purpose exempt
from tax except when the law provides otherwise;
b. Agencies preforming government function, income tax
exempt unless expressly taxed
Tabuzo, Tax Remedies
c. Agencies performing proprietary function- Income is
taxable unless expressly exempt.
Properties for public use are exempt from tax.
I. Properties devoted to government use and
purposes exempt from tax except when the law
provides otherwise.
ii. Agencies performing governmental functions ,
income is tax exempt unless expressly taxed.
iii. Agencies performing proprietary function:
Income is taxable unless expressly exempt;
7.The government cannot tax themselves exemption
E. PRINCIPLES OF A SOUND TAX SYSTEM
Three basic principles of what constitutes a sound tax
system (Adam Smith): ( FTA)
1. FISCAL ADEQUACY
Source of the government revenue in the
amount of tax collected must be sufficient to
finance public expenditure.
2. THEORETICAL JUSTICE
If we design a tax system, we should design it
in a way as based on the taxpayer’s ability to
pay. This is synonymous with progressive.
However, it is not always about having a
progressive taxation. It is also about the
observance of due process. If this violates equal
protection clause, then it is a ground to inviolate
the law.
Note: Tax system need not always be
progressive. There are some provisions in the
Tax Code that are regressive.
3. ADMINISTRATIVE FEASIBILITY
The beauty of tax system must always be easy
to administer or capable of being administered,
and easy to enforce. Aside from being
progressive, the taxes should be certain and not
arbitrary. Taxes should likewise be subject to
limitations.
o General Rule: These are not grounds to
question the tax law, only THEORETICAL
JUSTICE may invalidate a tax law if it violates
the equal protection of the law. The violation
must be on the equal protection clause and not
due to the principle of equity, which held that
taxation need not always be progressive.
Test to Determine Public Purpose
1. Duty Test: There is a public purpose if the thing to be
furthered y the appropriation of public revenue is
something which is the duty of the state as the government
to provide
2. Promotion of General Welfare Test: There is pubic
purpose if the proceeds of the welfare of the community in
equal measure.
3. The taxing power of the state does not extend beyond its
territorial limits, but within such limit it may tax person ,
property income or business.
DIAZ VS SECRETARY OF FINANCE AND CIR
The petitioner argued that implementation of the VAT
system is not administratively feasible to claim the input
VAT, names , address and tax tin number of the toll way to
be indicated in the VAT receipt or notice. Further, the
manner of the BIR to implement the VAT by rounding of
the toll rate and placing the excess of an escrow account is
illegal. Also, an alternative of giving change to thousand of
motorist is not feasible.
In this case, it simply means that the tax system must be
capable of being effectively administered and enforced with
the least convenience to the taxpayer. Here, the non-
observance of the canon based on administrative feasibility
will not render a tax imposition invalid except to the extent
to specific constitutional or statutory limitation are
impaired. Even if the imposition of VAT on tollway
operations may seem burdensome , it is not necessarily
invalid unless some aspect of its shown to violate any law
or the constitution. Even if the imposition of VAT seems to
be burdensome to implement, administratively feasible
unless the same violates the constitution or any other law or
constitution. In this case, there is yet any implementation of
VAT on tollway operators. Any declaration of the court as
to the manner of its implementation is premature.
F. SCOPE AND LIMITATIONS OF TAXATION
1. Public Purpose: The proceeds of tax must be used to
support the state for some recognized objective of the
government or to directly promote the welfare of the
community.
2. Inherently Legislative: Only the legislature has full
discretion as to the person, property occupation or business
to be taxed provided that it is within the jurisdiction of the
state.
Exemption:
1. Delegation to local government
Article 10: The LGU shall have the power to create their
own ways to earn tax.
2. Delegation to the President
Tabuzo, Tax Remedies
The Congress cannot enact a law to give the president the
power to enact a law giving the president the power to
determine tax rate. The delegation here pertains merely to
the power of the president to enter into tax treaties, the
congress may fix the limits tariff rate, import and export
quotas and tariff dues.
3. Delegation to administrative agencies
For the delegation to administrative agencies , this is
limited to administrative limits. This pertains to the concept
of subordinate legislation, applying the 1. Completeness
test 2. Sufficient standard test.
Constitutional Limitation of Taxation:
1. Due Process Clause
a. Substantive Aspect
Taxes should not be harsh, confiscatory unjust
and oppressive and tax laws should not violate
inherent limitation of the power to tax.
B .Procedural aspect
Taxation must be exercised reasonably without
arbitrariness and in accordance with procedures.
2. Equal Protection
a. Burden of tax falls equally and impartially
upon all the person and property subject to it;
b. It applies only to persons or things identically
situated and does not bar a reasonable
classification
i. It is based on substantial distinction
ii. There are germane to purpose of law
iii. The classification applies not only to present
condition but also to future condition
iv. The classification applies only to those who
belong to the same class
Ex: To recognize all senior citizen as a group without
distinction as to income is a valid classification. The
constitution itself considered the elderly as a class of their
own and deemed it a priority to address their needs .
Person with disability from a class separate and distinct
from the other citizen of the country. Indubitably, such
substantial distinction is germane and intimately related to
the purpose of the law. Hence, the classification and
treatment accorded to the PWD fully satisfy the demands of
equal protection. Thus Congress may pass a law providing
for a different treatment to a person with disability apart
from the other citizen of the country.
3. Religious Freedom
1. If tax is levied in order to suppress this basic right and
impose prior restraint.
2. It does not prohibit the imposition of generally
applicable sales and use tax on the sale of religious
materials by religious organization; thus if the sale of
religious articles is on a large scale, he same may be
considered as commercial in character and therefore subject
to tax.
4. Freedom of Speech and of the Press
1. If a tax is levied in order to suppress this basic right and
impose a prior restraint;
2. The registration fee, although a fixed amount of (P1,000)
is not imposed for the exercise of privilege but only for the
purpose of defraying part of the cost of registration; the
registration fee is thus a administrative fee , one not
imposed on the exercise of a privilege much less a
constitutional right.
5. Non-Impairment of Obligation of Contracts
1. If a tax exemption based on contract is revoked by a
latter statute but non-impairment clause will only be
violated if and when the taxing authority was a part of the
contract in question
2. It does not apply to utility franchise or rights since they
are subject to amendment, alteration or repeal by the
Congress when the public interest so requires.
3. A franchise partakes the nature of a grant which is
beyond the purview of non-impairment clause
6. Uniformity, Equitability and Progressivity of
Taxation
1. Uniformity in Taxation: Means that all articles of
properties of same class shall be taxed at the same rate.
Different articles or other subjects like transaction, business
rights , rights may be taxed at different rates provided that
the rate ( not necessarily the amount) is uniform in the same
classes everywhere with all people at all times.
2. Taxes are uniform and equal when imposed upon all
property of the same class or character within the taxing
authority.
7. Progressivity of taxation
The constitution does not really prohibit the imposition od
indirect taxes which like the VAT are regressive. What is
simply provides is that the Congress shall evolve a
progressive system of taxation. It simply means that direct
axes are to be preferred and as much as possible indirect
taxes must be minimized.
8. Prohibition Against Taxation of Religious Charitable
and Education Entitles .
1. Entities : Charitable, religious or educational entity
2. Tax: Property or realty taxes
3. Test of Exemption: Real properties that are actually ,
directly and exclusively used for charitable, religious or
educational purpose
To be entitled to this exception it must be proven by clear,
unequivocal proof that the entity is
a. Charitable , religious or educational entity
Tabuzo, Tax Remedies
b. Its real property are actually directly and exclusively for
charitable religious purpose
Exemption: This extends to those facilties that re incidental
thereto
Q: What is the rule on taxability of income that a
government educational institution derives from school
operation
A: Exempt from income taxation if it is actually ,
directly and exclusively used for educational purpose.
8. Prohibition against taxation of non-stock, non-profit
educational institution
i. Entities: Non-stock , non profit educational
institution
ii. Taxes ( assets and revenues)
i. Internal revenue tax ( income, VAT ,
percentage and donor’s tax) customs
duties and DST and real property tax
Test of Exemption: The revenue/ income is used ADE for
educational purpose.
To be granted the exemption, it must be proven with
substantial evidence that 1. It falls under the classification
of non-stock non profit educational institution 2. The
income it seeks to be exempted from taxation is actually
directly, and exclusively for educational purpose.
Q: San Juan University is a non-stock, non profit
educational institution. It owns a piece of land in
Caloocan City on which its three 2-storey school
buildings stood. Two of the buildings are devoted to
classrooms, laboratories, a canteen, a bookstore, and
administrative offices. The third building is reserved as
dormitory for student athletes who are granted
scholarships for a given academic year.
In 2017, San Juan University earned income from
tuition fees and from leasing a portion of its premises to
various concessionaires of food, books, and school
supplies.
a. Can the City Treasurer of Caloocan City collect real
property taxes on the land and building of San Juan
University? Explain your answer. (5%) (2017 BAR)
Q: Can the city treasurer of Caloocan collect real
property taxes on the land and building of San Juan
University?
A: Yes. but only on the leased partition. The constitution
provides that the assets, of a non-stock non profit
educational institution is exempt from taxes and duties
only if the same is actually, directly and exclusively for
educational purpose. The test of exemption from
taxation is the use of property for purposes mentione in
the constitution. The leased portion of the building may
be subject to real property tax since the lease is for
commercial purpose , it removes the asset from the
property tax exemption granted under the Constitution
Q: Is the income earned by San Juan University for the
year 2017 is subject to income tax
A: No. provided that the revenue used is actually ,
directly and exclusively used for educational purpose.
The requisite for tax exemption 1. The taxpayer falls
under the classification o non-stock non profit
educational institution . 2 The income it seeks to be
exempted form taxation is used actually , directly and
exclusively for educational purpose.
Q: A group of Philantropist organized a non-stock,
non-profit hospital charitable purpose to provide
medical services to the poor. The Hospital also
accepts paying patients although none of its income
accrued to any private individual; all income are
plowed back for the hospital’s use and not more than
30% of its funds were used for administrative
purpose
Q: Is the hospital subject to tax on its income? If yes
what rate?
A: The non stock non profit hospital income form
paying patients is subject to preferential income of 10%.
The CIR vs St lukes case provides that the hospitals are
exempt from income tax with respect to the activities
conducted exclusively for charitable purposes or social
welfare. However ,they are subject to a preferential rate
of 10% under charitable and social welfare purpose.
The Philippine-British Association, Inc. (Association)
is a non-stock, non-profit organization which owns
the St. Michael's Hospital (Hospital). Sec. 216 in
relation
to Sec. 215 of the LGC classifies all lands, buildings
and other improvements thereon actually, directly,
and exclusively used for hospitals as "special." A
special classification prescribes a lower assessment
than a commercial classification.
Within the premises of the Hospital, the Association
constructed the St. Michael's Medical Arts Center
(Center) which will house medical practitioners who
will
lease the spaces therein for their clinics at prescribed
rental rates. The doctors who treat the patients
confined in the Hospital are accredited by the
Association.
The City Assessor classified the Center as
"commercial" instead of "special" on the ground
that the Hospital owner gets income from the lease of
its spaces to doctors who also entertain out-patients.
Tabuzo, Tax Remedies
Is the City Assessor correct in
classifying the Center as "commercial?" Explain.
(5%) (2016 BAR)
A: No The Medical arts center is an integral part of the
hospital and must be classified for assessment purpose
as special. The fact alone that doctors holding clinics in
the center are those duly accredited by the association
who owns the hospital and these doctors are the ones
who can treat the hospital patients confined in its takes
away from the Medical Center from being categorized
as commercial since a tertiary hospital is required by
law to have a pool of physician required medial
department in various medical field.
9. Appropriation, revenue and tariff bills hall originate
exclusively form the House of Representative
i. It is not the law, but the revenue bill which is
required by the constitution to originate exclusively in the
House of Representative. In fact a bill , originating in the
house may undergo such extensive changes in the Senate
that the result may be rewriting of the whole. What the
Constitution simply means is that the initiative for filing of
the revenue, tariff or tax bills, bills authorizing an increase
of the public debt, private bills and bills of local application
must come from the House of Representative.
10. Grant of Taxing power to the Local Government
unit
a. To create its own sources of revenue accrue
exclusively to the LGU
b. Just share in the national taxes
i. The just share must be based on national taxes.
ii. The just share must be determined by law
iii. The just share shall be automatically released
to the LGU.
Basis of Just Share
1. National internal revenue taxes
2. Tariff and customs duties
3. 50% of the VAT and 30% of the national taxes ARMM
4. 60% of the national taxes from exploitation and
development of the national wealth( 40% will accrue to the
hose LGU)
5. 85% of the excise taxes from locally manufactured
Virgina and other Tobacco products
6. 5% of the franchise taxes in favor of the national
government paid by franchise holders.
11. Other Constitutional limitation
a. Majority vote of Congress for grant of tax exemption
2. Prohibition on the use of tax levied for special purpose
3. Presidential veto power of appropriation , revenue and
tariff bill
4. No appropriation or use of public money for religious
purpose.
I. PLANTERS PRODUCTS, INC. VS.
FERTIPHIL CORPORATION, G.R. NO. 66006,
14 MARCH 2008
An LOI was issued providing the imposition of a capital
recovery component of domestic sale. Fertiphil was forced
to increase its prices, arguing the same is a violation of due
process enacted for the benefit of private entity. The court
ruled that the imposition is a tax, as the purpose is for
revenue, however it is not valid because it is an exaction in
favor of a private entity. ( PPI is a private entity). If it is the
duty of the state to provide and for the general welfare it is
to be considered as a public purpose. If the proceeds is for a
particular industry, and such industry is for a public
purpose , it is an industry for public interest..
II. ABAKADA GURO PARTY LIST VS.
ERMITA, GR NO. 168056, 1 SEPTEMBER 2005
ABAKADA questioned the VAT reform authorizing the
SOF to raise the VAT to 12% subject to certain standards.
The SC ruled that there is uniformity because the taxes are
taxed at the same rate.It is also equitable as there is a
threshold margin in the type of industry and though it is
regressive, the constitution only calls for imposition of
progressive direct tax which VAT is not. This is a matter of
tax enforceability. Further it is only the President is not
really given the right to create a law, it merely implements.
III. GEROCHI VS. DEPARTMENT OF ENERGY,
G.R. NO. 159796, 17 JULY 2007
Delegation of Legislative Power to Tax: ( Valid ra 3019)
giving the ERC the right to regulate energy. The Universal
Charge of the said law can be implemented by the ERC
because it is a regulatory fee and not a tax. The purpose of
a regulatory fee is regulation and revenue is incidental, as
seen in this case that the fees were collected to curb
excessive demands upon the international reserves and to
stabilize currency.
IV. TOLENTINO VS. SEC. OF FINANCE, GR
NO. 115455, 25 AUG 1994
Summary: The petitioner argues that
1. There is a violation of religious freedom as the person
subject to VAT has to pay annual registration in the amount
of P1000 for every separate establishment.
Tabuzo, Tax Remedies
2. RA 7716 did not originate exclusively in the HREP as
required under the constitution.
Ruling: As to the violation of press freedom, the court did
not stick with the American Bible case where the court
invalidated the imposition of license fee ( Prior
restraint).The license fee here is not imposed for the
exercise of religious freedom but only for the purpose of
defraying regulation.
3. It is not the law , but the revenue bill which must
originate from the HREP. The bill originating from the
house may undergo changes in the Senate, and the senate
may even propose amendment thereto
4. The Constitution merely provides that the progressive
system of taxation in direct taxes, it does not prohibit
indirect tax which is regressive.
In comparison with American Bible: The court ruled
that the price asked for the Bible and other religious
pamphlet was in some instances higher and a little bit
higher than the actual cost of the same but this does not
mean that the appellant was engaged in the business or
occupation of selling merchandise for profit. Therefore,
the City Ordinance cannot tax the petitioner for it would
impair the exercise and enjoyment of religious
profession and worship and its rights of dissemination of
religious belief ( license fee)
In the case of Tolentino, the court ruled that VAT is a
different issue , It is not a license tax. It is not a tax on
the exercise of a privilege much less than a constitutiona
right. It is imposed o the sale, barter or lease or
exchange of goods or properties or sale or exchange of
services and lease of properties that are purely for
revenue purpose. To subject the press to the payment is
not to burden the exercise of its right any more than to
make the press pay income tax subject to its general
regulation is not to violate the freedom under the
constitution.
V. PAGCOR VS. BIR, GR NO. 172087, 15
MARCH 2011
Initially exempted from paying taxes including Franchise
and Customs tax, the NIRC later took effect and mandated
GOCC to pay corporate income tax removing PAGCOR
from the GOCC exempt from CIT.The petitioner argues
that removing the CIT exemption is a violation of the non-
impairment clause since the investor will consider the tax
exemption and use it as a consideration in its transaction,
and its withdrawal has an effect of changing the
consideration of the contract.The court ruled that the
exemption only extends to VAT because RA 9339 only
removes from the exemption Corporate Income Tax. In the
impairment of contracts, the court ruled that there is an
impairment of contract when a tax exemption is
revoked by the later statute when the taxing authority is
a party to the question. This does not apply to franchises,
as seen in this case as franchises are subject to amendment,
alteration when public interest requires.
VI. CIR VS. CA,YMCA GR NO. 123043
Summary: Income Tax( Non educational)
YMCA a non stock non profit institution leased out
portions of its premises to small shop owner like
restaurant and parking fees. CIR issued an assessment to
recover deficiency tax on rentals. The court ruled that the
income to be exempted under the constitution must be
proven that 1. Charitable , religious educational entity 2. Its
real property are actually, directly and exclusively used for
religious purpose and the exemption extends to those
incidental thereto which this case does not fall.
To be granted the exemption, it must be proven with
substantial evidence that 1. It falls under the classified non-
stock non-profit educational institution 2. The income it
seeks to be exempted from taxation is used as actually
directly, and exclusively for educational purpose.
VII. CIR VS. DLSU, GR NO,196596, 9 NOV
2016
Summary: Income Tax Educational
DLSU received a letter from the BIR for deficiency income
tax on rental earnings form the a. Restaurant 2. Bookstore
operating within the campus 3. VAT on business income 4.
DST on loans and leased contract . DST protested on the
ground that it is a non-stock non-profit educational
institution and is exempt from tax. As it provides that All
Revenue, and assets of non-stock non profit educational
institution are actually , directly and exclusively for
educational purpose are exempt from tax. Here, the
income is taxed The court ruled that in this case, DLSU is
exempt from income tax. Under the Constitution, it
provides that all revenues, asset of non-stock non profit
educational institution actually, directly and exclusively
used for educational purpose are exempt from tax.
Therefore, in order for a non-profit educational institution
to be exempt from income tax 1. There must be a non-stock
non-profit educational institution 2. The income must
actually be used for educational purpose. Therefore, if
DLSU can prove that its income is used for educational
purpose the same can be exempt from income tax.
Tabuzo, Tax Remedies
VIII. LA SALLIAN EDUCATIONAL
INNOVATORS FOUND. VS. CIR,GR NO.
202792, 27 FEB 2019
The issue here is whether DLSU is exempt form income
tax. The court ruled that Yes, the administrative expense is
actually, directly used for educational purpose. Under the
Constitution, it must be proven that 1. Non- stock non -
profit educational institution 2. The income used is actually
,directly and exclusively used for educational purpose
therefore, exempt
IX. ABRA VALLEY COLLEGE INC. VS.
AQUINO, GR NO. L-39086, JUNE 15, 1988;
The issue is whether Abra is subject to real estate tax, there
is an argument that the same is not used for educational
purpose because there is a commercial establishment in the
first floor and the president resides in one of the rooms. The
court ruled that in order to be entitled to RPT exemption 1.
Charitable religious 2. Directly used for religious purpose
Q: DLSU rents of the establishment to Starbucks is this
exempt from Real Property Tax.
A: Liability of RPT .The commercial use is not
incidental or reasonably necessary for the
accomplishment of the purpose which is to educate
student.
X. LUNG CENTER OF THE PHILIPPINES VS.
QC, G.R. NO. 144104. JUNE 29, 2004
Lung Center admits paying customers leased a space on the
ground floor to private parties, canteen and medical
practitioners. The court ruled that the petitioner is exempt
from Real Property Tax, as the property is actually ,
directly and exclusively used for charitable purpose since it
was organized for the welfare of the poor. As to the income,
whatever kind and character of charitable institution from
any of its activities conducted for profit regardless of
disposition is subject to tax.
XI. MANDANAS, ET AL. V. EXECUTIVE
SECRETARY, ET AL., GR NOS. 199802 AND
208488, 3 JULY 2018;MR: 10 APRIL 2019
What is the difference between Revenue tax and National
Internal Revenue Tax. The petitioner argues that certain
collection of the NIR by BOC specially excise tax are not
included in the Internal Revenue Allocation for the purpose
of computing the National Internal Revenue Tax to be
allocated to local government unit.
The petitioner argues that Section 6 of the Constitution
provides Local Government with a just share in national
taxes and automatic release. The court ruled that the
computation is not proper as national taxes are
different form national internal revenue taxes. The term
national Internal revenue tax (NIRT) is more restrictive
than the term national taxes.( because national taxes
includes all the internal revenue tax and not only the NIRT)
Also, there is no need for General appropriation act to
allocate the same to them because the release is automatic.
 Motion for reconsideration.
- Denied
3. Payment: This is the act of compliance by the taxpayer
including whatever remedies the law provides him.
H. DEFINITION, NATURE AND
CHARACTERISTICS OF TAXES
1. Enforced Contributions
2. Generally payable in money
3. Proportion in character, it is based on one’s ability to pay
4. Levied on persons , property or exercise of a right or
privilege
5. levied by the state having jurisdiction

Section 6 of Article X of the Constitution expressly states 6. Levied by the legislature

that National taxes constitute the base amount from which 7. For a public purpose
just share is to be computed, without the constitution itself 8. Paid at regular periods of intervals
excluding such national taxes from computation the rule is
that the same is included. Under Section 6, it states that I. REQUISITES OF A VALID TAX
National Taxes shall constitute the base amount from Elements :
which the just share is to be computed, but what 1. It is an enforced proportional contribution from person
happened her is that they limited it to internal revenue and properties
taxes. The constitution did not enable the congress to 2. It is imposed by the state by virtue of its sovereign and
c. It is levied for the support of the government
determine just share and base amount other than national
taxes. Requisites:
1. It must be for a public purpose
2. It must be uniform and equitable
CHARITABLE OR NON- STOCK , NON-
3. The person or property taxed must be within the
RELIGIOUS PROFIT EDUCATION
jurisdiction of the taxing authority
ENTITIES ENTIES
4. It must comply with the due process of law
1. RP that are ADE used 1. Real property tax are 5. It must not violative the inherent and constitutional
for charitable or religious actually, directly , limitation on the power to tax.
purposes are exempt from exclusively used for J. TAX VS. OTHER FORMS OF EXACTIONS
real property educational purpose are
exempt from RPT If generating revenue is the primary purpose ad regulation
2. Income received by 2. Income received by is merely incidental, the imposition is a tax, but if the
them as such is exempt them such is exempt from regulation is the primary purpose and that revenue is
from income tax income tax incidentally obtained it does not make it a tax.
3. Income from properties 3. Revenue from
or activities conducted for properties or activities 1. Tariff
profit are taxable conducted for profit that 2. Toll
regardless of disposition are actually directly,
exclusively purpose are 3. License fee
tax exempt. 4. Special assesment
G. STAGES OR ASPECTS OF TAXATION 5. Debt
1. Tariff: A tax embraces tariff, it is just that tariff is a
Three Stages of Taxation
more specific kind of tax imposed on articles which are
traded internationally.
1. Levy: It refers to the imposition of taxes through
enactment of tax laws or statute which is essentially 2. Toll
legislative in nature. Taxes Toll: Different from a
tax, therefore this is not
2. Assessment and Collection: It is the act of an imposition of a tax on
administration and implementation of tax law by the a tax.
executive branch through its administrative agencies. 1. Enforced proportional 1. Enforced For the use
to the contribution from something in

Tabuzo, Tax Remedies


a person and property consideration which is
paid for the use of a
property that is public in
nature
2. No limit as to the 2. Amount of toll depend
amount to be taxed upon the cost of
construction or
maintenance of the public
improvement used
3. May be imposed by the 2. May be imposed by
government private individuals as an
attribute of authority
4. Effect of Non-payment: 4.prohibits use of facility
Business may be
continued but the state
may impose penalty
3. LICENSE FEE
If generation of revenue is the primary purpose and
regulation is merely incidental, the imposition is a tax but if
the regulation is the primary purpose the fact that revenue
itself is incidental does not make the same a tax.
How to check?
1. The amount may be so large as to itself show that the
purpose was to raise revenue and not to regulate.
A. Useful and beneficial : Amount determines the
purpose
b. Inimical and dangerous of Public health, moral
or safety the fee may be very large without
necessarily being a tax.
Tax License fee
1. The purpose is revenue 1.The purpose is
regulation
2. Imposed under power 2. Imposed under the
of taxation police power must pertain
to an activity that engages
the public interest in
health, morals and safety
and development as to
require the regulation for
the protection and
promotion of public
interest.
3. No limit as to the 3. Amount of license fee
amount that can be collected is
limited to the cost of
license and the expenses
of police surveillance
Tabuzo, Tax Remedies
4 .Special Assessment: An enforced proportional
contribution from owners of lands especially or
peculiarly benefited by public improvement
Tax Special Assessment
Imposed on persons, Only on land
properties and etc
Regardless of public Public improvement
improvement benefits the land and
increases its value
Support of the government Contribution to the cost of
public improvement
Necessity Benefits obtained.
5. Debt: Based on a contact or judgment. There is no
imprisonment for the failure to pay the debt. The
prescriptive period is the Civil Code.
6. Penalty: Sanction imposed as punishment for violation
of a law acts deemed injurious violation of tax laws may
give rise to the imposition of penalties
7. Subsidy: A grant of revenue to aid public enterprise
deemed to promote a public welfare. It is not a tax although
it may necessary to raise money to pay the subsidy by
means of tax.
I. CHEVRON PHILIPPINES, INC. VS. BCDA,
G.R. NO. 173863, 15 SEPTEMBER 2010
The Royalty fees on sale of fuel inside the CSEZ
was imposed primarily for regulatory purpose and not
for the generation of income and profit. The questioned
royalty fees form a part of the regulatory framework to
ensure the safety, security and good condition of the
petroleum fuel industry within the CSEZ. If the imposition
in question relates to an occupation or activity that is
engaged in public interest, health or morals as to require the
protection or promotion of public interest, the imposition
must bear a reasonable relation to the probable expense of
regulation.
In this case the oil industry is imbued with public interest it
affects the general welfare . In addition, fuel is a highly
combustible product if left unchecked poses a threat to the
life and property. There is reasonable relation between the
Royalty imposed per litter and the regulation sought to be
attained which is the higher volume of fuel that enters the
CSEZ the greater extent of supervision.
II. ANGELES UNIVERSITY FOUNDATION VS.
ANGELES CITY, G.R. NO. 189999, 27 JUNE
2012
Regulatory fee: a charge of a fixed sum which bears no c. Mixed
relation at all to the cost of inspection and regulation may 4. As to purpose
be held to be a tax rather than an exercise of the police
a. General – ( Income tax)
power. In this case, Angeles was arguing that the building
permits were being collected based on Article 244 of the b. Special ( customs)
LGC. The AUF argus that it is a non-stock non-profit 5. As to scope or authority
institution that is exempt form tax. In this case, the court
a. National
ruled that the fees imposed against AUF are not taxes but
regulatory fees. The building permit is a regulatory b. Local
imposition since the processing of an application for a 6. As to graudation
building permit, the building official sees to it that the a. progressive
applicant conforms with the approved standard of zoning,
- Tax rate increase tax base increase – Income tax
land use, lines and grades structural design , sanitary
sewage .These permit fees are not charges on the property b. Regressive
they are not imposition from which the petitioner is - Tax rate decreases as the tax base increase
exempt. If the purpose is for regulation, even though the
c. Proportionate
revenue is merely incidental , it is deemed a tax.
- Tax rate is fixed.
K. KINDS OF TAXES 7. As to purpose
a. General b. Special tax
1. As to Object
a. Personal, capitation, poll tax L. CONSTRUCTION AND INTERPRETATION
- Taxes imposed on person without regard to
I. CIR VS. PUREGOLD DUTY FREE, INC. G.R.
their property. ( Income tax) NO. 202789, JUNE 22, 2015
Q: Can a person be imprisoned for non payment of tax?
Here, even prior to the coconut oil case, Puregold enjoyed
A: Yes, but not for non payment of poll tax. duty free importation and is exempt from local and national
b. Property tax taxes. The court ruled that the ruling of the coconut oil case
- Taxes imposed on the property within the cannot be applied retroactively. Tax exemptions are strictly
construed against the taxpayer and liberally in favor of the
taxing authority.( Real Estate tax)
government. Therefore, NIRC to be exception to general
c. Privilege tax amnesty grant it could have provided for as exception under
- Taxes laid on the manufacture, sale or the law. The principle of expression unio est exclusio
alterius not being expressly stated under RA 9339.
consumption of commodities within the country, upon
licenses to pursue certain occupation. ( VAT)
M. DOCTRINES IN TAXATION
2. As to burden or incidence
1. Prospectively of tax laws
a. Direct 2. Imprescriptibly
- When the impact and incident fall on one person 3. Double Taxation
4. Escape from taxation
b. Indirect 5. Exemption from taxation
- When the impact falls on one person but the 6. Compensation and set-off
burden falls on the other.( The taxpayer can shift 7. Compromise
the burden but not liability) 8. Tax Amnesty
9. Construction and Interpretation
3. As to tax rate
Prospectively of tax laws:
a. specific
General Rule: Laws shall be prospective in application.
- Tax imposes a specific sum by the head or a
number or by some standard of weight or measurement Exception:
require no assessment beyond the listing and classification Note: No retroactive application if they are prejudicial to
of the subject to be taxed. ( Excise) the taxpayer
b. Ad valorem Exceptions :
- Excise tax which is based on selling price or 1. Taxpayer deliberately misstates or omits a material fact.
other specified value of good and articles ( RPT, VAT)

Tabuzo, Tax Remedies

2. Facts subsequently gathered by the BIR are materially
different from the facts which the ruling is based or
3. Taxpayer acted in bad faith
Imprescriptible:
General Rule: Taxes are imprescriptible
Exception: The law may provide for otherwise. The NIRC
and LGC provides for prescriptive period for assessment
and collection of taxes.
Ratio:Prescriptive period is both beneficial to the
government and the taxpayer. It is beneficial to the
government as the personnel would be obliged to act
promptly in making the assessment and on the part of
the citize n, they would have some sort of feeling of
security against unscrupulous tax agents.
NB: A. The BIR has the period of three years within which
to assess the taxpayer for deficiency tax. Within the said
three years, the FAN must be sent to the taxpayer.
However, if the ground is fraud, falsity or omission , the
period can be exended for a period of ten years.
Construction:
The law on prescription being a remedial measure is
liberally construed to afford protection. Exception are to be
strictly construed against the taxpayer and liberally
construed in favor of the government.
3. Double Taxation
Definition: Taxing the same property twice when it
should be taxed once. It is defined as taxing the same
person twice by the same jurisdiction over the same
thing.
Types of Double Taxation
1. Strict Sense:
Test: In order to constitute a direct duplicate taxation
which is objectionable or prohibited the same property
must be taxed twice when it must be taxed once, both taxes
must be imposed on the same property, or subject -matter
for the same purpose by the same state, government or
taxing authority within the same jurisdiction or taxing
district during the same taxing period, and they must be of
the same kind and character of tax.
Q: Mr Allas Sells shoes in Makati through a retail
store. He pays VAT on his gross sales to the BIR and
the municipal license tax based on the same gross
sales to the City of Makati. He cones to your advice
regarding double taxation
A: There is double taxation, when one tax is imposed
by the national government and the other is imposed by
the local government . The Supreme Court declared that
double taxation does not violate the uniformity rule nor
does not infringe the equal protection guarantee just
because one tax is imposed by the National government
and the other is local government unit.
Tabuzo, Tax Remedies
Q: City X amended its revenue code to include a new
provision imposing a tax on every sale of
merchandise by a wholesaler based on total selling
price of the goods inclusive of value added tax . ABC
corporation , a wholesaler operating witinh the city
X challenged the new provision based on the ff 1. The
new provision is a form of double taxation because it
amounts to City XI imposing VAT which was
already being levied by the National Government
A: No .There is no double taxation. ABC Corporation is
incorrect. Under the NIRC, direct double taxation exist
when there are two taxes on the same subject matter,
same purpose, same taxing authority , same jurisdiction ,
same taxing period , the taxes must be of the same kind
of character. In this case, the taxing authorities are
different. One is the local government and one is the
national government
Q: Upon retirement, Alfredo transferred his savings
derived from his salary as marketing assistance to a
time deposit with AAB Bank. The bank regularly
deducted 20% of the final withholding tax on the
interest income from time deposit . Alfredo contends
that the 2-% final tax on the interest income
constituted as double taxation because the salary is
already subjected to withholding tax
No. Double taxation means the taxing of the same tax
period the same thing or activity twice when it should be
taxed but once for the same purpose and with the same
kind of character of tax. The 20% final tax imposed on
the interest income while the tax earlier withheld is on
the salary or compensation income. Thus both pertain to
income tax, they do not pertain to the same thing or
activity and consequently no double taxation exist.
Q: Caruso , a resident Filipino citizen received
dividend income from the US based corporation
which owns a Filipino restaurant in the west coast
USA. The dividend remitted to Caruso is subject to
US Withholding tax with respect to non-resident
alien like Caruso.
A. What will be your advice to Caruso to lessen the
impact of double taxation?
A: Caruso has the option either to claim the amount of
income tax withheld in the US as deduction from his
gross income in the Philippines or to claim it as a tax
credit.
Q: Mr . Alas sells shoes in Makati through a retail
store. He pays VAT on his gross sale to the BIR and
municipal license tax based on his gross sale in Citiy
of Manila. Is there double taxation.
a. There is no double taxation( Vat the subject matter is
gross sale, the municipal license tax is the privilege to
conduct business)
b. VAT is imposed by the national government while
license tax is imposed by the municipal government.
2. Indirect Sense: Some of the elements of double taxation
are not present.
The usual methods of avoiding the occurrence of double
taxation:
1. Allowing reciprocal exemption either by law or by
treaty: Both parties will no longer tax the same.
Tax treaties are entered into to reconcile the national
fiscal legislation of the contracting parties and in turn
help the taxpayer avoid simultaneous taxation in two
different jurisdiction
International Double Taxation is the imposition of
comparable taxes in two or more states o the same
taxpayer in resect to the same subject matter and for
identical parties .
Methods to Eliminate Double Taxation
1. It sets out respective rights to tax of the state of source
and of the state of residence with regard to certain class of
income or capital
2. State of source is given the full or limited right to tax
together with the state of residence but the state of
residence shall allow relief if
a. Exemption method : The income or capital
which is taxable in the state of source is
exempted in the state of residence .
b. Credit Method: The tax paid in the state of
source is credited against the tax levied in the
state of residence.
Q: Jennifer is the only daughter of Janina who was a
resident of United States. Janina died in the US
leaving Jennifer one million shares of Sunlife a
corporation organized here in the Philippines. The
said shares were held in trust for Janina.The
Internal revenue service taxed the shares on the
ground that Janina was domiciled in the US at the
time of death .
Q: Can CIR tax the same ?
Q: Explain double taxation
A. Yes. The property being located in the Philippines is
subject to Philippine estate tax, irrespective of
citizenship or residence of the decedent. However, if
Janina is a non-resident alien at the time of her death,
the transmission of the share can only be applied on the
principle of reciprocity.
B. Double taxation is prohibited when it is a imposition
of taxes on the same subject matter, for the same
purpose for the same taxing authority within the same
jurisdiction and during the same taxing period with the
same kind of tax. It is permissible if the taxes are of
different nature or character and is imposed by two
different taxing authorities.
Tabuzo, Tax Remedies
Upon his retirement , Alfredo transferred his saving
derived from his salary as marketing assistant to a
time deposit with AAB Bank. The bank regularly
deducted 20% of final withholding tax on the interest
income from the time deposit. Alfredo contends that
the 20% final tax on the interest income constitutes
as double taxation because the salary is already
subject to withholding tax
A: No. Double taxation means the taxing for the same
tax period the same thing or activity when it should be
taxed but once for the same purpose, wth the same kind
of character of tax. The 20% final tax is imposed on
interest income, while the tax earlier withheld is on the
salary or compensation income . Thus both pertain to
income tax ,they do not pertain to the same or activity
and consequently no double taxation exist.
4. Escape from Taxes
a. Shifting of the tax burden
Shifting of tax burden: When the burden of tax is
transferred from the statutory taxpayer ( impact)to one
whom the tax was assessed or imposed to another without
the violation of the law ( incidence).
a. Impact of taxation: Point on which tax is
originally imposed
b. Incidence of taxation: A point on which the tax
burden finally rest or settles down
b. Tax Avoidance
Tax saving device within the means sanctioned by law, this
method should be used by the taxpayer is in good faith and
at arms length , otherwise known as arms length rule
c. Tax evasion
Deliberate adoption of illegal means to defeat or lessen the
payment of tax. It is a scheme used outside of those lawful
means and when availed of . it usually subjects the taxpayer
to further or additional civil or criminal liabilities otherwise
known as dodging.
Tax Evasion: Connotes three factors
1. The end to be achieved ( payment of less than known by
the taxpayer to be legally due or the non-payment of tax
when it shown that the tax is due )
2. An accompanying state of mind which is described as
being evil, bad faith, willful or deliberate
3. The cause of action or failure is unl
Enumerate the ways of shifting the tax burden and
define each
1. Forward Shifting: When the burden of the ax is
transferred from the factor of production through the factor
of distribution until it settles to the purchaser .
2. Backward: When the burden of tax is transferred from
the consumer or purchaser through the factors of
distribution to factors of production
3. Onward shifting: When the tax is shifted two or more
times either backward or forward.
NB: Only indirect tax can be shifted. TO determine when
one is an indirect tax , the test is when the impact or the tax
liability for the payment of the tax falls on one person but
the incidence can be shifted or passed to another.
Caruso, a resident Filipino citizen received dividend
income from the US based corporation, which owns a
chain of Filipino restaurants in the west coast USA.
The dividend remitted to Caruso is subject to the US
withholding tax with respect to non-resident like
Caruso
What will be your advice to Caruso to lessen the
impacy of double taxation?
He can claim the amount of tax withheld in the US as a
deduction from his gross income in the Philippines or to
claim it as a tax credit
Proper Party :
The proper party to file a refund is the statutory taxpayer,
the person on whim the tax is imposed y law and who pays
the same despite shift.
Exemption: The case is not applicable when a party to
whom economic burden is shifted provides an exemption
from both direct and indirect taxes . In such case he or she
must be allowed to claim refund.
Example
ABC Petroleum sold XYZ Airline Petroleum Fuel.
ABC passed on the new related excise tax to XYZ
Airlines. Now XYZ Airlines sought to refud the said
excise tax on the basis of tax exemption. CIR argues
that XYZ has no personality to file the subject tax
refund claim because it is not the statutory taxpayer.
Does XYZ have personality to file ?
Ruling: Yes. If the party to which the economic burden
if shifted provides an exemption from both direct and
indirect tax, the proper party to question or seek refund
of an indirect tax is the statutory taxpayer the person on
whom the tax is imposed by law and paid the same even
if he shifts the burden to another.
Tax Avoidance: Is the tax saving device within the means
sanctioned by law this method should be used by the
taxpayer in good faith and at arms length, otherwise known
as tax minimization or tax loophole.
The following are the offenses:
1. Willful failure to pay taxes
2. Willful failure to make a return
3. Willful failure to keep any record
Tabuzo, Tax Remedies
4. Willful failure to supply correct and adequate
information
Willful Blindness Doctrine: A taxpayer can no longer
raise the defense that the errors on their tax returns are not
their responsibility or that it is the fault of the accountant
that they hired. Hence, the only thing that needs to e proven
is that the taxpayer was aware of his obligation to file a tax
return, but he nevertheless knowingly intentionally failed to
file the same.
What is the willful act?
1. Aware of his or her obligation to file annual
ITR or submit accurate information, but that he
or she or his or her supposed agent,
nevertheless voluntarily, knowingly and
intentionally failed to file the required returns
or submit accurate information.
2. Bad faith on intent to defraud need not be
shown.
In order to prove that there was failure to file a
return, there is a need to prove the following
elements:
1. That the accused was a person required to make
a file a return;
2. That the accused failed to make or file a return
at time required by law; and
3. That the failure to make or file a return was
willful.
PEOPLE V JUDY ANNE SANTOS Y
LUMAGUI, CTA CRIM CASE NO. O-012,
JANUARY 16, 2012
The elements of the offense willful failure to
supply correct and accurate information are as
follows:
1. That a person is required to supply correct and
accurate information;
2. That there is failure to supply correct and
information at the time/s required by law or
rules and regulations; and
3. That such failure to supply correct and accurate
information is done willfully.
Tax Exemption:
Definition: A grant of immunity, express or implied to a
person or corporation from the obligation to pay taxes.
 General Rule:
Tax exemption can only be granted by the
Legislature

 Exemption:
1. Can be granted to the President Tariff
Clause;
2. Local Government Code delegated
power for the local government to grant
exemption; and
3. Tax treaty by the president.
4.
Tax Exemption cannot exist by implication? No. Whether
the undertaking signed by the Secretary of Finance in the
promissory note can be considered as an exception on the
taxes on the interest remitted . The Supreme Court ruled
in negative and opined that tax exemption is not merely
implied but must e expressed ( NDR v CIR).
Any claim for tax exemption must be able to point to some
positive and specific provision of the law creating such
right. It cannot be allowed to exist on a mere vague
interpretation.
Nature of Tax Exemptions:
1. Mere personal privilege to the grantees
2. Generally revocable by the government unless founded
on contract which is protected by the non-impairment
clause
3. Implies a waiver on the part of the government of its
right to collect what otherwise would be due.
4. Not necessarily discriminatory as long as the exemption
has basis.
Grounds for Tax Exemption:
1. Contract
2. Some ground of public policy
3. Treaty created on grounds of reciprocity or to lessen the
rigors double taxation.
Revocation of Tax
1. Exemption granted to private parties based on material
consideration of a mutual nature is covered by a non-
impairment clause of the Constitution .
2. Exemption granted by the Constitution may be revoked
through the Constitutional amendment
3. Special law is not repealed by the latter statute which is
in its general terms provision and application unless there is
a manifestation to repeal or alter special law.
Equitable Recoupment
Tabuzo, Tax Remedies
1. Allows the taxpayer whose claim for refund was
prescribed to offset tax liabilities with his claim for
overpayment.
2. It is not convinced of the wisdown or proprietary
thereof , and hat it may work to tempt both the collecting
agency and the taxpayer to delay and neglect their
respective pursuits of the legal action with period set by
law.
Compensation :
As a rule, taxes cannot be the subject of compensation
because the government and the taxpayers are not
mutually creditors and debtors of each other. A claim of
taxes is not such a debt, demand or contract where there
can be set off
Exemption: There can be set off between taxes and debts
when both are due, demandable as well as fully
liquidated compensation takes place by law ( Domingo
vs CA) .It must be noted that offsetting is not allowed when
the period to assess deficiency taxes in excess of the
amount claimed for refund has already prescribed.
Solutio Indebiti: The principle of Solutio Indebiti applies at
the case at bar since the government had to restore to the
petitioner the erroneous payment of taxes.
Off -setting of Tax refund with tax deficiency
General Rule: With respect to the offsetting of tax refund
with tax deficiency the same is unavailing under Article
1279 of the Civil Code
Exception: If the determination of the taxpayer liability is
intertwined with the resolution of the claim for tax refund
of erroneously or illegally collected taxes under Section
229 of the NIRC.
The SC allowed the offsetting and did not grant the
prayer for refund because the correctness of the return
filed by the petitioner is put in doubt due to the finding
of the CTA that the petitioner although not liable under
the NIRC is liable under Section 28 NIRC.
Compromise:
a. Compromise Penalty:
1. Amount to be paid by a taxpayer to settle a criminal
liability for violation of the tax code in lieu of criminal
prosecution.
2. Compromise penalties cannot be imposed in the absence
of showing that the taxpayer consented thereto.
b. Compromise of Taxes
1. There is a doubtful validity of the claim against the
taxpayer .
2. Financial incapacity of the taxpayer.
Tax Amensty: Absolute waiver by a sovereign of its right
to collect taxes and the power to impose penalties on
person or entities guilty of violating a tax law. It aims to
granta general reprieve to tax evaders who whish to come
claim by giving them the opportunity to straighten their b. From sources without the Philippines
record c. Income partly within and partly without

Tax Amensty Tax Exemption 1. From sources within the All kinds of taxpayer are
Philippines subject to income tax on
1. Immunity form all 1. Immunity form civil
income derived from
criminal civil and liability only
sources within the
administrative liabilities and
Philippines
non payment of taxes
2. From sources without the Only resident citizen and
1. Applies only to past tax 2. Has prospective
Philippines domestic corporation are
application
liable for income tax
derived from source without
the Philippines
Construction:
3. Partly within and partly 1. Taxable income
General Rule: There is no need for statutory construction without attributable to sources
if the law on tax is clear. within the Philippines may
be determined by the
Exception: If there is ambiguity in the law, statutory process or formulas of
general apportionmet.
construction is but proper and tax laws shall be liberally
interpreted in favor of the taxpayer and strictly against the
taxing authority. B. Property tax :

- Ratio: Tax statute are strictly construed If the property is tangible Where the property Is
physically located although
against the taxing authority because taxation the owner resides in another
is a destructive power which interferes with jurisdiction
personal property of the people
If the property is intangible General Rule: Domicile of
Exception to the Exception: The tax exemption must be the owner
strictly construed against the one claiming the exception Exception:
because it is contrary to the life blood doctrine
a. Where the intangible
Tax Exemption: personal property has
acquired a business situs in
General Rule: Strictissimi juris against the taxpayer and another jurisdiction
liberally against the taxing authority .
b. Where the law provides
Exception: for a situs of the tax.
1. Statute provides for the liberal construction
2. The special taxes relating to special cases and
effecting only special classes C. Situs of excise tax
3. Exemption refer to public property
4. Exemption granted to religious charitable and 1. Estate Where the transaction was
educational institution performed it is the place
5. Exemption in favor of the government its where the business or
political subdivision or instrumentalities . occupation is beong
conducted. It is so because
that is the place which gives
Situs of Taxation: The situs of taxation is the place or protection to the business or
authority that has the right to impose or collect taxes. occupation
a. Based on the symbiotic relationship
b. Jurisdiction, state or political units that gives 2. Donors Same rule
protection has the right to demand and support.

Factors to be Considered: Situs on Business Taxes

1. Domiciliary Theory 1. Real Property The situs of sales of a real
2. Nationality Theory property is where the real
3. Source theory property is located
NB: These are to depend on the type of income involved.
2. Personal Property The situs of the sale of
a. From Sources within the Philippines personal property is the

Tabuzo, Tax Remedies


place where the sales are
perfected or
consummated.
3. VAT Where the transaction is
made is either where the
property is sold and
consumed or where the
service is to be performed
I. CIR VS. SOLIDBANK CORPORATION, GR
NO. 148191, 25 NOV. 2003;
Doctrine: Solidbank alleged double taxation exist as it was
already taxed 20% on its final withholding tax on passive
income at the same time the bank is subject to 5%
Gross Receipt tax. The issue here is whether double
taxation exist. There is double taxation when tax is
imposed twice on the same object when it must only be
taxed once 1. Taxed on the same subject matter, 2. By the
same taxing authority 3. Within the same taxing period 4.
For the same taxing purpose.
In this case , the tax is imposed on different subject
matter, FWT is a passive income generated on deposit
yielding substitute, GRT is imposed on the privilege of
enjoying business. Second, the taxing period is different as
FWT is withheld as soon as the income is earned. GRT
is neither deducted nor withheld . FWT is subject to
withholding , GRT is a percentage tax.
II. SWEDISH MATCH PHILIPPINES, INC. VS.
CITY OF MANILA, GR NO. 181277, 3 JULY
2013
 Section 14: A tax on manufacturers , assemblers
and other process
 Section 21: Applies to business subject to
excise, value-added or percentage tax.
There is double taxation .Taxed on the same subject matter,
the same authority the same taxing period the same
purpose. In this case, it is imposed on the same subject
matter, privilege of doing business, second it is imposed
for the same purpose ( conduct business) 3. Same taxing
authority ( city of manila) 4. Same period ( calendar
year ) 5. Same character ( local business tax). Therefore,
the petitioner should not have been subject to tax.
III. NURSERY CARE CORPORATION ET AL
VS. ACEVEDO, G.R. NO. 180651, JULY 30,
2014
Tabuzo, Tax Remedies
The City of Manila assessed taxes from petitioner pursuant
to Section 15 ( Tax on wholesale) and Section 17 ( Tax
on Retail). At the same time Section 21 ( Tax on
business subject to excise, VAT and NIRC) as condition
for renewal of license. In this case, there is double taxation
as the same property is taxed twice when it must only be
taxed once by the same person by the same jurisdiction ad
the same thing. Same person ( Section 21 imposed a tax on
person who sold goods in the course of trade or business) .
Section 15 and 17 imposed tax on person who sold goods
and service in the trade or business. Same taxing authority
( city of Manila). Same purpose ( to contribute to city
revenue). Same nature ( Local government tax)
IV. CIR V. S.C. JOHNSON AND SON, INC., GR
NO. 127105, 25 JUNE 2009
Doctrine ; Method to Eliminate Double Taxation
1. It sets out the respective right to tax of the state of source
and of the state of residence with regard to certain income
or capital.
2. State of source is given a full or limited right to tax
together with the state of residence, but the state of
residence must be allowed to relief.
A. Exemption Method: Income or capital which
is taxable in the state of source is exempted in the
state of residence.
b. Credit Method: The tax paid in the state of
source is credited against the tax levied in the
state of residence.
The RP US treaty is one of the Bilateral treaties
that the PH entered into to avoid double taxation. Double
taxation takes place when a person is a resident of
contracting state and derives income form or owns capital
in the other contracting state. In this case, the state of
source is the Ph, because royalties are in the PH. The US is
the state of residence. Under the treaty, the state of
residence and the state of source are permitted to tax
the royalties with a restraint on the tax that may be
collected at the state of source.
Under the treaty, one of the method that is
imposed is that double taxation sets out respective rights to
tax of the state of source or situs and the state of residence
with regard to certain income. The second method , applies
whenever the state of source is given the full or limited
right to tax. In this case, the treaties make it incumbent
upon the state of residence to allow relief in order to avoid
double taxation. There are two reliefs, the exemption
method and the credit method, In the exemption method,
the income or capital which is taxable in the state of source
is exempted in the state of residence. In the credit method,
although the income is taxed at the state of source it is still
taxable in the state of residence, the tax paid in the former
is credited against the tax levied against the latter.
 In this case, the state of source is the Philippines
because royalites are paid. The US is the residence since
the taxpayer is based there. Under the treaty, the state of
residence and the state of source are both permitted to
tax the royalties with restrain on tax that is collected by
the state of source.
Further, the RP Germany treaty allows the
crediting of German income and corporation tax of 20% of
the gross amount of royalites, while Article 23 of the RP Us
treaty does not, therefore, it cannot fall under the most
favored clause as for the latter to apply there must be
similarity in condition.
V. DEUTSCHE BANK AG MANILA BRANCH
VS. CIR, GR NO. 188550, 19 AUG 2013
Doctrine: The petitioner withheld and remitted to the
respondent 15% of its branch profit remittance tax. The
petitioner filed a claim pursuant to the RP Germany treaty
of a preferential rate of 10%. The CTA ruled that the
petitioner is not entitled to the preferential tax rate
because it failed to file prior application for the claim of
refund within 15 days from the time of transaction The
court ruled that the petitioner is entitled to a refund since
tax treaties are entered to minimize the harshness of
double taxation. Under the said treaty, there is nothing
provided that an application must be made within the
fifteen day period to claim a refund. In this case, the
obligation to comply with a tax treaty takes precedence
with RMO’s objective.
VI. CBK POWER COMPANY LIMITED VS. CIR,
G.R. NOS. 193383-84, JANUARY 14, 2015;
Doctrine: CBK obtained a loan from foreign banks.
According to CBK, relevant tax treaties between the PH
and other countries provide that interest income is subject
to 10% preferential tax rate. CTA e banc argued that the
availment of a tax treaty relief is preceded by the
application Of BIR ruling to the ITAD 15 days before the
transaction. The court ruled that the BIR cannot add
additional requirement, the obligation to comply with a tax
treaty precedes over the objectives of the RMO. Court ruled
that the application of a tax treaty relief from the BIR must
operate to conform the entitlement of taxpayer to
relief.The application for tax relief must only operate to
conform the entitlement of the taxpayer to the relief sought.
VII. CIR VS. ESTATE OF TODA, GR NO.
147188, 14 SEPT 2004
Doctrine: Tax Evasion
CIC- Altonga- RMI here CIC was taxed of 5% CGT
instead of 35% Corporate Income tax because dinaan nya
sa individual kaya lower tax rate
Tabuzo, Tax Remedies
( CIC)Toda sold the Cibeles Building to Altonaga
who sold the same to RMI. Altonaga sold the same to
RMI paying a CGT of 10M. Toda on the same day
transferred his share to Le Hun Choa ( on the same day).
BIR sent an assessment notice stating that the scheme was
fraudulent . The Commissioner argued that the scheme was
fraudulent since Alotnga was neither the buyer and the sller
of the property from CIC or the seller to RMI. In this case,
CIC was taxed only CGT of 5% instead of 35% Corporate
income tax. The court ruled that there is tax evasion based
on the ff factors 1. The end to be achieved, 2. The
accompanying state of mind which is willful and
deliberate 3. The course of action is unlawful. Tax
evasion exist in this case, prior to the sale of property
CIC already received the purchase price from RMI and
not from Altonaga.The same was likewise debited in the
part of RMI. Therefore,, the court ruled that fraud is present
as the scheme resorted to make it look like there is two sale
was made to reduce the amount of tax.
VIII. DOMINGO VS. CARLITOS 8 SCRA 443
In the proceeding , the CFI of Leyte ordered thep
payment of estate and inheritance taxes, charges and
penalties. The fiscal filed an execution of judgment but this
was denied on the ground that the government was indebted
to the estate. The issue here is whether taxes can be
compensated with the debt of the government. Court
ruled that Yes, in this case both the claim or inheritance tax
and the claim for instate service was already due and
demandable and liquidated. Under the CC, compensation
takes place by operation of law which is present at the case
at bar.
IX. AIR CANADA VS. CIR, JANUARY 11, 2016,
G.R. NO. 169507
The petitioner argues that the CTA must not have denied
its claim for refund of gross billings tax on the ground that
the same is subject to income tax 1. It had not assessed by
the BIR any income tax liability 2. Internal revenue taxes is
not subject to compensation. The court ruled that the
issue for the claim of refund is intertwined with the
issue of proper taxes that are due to the petitioner. Upon
the filing of the tax refund, there is a presumption that the
returns filed were correct. In this case, the court ruled
that it must first determine the proper tax due before
ruling on the refund claim. The imposition of the 32%
regular income tax is made to ascertain the petitioner’s
entitlement to tax refund and not the imposition of
deficiency tax.
The petitioner is an international air carrier with no landing
rights in the Philippines as a resident, foreign corporation
engaged in business in the Philippines through its local
sales agent that sold and issued tickets for the airline
company. An offline carrier is any foreign air carrier not
certified by the CAB but maintains an office or appointed
agent or employees in the Philippines who sells or offers
any air transportation in behalf of the foreign air carrier or
holds itself out for solicitation , advertisement etc.
Therefore, the petitioner is doing business or engaged in the
business in the Philippines performing act directly for its
principal. The activities of Aerotel bring direct receipts or
profits to petitioner. Further, petitioner was issued by the
Civil Aeronautics Board an authority to operate as an
offline carrier in the Philippines for a period of five years.
Petitioner is, therefore, a resident foreign corporation that is
taxable on its income derived from sources within the
Philippines
X. CS GARMENT, INC., VS. CIR, G.R. NO.
182399. MARCH 12, 2014:
CS Garment is a domestic corporation that is registered
with PEZA engaged in the manufacture of garment. It
received a LOA from the respondent requiring it to pay
VAT deficiency. While the case was pending before the
CTA the petitioner filed a manifestation stating that it
availed of the tax amnesty. The OSG argues that tax
amnesty is not automatic and that it cannot be granted to
the petitioner since a judgment was already rendered in
favor of the BIR. The court ruled that CS Garment is
immune form the payment of deficiency tax. Tax amnesty
pertain to a general relief to tax evaders who wanted to
straighten their record. The tax amnesty provides that
taxpayers that are entitled enjoy privilege as as soon as they
fulfill the substantive condition therein.
Tax Amensty Conditions The immunities of tax amnesty
shall not apply where the person failed to file a SALN
and the tax amnesty return or where the amount of net
worth is proven to be understated y 30%. It is also
required that 1. Notice of Availment. 2. Tax Amnesty
return form 3. SALN and 4. Tax amnesty payment form
must first be filed. The petitioner complied with all of this
and 1. Its net worth is not understated by 30% , it filed a
SALN. While tax amnesty, similar to a tax exemption, must
be construed strictly against the taxpayer and liberally in
favor of the taxing authority, the IRR cannot expand the
lamentinging law.30 
N. TAXPAYER’S SUIT
. A taxpayer is allowed to sue where there is a
1. claim of public funds that are illegally disbursed or that
2. The petitioner is directly affected by the act.
EX( Where the disposition is of alleged public property lie
paintings and silverware of the Marcoses) and not public
funds, a taxpayer’s suit is not proper ( Joya v. PCGG).
The taxpayer suit must yield to transcendental importance.
Tabuzo, Tax Remedies
I. REMULLA VS MALIKSI, G.R. NO. 171633,
SEPT. 18, 2013
Doctrine:De Villa, ceded a donation in favor of province of
Cavite where the government facilities are located. The
province of Cavite filed a complaint before the RTC
seeking to expropriate the subject property. De Villa
opposed the proceeding arguing that the donated portion
has yet to be developed. De Vila then sold the property in
favor of Goldenrod. A compromise agreement was entered
into by Maliksi which GoldeRod sold it to Mathay and
Pascual .Remulla filed a petition arguing that the
compromise agreement is disadvantageous to the
government since the price was excessive, and Maliksi
entered into compromise without authority of law. Court
ruled that he has standing 1. There is a claim of public
funds 2. Public money illegally disbursed. The funds of
province of cavite are to be expended to enforce the
compromise judgment. Therefore as long as taxes are
involved people have the right to enter into compromise
judgment
II. SOF, ET AL V. LAZATIN AND ECOZONE
PLASTIC ENTERPRISES CORPORATION, G.R.
NO. 210588, NOVEMBER 29, 2016
Doctrine
The Secretary of Finance signed RR 2-2012. The RR
requires the payment of VAT and excise tax on
petroleum products on petroleum products directly
abroad into the PH. It allows a tax refund if the taxpayer
proves that the petroleum brought in has been sold to a duly
registered economic zone. Pampanga first district
representative filed an injunction against the petitioner to
annul the RR, Eocozone sought to intervene. As to
Lazatin, he has the legal standing to question that act of
usurpation of legislative power of the congress. As to
EPEC it has legal standing as Clark FEZ locator. The
Revenue Regulation relates to the imposition of VAT and
applies to all petroleum products imported abroad to the PH
including FEZ.In this case, since EPEC is an enterprise
located in the Clark Fez it has standing
B. ORGANIZATION AND FUNCTIONS OF
THE BUREAU OF INTERNAL REVENUE
1. POWER OF THE BIR
1. Has assess and collect all taxes, fees, and charges
2. To enforce all forfeiture, penalties , and fines in
connection therewith
3. This include execution of judgment in all cases decided
in its favor.
II. SPECIFIC PROVISIONS TO BE CONTAINED
IN RULES AND REGULATIONS
SEC. 245. Specific Provisions to be Contained in Rules
and Regulations. - The rules and regulations of the
Bureau of Internal Revenue shall, among other things,
contain provisions specifying, prescribing or defining:
(a) The time and manner in which Revenue Regional
Directors shall canvass their respective Revenue
Regions for the purpose of discovering persons and
property liable to national internal revenue taxes, and
the manner in which their lists and records of taxable
persons and taxable objects shall be made and kept;
(b) The forms of labels, brands or marks to be required
on goods subject to an excise tax, and the manner in
which the labelling, branding or marking shall be
effected;
(c) The conditions under which and the manner in which
goods intended for export, which if not exported would
be subject to an excise tax, shall be labelled, branded or
marked;
(d) The conditions to be observed by revenue officers
respecting the institutions and conduct of legal actions
and proceedings;
(e) The conditions under which goods intended for
storage in bonded warehouses shall be conveyed thither,
their manner of storage and the method of keeping the
entries and records in connection therewith, also the
books to be kept by Revenue Inspectors and the reports
to be made by them in connection with their supervision
of such houses;
(f) The conditions under which denatured alcohol may
be removed and dealt in, the character and quantity of
the denaturing material to be used, the manner in which
the process of denaturing shall be effected, so as to
render the alcohol suitably denatured and unfit for oral
intake, the bonds to be given, the books and records to
be kept, the entries to be made therein, the reports to be
made to the Commissioner, and the signs to be displayed
in the business or by the person for whom such
denaturing is done or by whom, such alcohol is dealt in;
(g) The manner in which revenue shall be collected and
paid, the instrument, document or object to which
revenue stamps shall be affixed, the mode of
cancellation of the same, the manner in which the proper
books, records, invoices and other papers shall be kept
and entries therein made by the person subject to the tax,
as well as the manner in which licenses and stamps shall
be gathered up and returned after serving their purposes;
(h) The conditions to be observed by revenue officers
respecting the enforcement of Title III imposing a tax on
Tabuzo, Tax Remedies
estate of a decedent, and other transfers mortis causa, as
well as on gifts and such other rules and regulations
which the Commissioner may consider suitable for the
enforcement of the said Title III;
(i) The manner in which tax returns, information and
reports shall be prepared and reported and the tax
collected and paid, as well as the conditions under which
evidence of payment shall be furnished the taxpayer,
and the preparation and publication of tax statistics;
(j) The manner in which internal revenue taxes, such as
income tax, including withholding tax, estate and
donor's taxes, value-added tax, other percentage taxes,
excise taxes and documentary stamp taxes shall be paid
through the collection officers of the Bureau of Internal
Revenue or through duly authorized agent banks which
are hereby deputized to receive payments of such taxes
and the returns, papers and statements that may be filed
by the taxpayers in connection with the payment of the
tax: Provided, however, That notwithstanding the other
provisions of this Code prescribing the place of filing of
returns and payment of taxes, the Commissioner may,
by rules and regulations, require that the tax returns,
papers and statements that may be filed by the taxpayers
in connection with the payment of the tax. Provided,
however, That notwithstanding the other provisions of
this Code prescribing the place of filing of returns and
payment of taxes, the Commissioner may, by rules and
regulations require that the tax returns, papers and
statements and taxes of large taxpayers be filed and
paid, respectively, through collection officers or through
duly authorized agent banks: Provided, further, That the
Commissioner can exercise this power within six (6)
years from the approval of Republic Act No. 7646 or the
completion of its comprehensive computerization
program, whichever comes earlier: Provided, finally,
That separate venues for the Luzon, Visayas and
Mindanao areas may be designated for the filing of tax
returns and payment of taxes by said large taxpayers.
For the purpose of this Section, 'large taxpayer' means a
taxpayer who satisfies any of the following criteria:
(1) Value-Added Tax (VAT) - Business establishment
with VAT paid or payable of at least One hundred
thousand pesos (P100, 000) for any quarter of the
preceding taxable year;
(2) Excise tax - Business establishment with excise tax
paid or payable of at least One million pesos (P1,
000,000) for the preceding taxable year;
(3) Corporate Income Tax - Business establishment with
annual income tax paid or payable of at least One
million pesos (P1,000,000) for the preceding taxable
year; and

(4) Withholding tax - Business establishment with
withholding tax payment or remittance of at least One
million pesos (P1,000,000) for the preceding taxable
year.
Provided, however, That the Secretary of Finance, upon
recommendation of the Commissioner, may modify or
add to the above criteria for determining a large
taxpayer after considering such factors as inflation,
volume of business, wage and employment levels, and
similar economic factors.
The penalties prescribed under Section 248 of this Code
shall be imposed on any violation of the rules and
regulations issued by the Secretary of Finance, upon
recommendation of the Commissioner, prescribing the
place of filing of returns and payments of taxes by large
taxpayers.
Power to interpret tax laws and decide tax cases
1.Commissioner of internal Revenue :
a. Quasi-Legislative: ( Appeal to SOF). This pertains to the
power to interpret the provision of the tax code and other
tax laws shall be under the exclusive and original
jurisdiction of the CIR subject to review by the SOF.
The determination of validity of administrative issuances
( revenue orders , revenue memorandum circulars or
rulings, and the tax rulings clearly falls within the appellate
jurisdiction of the CTA subject to prior review of the SOF)
b. Decide : QUASI JUDICAL
The power to decide disputed assessment , refund or
internal revenue taxes, fees or other charges penalties
imposed in relation thereto or other matters arising under
the Tax Code or other laws or portion thereof administered
by the BIR vested in the CIR subject to the exclusive
appellate jurisdiction.
1. Disputed assessment
2. Refunds
3. Other matters arising form the NIRC subject to
review by the CTA.
The determination of the validity of
administrative issuance and tax rulings clearly falls within
the exclusive jurisdiction of the CTA under RA 1125 as
amended subject to prior review by the SOF as required
under the NIRC.
c. Power to obtain information and summon ,examine and
take the testimony of the person
Failure to obey the summons ( Section 266)
Tabuzo, Tax Remedies
1. A person is duly summoned to appear , testify or to
appear, and produce books of accounts records, memoranda
or other papers or furnish information and
2. The person neglected to appear or produce such books of
accounts or records memoranda or other purpose or to
furnish such information
d. power to make assessment and prescribe additional
requirement for tax administration and enforcement
There must be a grant of authority from the CIR
before any revenue officer can conduct examination or
assessment. Equally important is that the revenue officer so
authorized must not go beyond the authority given. In the
absence of such authority the assessment or examination is
nullity.
The Commissioner of internal revenue has the power to
interpret tax laws, this is codified in two ways
1. Revenue memorandum circular (RMC)- apply to
all taxpayers. ( the cir makes an interpretation and
provides for a guideline how a provision in the
tax code apply to a particular circumstances)
2. BIR rulings- international tax affairs division
rulings( IATAD)( In a ruling a particular
taxpayer, goes to the BIR to ask the BIR to
answer the interpretation of the taxpayer is
correct)
The IATAD ruling – if the taxpayer wants to
avail of the tax exemption by virtue of a IATAD
ruling. The ruling only applies to the taxpayer
who requested this ruling no other taxpayer can
invoke this BIR ruling. –( persuasive)
3. Internal revenue order. – this is merely directed to
the internal officer. Of the BIR. (Revenue
Memorandum Order)
Note: The expanded Jurisdiction of the CTA:
This is not limited to cases that involves the decision or
inaction of the BIR on disputed assessment but also all
matters arising to the BIR or the tax code. In tax refund ,
the CTA has exclusive jurisdiction all tax problem .
Hence, it can take cognizance of a case challenging its
constitutionality, regulation and admin issuance, since
the resolution is necessary to determine whether the
assessment is valid.
II. POWER OF THE CIR TO INTERPRET TAX
LAWS AND DECIDE TAX CASES
c. Cases:
I. PHILAMLIFE VS. DOF, G.R. NO. 210987,
NOVEMBER 24, 2014
The petitioner was informed that it needs to apply for a BIR
ruling to determine the potential donors tax in the sales of
stock. A BIR ruling was obtained but denied by the
Commissioner. The petitioner field a disputed assessment
with the CA, but the CA dismissed the case as it must be
the CTA who can interpret tax laws. The court ruled that it
is the CTA who has jurisdiction to rule on appeals
pertaining to disputed assessment.
In line with the expanded jurisdiction, CTA has the power
of certiorari within its appellate jurisdiction. The CTA has
certiorari powers to determine whether there has been grave
abuse of discretion on the part of the RTC when it issued
interlocutory order. Therefore,, in lined with the CTA, can
rule on the assessment and validity of revenue regulation
order. Therefore in lined with this the CTA can rule in
assessment and validity of revenue regulation order. The
fact that the petitioner not only contested the applicability
of sales transaction but the validity of the memorandum
does not divest the CTA of its jurisdiction
* The review of decision by the SOF must be made to the
CTA and not to the CA as erroneously made by the
taxpayer. “ This pertains to other matters”Expanded
Jurisdiction of the CTA: With the transfer of the appellate
jurisdiction to the CTA to rule on the propriety of
assessment comes with the certiorari jurisdiction of the
CTA to rule on the validity of revenue memorandum to
which it was made. In refund cases, the CTA has
jurisdiction to rule on all tax problems therefore it can take
cognizance of a case challenging the constitutionality,
regulation of administrative issuance
II. CLARK INVESTORS AND LOCATORS
ASSOCIATION, INC. VS SOF, G.R. NO. 200670,
JULY 06, 2015
 Ceritorari cannot prosper if the revenue
regulation was enacted pursuant to quasi
legislative and not quasi judicial. ( SOF ung ng
issue). Certiorari can only be had in quasi judicial
Doctrine: RA 7227 provides that all business within the
SEZ must provide preferential gross income of 5% and are
exempt from payment of import duties in raw materials.
RR 2-2012 was issued reversing the exemption by
imposing VAT and excise tax on petroleum.The
petitioner filed for the petition for certiorari. The court
ruled that the petition for certiorari cannot prosper as the
respondent (SOF)acted not in a quasi judicial but quasi
legislative when it impelemented RMO. Here the RR
Tabuzo, Tax Remedies
was issued pursuant to the quasi legislative and not
quasi judicial and was issued pursuant to the
Secretary’s power to promulgate rules and regulation.
Hierarchy of courts needs to be respected. A direct
invocation to the SC original jurisdiction to issue this
writs must only be allowed when there are special and
important reason specifically set out in the petition. In
the case, at bar the petitioner did not state exceptional and
compelling reason to justify the same. Hence, the resort to
special action of certiorari is not proper.
Q: The City of Liwlia assssed local business taxes
against Talin claiming that there is double taxation.
Talin Company filed a complaint for recovery of
erroneously collected Local Business tax prohibition
with prayer to issue TRO and writ of preliminary
injunction with the RTC. The RTC denied the
application for writ of preliminary injunction. Since
its motion for reconsideration was denied .Talin
Company filed several special civil action for
certiorari with the CA. The government lawyer
representing the City of Liwila prayed for the
dismissal of the petition on the ground that the same
must be file with the CTA. Talin countered that the
CTA cannot entertain a petition for certiorari since it
is not one of its powers and authorities under existing
rules and laws.
A: The petition filed with the CA must be dismissed
since the petition have been filed with the CTA. The
CTA has the power to determine whether there has been
grave abuse of discretion amounting to lack of excess
jurisdiction on the part of the RTC in issuing
interlocutory orders in cases falling within the CTA
exclusive jurisdiction. The CTA therefore has
jurisdiction to issue writs of certiorari in such cases.
Furthermore, its authority to entertain petition for
certiorari questioning interlocutory orders issued by the
RTC is included in the power granted by the constitution
inherent in the exercise of appellate jurisdictino
III. BANCO DE ORO VS. RP, 2015
Doctrine ( CIR ng issue)
Certiorari petition to the SC ( no need to go thru SOF and
CTA)The CIR issued BIR ruling declaring that PEACE
bonds are subject to 20% FWT.Because of this the
Secretary of finance directed the BOT to withhold 20%
final witholding tax of peace bond upon maturity.The
petitioner filed a certiorari with the SC. The respondent
argue that there is a violation of hierarchy of laws. In this
case, there is no violation, the rulings are reviewable by the
SOF. Pursuant to its interpretative powers the CIR has the
power to interpret a provision of the tax law.
As a rule, the decision of the CIR must first be appealed to
the SOF. Thus, resort to administrative remedies must
first be had before resort to court can be made.
However, the doctrine of exhaustion of administrative
remedies has exemption 1. When the issue is purely legal 2.
When the circumstance indicates urgency of judicial
intervention. In this case, the exemption applies. The
question involved here is purely legal as it pertains to
the interpretation of the 20 lender rule and whether the
imposition of 20% Final Withholding tax on the PEACe
bond violate the constitutional prohibition of non-
impairment of contract. In this case the petitioner need not
appeal to the SOF because it was with the request of the
SOF that the ruling is to be issued. Generally, the case must
be filed with the CTA but due to its compelling nature and
circumstance resort to the SC is warranted.

TAX REMEDIES

F. REMEDIES UNDER THE NIRC

a. Tax Assessment

Kinds of Assessment
1. Self-Assessment: When a taxpayer computes his own
liabilities, files his return and pays his tax based on his
computation.
2. Deficiency assessment: This occurs upon discovery of the
BIR that the self-assessment was ether deficient or when there
is no return was made by the taxpayer.

For there to be a valid formal assessment, the following must

concur: (a) it must be addressed to the taxpayers; (b) there must be
demand made on the taxpayers to pay the tax liability, or a period
for payment set therein; (c) the letter must be mailed or sent to the
taxpayers by the Commissioner.

Tabuzo, Tax Remedies

It must be addressed to the taxpayer -> demand must be made to
the taxpayer to pay  the letter must be ailed or sent to the
taxpayer by the Commissioner.
i. Requisites of a valid assessment
a. The Final Assessment Notice ( FAN) must indicate the umber of
tax to be paid and after due date of the payment, without the
definite amount or the date when the tax must be paid, t is not a
valid demand.
b. The assessment must be made in writing and must inform the
taxpayer of the law and the facts on which the assessment is made.
i. The legal and factual bases of assessment must be
stated in the formal letter of demand and assessment notice, not in
any other document or paper issued by the CIR.
NB: Substantial Compliance: When the legal and factual bases can
be found in a series of correspondence between the BIR and the
taxpayer ( this is not indicated in the FAN)
Issuing Authority
1. The power to issue an assessment is with the CIR. However, he
can authorize any revenue officer to conduct an examination or
assessment through a letter of authority.
1. CIR vs. Eron Subic Power Corporation, GR No. 166387, 19
January 2009
Doctrine: The taxpayer must be informed of the factual and legal
bases to which assessment is made  This does not include letter
notices.
#1 Assessment must inform the taxpayer of the law and the
facts to which it is made. The court held that tax deficiency failed
to inform the taxpayer of the law and the facts which is made. The
court ruled that the tax deficiency and the five day notices are not
valid substitutes for mandatory notice in writing. A preliminary
letter during pre-assessment does not mean that Enron was
informed of the law and the facts to which the assessment was
made. A preliminary letter and audit working paper does not
suffice
2. CIR vs. United Salvage And Towage, G.R. No. 197515, 2 Jul
2014
FAN deficiency income tax show that other than the alleged
deficiency tax, no further detail regarding the assessment was
provided for by the petitioner and it was only the resulting interest,
surcharge and penalty which was anchored with legal basis. The
court ruled that the petitioner should have attached a notice of
discrepancy and explained as to why the deficiency is collectible
against the respondent and how the amount was arrived at.
3. Samar-I Electric Cooperative vs. CIR, G.R. No. 193100, 10
December 2014
Tabuzo, Tax Remedies
Doctrine : Note the particularity of the case because of the
peculiarities of this case the taxpayer is provided with audit
findings, audit working paper, PAN and this contain the facts and
the law to which it is based. Considering the exchange of
correspondence and document between the parties the requirement
of Section 228 was substantially complied with. In this case ,the
factual and legal bases of the deficiency tax assessment enabling
the latter to file an effective protest thus the taxpayer right to due
process is not violated.
SUBSTANTIAL COMPLIANCE:
1. The petitioner was duly furnished with a copy of the summary of
the report submitted by the Revenue Officer containing the
explanation f the findings and investigation that state the legal and
factual bases of the assessment.
2. When the petitioner requested for copies of working papers, the
respondent replied and furnished him with the same.
Hence the court ruled that the respondent was able to substantially
inform the petitioner of the law and the facts of the tax assessment.
Therefore the court ruled that substantial compliance as to the legal
bases of the deficiency enabled it to file an effective protest.
4. Pilmico-Mauri Foods Corp., v. CIR, G.R. No. 175651,
September 14, 2016
In a petition for review filed before the CA it is the burden on the
part of the taxpayer to properly invoke the legal provision to
reduce its tax liability. The CTA is not bound to rule solely on the
basis of the law cited by the CIR Were it otherwise the tax court’s
appellate power of review is rendered useless. An absurd situation
arises leaving the CTA with two option 1. Affirm the legal finding
or 2. Altogether absolve the taxpayer from liability of the CIR
relied on misplaced provision
5. CIR v. Fitness by Design, Inc., G.R. No. 215957, November
9, 2016
There must be demand: Here, the tax due still shows that it is still
subject to modification. The complete details covering the
aforementioned discrepancies established during the investigation
of this case are shown in the accompanying annex 1 of the Noitce.
The 50% surcharge and the 20% interest have ben imposed
pursuant to the NIRC . Please note however that the interest and
the total amount due will have to be adjusted if paid prior or
beyond April 15  This shows that the demand is not yet final
6. Adamson v. Court of Appeals, GR No. 120935, 21 May 2009
In this case the recommendation of the commissioner to the DOJ
that proper assessment must be filed against the taxpayer is not a
valid demand. An assessment is a written notice and demand made
by the BIR on the taxpayer for the settlement of tax liability which
is set and fixed. Therefore, a recommendation letter of the
commissioner is not considered to be a formal assessment because
1. It is not addressed to the taxpayer 2. There was a demand made
to the taxpayer but the letter was not sent to the taxpayer by the
CommissionerLastly, there is no need for the assessment before
criminal prosecution applies. A crime is consummated when the
violator knowingly and willfilly filed a fraudulent return
7. Estate of Julina Diez vda. De Gabriel vs. CIR, GR No.
155541, 01 Jan 2004
3rd Requisite: The assessment must be served to the taxpayer, to
enable the taxpayer to determine his remedies due process requires
that it must be served and received by the taxpayer. In this case the
assessment was sent to Philtrust a third person not related to
Juliana the taxpayer.
8. CIR vs. E shuttle Service GR 240729
In this case, there was no demand, and that the assessment was not
served to the taxpayer. There was no proof of mailing. There was
no demand because the formal letter of demand and assessment
provides that there is nothing on record that reveals that CIR issued
a final demand that contains a definite period of payment. .
Further, the CTA en banc observed that the alleged notice attached
to the FAN did not prescribe a definite period for the respondent to
pay deficiency taxes. Therefore, the same is not valid.
9. CIR vs. Spouses Magaan May 23 ,2021
In assessment the taxpayer must be informed of the factual and
legal bases to which the assessment is made. Tabular summaries of
the alleged underdeclared income of the respondent only
mentioned payment received but no other explanation left to enable
the taxpayer to make a protest
Also, demand was not made to the spouses. As stated in the formal
letter of demand, the CIR considered IMELIC as the same entity as
that of the spouses. The court ruled that Imilec is a partnership that
has a separate and juridical existence from its partners and that
there is no clear and convincing proof that the corporation was
created to commit fraud. Therefore the separate juridical
personality applies and that notice to IMELIC is not considered to
be notice to the spouses
ii. Prescriptive Period
General Rule The right to assess must be exercised within three
years from
a. The day the return was actually filed
b. From the last day of the filing the return
* Which ever is later ( April 15)
Return:
- Whenever there is an amended return which it must be
substantially complete as to include the needed details on which
the assessments were made. The period to assess is counted from
the time of the filing of amended return and not original return.
( CIR v. Phoenix)
3. If the taxpayer filed a wrong return , it is as though he filed not
return at all. In situation like this, the ten year period applies.
Tabuzo, Tax Remedies
4. It is incumbent upon the taxpayer who wants to avail the defense
of prescription to prove that he or she indeed filed a return.
Exceptions:
1. False or fraudulent return with intent to evade the taxes within
ten years from the discovery of falsity or fraud.
2. Failure or omission to file a return within ten years after the
discovery of failure or omission to file a return
3. Waiver of the statute of limitation in writing which must e made
before the expiration of the three year period of assessment.
FRAUD, FALISTY AND IMPOSITION OF 10 YEAR PERIOD
1, Fraud : Is a question of fact and circumstances this must be
alleged and proven in court. It is not lightly to be presumed
because it is a serious charge. Hence, if fraud is not proven the
government cannot use the 10 year period to make an assessment.
2. False Return: implies deviation from the truth. It is usually due
to mistake, carelessness and ignorance.
3. Fraudulent return: Implies intentional or deceitful entry with
an intent to evade the taxes due.
Q: Why is there a need to distinguish when the
prescriptive period is the same?
A: The importance is the application of penalty surcharge. In
Aznar, there s a surcharge of 50% penalty surcharge. For the
surcharge to apply, it must be intentional fraud, consisting of
deception willfully and deliberately done or resorted to in order to
induce another to give up some legal right.
Q: Does the 30% threshold proves that fraud exist?
A: No it does not. It only pertains to a presumption of fraud, which
in the end must be proven by the government.
Suspension Of the Running of the Statute of limitation
1. CIR is prohibited form the making the assessment or beginning ,
distraint or levy or a proceeding in court and sixty days thereafter
2. When the taxpayer requested for reinvestigation and it is granted
by the CIR
3. The taxpayer cannot be located in the address unless there Is a
notice
4. When warrant of distraint or levy is duly served and no property
may be located.
5. When the taxpayer is out of the Philippines
Waiver:
The taxpayer and the government may extend by mutual agreement
in writing the prescriptive period for the assessment and collection
of taxes.
Mandatory Requirement for a valid waiver:
1. The waiver must be executed before the expiration of the period
to assess or collect taxes.
2. The date of execution must be specifically indicated in the
waiver.
3. The waiver must be signed by the taxpayer or his duly
authorized representative. For corporation, it must be duly signed
by its responsible officials.
4. The expiry date of the period agreed upon to assess or collect
after the regular three-year period must be indicated.
5. It is mandator that the waiver is in writing, the same need not be
notarized.
6. The taxpayer has the duty to submit the duly executed waiver to
the relevant BIR officer
A. The BIR officer indicates acceptance of the waiver by signing
the same.
b. Both the execution of the waiver and the acceptance must be
done prior to the expiration of the period to assess or collect.
Prescriptive Period
1. In determining if prescription to assess has indeed set in , the
important date to remember is when the demand letter , or notice is
released or mailed or sent to the CIR to the taxpayer. (At the time
of release and not at the time of Receipt)
CIR’s part
A. If the release was effected before the prescription sets in : The
assessment is deemed to be made on time, even if the taxpayer
receives the same after prescription period
B. However, the fact that the assessment notice was mailed before
the prescriptive period sets in must be proven by substantial
evidence by the CIR
Taxpayer’s Part
A. If the taxpayer makes a direct denial of the receipt of a mailed
demand letter, such denial shifts the burden to the government to
prove that such letter was indeed received by the taxpayer.
Estoppel:
In cases when the taxpayer still paid within the
extended period provided in the waiver. The court rueld that the
taxpayer is estopped from the questioning of the waiver as it
impliedly admitted to the validity of the waiver. Had it believed
that the waiver is invalid and the period to assess had prescribed it
would not have paid the same.
NB: If the taxpayer impugned the validity o f the
waiver and made partial payments of the assessed deficiency tax.
The court ruled that the taxpayer is not estopped as it did not waive
the defense of prescription as regard to tax deficiencies and
continued to raise the defense of prescription.
1. CIR vs. Asalus Corporation, G.R. No. 221590, 22 Feb 2017
There is a prima facie evidence of a false return if there is
substantial under -declaration of taxable sales, receipt or income.
Tabuzo, Tax Remedies
The failure to report sales, receipt or other income in an amount
exceeding 30% what is declared in the returns constitutes as
substantial under declaration. When there is a showing that a
taxpayer has substantially under declared its sales, receipt or
income there is a presumption that it filed a false return.
As a general rule, the period to assess is three years from the time
of the filing of the return or at the last day of filing of the return
whichever comes later. An exception in case of false return the
period is ten years. Also note that the mere showing that the tax is
undeclared to the amount of 30% shows that the tax filed was false
notwithstanding the intent to defraud sufficient to warrant the
application of the ten year period
2. CIR vs. Philippine Daily Inquirer, Inc., G.R. No. 213943, 22
March 2017
Doctrine:false Return : NO intent to evade In this case, the entry
of a wrong information due to carelessness without the intent to
evade taxes does not constitute a false return, it also does not
provide as enough evidence to prove falsity or fraud on the part of
the PDI. In this case, the three year period applies as there was not
enough evidence to prove fraud or intentional falsity on the part of
PDI.
3. CIR vs. La Flor Dela Isabela, Inc., G.R. No. 211289. January
14, 2019, J. Reyes
DOCTRINE
Withholding taxes do not cease to become income tax just because
it is collected and paid by the withholding agent. It was never
meant to mean that withholding tax do not fall within the term of
internal revenue tax considering that the income taxes are the one
withheld by the withholding agent.Section 203 of the NIRC
provides that all internal revenue taxes shall be assessed within
three years from the last day prescribed by law for the filing of the
tax.
4. BIR vs. GMCC United Dev’t Corp., GR No. 191856, 7
December 2016
Doctrine: For the ten year period under Section 222(a) to apply it is
not enough that fraud is alleged in complaint fraud must be
established by clear and convincing evidence
In this case the error of GMCC stemmed from the wrongful
application of the law and not an intention to evade payment if
there is an intent to evade payment GMCC should not have paid
the tax albeit in a wrong year.
Section 203 prohibits two acts after the expiration of the three year
period. 1. An assessment for the collection of taxes in the return 2.
Initiating a court proceeding on the basis of such return. The state
prosecutor was correct in dismissing the complaint for tax evasion
since it was clear that the return cannot be used as basis for the
case.
.
5. CIR vs. Systems Technology, Inc. vs. CIR, G.R. No. 220835,
July 26, 2017,
Compare this case with RCBC v. Cir : Partial payments of the
revised assessment issued within the extended period as provided
in a waiver is an implied admission as to the validity of the waiver.
Vs. This case . Here, there is no partial payments made hence it is
not an implied admission of the validity of the waiver
The estoppel upheld in the RCBC case arose from the taxpayer’s
act of payment and not to the reduction in the amount of assessed
taxes. RCBCs partial pamynet of the revised assessment effectively
belied its insistence that the waivers are invalid and the
assessments were issued beyond the prescriptive period. Here,
there is no such payment by the STI the mere reduction of the
amount of the assessment because of a request for reinvestigation
must not bar it from raising the defense of prescription.
6. CIR vs. Avon Products Manufacturing, Inc/Avon Products
Manufacturing, Inc. Vs. TheCommission of Internal Revenue,
G.R. Nos. 201398-99/G.R. Nos. 201418-19. October 3,
The Estoppel upheld by the RCBC arose from 1. The benefit
obtained by the taxpayer from its execution of waiver in the form
of drastic reduction of deficiency taxes 2. The taxpayer’s payment
of a portion of reduced taxes.
In this case, Avon did not actually receive any benefit from the
waiver. There was even a drastic increase in the assessed
deficiency taxes when the CIR increased the alleged sales
discrepancy. Under this circumstance, Avon payment of an
insignificant portion of the assessment is not an admission as to the
validity of the waiver.
7. CIR vs. Standard Chartered Bank, G.R. No. 192173, July 29,
2015
Doctrine
Although the respondent paid the deficiency WTC and FWT
assessment it did not waive the defense of prescription as regard to
the remaining tax deficiencies it being on record that the
respondent continued to raise the issues of prescription in its pre-
trial brief , joint stipulation of facts, issues and direct testimonies of
the witness and memorandum. ( Exception to the RCBC case)
8. CIR vs. Next Mobile, G.R. No. 212825, December 07, 2015,
The waiver is upheld despite invalidity due to estoppel In this
case , the respondent executed five waivers an delivered them to
the petitioner one after the other .It allowed the petitioner to reply
on the said waiver and did not raise any objection as to its validity
until the time the petitioner assessed the tax and penalties . The
court ruled that the taxpayer cannot invoke the doctrine of
estoppel.
The doctrine of estoppel was recognized and the waiver was only
upheld when both the taxpayer and the BIR were in pari delicto.
The act of the taxpayer in impugning the validity of the waiver and
benefiting from it constituted as bad faith.
Tabuzo, Tax Remedies
The application of estoppel is necessary to prevent undue injury
that the government would suffer because of the cancellation of the
petitioner’s tax liabilities
9. Asian Transmission Corp. vs. CIR,2018, G.R. No. 230861, 19
Sept 2018,
Here, the taxpayer executed two defective waivers. In this case the
defects noted on the waivers of ATC weren’t solely attributable to
the CIR. A careful reading of the RDAO indicates that the proper
preparation of the waiver is the responsibility of the taxpayer.
The princi0ple of estoppel was applicable. The execution of the
waiver was to the advantage of ATC because the waiver would
provide ATC the sufficient time together and produce voluminous
record for audit. Therefore, it would be unfair were ATC be
permitted to assail the waiver only after the assessment proves to
be adverse
CIR vs Transaction Optical
1. TP never raised the invalidity of the waivers at the earliest
opportunity either in its protest to the PAN. Protest to the Fan or
supplemental protest to the FAN; in fact TPs protest to the FAN
recognized the validity of th waiver.
2. TP repeatedly failed to comply with audit notices and ignored
the request for informal conference to discuss discrepancies in the
partial document submitted.
10. CIR vs. Basf Coating + Inks Phils., Inc., G.R. No. 198677,
26 Nov 2014
Doctrine : The failure of the respondent to inform the BIR of its
change of address does not warrant the non suspension of the
prescriptive period because BIR knew of the change of address.
( ie : Return to sender )
In this case, even if there is an absence of formal written notice of
respondent change of address , the fact remains that the petitioner
became aware of the respondent’s new address as shown by the
document. Therefore, the running of the three year period to assess
the respondent was not suspended and had prescribed.
Prescription in the assessment and the collection of taxes is
provided by the legislature for the benefit of both the government
and the taxpayer , for the government for the purpose of expediting
the collection of taxes, so that the agency charged with the
assessment and collection may not tarry to long to prejudice the
interest of the government.
11. AFP General Insurance vs CIR, GR 222133
In this case AGIC, argues that the letter or authority is invalid
because the assigned revenue officer 1. Failed to render an
investigation report 2. Submit the letter of authority for
revalidation. As provided under the law. A revenue officer
assigned to an audit is duty bouond to render an investigation
report within 120 days from the issuance of the LOA. Failure to
revalidate the letter of authority does not make the said LOA void
ab initio since the loa merely becomes unenforceable inasmuch as
the revenue officer must first seek ratification of his expired
authority to audit or continue beyond the 120 days.If however the
revenue officer does not get revalidated during the 120 day period
as to when she rendered her investigation. He or she may instead
render a report based on the initial assessment that was issued prior
to the expiration of the LOA.
iii. Is Assessment Necessary Before Prosecution?
An assessment of deficiency is not necessary to a criminal
prosecution for willful attempt to defeat and evade the income tax.
There is no requirement for a precise computation and assessment
of the tax before there can be a criminal prosecution under the tax
code. The crime is complete when the violator has knowingly and
willfully filed a fraudulent return with intent to evade and defeat
apart or all of the tax .
1. Ungab vs. Cusi, 97 SCRA 877, 30 May 1980
DOCTRINE: While there can be no civil action to collect before
the assessment procedure provided in the code, there is no
requirement for the precise computation and assessment of tax
before a criminal prosecution may exist. Hence, in a criminal case
all the prosecution has to do is to identify the elements of the
crime, therefore there is no need for an assessment
2. CIR vs. CA (Fortune Case) GR No.119322, 4 June 1996
For a criminal prosecution to proceed before the assessment there
must be a prima facie showing of a willful attempt to evade tax.
The registered wholesale price of the goods approved by the BIR is
presumed to be the actual price therefore it is not fraudulent and
unless and until the BIR has a final determination as to what the
correct tax are the taxpayer is not to be placed in a criminal
prosecution if tax evasion
-vs- Ungab vs Kusi
In the case of Ungab, there is willful attempt because the taxpayer
failed to declare in his income tax return his income derived from
Banana Sippings. In the present case, it is different since the
registered wholesale price of the goods as approved by the BIR is
presumed to be actual wholesale price therefore, there is no
fraudulent return and unless and until the BIR had made
determination of correct taxes, the taxpayer must not be placed
under criminal prosecution
3. Adamson vs. CA/CIR vs. CA, GR Nos. 120935 & 124557, 21
May 2009
Issuance of the assessment is different from the filing of the
complaint. Before the assessment is issued there is a practice of
pre-assessment notice sent to the taxpayer. The taxpayer is given
the chance to submit position papers to prove that the assessment is
unwarranted. If the commissioner is not satisfied, an assessment is
to be sent to the taxpayer.
Tabuzo, Tax Remedies
In contrast, a criminal charge is directly filed wih the DOJ.
Thereafter, the taxpayer is notified that a criminal charge against
him and not that the commissioner issued an assessment
4. BIR vs.CA, Spouses Manly, G.R. No. 197590. November 24,
2014
Doctrine
Corollary an assessment of tax deficiency is not required in a
criminal prosecution for tax evasion. However, in CIR vs CA , the
court clarified that although a deficiency assessment is not
necessary, the fact that a tax is due must be proven before one is
prosecuted for evasion. Here the BIR enough to prove through the
summary that there is a gross disparity
By looking at the table presented by the petitioner CIR there is a
showing that the spouses underdeclared their income. There is a
huge disparity of the reported income and acquisition within the
past years.Therefore, the court ruled that even without assessment
CIR was able to convince it that there is probable cause to indict
the respondent spouses for tax evasion as the petitioner was able to
show that a tax was due form them.
b. Assessment Process and Reglementary Periods
Assessment: General Rule: The right to assess must be exercised
within three years from :
* From the failure to file a return
a. The date the return was actually filed
b. The last day of the filing of the return whichever is
later
Exception: ( Suspension of Running of Statute Limitation)
1. 10 Years:
a. False Return ( Bad Faith)
b. Fraudulent: Contemplated by law must not be actual
it must be intentional
c. Failure to file a return
2. Suspension: Prohibited form making assessment, distraint or
levy or a proceeding in court and 60 days thereafter
If there is a pending case in court.
3. When the taxpayer cannot be located unless there is a notice of
change of address.
4. When the BIR executes a valid waiver.
Requisite:
1. Both the Commissioner an the taxpayer agrees in writing to its
assessment after such time the tax assessed within the period
agreed within such time.
2. The taxpayer may be assessed within the period agreed upon
3. May be extended but it must be prior to the period agreed upon
5. When the taxpayer request for reinvestigation which is granted
by the CIR.
6. When the taxpayer is out of the Philippines
1. letter of authority
Must be served within 30 days from the time it is issued. It
covers the ff : 1. Taxes covered . 2. Period covered 3.
Authorized examiner 4. Authorized signatory
8. protest : The taxpayer protest within thirty days from the
receipt of the formal letter of demand . The protest must be
done within 30 days
Choices
a. Reinvestigation: Protest within 30 days plus additional 60
days to submit additional document ( last day of the 30 days +
60 days to submit). Based on newly discovered evidence
b. Reconsideration: Submission 30 days from the issuance of
the FAN. Based on existing records without the introduction of
new evidence
Denial of the Protest
1. If the protest is accepted : A motion fo reconsideration is
filed to the superior officer.

2. Audit: An audit is conducted 120 days from the issuance of

the LOA Appeal to the Ca
A. Non Deficiency : Assessment period ends 1. 30 days from the denial of the CIR or his duly authorized
B. Deficiency : The RO informs the taxpayer through a report. representative
The revenue officer states the facts in his report of investigation 2. 30 days from the lapse of inaction of the BIR
and submit the same to the Regional Director or Special
Investigation division ( indorse)
3. Notice of discrepancy: The RDO and special investigation a. Reinvestigation: File 180 day from the time of submission
division informs the taxpayer in writing in case the discrepancy of document with protest or Wait for the decision and then go
in the taxpayer is payment beyond the 30 days
4. Reply: The taxpayer is given three days to file a reply but the
resolution is thirty days
b.Reconsideration: 1. 180 days form the time of protest or 30
a. Yes: There will be a notice of informal conference days from the time decision
b. No. The default case is endorsed to the assessment division
5. PAN : A preliminary assessment notice ad endorsement to
CTA decides within 30 days from the time it is submitted
the RDO, the assessment division to the CIR. The PAN is
issued showing facts of the law and rules ad regulation n which
the assessment is based
Appeal the CTA en banc within 15 days receipt f the resolution.
Exception to PAN This remedy is jurisdictional , failure to file the same
1. When the deficiency is a result of a mathematical error. APPEAL RULE 45
2. When the discrepancy has been determined between and
withheld and tax actually remitted to the BIR
3. When the taxpayer who opted to claim a refund or tax credit
or excess who fund carry over the subsequent year of credit of
exercise was found to carry over the subseqneut year
4. Excise tax is not paid i. Medicard Philippines vs. CIR, GR. No. 222743, 5 April 2017
5. When an acitvitiy locally purchased or imported is sold or
transferred to a non exempt personk Prior to the issuance of the PAN and the FAN there must be an
issuance by the revenue officer of a letter authority. In the case at
6. Taxpayer responds: The taxpayer must respond within
fifteen days from the issuance of the preliminary assessment bar since there is only letter notices it cannot substitute a defective
notice stating the factual and legal grounds letter of authority because a letter notice is not a letter authority

- by disregarding the 15 day period provided by law, the CIR

utterly deprived the tax payer of the opportunity to contest the Letter Notice Letter of authority
PAN and present evidence in support thereto before the FAN
was issued. Clearly due process requires that the taxpayer 1. This is only required for the 1. A LOA is required prior to
receives the PAN and that he is given the opportunity to purpose of notifying the the examination of a taxpayer
respond thereto taxpayer that a discrepancy is
found based on BIR relief
7. Final Assessment Ntoice : system
CIR or his duly authorized representative issues a formal letter 2. A letter of notice has no time 2. A letter of authority must be
of demand objected via protest made within 30 days from the limit served within 30 days
receipt
3. There is no time limit 3. The revenue officer has 120

Tabuzo, Tax Remedies

 court ruled that estoppel has set in. The act of the respondent
days from the receipt of the
shows that it impliedly accepted the validity of thee waiver . 1. It
LOA to conduct the
examination – Need to never raised the invalidity of the waiver at the earliest opportunity ,
revalidate if not rescissible either in the protest to the PAN and the FAN 2. The respondent
also benefited from the waiver.

vi. CIR vs. Avon Products Manufacturing, Inc/Avon Products

ii. CIR vs. Lancaster Philippines, Inc., G.R. No. 183408, July
Manufacturing, Inc. Vs. CIR,
12, 2017
The law provides that there must be a 30 day expiration for service
In this case the Letter of authority shows that the period for
of LOA. Upon expiration of the LOA, it becomes unenforceable as
examination is taxable year 1998, as seen in the LOA the bearer is
it cannot be served without revalidation upon the taxpayer who has
authorized to examine the books of account and other record for
the right to refuse the same. Failure to comply with the 12- day
the year 1998. In the case at bar, since the subject LOA specified
rule does not render the LOA void. The expiration of the LOA
the examination should be only for the taxable year 1998 but the
merely rendered it unenforceable inasmuch revenue officer must
subsequent assessment issued against Landcaster is for the fiscal
first seek ratification of his expired authority to validly continue its
year 1999, hence outside the scope of the LOA therefore the same
investigation beyond the 120 days. If the revenue officer is unable
is void.
to revalidate his LOA, it does not invalidate the assessment already
performed within the 120 day period. Instead, the Revenue officer
iii. CIR vs. Metro Star Superama, GR No. 185371, 8 December
may render a report based on the result of the initial investigation.
2010

In cases the taxpayer denies receiving the assessment from the CIR
it is incumbent upon the latter to prove by competent evidence that
c. Civil Penalties
such notice was received by the addressee. While a mailed letter is
deemed received, such is merely a disputable presumption subject
i. Revenue Regulations No. 21-2018
to denial thereof and shifts the burden to the party to prove that the
mail letter was indeed received. In this case, the BIR failed to Rate of Interest
prove the fact of mailing , hence it is presumed that assessment 1. Loans of Forbearance: 6% in the absence of any stipulation.
was never sent,
2. No Loans of foreberance: 12% the rate of legal interest
iv. CIR vs. Mcdonald’s Philippines Realty Corporation, GR 3. Deficiency Interest: Interest imposed on any deficiency tax due ,
No. 242670, 10 May 2021 which interest shall be assessed and collected from the date
prescribed for its payment until 1. Full payment 2. Issuance of the
notice of demand of the commissioner whichever comes first.
There is a requirement for the issuance of a new letter of authority
if the revenue officers are 1. Reassigned 2. Transferred 3. 12% : Double the interest of loans of forbearance of money.
Revalidation of the expired Letter of authority. Here, there is no Section 56(b) The amount a determined by the CIR exceed the
issuance of the LOA when there is a transfer of authority from one amount of taxpayer in return
CIR authority to another. Therefore, the LOA is invalid.
If there is no amount as shown in the taxpayer return, the amount
as determined by the CIR
The use of memorandum of assignment, and other equivalent
document directing the continuation of audit or investigation by 4. Delinquency Interest: Interest imposed on the failure to pay:
1.The amount of tax due on any of the return file 2. The amount of
unauthorized revenue officer usurps the function of the LOA. In
tax due for which no return is required or 3. The deficiency tax or
this case the memorandum of assignment is not proof of existence any surcharge or interest thereon on the due date appearing in the
of authority of substitute or replacement revenue officer notice and demand of the commissioner until the full amount is
paid which interest forms a part of tax.
NB: Upon the effectivity of the train law, no case shall the
deficiency and delinquency interest prescribed therein be imposed
Hence, the act of reassigning revenue officer who are the original
simultaneously
authorized officer named in the LOA and substituting them with
the new revenue officer who do not have a separate LOA issued in
their name is in effect a usurpation of the statutory power of the Delinquency Tax Deficiency tax
CIR or his duly authorized representative. 1. To pay the amount of tax 1. Amount by which tax are
due on any return required to imposed by law as
be filed , a return but did not determined by the CIR or his
pay the entire amount written representative exceeds the
v. CIR vs. Transitions Optical Philippines, Inc., G.R. No. in the return or amount show in the tax by the
taxpayer in his return
227544, 22 Nov 2017 2. TO pay the deficiency tax
on the date appearing in the
In the case at bar, there is an invalid waiver as the waiver was not demand of he CIR
2. If no amount is shown by
accompanied by a notarized written authority from the respondent i. Delinquent taxes can be the taxpayer or if no return is
authorizing the representative to act on his behalf. However, the collected administratively via made then the amount which

Tabuzo, Tax Remedies

 Requisite for collectability:
distraint or levy or judicial the tax as determined by the
action CIR or his representative 1. There is already a final assessment made for the determination
exceeds the amount of the tax due.
previously assessed or
2. Self-assessed tax as shown in the return not paid in the due date
collected as defcieicny
prescribed by law.
Deficiency tax must be
assessed before collection
Two Types of Remedies to enforce the collection of Unpaid
Failure of the taxpayer to pay There is already a payment taxes
tax due on the date fixed y but an amount is still due and
law or indicated in th collectible form the taxpayer 1. Summary administrative remedies
assesment notice or letter of upon audit.
* BIR may summarily enforce collection only when it has
demand
accorded the taxpayer administrative due process which vitally
includes the issuance of a valid assessment
2. Judicial action
A civil and administrative sanction not a criminal penalty
a. Criminal Action
b. Civil Action
A penalty of 25% A penalty of 50%
1. Filing of the complaint by court of
1. Failure to file any return 1. Willful neglect to file a competent jurisdiction
AND pay the taxes due return within the period
prescribed by law 2. Where the assessment is appealed to the
2. Filing a return with an CTA by the filing of an answer to the
internal revenue officer other 2. False or fraudulent return is taxpayer petition for review where payment
than those with whom the willfully made of tax is paid for
return is required to be filed
a. There is a prima facie *Unlike summary administrative remedies the government power
3. Failure to file a deficiency evidence of a false return to enforce the collection through judicial action is not conditioned
ta within the time prescribed when there is substantial upon the previous valid assessment.
in the notice of assessment under declaration f 30% for
the taxable income or
4 . Failure to pay in full or
deduction.
part of the amount of tax Prescriptive Period :
stated in the return
1. If there is an assessment
NB; There is no 25%
- Within five years from the date of assessment
surcharge when you file on
time , pay the full amount 2. In case of false, fraudulent return with an intent to evade tax or
stated in the return but failure to file a return
subsequently find out that the
return filed is erroneous. - Within 10 years after the discovery of falsity, fraud or
omission without the need of an assessment
- Within five years from the assessment if it was made
within the ten year period
Notes on Willful Neglect
3. Waiver of the statute of limitation
1. If the taxpayer files a return only after prior notice in writing
from the BIR, then the 50% surcharge shall be imposed for late
filing and late payment of tax i. China Banking Corporation v. CIR, GR. No. 172509,
February 04, 2015
a. If no demand on the BIR and the taxpayer pay then
the payment is 25%. ( With demand 50% without demand 25%). BIR issued an assessment on April 19 1989, when the applicable
b. The 25% surcharge is not imposable where the non rule is that the assessment be made within the three year period.
payment was due to a legitimate dispute on whether an article is Here, there is no record to show that the assessment notice was
subject or not to sales tax. mailed, assuming that it was mailed on April 19 1989, BIR has
c. If the imposition of tax is controversial the taxpayer three years to collect the DST from the said date, which BIR still
may not be held liable for surcharge and interest. It is only liable failed to enforce.
for tax proper and must not be held liable for surcharge or interest.
d. Willful neglect to file the required tax return or The argument of BIR that request for reinvestigation suspended the
fraudulent intent to evade tax cannot be presumed statute of limitation cannot propser. The request for reinvestigation
alone will not suspend the statute of limitation. For there to be
i. The fraud must be actual and not constructive. It must be
suspension, the request for reinvestigation must have been granted
intentional fraud
by the CIR before it can suspend the three year period.

ii. Angeles City vs. Angeles City Electric Coop., GR No.

166134, 29 June 2010
Collection

Tabuzo, Tax Remedies

Local government tax : Injunction In cases of local taxes, there is
no express provision in the Local government code prohibiting
courts from issuing an injunction to restrain local governments
from collecting taxes. Two requisites must exist to warrant the
issuance of injunction 1. The existence of a clear and unmistakable
right to be protected 2. Urgent paramount necessity for the writ to
prevent serious damage
iii. CIR vs. Pilipinas Shell, GR Nos. 197945 & 204119-20, 9 Jul
2018
The Congress delegated the assessment and collection of all
National internal revenue taxes and fees to the BIR. The CIR has
the power to make assessment and prescribe additional
requirement for tax administration and protest. The tax code
provides that there are two governmental remedies in the collection
of taxes 1. Summary administrative remedies 2. Judicial remedies
such as the filing of the criminal and Civil action.
In an assessment process, the BIR must first make an assessment
then enforce the collection of the amounts so assessed. An
assessment is not an action for the collection of taxes. The BIR can
only enforce the collection when it accorded the taxpayer
administrative due process which includes the issuance of valid
assessment
In the case at bar, the collection letters issued by the BIR shows
that it intended to pursue through said collection letters summary
administrative remedies for the collection of the respondent’s
alleged excise tax deficiency, In this case, the collection letter was
followed by a warrant of garnishment, distraint or levy and that the
BIR proceeded with the collection of the respondent’s unpaid taxes
without a previous valid assessment.
Absent a previous assessment that supports a collection letter, the
attempt of BIR to collect through the collection letter followed by
subsequent warrants of garnishment and distraint or levy are void
and ineffectual. An invalid assessment bears no fruit.
iv. CIR vs. BPI, GR NO. 224327, 11 June 2018
CIR argues that the CTA did not acquire jurisdiction over the case
as the respondent failed to contest the assessment made against it
by the BIR within the prescribed period provided by law. The
petitioner also argues that estoppel is present
An assessment becomes final and unappealable within thirty days
from the receipt of the assessment if the taxpayer fails to file a
protest requesting for reconsideration and reinvestigation. In this
case the petitioner insist that the respondent failed to elevate the
tax assessment against it to the CTA within the prescribed period,
the taxpayer on other hand argues that there was no final
assessment notice received which denied the same in whole or in
part.
In this case, BIR failed to prove that it sent a notice of assessment
and that it was received by the respondent, Therefore the notice
dated May 6 1991 is deemed to be the notice. While a mailed letter
is deemed as received by the addressee this is merely a disputable
presumption, BPI denies receiving the assessment notice and the
Tabuzo, Tax Remedies
CIR is unable to present substantial evidence tat such notice was
indeed sent to the BIR before the latter’s right to assess prescribed.
Hence, since the court reconned the period to collect from May 6
1991the same had already prescribed, hence the issuance of the
warrant of distraint and levy wad made beyond the prescriptive
period.
v. BPI vs. CIR, G.R. No. 181836, July 09, 2014
Any internal revenue tax which has been assessed within the
period of limitation may be collected by distraint or levy and or
court proceeding five years from the time the PAN was issued.
Note the difference between request for reinvestigation and request
for reconsideration. In reinvestigation, this entails the reception
and evaluation of additional evidence that takes more time than a
reconsideration which is limited to the evidence on hand. This
justifies why reinvestigation can suspend the statute of limitation
while the latter cannot. In the case at bar, what was requested was
merely a reconsideration therefore it did not toll the prescriptive
period
Request for reconsideration Request for reinvestigation
Refers to a plea for re- Refers to a plea for
evaluation of assessment based reevaluation of an assessment
on existing records without the on the basis of newly
reception of additional discovered evidence that the
evidence taxpayer intended to present in
the reinvestigation
e. Taxpayer’s Remedies
1. Administrative protest
2. Judicial protest
1. Protest or dispute the assessment or
2. Refund or recover of erroneously or illegally collected taxes .
3. The granting of the taxpayer other certain remedies such as
applying for compromise or an abatement releasing property from
a public sale or redeeming it and availing tax amnesty.
i. Protesting an Assessment
The taxpayer files a letter of protest within thirty days form the
date of the receipt of the FAN. If the taxpayer fails to do so, then
the assessment becomes final , executory and demandable. The
protest comes in the form of either a written request for
reinvestigation or reconsideration
Contents of the Protest
1. State the nature of the protest ( reconsideration , reinvestigation)
2. Date of the FAN
3. Applicable rules, law and etc: If the protest lack any of these

then it shall be considered to be void and without force and effect.
4. Reconsideration: The taxpayer has 60 days to submit all the
relevant and supporting documents form the date of the filing of
the letter of protest. The 60 day period to submit relevant
supporting document does not apply to request for reconsideration
a. “ Relevant supporting documents” : Must be understood as those
documents that are necessary to support the legal basis in disputing
the tax assessment as determined by the taxpayer.
b. The BIR can only inform the taxpayer to submit additional
documents. The BIR cannot demand what type of supporting
documents must be submitted. Otherwise the taxpayer will be at
the mercy of the BIR which may require the production of
document that a taxpayer cannot submit.
c. The legal implication of this is that the taxpayer must allege
when the supporting ducents were submitted in order to reckon the
180 day period . If not the CTA may dismiss the case because it
was filed still within the 180 day period and thus prematurely filed.
Denial of the Protest
1. The CIR or his representative denies it
If the protest is denied in whole or in part by the CIR
representative , the taxpayer has two options :
1. Appeal to the CTA division within 30 days from date of receipt
of the decision VIA petition for review under RULE 42.
2. Request for reconsideration with the CIR within 30 days from
the date of receipt of the decision ( administrative remedies)
a. If the protest or request for reconsideration is still denied by the
CIR appeal to the CTA within 30 days from the date of receipt of
said decision.
b. A motion for reconsideration MR of the CIR denial will not toll
the thirty day period to appeal to the CTA.
2. Does nothing with it. ( Inaction)
If the CIR representative does not act within 180 das counted from
1. The date of filing of protest in case of request for
reconsideration or
2. The date of submission of the required relevant supporting
document ( within 60 days from the date of filing of the protest for
a request for reinvestigation)
The taxpayer may either :
1. Appeal to the CTA within 30 days from the expiration o the 180
day period or
2. Wait for the final decision of the CIR representative.
* Appeal or wait option in inaction cases are mutually exclusively
resort to one parts the application of the other. The option is
granted to the taxpayer, hence the CIR cannot state that the appeal
to the CTA is late if the taxpayer chooses to wait for the final
decision even if it is beyond the 180 day period.
Tabuzo, Tax Remedies
* The taxpayer does not have the option to appeal to the CIR in
case the CIR representative does not act on his protest . The
taxpayer must choose between the two options.
FDDA:
Assuming that the CIR or his representative acts on the protest the
FDDA must state that : The fact the applicable law, rules, and
regulation or jurisprudence on which the decision is based. That
the decision is the final decision.
A void FDDA does not invalidate the underlying assessment
because an assessment and a FDD are different . If the FDDA is
void, it is as if there was no decision by the CIR tantamount to a
denial by inaction by the CIR which may be appealed to the CTA
1. CIR vs. First Express Pawnshop Co., GR No. 172045, 16
June 2009
In the case at bar CIR argues that since the respondent failed to
submit supporting documents in the request for reinvestigation
within sixty days from the filing of the protest for deposit. The tax
code provides that the BIR can only inform the taxpayer to submit
the documents but it cannot demand what type of document the
taxpayer must submit otherwise, they will be under the mercy of
the taxpayer.
2. CIR VS. Liquigas Phils. Corp., GR Nos. 215534 & 215557,
18 Apr 2016
In this case, the petitioner sought to invalidate the FDDA on the
ground that it did not provide the facts and the law to which the
assessment was based. The respondent argues that since the FDDA
did not state the laws and the fact to which the assessment is based
the assessment is considered as null and void.
The court ruled that the FDDA must state the law and the facts to
which the assessment was made in this case it merely contained a
table of liquigaz supposed tax liabilities without going into specific
transaction that gave rise to tax deficiency. The FDDA fails to
inform the taxpayer of the facts and the law to which the
assessment was made.
A void FDDA does not void the assessment. An assessment
becomes dispyted after the taxpayer files a protest in the
administrative level. The CIR either issues a decision o the
disputed assessment or fails to act on it. The taxpayer appeals the
decision or inaction of the CIR. The FDDA is not the only means
where the final tax liability of the taxpayer may be appealed, an
assessment differs from the FDDA hence the invalidity of one does
not result I the invalidity of the other.
3. Lascona Land Co., Inc. vs. CIR, GR No. 171251, 5 March
2012
In the event that the taxpayer failed to act on the disputed
assessment within 180 days from the period of submission of
document the taxpayer has two remedies 1. File a petition for
review within the CTA within 30 days from the expiration of the
180 day period 2. Wait for the decision of the Commissioner in
such disputed assessment and appeal the same within thirty
days.Therefore, the court ruled that the argument of the BIR that
the assessment has become final and executory after the lapse of
thirty day period from the 180 days. A taxpayer cannot be
prejudiced if he choses wait for the final decision of the CIR on the
protested assessment. In the case at bar, Lascona chose to wait for
the decision of the CIR, before appealing the same even though
beyond the 180 day period is a proper remedy .
4. RCBC vs. CIR, GR No. 168498, 24 April 2007
In this case the Commissioner failed to act on the disputed
assessment within 180 day period from the date of the submission
of the taxpayer 1. Either file a petition for review with the CTA
within 30 days after the expiration of the 180 day period or 2. Wait
for the final decision of the Commissioner on the disputed
assessment and appeal the same within 30 days after the receipt of
the same. The option of the are mutually exclusive and the resort
of one bars the other.
In this case, the Commissioner failed to at on the assessment
within 180 days. The petitioner opted to file a petition for review
with the CTA without waiting for the decision of the CTA. This
was filed out of time as it was filed more than 30 days after the
lapse of the 180 day period. Therefore, the petitioner cannot
dispute that the assailed decision is not final, after availing the first
option, the petitioner cannot resort to he second option which is
awaiting the final decision of the Commissioner and appealing the
same with the CTA on the pretext that there is no final decision on
disputed assessment since the choice of one remedy precludes the
other.
5. PAGCOR vs. BIR, G.R. No. 208731, January 27, 2016
There are three options given to taxpayer when the protest is
denied.
1. If the protest is denied wholly or partially by the CIR : The
taxpayer may appeal with the CTA within thirty days from the
receipt of the whole and partial denial of the protest.
2. If the protest is wholly or partially denied by the
AUTHORIZED REPRESETATIVE: The taxpayer appeals to
the CIR within thirty days from the receipt of the whole or partial
denial of the protest.
3. The CIR and his authorized representative fails to act within 180
days from the submission of the required document, the taxpayer
appeals to the CTA within 30 days from the lapse of the 180 day
period. If the failure to act appeal with the CTA.
In the case at bar , PAGCOR did not wait for the Regional Director
or CIR decision on its protest. It made separate and successive
filing before the RD and the CIR before it filed a petition with the
CTA.
1st Option: Not applicable: There was no decision on the RD’s part
therefore PAGCOR is unable to make use of the first option to
justify an appeal with the CTA.
Tabuzo, Tax Remedies
2nd option: PAGCOR rendered the second option moot when it
formulated its own rule and chose to ignore the clear test of the law
when PAGCOR elevated an appeal to the CIR on August 13 2008
without any decision from the regional director then filed a petition
before the CTA on March 11 2009 .
3rd option: Not applicable , PAGCOR filed an appeal with the CIR
and not the CTA even before the lapse of the 180 day period. This
remedy is utilized when the CIR failed to act on the appeal within
the 180 day period since the RD still has util December 27 2008 to
issue a decision.
When PAGCOR filed its petition before the CTA it is clear that it
failed to make use of any of the three options. A petition before the
CTA may only be made after a whole or partial denial of the
protest by the CIR or its authorized representative. Hence, when
PAGCOR field its petition before the CTA on March 11 2009,
there was still no denial of its protest either by the RD or the CIR.
Therefore, PAGCOR clearly failed to comply with the requisite in
disputing the assessment as provided under Section 228
6. CIR vs. VY Domingo Jewellers, GR No. 221780, 25 March
2019
In this case, upon the receipt of the assessment VY Domingo sent a
letter to the BIR requesting for the certified true copies oof
assessment. It then filed with the CTA division to have the notices
declared as null and void being issued beyond the prescriptive
period. CIR filed a motion to dismiss for lack of jurisdiction
arguing that it is neither the assessment nor the formal letter of
demand that is appealable to the CTA but the decision of the CIR
on disputed assessment ( CIR argues that the taxpayer must first
dispute the assessment first) The issue here is whether there is a
violation of exhaustion of administrative remedies.
The court ruled that there is a violation of the doctrine of
exhaustion of administrative remedies. Before a party is allowed to
seek the intervention of the court he or she must first availed
himself or herself of all the means of administrative process
afforded to him or her. In this case, before resorting to judicial
remedies, they must first appealed the same in the administrative
remedies. ( Wala pang FDDA)
7. CIR vs. SOJ and Metropolitan Cebu Water District, GR No.
209289, 9 July 2018
Where the disputing parties are all public entities ( between the
government agencies and other government agencies) the dispute
shall be administratively settled and adjudicated by the SOJ, the
solicitor general or the government corporate counsel depending
on the issues an government agencies involved. For cases
involving only question of law it is the SOJ which has jurisdiction.
It is clear in this case that the dispute of the CIR and the
respondent a local water district which the GOCC clearly the SOJ
has jurisdiction to decide the case.
The SOJ jurisdiction over tax dispute between the government and
the government owned and controlled corporation is settled. Under
PD 242 it is mandatory that disputes and claims solely between
the government agencies and offices including government
owned or controlled corporation involving only questions of
law be submitted and settled or adjudicated by the Secretary of
National Office or his duly authorized
justice. The law is clear that is covers all disputes claims and
representative
controversies solely between or among the department, bureau
offices agencies and instrumentalities of the National Government 3. Delinquent account with duly
approved schedule of
including the constitutional offices or agencies arising form the
installment payment
interpretation and application of statute, contract or agreement. 3. Civil tax cases being
Since this case as a dispute between CIR and the respondent a local disputed before the courts 4. Cases where the final reports
water district which the GOCC pursuant to PD 198 also known as of reinvestigation or
4. Collection cases filed in reconsideration have been
Provincial Water Utilities Act clearly the SOJ has no jurisdiction to courts issued resulting to reduction in
decide the case the original assessment and the
5. Criminal violation other than
those already filed in court or taxpayer is agreeable to such
ii. Compromise and Abatement rr 21-2018 those involving tax fraud. decision by signing the required
agreement form for the purpose.
On the other hand, other protest
Under Section 204: The Commissioner of Internal Revenue cases shall be handled by the
has the sole authority to compromise and abatement of taxes Regional Evaluation board or
the power shall not be delegated. the national evaluation board on
a case to case basis .
5. Cases which become final
Grounds for Compromise and executory after final
judgment a court where a
Assessment issued by the regional office involving basic compromise is requested on the
deficiency taxes of Five hundred thousand pesos or less and minor ground of financial incapacity
of the taxpayer.
criminal violation may be compromised by the regional evaluation
board. The offer of compromise must be accepted by the parties
this requirement is not required in case of abatement.
Grounds for abatement: ( A total cancellation of tax liability-
1. Doubtful Validity : If there is a reasonable doubt as to the penalties)
validity of the claim against the taxpayer the percentage is 40% of
basic tax. 1. When the tax or any portion thereof appears to be unjustly
or excessively assessed.
2. Financial Incapacity: 10% of the basic assessed tax. Here there
must be a waiver of the bank confidentiality a. Filing of the return or payment wrong venue
b, Mistake in payment of tax is due to erroneous
Minimum Compromise Payment written official advice of revenue officer
c. Failure to file a return and pay tax on time due to
1. For cases of financial incapacity the minimum compromise rate
substantial losses from prolonged labor dispute , force
is 10% of the basis assessed tax . majure and business reverses. ( This covers only
surcharge and compromise penalty)
2. For other cases ( including doubtful validity) the minimum
d. Assessment is based on non-compliance with the law
compromise rate is 40%> of the assessed tax.
due to difficult interpretation of law
If the compromise offer of the taxpayer is lower than the e. Failure to file a tax return and pay the correct tax on
prescribe rate, there must be an evaluation by the National time due to circumstance beyond control
evaluation board. The evaluation board must also approve the f. Lte payment due to meritorious circumstance
compromise if the basic tax exceeds P1 Million.
2. The administration and collection cost do not justify the
collection of the amount due.

A. Abatement of penalties on assessment confirmed

Subject to compromise
1. Delinquent accounts
- ng file Ka ng return pero di
ka ng bayad.
2. Cases under administrative
protest after the issuance of the
FAN to the taxpayer which are
still pending in the RO, egal
office , large taxpayer service,
collection service, enforcement
service and other officers of the
Not subject to compromise ased
1. Withholding tax cases unless
A VOID assessment cannot be used as a basis for compromise.
the applicant invokes the
The assessment that is void cannot turn be used as a basis for the
provision of law that cast doubt
perfection of a tax compromise.
on the taxpayer’s obligation to
withhold
Can Criminal Violation of tax code be compromised
- it is not a tax, merely withhold
income in favor of the
government. Yes, except those already filed in court or those involving fraud
VS. Abatement: a compromise is marked by mutual concession
2. Criminal tax fraud cases whereas an abatement or cancellation there is no mutual
confirmed as such by the CIR concession between the taxpayer and the CIR are made.

Tabuzo, Tax Remedies

1. Asiatrust Dev’t Bank, Inc., vs. CIR, G.R. No. 201530, April
19, 2017
Doctrine :
The application for tax abatement is considered approved only
upon the issuance of the termination letter. Section 204 B of the
NIRC empowers the CIR to abate or cancel a tax liability.The
application for tax abatement is considered as approved only upon
the issuance of the termination letter since NIRC empowers the
CIR to abatement or cancel a tax liability. Based on the guidelines
the last step I the tax abatement process is issuance of a
termination. The presentation of the termination letter is essential
as it proves that the taxpayer application for tax abatement had
been approved without the termination letter a tax assessment
cannot be considered as closed and terminated
1. A written claim for credit or refund filed with the CIR( A
return filed showing overpayment shall be considered as a written
claim) whether or not the tax has been paid under protest.
This serves as a notice on the government that the tax is questioned
and to estimate tax expenditures. This is also a warning on the part
of the CIR that court action will follow.
Section 229: This written claim is not necessary when on the face
of the return such payment is erroneously paid.
2. The claim for refund must be categorical demand for
reimbursement
3. The claim must be filed or the suit or proceeding the reform
must be commenced in the court within two years from the
date of payment of tax or penalty regardless of any
supervening cause.

Note: It is the two year period that applies to refund and not
solution indebiti under the Civil Code

Documents :

1. A claim for a refund or credit partakes the nature of an

exemption and is strictly construed against the claimant. Therefore,
iii. Recovery of Tax Erroneously or Illegally Collected he needs to establish basis for refund.

The following are instances when a claim of refund may be 3. The claim must e filed with the CIR, even if the different
availed of: government agency has the responsibility of collecting the taxes
where the taxpayer filed a refund claim for forrest charge with the
1. Erroneously or illegally assessed or collected internal revenue DENR which the SC held was wrong as forrest charges were taxes.
taxes( 204 c- Administrative 209 of tax code- Judicial)
2. Penalties imposed without authority Proper Party to file
3. Any sum alleged to have been excessive or in any manner
wrongfully collected.
4. Refund of the BIR stamps when returned in good condition by a. Statutory Taxpayer
the purchaser b. Withholding tax= Withholding agent is entitled to claim for tax
5. Redemption or change of unused stamps rendered unfit for use refund but with the obligation to remit the tax to the principal
and refund of their value taxpayer
c. Indirect tax= The statutory taxpayer even if he shifts the burden
to another.
There is a distinction between tax refund and tax credit
4. Excise tax exemption
General Rule: The statutory taxpayer ( manufacturer, producer or
Tax Refund Tax Credit importer) and not the party who only bears the economic burden
1. There is actual 1. A tax certificate or a tax Exception: The party who bears the economic burden of the tax is
reimbursement credit memo is issued to the allowed to file the claim if the law grants such party an exception
taxpayer and this can be from both direct and indirect tax.
applied against any sum that
may be due and collectible
form the taxpayer except
withholding taxes.
- Tax credit certificate can no
longer be transferred or Two Venues for REFUND
assigned to another person
1. administrative
2. Judicial

Statutory Requirement:

On Written Claim to the BIR

Tabuzo, Tax Remedies

1.A written claim for credit or refund is a condition precedent or
mandatory requirement for a claim of refund or tax credit to
prosper.
On Refunding overpaid creditable Withholding tax
1. The filing within the two year period
2. Establishing the fact of withholding with copies of the CWT
certificate
3. Showing that the income received was declared as a part of
gross income
On Two year prescriptive Period
This refers to both the administrative and judicial claim
1. From the date of payment, the date of payment is when the tax
liability falls due.
2. The filing of the final adjustment return in case of income tax
return filed a quarterly basis
3. From the date of final payment in case of tax paid in
installment
4. Withholding tax.
The Final Withholding tax are considered as full ad final
payment of the income tax due and thus are not subject to any
adjustment . Thus the two year period commences to run from
the time the refund is ascertained and the date such tax was
paid and not the end of the FAN.
Creditable Withholding Tax: The tax withheld is oly an
approximation of the income tax due, the taxpayer is still required
to include such income as a part of gross income. – End of the
taxable year
1. The taxpayer need not wait for the final resolution of its
administrative claim for refund it is only required that an
administrative claim be first filed before a judicial claim is filed
2. For as long as administrative claim and the judicial claim are
filed within the two year prescriptive period then there is
exhaustion of administrative remedies
3. Mandatory regardless of any supervening cause that may arise
after payment
On Choosing between a refund and a credit for
corporation :Remedies of the Corporation entitled to a tax
credit or refund in excess estimated quarterly income tax
1. To carry over excess credit
2.To apply for the issuance of TCC or to claim a cash refund
Tabuzo, Tax Remedies
If you choose the carry over option, it is considered
irrevocable for that taxable period, and no application for tax
refund or issuance of a tax credit certificate shall be allowed.
Once the taxpayer opts to carry-over the excess income tax
against the taxes due for the succeeding taxable years, such
option is irrevocable for the whole amount of the excess
income tax, thus prohibiting the taxpayer from applying for a
refund for the same excess income tax in the next succeeding
taxable year.
Except: When the corporation had already ceased to operate
The unutilized excess tax credit will remain in the taxpayer
account and will be carried over and applied against the
taxpayer income tax liabilities in the succeeding taxable years
until fully utilized.
In other words, if you choose to carry over the utilized taxes in
2010 , you have to keep carrying these taxes over until they are
fully exhausted. ( Belle Corp vs Cir)
The controlling factor for the operation of the irrevocability
rule is that the taxpayer choses an option and once he had
already done so it could no longer make another one. Hence,
once the taxpayer opts to carry over its excess tax credit to the
ff period the question of whether it gets to apply tax credit is
irrelevant. ( rhombus v cir)
Does the irrevocability Rule apply exclusively to carry over
option?
1. Yes. This is only limited to the carry over option such that a
taxpayer is free to change its choice after electing a refund of
its excess credit
2. But once it opts to carry over such excess creditable tax, after
electing a refund or issuance of tax credit certificate, the carry
over option becomes irrevocable. Accordingly the previous
choice of tax refund even if subsequently pursued may no
longer be graned
Carry Over Option
1. If the option to carry over the excessive credit is exercised the
same shall be irrevocable for that taxable period ( It can no longer
be revoked) . This the taxpayer can no longer seek refund of the
unutilized excess income tax payment.
2. The taxpayer may however apply the unutilized excess income
tax payment as a tax credit to the succeeding taxable years until
such has been fully paid pursuant to Section 76 of the NIRC
Bar: On April 16 ,2012, the corporation filed its annual
corporate income tax return for 2011 showing an overpayment
of income tax of P1,000,000 which is to be carried over to the
succeeding years. On May 15 2012 the corporation sought
advice form you and said that it contemplates to file an
amended refund for 2011 which shows that instead of carry
over of the excess income tax payment the same shall bec
considered as a claim for tax refund and small box show “
refund” in the return will be filed up, Within a year, the
corporation will file a request for refund for the excess
payment would you recommend the ff?
1. Will you recommend to the corporation such cause of action
( changing form carry over to refund)
2. Should the PFR be field with the CTA on the basis of the
amended tax return to be denied by the BIR and the CTA could the
corporation still carry over such excess payment of income tax in
the succeeding years.
Answer
1. Once the option to carry over and apply the excess quarterly
income tax against income tax against tax due for taxable quarters
of the succeeding taxable years had been made such option shall be
considered as irrevocable for the taxable period and no application
for tax refund or issuance of tax credit certificate shall be allowed
therefore
2. Yes. The carry over of excess income tax payment is no longer
limited to the succeeding txalbe year. Unutilized excess income tax
payment may now be carried over to the succeeding taxable year
until fully utilized. In addition, the option to carry over excess
income tax payment is now irrevocable. Hence, unutilized excess
income tax payment may no longer be refunded,
1. CIR vs. Pilipinas Shell, GR No. 180402, Feb 10, 2016
PARTIES WHO CAN CLAIM REFUND: Exemption
As a rule, it is the statutory taxpayer who has the burden to seek
a refund of indirect tax even if the tax is shifted to another.
However the general rule cannot apply if the economic burden
of tax is shifted provides for an exception from both direct and
indirect tax. In which case, the party to whom the taxes are
shifted is allowed to claim for a tax refund.
Here, Petron ( International carrier) passed the excise tax to
shell.Philipinas Shell filed a claim for refund for excess tax.
CIR objected on the claim on the ground that excise tax is
levied on the manufacturer regardless of its purchaser or buyer.
In this case, the court allowed shell to claim the tax refund.
Under Section 135(a), fuels which are sold to international
carriers are exempt from tax since the law granted the
economic burden shifted exempt from both direct and
indirect tax. Hence, shell is the property party to claim the
refund since the law provides for an exemption both from direct
and indirect tax.
2. CIR vs. PASAR, GR No. 186223, Oct 1, 2014
Tabuzo, Tax Remedies
PROPER PARTY TO FILE ( EXEMPTION APPLIED
BECAUSE EPSA EXEMPTED DIRECT AND INDIRECT):
Petron passed to PASAR excise tax. Here, PASAR is
exempted from the payment of excise tax being a EPZA
registered entity.PASAR filed a claim for refund , this claim
was granted on the ground that PASAR is a tax exempt entity
enjoying tax exemption privilege under PD No 66. CIR appeals
The court ruled that PASAR is the proper party to file a claim
for refund.EPZA law provides that supplies are not subject to
excise tax. As a rule, it is the statutory taxpayer who has the
legal personality to file a claim for refund. This does not apply
to the case at bar , since the law confers an exemption from
both direct or indirect tax. Hence, if the exemption is only as
to the direct tax, the statutory taxpayer is the onlpy arty who
can file the same. Hence, PD 66 exempts Petroleum product
whether used directly or indirectly from payment of excise tax
which was passed by PASAR by Petron. Therefore, PASAR is
the proper party.
3. Chevron vs. CIR, GR No. 210836, 1 Sept 2015
PARTIES WHO CAN FILE ( EXCEPTION DOES NOT
APPLY BECAUSE STATUTORY TAXPAYER DID NOT
PASS THE TAX): Chevron sold and deliver petroleum
products to CDC, Chevron did not pass to CDC the excise tax it
paid for the year 2007. Petron ( Petron ) filed a claim for
refund based on the fact that CSC is exempt from payment of
tax. The issue here is whether Chevron is entitled to tax
refund or tax credit for the excise tax paid on the
importation of products.
The court ruled that Yes, Petroleum products that are sold to
entities that are exempt from excise tax. CDC was created as an
implementing arm of BCDA exempt from the payment of both
direct or indirect tax.
the Court has also made clear that this rule does not apply
where the law grants the party to whom the economic burden of
the tax is shifted by virtue of an exemption from both direct and
indirect taxes. In which case, such party must be allowed to
claim the tax refund or tax credit even if it is not considered as
the statutory taxpayer under the law. The general rule applies
here because Chevron did not pass on to CDC the excise
taxes paid on the importation of the petroleum products,
the latter being exempt from indirect taxes by virtue of
Section 24 of Republic
4. CIR vs. Goodyear Philippines, Inc. GR No. 216130, 3 August
2016
There is no need to wait for the decision of the CIR before
filing the case to the CTA all the law requires is that both the
judicial and administrative claim is filed within the two year
period from payment.. Goodyear filed a claim for tax refund
before the CIR . On November 3, 2010 without waiting for the
resolution it filed a claim by way of petition for review with the
CTA. CIR argued that the claim must be denied because of 1.
Failure to exhaust administrative remedies 2. Failed to
submit complete supporting document before the BIR. CIR
argued that by filing a claim of administrative and judicial
claim fifteen days apart there is a violation of failure to exhaust
administrative remedy.
Issue
1. Whether the judicial claim of the respondent must be
dismissed for non-exhaustion of administrative remedies
Held: There is no dismissal due to exhaustion of administrative
remedies. Section 229 merely requires that the judicial claim
for refund must be filed within two years from the date of
payment of tax and the same cannot be maintained until a claim
for tax remedy had been made in the BIR.Here, the filing of an
administrative claim is merely to serve as a warning to CIR that
a court action follows if it fails to act on the same, it does not
mean that the taxpayer must wait for the final resolution of
administrative claim for refund as doing so violate due process.
There there is no requirement that the collector of internal
revenue must first act on the claim before the taxpayer can file
to the CTA what is required is that both administrative claim
must be filed within the two year period.If the respondent
waited for the action of the petitioner knowing fully well that
the period was about to lapse. It would have forfeited its
right to seek a judicial review of its claim thereby suffering
irreparable damage
5. Metropolitan vs. CIR, GR No. 182582, 17 Apr 2017,
Doctrine
The Final Withholding tax are considered as full ad final
payment of the income tax due and thus are not subject to any
adjustment . Thus the two year period commences to run
from the time the refund is ascertained and the date such
tax was paid and not the end of the FAN.
Point of Contention: Reckoning date of the two year
prescriptive period date of payment April 2001, the end of the 2
year period is April 21 2005. ( If the reckoning date is the end
of taxable year the two year period end on December 31
2003)-- > Here the monthly remittance return is denied for
insufficiency of evidence.
*administrative claim “December 27 2002-- > if you reckoned
it from the date of payment file out of time na but if at the end
of the taxable period it is not out of time.--> At the time of
payment and not at the end of taxable period ( FAN).
The Final withholding tax here is already payment of full tax
due 10% withholding tax cu
Metrobank filed a claim for refund on the ground that it
mistakenly remitted the amounts to the BIR which the latter
included in its final tax withheld. Metro bank filed a letter to
the BIR requesting for a refund, since the BIR did not act on
the claim it filed a petition for review with the CTA.
Tabuzo, Tax Remedies
Issue: Whether the Claim for refund has prescribed
Held: Yes. NIRC provides that no credit or refund of taxes or
penalties must be allowed unless the taxpayer files in writing a
claim for credit or refund within two years from the payment of
the tax. It is also required that a claim of refund must first be
filed with the petitioner
Quarterly income tax are treated as mere advance of payment
cover more than the said corporate taxpayer entire tax liability.
It is only logical to reckon the two year period from the time
of the FAN or annual income tax return since it is from that
time it is possible to determine whether corporate taxpayer paid
the amount exceeding annual tax liability.
In this case, Metrobank Final Withholding tax liability was
remitted to the BIR on April 25 2001, it only had until April 25
2003 to file its administrative and judicial claim for refund.
Moreover, while the administrative claim was filed on
December 27 2003, its corresponding judicial claim as only
filed on September 10 2003. Therefore, the refund has
prescribed.
Solutio Indebiti
. There is solutio indebiti where: (1) payment is made when
there exists no binding relation between the payor, who has no
duty to pay, and the person who received the payment; and (2)
the payment is made through mistake, and not through
liberality or some other cause.
1. First Requisite: Not present , there is a relation between the
taxpayer Meralco as withholding agent and the government
2. This does not apply as a tax code a special law provides for a
period for claiming a refund of taxes erroneously paid.
6. PBCOM vs. CIR, GR No. 194065, 20 June 2016
The rule is that the date of payment is when the tax liability
falls due. For DS metering machine users, the payment of the
DST upon loading and reloading is merely an advance
payement of DST falls due only upon the occurrence of taxable
transaction. ( loading and unloading + occurrence of taxable
transaction)
The DST fell due when the petitioner fell into repurchase
agreement with the BSP and corresponding documentary stamp
were imprinted on the confirmation letter, Thus the prescriptive
period for the filing of a claim for a refund or tax credut must
be reckoned from the date when the documentary stamp were
imprinted on the Confirmation letters.
In this case, to determine DST for the purpose of counting the
two year period is from the time of payment. As provided under
Section 229 of the Tax Code, the refund of erroneously paid tax
must be made within two years from the date of payment. The
date of payment must be read in relation to Section 200 which
shows that the date of payment may be done by imprinting the
stamps of taxable document through DS Metering Machine.
The date of payment of the DST commences to run from the
time of last payment for purpose of claiming a refund , it is the
actual payment made upon loading or reloading in the DS
Metering machine therefore, the date of imprinting is the date
of payment ( Printing * a mode of payment)
The DST fell due when the petitioner entered into repurchase
agreement with the BSP and corresponding documentary stamp
were imprinted on the Confirmation letter. Thus , the
prescriptive period for filing of the claim for refund or tax
credit is reckoned from the date when the documentary
stamp is imprinted in the letter.
PAL VS. CIR
1. Proof of actual remittance is not a condition to claim a
refund of unutilized tax credit. The payor and withholding agent
and not the payee- refund claimant who is vested with the
responsibility of withholding and remitting income taxes.
2. It is only required to prove that taxes were withheld. The taxes
withheld are deemed to be the full and final payment of the income
tax due from the income earner or payee
3. The certificate of creditable tax withheld at source is competent
proof to establish the fact that taxes are withheld. It is not
necessary that the person who executed the said certificate testify
to prove its authenticity.
Irrevocability Rule
1. A corporation entitled to a tax credit or refund of the excess
estimated quarterly income tax has two options
a. Carry over the excess credit
* If the option to carry over the excess credit, the same
shall be irrevocable for the taxable period. The tax
payer cannot longer revoke his choice
* The taxpayer may apply the unutilized excess income
tax payment as tax credit to the succeeding taxable year
until such has been fully paid and applied pursuant to
Section 76 of NIRC.
b. To apply for the issuance of tax credit certificate or a
cash refund.
7. Mitsubishi Corp.–Manila Br. vs. CIR, G.R. No. 175772, 5
Jun 2017,
CIR argues that Mitsubishi Corp being a foreign Japanese
entity must have filed the claim for refund with the NPC and
not the CIR based on a RMC. The court ruled that the RMC is
not valid. NIRC vest the CIR the SOLE authority to refund or
claim taxes that are erroneously claimed by the taxpayer.
Therefore, an administrative issuance directing the petitioner to
claim a refund from the NPC cannot prevail over the NIRC.
Tabuzo, Tax Remedies
8. CIR vs. Manila Electric Company, G.R. No. 181459. June 9,
2014
The two year prescriptive period is mandatory regardless of any
supervening cause that arises after payment. It must be pointed
out that the two year prescriptive period runs from the time
refund is ascertained. Here, the issuance of the BIR ruling is
not the operative act to determine the amount of refund snice
BIR is tasked only to confirm whether one is entitled to file a
refund.
9. Republic vs. Team Energy Corp., G.R. No. 188016, 14 Jan
2015
QUARTERLY TAX RETURN IS NOT A PREREQUISITE
TO SHOW THAT TAXPAYER DID NOT CARRY
OVER :
Mirant is engaged in the business of developing and
maintaining gas power plant. The respondent filed an annual
tax return for the years 2002 and 2003 indicating its option to
refund of tax overpayment. The respondent filed a claim for
refund or issuance of tax credit with the BIR representing
overpaid income tax or excess creditable tax. Due to BIR’s
inaction, the respondent filed a petition for review with the
CTA. The CTA rendered a decision granting tax exemption
which the CTA en banc affirmed. Republic alleged that it is
necessary that quarterly return must be established in order to
prove entitlement to refund pursuant to Section 76 of the NIRC.
Issue: Whether the respondent is entitled to refund
Held
There are three remedies that a corporate taxpayer opts to
exercise 1. Pay the balance 2. Carry over 3. Be credited or
refunded with the excess tax paid. The two option are
alternative in nature the choice of one precludes the other.
Hence, the corporation must choose whether it request for tax
refund or carry over by marking the option. The intent of the
irrevocability rule is to prevent the taxpayer from flip -flopping
on its option and avoid confusion and complication as regard to
the tax payer excess credit. The interpretation of the CA that
the carry over rule only applies to “ taxable period” is not
within the intent of law
Requirement for refund
“1. That the claim for refund was filed within the two year
prescriptive period
2. When it is shown on the ITR that income received is a part
of gross income
3. When the fact of withholding is established showing the
amount paid and income tax withheld from the amount
Here, there is evidence that the income was indeed received as
a part of the gross income. The testimonies of the petitioner
employee also substantiate the claim that income was indeed
incurred. As to the fact of withholding, the respondent
presented certificate of tax withheld. There is no need for the
submission of quarterly returns of the respondent to show
that it did not carry over the excess withholding tax to
succeeding quarter as the respondent ws able to establish
prima facie right to refund through object and testimonial
evidence
10. CIR Vs. Team [Phils] Corp. GR No. 179260, 2 Apr 2014
WHAT IS NEEDED TO BE PROVEN IS THE FACT OF
WITHHOLDING ACTUAL REMITTANCE IS NOT
NECESSARY . Team Phils entered into an operating and
management agreement with Mirant to provide the latter
operation and maintenance service with the thermal power
station in Pangasinan. Respondent filed its income tax return
for overpayment from unutilized creditable tax withheld.The
respondent then field a request with the BIR to withhold tax for
the year 2001, and file a petition with the CTA to toll the
running of prescriptive period. CIR argued that there is a
need to present the proof of actual remittance of the
withheld tax before a taxpayer is entitled to tax credit
certificate
Issue: Whether the respondent establish the claim for refund or
tax credit
Held
Yes. 1. The claim must be filed with the CIR within two
year period from the date of payment of the tax. Here, the
respondent filed its income tax return for the taxable year 2001
on April 15, 2002. Counting from the said date, it had until
April 14 2004 to file a claim for refund both judicially and
administratively. Here, the petitioner administrative claim and
petition for review filed on March 2003 fell within the
prescriptive period.
2. It must be shown in the return that the recipient that
income payment was declared to be a part of gross income
3. The fact of withholding is established by a copy of a
statement duly issued by the payor to the payee showing the
amount paid and the amount of tax withheld.
Here, the certificate of refund presented need not be verified in
court by the withholding agent. Here, the court ruled that the
certificate presented were duly signed and prepared under
penalties of perjury.To claim tax refund, there is no need to
establish that actual withholding was made , what is merely
required is to establish a fact of withholding
11. CIR vs. PNB, G.R. No. 180290, September 29, 2014
A certificate of creditable tax withheld at source is a proof to
establish that facts are withheld hence, it is not necessary that a
person who executed a certificate personally testify as to its
authenticity. PNB filed its tentative income tax return in 2000
which was amended in July 25 2001. In its amended return, the
respondent claimed overpayment on the tax credit to the
succeeding quarter. PNB filed a claim for the issuance of tax credit
with the BIR and subsequently with the CTA. The CTA ordered
the refund of tax credit certificate, the BIR questioned the validity
of the certificate of tax as the original certificate was only
presented before the CTA and not at the first instance when it
filed a claim for refund before the BIR.
the figures appearing in the withholding tax certificates can be
taken at face value since these documents were executed under the
Tabuzo, Tax Remedies
penalties of perjury, pursuant to Section 267 of the 1997 National
Internal Revenue Code.
12. PNB v. CIR, G.R. No. 206019, March 18, 2015,
Cir argues that the taxpayer in order to claim refund must comply
with BIR Form 2307 ( Certificate of creditable withheld at source).
The fact of witholding. In this case, PNB was able to establish that
GOTESCO did not carry over the withholding tax to settle its
liability 1. Gotestco Audited financial statement that included the
mortgaged property in the asset account 2. 2003 ITR which the
CTA first division required to show the excess creditable withhold
tax was not used by GOTESCO. Lastly, the testimony of the
former accountant . Hence, the evidence sufficiently proves that
the creditable withholding tax was withheld remitted to the
BIR that such withholding was erroneous
13. CIR vs. PNB, GR No. 212699, 13 March 2019
PRESENTAITON OF QUARTERLY INCOME TAX
RETUNR IS NO LONGER NECESSARY AS THE ANNUAL
INCOME TAX RETURN SUFFICES since the annual ITR
already contain quarterly income payment . In this case, PNB
offered its annual ITR containing the total taxable income earned
for the four quarters as well as the deduction and tax credit it
previously carried over in the quarterly ITR. All that is needed to
be proven is whether carry over to subsequent quarter was made.
Also note that PNB attempted to file its quarterly income tax return
through a motion to reopen which was granted by the CTA. Since
PNB relied on the case of Philam ,it decided that it is no longer
necessary, hence withdrew the same.
14. University Physician Services, Inc.- Mg’t, Inc. vs. CIR, 7
Mar 2018
Tax credit certificate- carry over  Refund
UPSI-MI filed its annual income tax return for the year December
31 2006 with the BIR reflecting overpayment. Subsequently it
filed a annual ITR reflecting an overpayment from prior year
credit ( carry over) on the same date, reflecting prior year
excess credit. The petitioner then filed a claim for issuance of tax
credit certificate representing alleged unutilized tax. The petitioner
filed a claim with the CIR since the CIR did not act on the same a
case was filed with the CTA
Issue: Whether the Irrevocability Rule applies
Held:Yes. The irrevocability rule is limited only to the option of
carry over such that the taxpayer is still free to change its choice
when it elects the claim of refund , but once it opts the carry over
option after irrevocability rule it becomes irrevocable. Therefore,
the law does not prevent a taxpayer who originally opted for a
refund or tax credit certificate from shifting to the carry over of the
excess creditable taxes to the taxable quarter of the succeeding
taxable year.
Here, UPSI-MI is barred from recovering its excess creditable tax
through refund of TCC. It is undisputed that despite the initial
option to refund its 2006 taxes tax. UPSI-Mi then indicated in its
2007 that it carried over the excess creditable tax in 2006 excess
creditable tax and applies the same in 2007 income tax due. The
choice of carry over is irrevocable and forbade the latter to go
back to its original choice.
15. Rhombus Energy, Inc. vs. CIR, GR No. 206362, August 1,
2018\
The controlling factor for the operation of irrevocability rule is that
the taxpayer chose an option and once it had already done so it can
no longer make another one. Consequently, after the taxpayer opts
to carry over its excess credit to the following taxable period the
question of whether or not it actually gets to apply said tax
credit is not relevant
Does the Irrevocability rule apply exclusively to carry over? No .
The controlling factor is the taxpayer chose an option.
2005 ITR= Excess Credit income tax ( refund)
2006 : Excess ( Prior year excess credit—quarterly ITR) When it
filed its annual year excess year is 0 he is now filing a claim for
refund on annual.
The court granted the refund here, it must be differentiated from
the UPSI case.( Sir Prefers Rhombus)
So ano mag prevail ito or UPSI? Rhombus
16. CIR vs. SMC, GR Nos. 180740 & 180910, 11 Nov 2019
SMC filed on January 10 ,2003 a letter with the BIR claiming for a
refund or credit of the alleged taxes it paid on the red horse bear.
Without waiting for CIR to act on the administrative claim , SMC
filed a petition for review before the CTA challenging Section 1 of
17-99. Both the CTA division and En banc affirmed the claim for
overpayment was barred by prescription as SMC failed to prove 1.
Exact amount paid the tribunal has no basis to apportion the
amount of excise tax payment corresponding the said period vs.
Total amount of excise tax as it only showed monthly removal
report.
EXCISE TAX: For excise tax on domestic product, the return is
filed and the excise tax is paid before the removal of the products
from the place of production. ( date of payment depends on the
date of actual removal)
Here SMC filed its administrative claim on January 10 2003,
through a letter to the BIR and its judicial claim through a petition
Tabuzo, Tax Remedies
for review with the CTA on February 24 2003. Counting back
from February 24 2003, the CTA first division determined that the
reckoning date for the two year prescriptive period was on
February 24 2001 hence the claim has prescribed.
Solutio Indebit is not applicable
There is a difference between tax refund and tax exemption. Tax
refund is based based on the statutes granting tax refund it does not
depend on legislative grace hence equity cannot apply
17. CIR vs. Univation Motors Phils., Inc. GR No. 231581, 10
Apr 2019
Income tax return filed in quarterly basis : RECON THE
TWO YEAR PERIOD FROM THE TIME OF THE FILING
IOF THE FINAL ADJUSTED RETURNAs long as the judicial
claim and administrative claim was filed within the two year
period there is exhaustion of administrative remedy.
The CIR argued that the respondent prematurely filed its judicial
claim with the CTA depriving it the opportunity to act on the
administrative claim violating the doctrine of exhaustion of
administrative remedies. Jurisprudence had provided that the two
year prescriptive period is counted from the date of payment of
tax , jurisprudence however clarified that the two year prescriptive
period to claim a refund actually commences to run at the earliest
on the date of the filing of final adjusted tax return because this wis
where the figures of gross receipt and deduction have been audited
and adjusted.
Here, the two year period to claim a refund is reckoned from April
15 ,2011, the date of the filing of Final Adjustment Return. Since
the respondent filed its administrative return on March 12 2012
and judicial claim on April 12 2013 therefore it is within the
prescriptive period and was filed on time. Under the circumstance,
the respondent need not wait for the decision of the CIR as the two
year period will lapse effectively resulting to the loss of the
respondent right to seek judicial recourse and worse its right to
recover
The law only requires that administrative claim be priorly filed.
That to give the BIR at the administrative level an opportunity to
act o the said claim. In other words for as long as the
administrative claim and the judicial claim was field within the two
year period there is exhaustion of administrative remedies
2. There must be a distinction between administrative case
appealed due to inaction and those dismissed due to failure to
submit supporting document. If the administrative claim was
dismissed by the CIR due to failure to submit document, the claim
is dismissible not for lack of jurisdiction but for failure to
substantiate the claim in administrative level.
.
Jurisprudence laid down the basic requirements in order for a
taxpayer to claim tax credit or refund of creditable withholding
tax, thus: (1) The claim must be filed with the CIR within the 3.The certificate of creditable tax withheld at source is the
two-year period from the date of payment of the tax, as competent proof to establish the fact that taxes are withheld. It is
prescribed under Section 229 of the NIRC of 1997; (2) The fact not necessary for the person who executed and prepared the
of withholding is established by a copy of a statement duly certificate to prove its authenticity.
issued by the payor to the payee showing the amount paid and
the amount of tax withheld; and (3) It must be shown on the
return of the recipient that the income received was declared as
part of the gross income Section 204 Section 112 © Section 228: THIS
IS TO PROTEST
THE
ASSESSMMNET
AND NOT
18. CIR vs. Semirara Mining Corp., GR No. 202534, 8 REFUND :D
December 2018 1. Recovery of tax 1. Refund of 1. Administrative
erroneously or unutilized input Vat protest on
illegally collected from 0% rated assessment
THERE IS NO PREMATURE EXHAUSTION WHEN BOTH transaction
THE ADMINISTRATIVE CLAIM AND THE JDUICAL
CLAIM WAS FILED WITHIN A PERIOD OF TWO 2. 2 year 2. Applies only to - 30 DAYS
YEARS.SMC entered into an operative contract with the PDIC prescriptive period AC from the close Reglementary
through the energy development board. The respondent argued that of the taxable period reckoned
- Applies to both
the NIRC exempted it from the payment of VAT on the sale and quarter where from the FAN and
AC and JC
importation of coal. NPC then started to withhold 5% VAT on the relevant sales are FLD
coal billings of the respondent SMC. NPC remitted to the BIR final - From the date of made
VAT withheld from the respondent SMC on the sale of coal. NPC payment
asked whether the sale is still exempt from VAT , which BIR
confirmed through a ruling.SMC then filed an application ofr tax 3. CIR has no 3. CIR period to 3. CIR period to
credit. CTA ruled that the refund must be granted period to resolve resolve 90 days resolve 180 days

Issue: Whether the refund is granted since SMC is exempt from 4. Appeal to the 4. Appeal to the Cta 4. Appeal to the Cta
VAT CTA
1. 30 days from 1. 30 DAYS from
Held: There is still no premature recourse to the court since both 1. Within 2 years receipt of denia; the decision or
the administeratitve and juducla claim is still within the two years. 2. AC be filed first 2. No deemed 2. 30 days from the
denial inaction or await
then approval
Even if the 90 day
within 30 days
19. CIR vs. Cebu Holdings, Inc., GR No. 189792, 20 June 2018 period had alpased
administrative
claim can still be
The taxpayer filed a claim for refund of excess creditable protected by BIR
withholding tax . The taxpayer used its prior years excess credit to
pay for its current year income ta due. The SC disallowed the same
because the prior year excess credit was unsubstantiated. Further
when the taxpayer opted to carry over to the succeeding year its VAT ZERO RATED : INPUT VAT
prior year excess credit and creditable taxes that is subject of
the refund, the SC went on to explain that only substantiated 1. a VAT registered person whose sales of goods, properties or
tax can be caried over to the succeeding year and may be services are zero rated or effectively zero rated may apply for the
applied against income tax due in the succeeding year. The SC
issuance of a tax credit certificate refund of input tax attributable to
ordered the BIR to issue a FAN on the taxpayer for using its
unsubstantiated excess credits as payment for its income tax due on such sales
the current year
2. A vat registered person whose registration has bene cancelled
due to retirement from or cessation of business or due to the
changes in our cessation of status under Section 106 © of the tax
code may within two years from the date of cancellation apply for
20. PAL vs. CIR, CIR vs. PAL, January 17, 2018, G.R. Nos. issuance of tax credit or refund if he has no internal revenue tax
206079-80 liabilities against which the tax credit certificate may be utilized.

1. Proof of actual remittance is not a condition to claim for a Old Rule Train Law
refund of unutilized tax credit, Under the law it is the payor
1. The two year period applies The two year period applies
withholding agent and not the payee refunding the claimant who is
only to the administrative claim ony to administrative claim
vested with the responsibility of withholding and remitting income
reckoned from the close of the reckoned from the close of the
taxes
taxable quarter taxable quarter
2. It is only required to prove that taxes are withheld the taxes
120 days for the CIR to resolve 90 days for the CIR to resolve
withheld are deemed to be full an final payment of the income tax
state the factual and legal bases
due from income earner or payee
in the case of denial subject to

Tabuzo, Tax Remedies

 Note: The filing of the two year prescriptive period only applies to
penalty under Sectuon 269
the filing of the administrative claim. The filing of the judicial
Judicial claim: ( 120+30) Judicial Claim: claim follows the 90+ 30 period
1. Within 30 days after CIR 1. Within 30 days after CIR
denial within the 120 day denial within the 90 day period
period
2. Deemed denial is no longer
2. Within 30 days from the applicable How to Apply 112
expiration of the 120 day
period if the CIR does not act Bar: KKI is a corporation engaged in the manufacturing and
within the 120 day period processing of steel and its by products. It is both registered
with the board of Investment with a pioneer status and with
the BIR as a VAT entity. On October 10 ,2010 it filed a claim
for refund and credit input VAT for the period January 1 to
a. Two year prescriptive period: March 31 2009 befor the CIR. On February 1 ,2011, as the CIR
had not yet made any ruling on its claim for refund or credit.
1. It is only the administrative claim that must be filed within two KKI fearful that the period to appeal to the courts might
prescribe filed an appeal with the CTA.
year prescriptive period. The proper reckoning date for the two
year prescriptive period is the close of the taxable quarter when A. Can the court of tax appeals act on KKI appeal
the relevant sales were made. b. Will the answer be the same if KKI filed the appeal on
March 20 2011 and CIR had yet to act on the claim?
Except: For the period of June 8 2007 to September 12
Administrative Claim: Yes. It is filed on time the reconning
2008. The reckoning date is the filing of the VAT return
period is March 31 2009 , two years from March 31 2009 is March
and the payment of tax. 30 2011, the claim here was filed on time.

Compare: In 204c and 229 both apply to both administrative and
judicial claim
“ Close of the taxable Quarter:”::1. March 31 2. June 30 3.
September 30 4. December 31
2. The CIR has a period of 90 days from the pre-train of the 120
days.
3. If the BIR does not act on the application within 90 days, then
the relevant officer, agent, or employee is liable for Section 269
2. The filing is improper under the old rule CIR has 120 days from
the submission of relevant supporting document, 120 days from
October 10 2010 is February 7 2011, Here it was filed on February
1, 2011 hence premature.
b. Judicial Claim: No. Under the old rule ( since this case is prior
to train) : CIR has 30 days from the lapse of the 120 days ( deemed
denial). Here 120 days from October 10 2010 + 30 days = March
9. Here, the period had already lapsed as the March 20 appeal was
over the March 9 deadline

Judicial Claim

1. The taxpayer can appeal in two ways f. Government Remedies

a. File judicial claim within 30 days after the CIR
denies the claim within the 90 day period or
* deemed denial is no longer applicable: If the CIR failed to act
within the 90 day period the claim for refund is not yet denied, but
the BIR is only liable for Section 269
- Can the taxpayer still file an appeal within the lapse of the 90 day
period? ( Sir’s view) : YesOtherwise the taxpayer is at the mercy
of the BIR as to denial of the protest.
1. Tax Lien : The claim of the government predicated on tax lien
is superior to the claim of the litigant in the judgment. The tax lien
attaches not only from the service of warrant of distraint and
personal property but from the time the tax because due and
payable.
2 Actual Distraint of Personal Property
This is effected by leaving a list of distrained property or by a
service of a warrant of distraint or garnishment

b. File the judicial claim within thirty days from the
expiration of the 90 day period if the CIR does not act
within the 90 day period.
NB: The thirty day period is both mandatory and jurisdictional ( If
you do not follow the 3- day period ) the claim is to be dismissed
by the CTA
Exception: Premature Judicial filing between December
10 2003 and October 5 2010
3. Constructive Distraint of Personal Property
1. Delinquent
2. Retiring from any business subject to tax
3. Intending to leave the Philippines or to remove his property
therefrom
4. performs any act tending to obstruct the proceeding for
collection of any tax due.
4. Levy on Real Property

Tabuzo, Tax Remedies

a. Effected by writing upon the certificate warrant a description of
the property upon which the levy is made.
b. At the same time , written notice of levy shall be mailed to or
served upon the register of deeds and upon the delinquent
taxpayer , his agent or the manager of the business or to the
occupant of the property in question .
5. Forfeiture of real property
a. No bidder for real property exposed for sale or
b. If the highest bid is for an amount insufficient to pay the taxes
and penalties and cost
6. Suspension of Business Operation
- For duration of not less than five days for the following
a. In case of VAT registered person
i. Failure to issue receipt or invoices
ii, Failure to file VAT return and
iii, Understatement
b. Failure of any person to register with the BIR
i. Administrative Remedies
ii. Judicial Remedies
1. Civil Action
A. By the filing of the civil case for collection of sum of money
with the proper regular court
b. By the filing of an answer to the taxpayer petition for review
with the CTA
I. CIR issued assessment and TP appealed the same to the CTA
II. CIR filed an answer praying for the payment of tax within five
years after the issuance of the assessment
III. At the time of filing , jurisdiction over judicial action for the
collection of internal revenue taxes was vested in the CTA not in
the regular courts.
2. Criminal Action
1. The judgment in the criminal cases shall not only impose the
penalty but shall also order the payment of taxes .
2. The subsequent satisfaction of civil liability by payment or
prescription does not extinguish the taxpayer’s criminal liability
3. Acquittal of the taxpayer in a criminal proceeding does not
entail exoneration form liability to paytaxes.
Steps in appealing a decision to the CTA and Beyond
1. Appeal within 30 days from the receipt of decision or a period
inaction of the CIR, COC , Secretary of finance, secretary of trade
and Industry.
General Rule: Appeal to the CTA Division by a petition for review
under Rule 42 within 30 days
Tabuzo, Tax Remedies
Exception: In case the decision of the CBBAA or the RTC in the
exercise of its appellate jurisdiction appeal to EN Banc by the
petition for review under Rule 43.
In criminal cases ,appeal from the decision of the RTC decided in
the exercise of its original jurisdiction is via a notice of appeal filed
within fifteen days from the receipt of decision
If RTC acted in the exercise of its appellate jurisdiction
appeal to the EN Banc by the petition for review under Rule 43.
2. If the decision of the division is adverse
File a motion for reconsideration or motion for new trial within
the same division within fifteen days from the receipt of the
decision.
-Note that the MR and the MNT is a condition
precedent before bringing the case to the CTA en banc. Before the
CTA en banc can take cognizance of the petition for review the
litigant must first show that it sought prior reconsideration or
moved for new trial with the division
3. In case the resolution of the division on the MR is still adverse:
File a petition for review with the CTA en banc under Rule 43
within 15 days from the receipt of the decision. Same rule applies
for criminal cases
a. a Denial of the motion to quash is an interlocutory
order which is not proper subject of an appeal or
petition for review to the CTA en banc.
b. The proper remedy of an interlocutory order issued
by the CTA division is rule 65 to the SC
4,In case the decision of the CTA en banc is still adverse
a. File a review on certiorari with the SC rule 45 within
15 days from the receipt of the decision .
b. If you want to appeal from the decision of the local
assessment, go first with the CBAA. The decision of the
CBAA is appealable to CTA en banc under Rule 43
Institution of criminal action and inclusion of a civil action
A petition for review questioning a FDDA is not deemed instituted
in a criminal case for tax evasion. Hence the taxpayer must still
apy the filing fees for the petition for review even if the tax evasion
case covers the same taxable years as the FDDA.
What is deemed to be instituted with the criminal action is only the
government’s recovery of taxes and peanlties relative to the
criminal case. The remedy of the taxpayer to appeal the disputed
assessment is not deemed as instituted with the criminal case.
While a tax evasion case is pending , the BIR is not precluded from
issuing an assessment or FDDA against the taxpayer. The taxpayer
must go through the assessment process to question the assessment
to prevent it from becoming final, executory and demandable.

Prescriptive Period for Violation of tax code
1. Five years from
a. The day of the commission of the violation of the law
b. If the same is not known at the time from the discovery of the
commission and the institution of judicial proceeding for its
investigation and punishment
c. Prescription shall be interrupted when the proceeding are
instituted against the guilty person and shall be begin to run again
if the proceeding are dismissed for reason not constituting jeopardy
d. Prescription shall not run when the offender is absent from the
Philippines
BAR: Gerry was being prosecuted by the BIR for failure to
pay his income taxability for Calendar year 1999 depsite
several demands by the BIR in 2002, The information was filed
with the RTC only last June 2006. Gerry field a motion to
quash the information on the ground of prescription the
information having been filed beyond the five year period, if
you were the judge will you dismiss the information.
Answer: No trial court can exercise jurisdiction. Prescription of
criminal action begins to run on the day that there is a commission
of the violation of the law. The criminal violation was committed
when Gerry willfully refused to pay despite repeated demands in
2002. Since the information was filed in June 2006, the criminal
case was instituted within the five-year period required by law
( Tupaz vs ULEP)
Criminal Complaint for non -payment of tax
1, In a violation could only be committed after service of the notice
and demand for payment of deficiency taxes upon the taxpayer .
This is so because prior to the finality of the assessment the
taxpayer has not committed any violation for nonpayment of tax
2. The offense is deemed to have been committed only after the
finality of the assessment coupled with the taxpayer willful
refusal to pay the tax within the allotted period.
Filing of Fraudulent Tax Return with Intent to Evade a tax
1. Section 281 of the tax code speaks only not only of discovery of
the fraud but also institution of judicial proceeding. Thus in
addition to the fact of discovery, there must be a judicial
proceeding for the investigation and punishment of the tax offense
before the five year period begins to run
A criminal tax case for filing fraudulent tax return with intent to
evade tax is practically imprescriptible for as long as the period
from the discovery and institution of judicial proceeding for its
investigation and punishment up to the filing of the information in
the court does not exceed five years.
G. LOCAL GOVERNMENT CODE
a. Local Government Taxation
Nature: The taxing power of the LGU is directly conferred by the
Constitution by hiving them authority to create their own sources
Tabuzo, Tax Remedies
of revenue. LGU do not exercise the power to tax as an inherent
power or by a valid delegation of power by the Congress but
pursuant to a direct authority conferred by the Constitution.
Each of the LGU has the power to
1. Create its own sources of revenue
2. To levy taxes fess and charges
- Subject to the Local Government Code provision and
is consistent with the basis policy of local autonomy.
i. Fundamental principles
1. Uniformity in LGU
2. The taxes, fees and charges and other imposition shall
a. Be equitable and based on the taxpayer’s ability to
pay
b. Be levied and collected based on the taxpayer ability
to pay
c. not be unjust, excessive, oppressive or confiscatory
d. Not be contrary to law, public policy , national
economy policy or in restraint of trade
3. Collection shall not be let to any private person
4. The revenue collected shall inure solely to the benefit of the
LGU levying the tax ,e etc unless specifically provided in the LGC
5. Each LGU shall evolve a progressive system of taxation.
B: The City of Manila enacted Ordinance No 55-66 which
imposes a municipal occupation tax on person practicing
various profession in the city . Among those subjected to the
occupation tax were lawyers. Atty Mariano Batas who has a
law office in Manila, pays the ordinance imposed occupation
tax under the protest. He goes to court to assail the validity of
ordinance for being discriminatory: Decide with reason?
A: The ordinance is valid the tax imposed by the ordinance is a
professional tax which is authorized by the law to be imposed by
cities. The ordinance is not discriminatory because the City
Government Council has the power to select the subjects of
taxation and impose the same tax on those belonging to the same
class. The authority given by law to cities is to impose professional
tax only on person engaged in the practice of their profession
requiring government examination and lawyers are included
Principle of Pre-emption
Where the National Government elects a tax a particular area, it
impliedly withholds from local government the delegated power to
tax the same field . This doctrine principally rest on the intention of
the Congress. Conversely should Congress allow municipal
corporation to cover fields of taxation it already occupies then the
doctrine of prevention will not apply ( Victroas Mining vs.
Municiaplity of Vibctorias)
Residual Power to Tax
1. Local government units may exercise the power to levy taxes,
fees or charges on any bases or subject not otherwise specifically
enumerated herein or taxed under the provision of the NIRC as
amended or other applicable laws subject to the ff:
a. Constitutional Limitation
b. Common Limitation
c. Limitation under Section 186 LGC must
not be unjust, excessive oppressive confiscatory or
contrary to national policy . And not enacted without
prior hearing conducted for such purpose.
I. Fundamental Principles of local and real property taxation
Local Taxing Authority:
1. The power to tax in the local government is vested in and
exercised by the Sanggunian
2. Every tax imposed must be levied pursuant to valid ordinance
The reference of Local Taxation is local ordinance
1. These ordinance usually add to the minimum requirement of the
LGC
2. LGU may exercise the power to levy taxes, fees or charges on
any bases or subject not otherwise specifically enumerated in the
LGC or the taxed under the NIRC or other applicable law.
II. Common Limitations on the taxing powers of LGUs
Instances when the LGU cannot impose a tax
1. Income tax
- Except when levied on bank and other financial
institution. ( or when the fee is an regulatory fee)
Bar Question: Pheleco as a private generation and distribution
company operating mainly form the City of Taguig . It owns
electric poles which it also rents out to other companies that uses
poles such as telephone and cable companies. Taguig passed an
ordinance imposing a fee equivalent to 1% of the annual rental for
these poles. Pheleco questioned the legality of the ordinance on the
ground that it imposes an income tax which LGU are prohibited
from imposing .
A: I would argue that the same is a regulatory fee therefore it is a
valid imposition by the LGU.
2. Documentary Stamp tax
3. Taxes on Estate, inheritance, legacies and other acquisition. (
Transfer taxes)
4. Customs, duties, registration of vessel and wharfage on
wharves, tonnage due, and all other kinds of customs fee
charges and dues ( Customs duties tariff and customs code)
Note: Municipalities may impose license fees for the
operation of fishing vessels of three tons or less
Bar : In 2014, M City approved an ordinance levying customs
duties and fees on goods coming into the territorial jurisdiction of
the city. Said city ordinance was duly published on February 15
Tabuzo, Tax Remedies
2014 with effectivity date on March 1, 2014. Is there a ground to
oppose the ordinance
]
Yes. The taxing powers of the local government such as M City
cannot extend to the levy of taxes fee, and charges already imposed
by the national government and this includes customs duties under
the tariff code.
5. Taxes, fees and charges and other imposition upon goods or
merchandise , carried into or out of or passing through the
territorial jurisdiction ( Imposition on the guise of wharfage
fee)of the local government units in the guise of charges for
wharfage, tolls for bridges or otherwise or other taxes fees in any
form whatsoever upon such goods or merchandise. ( Palma vs
Malangas)
It is therefore irrelevant that the fees imposed are actually for
police surveillance on the goods because any other form of
imposition on the goods passing through the territorial jurisdiction
of the municipality is prohibited Section 133 (e)
6. Taxes, fees or charges or agricultural products or aquatic
products when sold by marginal farmer or fisherman
- This provision prevents LG from providing inspection
fees.
7. Taxes on business enterprise certified to by the Board of
Investment as pioneer or non pioneer for a period of six years
and four years respectively from the date of registration .
- The starting point is the date of registration is not date
commercial operation.
- The reckoning date of the commercial operation refers
to income taxes imposed by the national government on
BOI registered firms
8. Section 133 (h) covers two distinct limitation
- Excise tax on articles enumerated under the
NIRC( advalorem ). This is levied n the specific article
rather than one upon the performance carrying on or the
exercise of an activity.
- Taxes, fees or charges of Petroleum: The distinction
between the tax on business and tax on article is
immaterial ( Petron vs , Tiangco). Not only on excise
tax but all tax including business tax.
XYZ Petroleum Corporation operates an oil refinery and depot in
Batangas City which manufacturers and produces petroleum
products that are distributed nationwide. The City Treasurer of
Batangas issued a notice of assessment to XYZ Petroleum
Corporation that demands the payment of business tax for its
manufacture and distribution of petroleum product. XYZ
Petroleum contended that Batangas City has no authority to impose
business taxes based on the sale of Petroleum Products. The City
Treasurer of Batangas insisted that the prohibition under Section
133 (h) of the Local government is limited to the imposition of
direct and indirect or excise tax on petroleum product and not
business tax Is the City treasurer correct?

No: Although the power to tax is inherent in the state the same is
not true for the LGU because although the mandate to impose taxes
granted to the LGU is categorical under the constitution it is not all
encompassing as it must be exercised within the guidelines and
limitation that the Congress may provide.
Among the Common limitation on taxing power of the LGU is that
it cannot exercise its taxing power in excise taxes on articles,
enumerated under the NIRC as amended and taxes, fees or charges
on Petroleum Products. Section 133 (h) specifies two kinds of
taxes that cannot be imposed by the LGU 1. Excise taxes on
articles enumerated under the NIRC as amended 2. Taxes fees or
charges on Petroleum Products. The prohibition under Section 133
( h) of the LGC makes it clear that the prohibition with respect to
Petroleum Product extends not only to the excise tax thereon but to
all taxes, fees or charges. This means that there is a specific
prohibition imposed barring the levying of any other types of taxes
with respect to petroleum taxes
business engaged in the production, manufacture, refining
distribution or sale of oil, gasoline and other petroleum products
shall not be subject to any local tax.
9. Percentage Tax or VAT on sales, barters or exchange or
similar transaction on goods or services
Bar: Batas law is a general professional partnership operating in
the City of Valenzuela, it regularly pays value added tax on its
services all the lawyers have individually paid the required
professional tax for the year 2017. However as a condition for the
renewal of its business permit for the year 2017, the City of
treasurer assessed BATAS law for payment of percentage business
tax on its gross receipt for the year 2016 in accordance with the
Revenue Tax Code of Valenzuela
A: No batas law is not entitled to pay the assessed percentage
business tax , Under Section 133 of the Local Government Code
local government units cannot levy percentage or value added tax
on sale of service. Here, Batas law income comes directly from its
services which no percentage tax can be imposed.
Pelizloy questioned the imposition of the province on gross
receipt from the admission fees of resorts, swimming pools and
bath houses. The province argues that resort, swimming pools
and hot springs are encompassed under the term amusement.
Is the province correct?
No. The LGC states that it may levy an amusement tax to be
collected from the proprietors, lesses or operators of theaters ,
cinema, concert halls circuses, boxing stadia and other place of
amusement. In this case, resort, swimming pools, bath houses and
tourist spots are not among those the amusement place mentioned
in the LGC as subject to amusement tax. Amusement places
include theaters, cinema, and concert halls circuses and other
places of amusement where one seek admission to entertain oneself
by seeing or viewing the show or performance
Tabuzo, Tax Remedies
10, Taxes on the gross receipts of transportation contractors,
and persons engaged in the transportation of passenger or
freight by hire and commo carrier by land, air and water
except otherwise provided
1. Common carriers makes no distinction as to the means of
transporting as long as it is by land, water and air. Nor does it
provide that the transportation of passenger or goods by motor
vehicle
2. A local ordinance which imposes local business tax n the gross
receipt of person who transport passenger or freight for hire and
common carrier was held invalid.
Q: BAS is a foreign corporation organized and existing under the
laws of Indonesia. It is licensed to engaged in the airline business
in the Philippines that involves the transportation of passenger and
cargo for hire. Its principal office and place of Business in the
Philippines is located in the City of Manila. As BAS was renewing
its business permit, it was assessed by the City Treasuer of Manila
for local business tax at the rate of 50% of one percent of the gross
receipt of transportation contractor, persons who transport
passenger or freight for hire, and common carrier by land, air or
water pursuant to the newly enacted ordinance. Can the City
treasurer of Manila legally impose the said local business tax”?
No. LGC clearly and unambiguously proscribes LGU from
imposing any tax on the gross receipt of transportation contractor
persons engaged in the transportation of passengers or freight by
hire, and common carrier by land , air and water.
11. Taxes on premiums paid by way of reinsurance or
retrocession. And not insurance premium
12. Taxes fees or charges for registration of motor vehicle and
for the issuance of all kinds of license or permits for the driving
thereof except tricycles.
This provision only pertains to the grant of franchise
excluding trycles. Other matters pertaining to the LGU remains
with the LTO.
13. Taxes fees or other charges on the Philippine products
actually exported except otherwise provided therein
12. Taxes, fees or charges in the countryside and barangay
business enterprises and cooperative duly registered und
13. Taxes, fees or charges of any kind of the National
Government its agencies and instrumentalities and LGU
-This is not absolute there is an exception to the exemption clause
which taxes the national government when the beneficial use of its
real property is given to the taxable entity.
a. Palma Dev’t Corp v. Mun. of Malangas, GR No. 152492, 16
Oct 2003
Doctrine: A municipal ordinance imposing fees on goods that pass
through the issuing municipality territory is null and void. The
imposition of service fee in the guise of wharfage dues are void for
violating the prohibition under RA 7160.
Wharfage and all other kinds of customs fee , charges and des
except wharfage on wharves constructed and maintained by the
LGU.Under RA 7160, wharfage is defined as a fee assessed
against the cargo of the vessel engaged in foreign and domestic
trade based on quantity weight or measure received and or
discharged by the vessel. Here, it is a wharfage
LGU may not levy taxes that are not provided under the Local
government Code. A municipal revenue Code was approved by the
Sangguniang Panlalawigan imposing a service fee for the use of
municipal road and streets leading to the wharf . The petitioner
argued that the local government code does not have the authority
to tax the goods transported to the vehicle. The issue here is
whether the Municipal government is taxable
Held:
No. The local government code prescribe toll fees or charges for
the use of public road, pier and wharf constructed by them.
However the local government code prohibits the imposition of
wharfage fees and other tax on goods and merchandise. Wharfage
fee pertains to a fee assessed against the cargo of the vessel
engaged in foreign and domestic trade based on quantity ,
weight or measure received and or discharged by the vessel.
Here, what is imposed are fees in the guise of wharfage fee.
b. Batangas City vs. Pilipinas Shell, GR No. 187631, 8 July
2015
Doctrine : A municipal corporation , does not have inherent
powers of taxation. The charter or statute must plainly show an
intent to confer that power of municipality , hence it cannot be
assumed. Hence, the power of province to tax is limited to the
extent that such power is delegated to it either by the Constitution
or by the statute.
The power to tax is inherent in the state, the same is not true in
cases of LGU, the power of LGU is conferred by the Constitution
or by the statute. The LGU has the power to tax business tax
butit cannot tax any charges on petroleum products Batangas
sent a letter of assessment to the respondent demanding the latter to
pay business tax and mayor permit fee for the manufacturer or
petroleum product pursuant to Section 134 of the LGC and Section
23 of the Batangas City Code. Batangas argued that based on
Section 143( h) of the LGC is so broad that it covers any business
of Sangunian concerned.
Issue: Whether the LGU is empowered to impose business tax on
person entities, engaged in the business of manufacturing and
distribution of petroleum product
Held: No. The power of the LGU to tax must be conferred by law.
A municipal corporation does not have inherent power to tax, the
charter or statute must show the intent to tax, hence the power must
be delegated by the Constitution or by the statute.
In this case, though the LGU has the power to impose business
taxes, the same is subject to explicit limitation which prohibits
the LGU from imposition of taxes, fees or charges of petroleum
product. Therefore, the specific prohibition prevails over the
general provision
Tabuzo, Tax Remedies
c. Petron vs.Tiangco, (2008)
Section 133 (h) Covers two limitation
1. Excise tax on articles enumerated under the NIRC
- The court defined excise tax on articles as that levied for a
specific article rather than one upon the performance carrying on
or the exercise of an activity. ( Ad valorem)
2. Taxes, fees and charge on petroleum products
Here, the law does not qualify the kind of taxes, fees or charges
that could withstand the absolute prohibition impoed by the
provision. Since the law does not distinguish, the LGU is not
prohibited from imposing not only excise tax but all kinds of
product.
Facts
Petron was assessed tax relative to the sale of diesel by Navotas .
Petitioner opposed this protest pursuant to Section 195 of the
code.It argued that it is exempt from payment of local business tax
in view of Article 232 of the Code. The issue is whether the local
government code is empowered to tax Petron over the sale of
diesel by Navatos.
The court ruled that the local government unit is not entitled to
impose excise tax based on Section 133. Though the local
government has the power to create its own source of revenue and
to levy taxes and charges it is subject to the guidelines which the
congress provides in this case is Section 133 of the Tax Code.
The excise tax on articles enumerated under the NIRC, the court
defined excise tax as that levied on specific article rather than one
upon the performance carrying or the exercise of an activity. In
order words,when the LGC talks about excise tax, it refers to those
enumated in the NIRC which is subject to ad valorem tax.
d. PBA vs. CA, GR No. 119122, 8August 2000
PBA was assessed for the deficiency amusement tax. The
protested this assessment, contending that local tax code
transferred the power and authority to sell from the national
government to the local government. The court ruled that
Amusement tax is a national tax. Province can only impose tax on
admission from the proprietors, lesses or operator of theaters ,
cinematograph concert hall or place of amusement. To determine
the phrase other place of amusement one must refer to the
enumeration of theater, cinematograph concert hall, and
cirucses Here, professional basketball game do not fall within
the said category as theater, cinematograph and other form of
entertainment.
e. Manila Vs. Hon. Angel Valera Colet, GR No. 120051, Dec 10,
2014
Taxes on the gross receipt of transportation contractors and person
engaged in the transportation of passengers or freight by hire and
common carrier by air, land or water. A local ordinance which
imposes local business tax on the gross receipt of person who
transport passenger or freight for hire and common carrier was
held invalid.
Section 21: There is an argument that Section 21 (b) of the LGC
contravenes the Constitution as Section 123 provides that taxing
power of the LGU does not extend to transport business. The court
ruled that Section 21 is void as LGU is prohibited from taxing the
gross receipt of transportation contractor, person, engaged in
transportation of passenger or freight by hire and common carrier
by land, air and water.
In the case at bar, the sanggunian of the municipality or city cannot
enact an ordinance imposing business tax on the gross receipts of
transportation contractors, persons engaged in the transportation of
passengers or freight by hire, and common carriers by air, land, or
water, when said sanggunian was already specifically prohibited
from doing so. Any exception to the express prohibition under
Section 133(j) of the LGC should be just as specific and
unambiguous. Second, the construction adopted by the Court gives
effect to both Sections 133(j) and 143(h) of the LGC. In construing
a law, care should be taken that every part thereof be given effect
and a construction that could render a provision inoperative should
be avoided, and inconsistent provisions should be reconciled
whenever possible as parts of a harmonious whole.
f. Manila Electric Company Vs. City of Muntinlupa and Nelia
A. Barlis, G.R. No. 198529.February 9, 2021
FRACHISE TAX : SECTION 142 only vest the province and
cities the power to levy franchise tax, the Muntinlupa is not a
province or city therefore the existing statute is void for being ultra
vires.
Barlis sent a letter to Meralco demanding the payment of franchise
tax pursuant to Section 25 of MO 93-35. Meralco argued that the
City of Muntinlupa did not have the power to collect a franchise
tax under the local government code.
Muntinlupa being a municipality definitely had no power to enact
the subject franchise tax ordinance. A void ordinance which is
incompatible with any existing law or statute is ultra vires hence
null and void. Therefore, the city of Manila cannot legally impose
a local business tax based on a void ordinance.
III. Requirements for a valid tax ordinance
1. Not contrary to the Constitution or any statute
2. Not unfair or oppressive
3. Not partial or discriminatory
4. Not prohibit but regulate trade
5. General consistent with public policy
7, Not unreasonable
IV. Procedure for approval and effectivity of tax ordinances
1. Satisfaction of the procedures applicable to local ordinance in
general
2. Public Hearing Shall be conducted for the purpose prior to the
enactment thereof
3. Publication for three consecutive days in a newspaper of local
circulation or posting in at least two conspicuous places and
publicly accessible places.
4. Copies shall be furnished to the respective local treasurer for
public dissemination
Ongsuco vs. Malones
1. A public hearing must be held prior to the enactment of an
ordinance levying taxes, fees or charges and that such public
hearing be conducted as provided under Section 277 of the IRR of
the LGC
2. Under Article 277 (b) (3) of the IRR of the local government
code, public hearing must be held no less than ten days from the
time notices were sent out, published or posted.

There are two test to determine the validity of the ordinance 1.

Formal test and 2. Substantive test. The formal test requires the
determination of whether the ordinance was enacted within the
corporate powers of the LGU . Substantive test primarily assess the VI. Tax Remedies under the Local Government Code of 1991
reasonableness and fairness of the ordinance and significantly its
compliance with the Constitution. a. Taxpayer’s remedies in local taxation

The LGU cannot impose the payment of Franchise tax Prescriptive period

For an ordinance to be valid it must be 1, Not Contary to the Assessment Collection

constitution or any statute 2. Not unfair or oppressive 3. Not partial 1. Five years from the date they 1. Within five years from the
or discriminatory 4. Not prohibit but regulate trade 5. General become due date of assessment by
consistent with public policy 6. Not unreasonable administrative or juridical
action
2. Within a period of ten years
Based on the substance test, Section 25 of MO 93-35 was passed
in case of fraud or intent to
beyond the powers of the municipality in a clear contravention of
evade the payment of taxes
RA 7160. MO 93-35 was passed by the Sangguiniang Bayan of
from the time of discovery
Muntinlupa on January 1, 1994, this is ultra vires considering the
power of Section 142 of RA 7160 vesting provinces and cities
the power to impose , levy and collect a franchise tax. The
Suspension

Tabuzo, Tax Remedies

1. When the treasurer is legally prevented from making the
assessment or collection of the tax.
2. When the taxpayer request for reinvestigation and executes a
waiver in writing prior to the expiration of the period
3. When the taxpayer is out of the country or otherwise cannot be
located
REMEDIES
1. Question the newly enacted ordinance
2. Protest against the assessment
3. Claim for refund or tax credit
QUESTION THE CONSTITUTIONALITY OF TAX
ORDINACE
1, Any question on the Constitutionality or revenue measure may
be raised on appeal within 30 days from the effectivity thereof to
the SOJ.
-Do not that this only pertains to those tax ordinance or
revenue measures. Hence if the ordinance pertain to
regulatory fee it must be brought with the RTC
Procedure
1, Appeal within thirty days from the effectivity of the ordinance to
the Secretary of Justice.
*Only review the Constitutionality of the tax ordinance.
2. Secretary must render a decision within sixty days from the
receipt of the appeal
3. Within 30 days from the lapse of the 60 days without any action
from the SOJ or within 30 days from the receipt of the decision,
the taxpayer goes to court.
The appeal is mandatory if not appeal to the DOJ was
made the RTC dismiss the case
* Note: The failure to comply with the Procedure makes the same
as null and void
The Secretary of justice can only review the Constitutionality or
legality of the tax ordinance and if warranted revoke it on either of
these grounds.
4. After the decision of the DOJ, the next step is to question the
decision under court of competent jurisdiction.
A taxpayer may file a complaint assailing the validity of the
ordinance and praying for a refund of its perceived payment
without filing a protest to the payment of taxes due under the
ordinance.
Protest of Assessment
Tabuzo, Tax Remedies
Protest: This pertains to notice of assessment contemplated by
Section 195 as these any amount of deficiency, surcharge interest
and penalties due from the taxpayer. Therefore, municipal license
receipts, mayor’s permit, business tax and other charges all of
which are required to renew a business permit under the LGU are
not considered as assessment that can be protest.
PRESCRIPTVE PERIOD: 5 YEARS FROM THE TIME THEY
BECOME DUE
Except 10 Years in case there Is fraud
1. Treasurer to issue an assessment
2. Taxpayer to file a written protest with the local treasurer
within 60 days form the receipt of the notice of assessment
otherwise it shall be considered as final and executory
“ Payment under Protest”: Is not necessary the rules are
different under the real property assessment
3. The treasurer has to decide within sixty days from the time of its
filing. If the treasurer finds the protest meritorious he will cancel
the assessment if not he will deny the protest.
4. Taxpayer has 30 days from the receipt of the denial or thirty
days from the lapse of the sixty day period within which to appeal
to the proper court of competent jurisdiction otherwise the
assessment becomes final
5. Go to the CTA within 30 days via
a. Petition for review with the CTA Division under
Rule 42( If the RTC acts in original jurisdiction)
b. Petition for review to the CTA En banc under Rule
4323 ( If the RTC acts in appellate jurisdiction)
* Competent Jurisdiction
1. appeal with the MTC: 2,000,000 and below
2. Appeal with the RTC:
*Appeal to the Court of Tax Appeals
A written protest is mandatory when protesting an assessment,
Corollary to assailing the validity of the ordinance no appeal to
the DOJ is necessary when protesting against the assessment.
Note However that one can still pay it under protest if you file a
refund when you appeal the denial or inaction in court.
Question: On mAY 15 ,2009, La Manga Trading Corporation
received a deficiency business tax assessment of P1,500,000.00
from Pasay City Treasuer. On June 30 2009, the Corporation
contested the assessment by filing a written protest with the City
Treasurer. On October 10 2009, the Corporation received a
collection letter from the City of Treasurer drawing it to file on
October 25 2009, an appeal against the assessment before the RTC
A. The Protest was filed on time
As provided under 195, upon the issuance of the assessment , the

taxpayer files a protest with the local treasurer within 60 days from
the notice of assessment
The appeal with the RTC was not filed on time
When the assessment is protested the treasurer has a period of 60
days within which to decide, the taxpayer has 30 days from the
receipt of the denial of the protest or from the lapse of the 60 day
period to file a case with the proper competent court which ever
date comes first. In this case, since there was no decision on the
protest was made the taxpayer should have appealed with the RTC
within 30 days from the lapse of the period to decide the protest
On January 17 2017, XYZ corporation received a tax assessment
for local business tax from the City Treasurer of Manila. XYZ
Corporation paid the taxes and charges in the tax assessment
on February 13 2018 and filed with the City Treasurer Office a
letter dated June 2 2018 asking for refund of the taxes and charges
paid and protesting the validity of the assessment. On August 8
2018, or within the two year prescriptive period for the filing of
judicial claim for refund. XYZ Corporation bought a judicial
action before the RTC. Will Judicial claim for the refund prosper.
A: No. The Judicial claim will not prosper. Upon the receipt of the
assessment, the petitioner may pay the same under protest and
administratively assail it within 60 days before the local treasurer
whether in a letter protest or refund. In the case at bar, the taxpayer
receives an assessment and opts to pay, Section 195 must still
apply. In the subsequent court action, the taxpayer may at the same
time question the validity and the correctness of the assessment
and seek a refund of a taxes it paid.
1. January 17 2017 received assessment
2. Paid Feb 13 2018 refund
3. August 8 20
REQUIREMENT OF TAX CREDIT RO REFUND CASES
1. Written claim filed with the local treasurer
2. Filed within two years from
a. Date of payment
b. Date when taxpayer is entitled to a refund or credit
As compared to NATIONAL Tax. The local taxation supervening
causes are allowed as reckoning points for prescriptive period
purpose ( National Taxes, supervening causes re not considered)
2. If the taxpayer wins a case against an LGU regarding local taxes
already paid what must the taxpayer do? The taxpayer must just
request from the LGU the implementation of the tax refund or
credit.
What happened if there is an assessment?
1. Protest the assessment
a. Do not pay the tax and appeal the assessment `
in court under Section 195
Tabuzo, Tax Remedies
Bring an action in court within 30 days fron the decision or
inaction by the local treasurer whether such action is denominated
as an appeal and to claim for refund erroneously or illegally
collected.
b. Pay it under protest and administratively assail within
60 days the assessment before the local treasure
whether in a letter protest or in a claim for refund
If this mode is chosen you have to bring an action in
court either to appeal from the assessment and or claim for refund
within thirty days from the decision or inaction of the treasurer.
Even if it is a refund , you cannot just use the two year period to
claim the refund under Action 196. You still have to follow the
period to protest the assessment because the a assessment triggers
thew application of Section 195 . If you don’t protest the
assessment the assessment becomes conclusive and unappealable
Section 195 And Section 196
1. Where an assessment is to be protested and disputed the
taxpayer may proceed a. Without payment b. With payment of the
assessed tax
2. If the taxpayer receives an assessment and does not pay the tax
its remedy is strictly confoned with Section 195
3. If the taxpayer receivesthe assessment and opts to pay Section
195 must still apply. In the subsequent court action, the taxpayer
may at the same time question the validity of the correctness of the
assessment and seek a refund of the taxes.
4. If no assessment notice is issued by the local treasurer and
taxpayer claims that it erroneously paid a tax or that the tax had
been illegally collected from him then Section 196 applies
i. City of Cagayan de Oro vs. CEPALCO, G.R. No. 224825, Oct
17, 2018
The Administrative Procedure under the local government code
which provides than an appeal must first me made with the SOJ is
not warranted or not applicable when the ordinance is a regulatory
measure.City of Cagayan enacted an ordinance which imposed an
annual Mayor Permit fee of P500 on every electric
telecommunication. The respondent would have to pay a permit fee
of P8,500,000 . CEPALCO filed a declaratory relief assailing the
validity of the ordinance contending that the imposition of police
power is unlawful and confiscatory. The issue here is whether
CEPALCO should have exhausted administrative remedy
Held:
No, The requirement to file a case with the DOJ, ( SOJ). There is
no need to appeal the tax ordinance to the SOJ within thirty days
from the effectivity of the ordinance since the provision outlining
the procedure partisans only to those ordinance permitting
revenue measures
The Purpose of the imposition determine the imposition determine
whether tax or regulatory fee. This is a regulatory fee as stated in
the whereas clause in the ordinance.
ii. Manila vs. Cosmos Bottling Corp., GR No. 196681, 27 Jun
2018
After receiving an assesment, the taxpayer can pay it amd appeal
the same in court and at the same time seek a refund.
If you choose this option, the taxpayer must bring the action in
court within thirty days from the decision or inaction of the
treasurer, the two year period under Section 196 does not apply to
refund cases because assessment triggers the application of
Section 195.
Manila assessed COSMOS local business tax and regulatory fee.
COSMOS protested on the assessment arguing that the
ordinance amending the revenue code of Manila must be declared
as null and void. Cosmos later tendered the correct computation of
local business this payment was refused by the Cit treasurer.
Cosmos filed a complaint before the RTC praying for a complaint
for refund of tax credit certificate. The RTC enjoined the
respondent from the imposition of business tax under the Revenue
Code. The CTA ruled that direct resort to the CTA EN BANC
violated Section 18
The Direct resort to CTA en banc violated administrative remedy
Yes. There must first be a filing for a motion for reconsideration or
motion of new trial before the CTA division before filing an
appeal with the CTA en banc.
Whether the assessment becomes final and executory when it
abandoned its protest and sued for refund
No.In case one receives an assessment there is two remedies
1. Protest and appeal the assessment in court under Section 195
and assail within sixty days the assessment before the local
treasurer.
2. Pay it: The taxpayer must administratively question the validity
and the correctness of the assessment n the letter claim within sixty
days from the receipt of notice of assessment and thereafter bring
the suit in court 30 days from either decision or inaction of the
local treasurer. Therefore, the period is not the period to file a
refund but still within the period of protest ( because protest
triggers 195)
In this case, after Cosmos received the assessment on January 15,
2007, it protested the assessment on January 18/ Cosmos received
a letter from Toledo denying its protest on March 8 2007 or exactly
30 days from the receipt of denial . Here Cosmos was fully
justified in asking for the refund of the assailed taxes protested the
sme before local treasurer.
iii. Alta Vista vs. Cebu, GR No. 180235, 20 Jan 2016
Doctrine: The Procedure under Section 187 can be set aside in
cases of pure questions of law
Appeal with the SOJ: Need not be made if the question is purely
legal. ( Purely Legal: There is no need for the presentation of
evidence: Can they impose playing tax on playing golf? ).
The Sangguniang Panlungsod of Cebu City imposeda tax
ordinance imposing an amusement tax of 30% on the golf course
and 20% on entrance fee. In the assessment , the petitioner was
originally assessed with deficiency busiensstax and other charges.
Tabuzo, Tax Remedies
The petitioner refused to pay arguing that under the local
government code. Amusement can only be imposed on
theaters, concert halls or places where there is a variety of
show and performance. The petitioner then wrote a letter
proposing to first settle other assessment in the assessment sheet
while the legality of the amusement tax is in question.
Therespondent treated this as a protest and rendered a decision
that denied the protest. A closure was then instituted Alta Vista
then filed a petition with the RTC for petition for
injunction ,prohibition and mandamus arguing that Section 42 of
the Cebu City tax ordinance with prayer of TRO is unconstitutional
for beign summarily issued. The issue here is that the taxpayer
failed to comply with Section 187
Issue:
1. Whether the power of Judicial review over the validity of a local
tax ordinance has been restricted by Section 187 of the Local
Government Code
No. The case at bar is an exemption from the doctrine of
exhaustion of administrative remedies. The tax code provides that
it is in compliance with Section 187 is mandatory. An exception is
in cases of purely legal question within the competence of the
jurisdiction of the court and not administrative agency constitute an
exception. Resolving question of the law is the function of the
court and such lower court may establish. Here, there is no need to
protest before the DOJ because it raises purely question of law
Iv. China Bank vs Treas of Manila , GR 204117
Doctrine
The Reconning point of the 60 day period is from the time the
taxpayer files his protest.On the basis of the income of the
petitioner was assessed by City Treasurer of Manila consisting of
local business taxes and other taxable fee. The petitioner paid the
same and protested the imposition of business tax as it constitutes
as double taxation. The petitioner acknowledged the receipt of
CBC payment under protest but will wait for further protest.
CBC wrote al etter that a protest was already made and that it had
until March 16 2007 to decide on the protest considering that the
letter was received on February 8 2007 but after four days the
deadline still did not decide on the protest, hence the respondent
demanded for a refund. CBC filed a petition with the RTC, the
RTC grated the decision of the CBC and ordered the refund. The
CTA division and en banc reversed the decision as RTC does not
have jurisdiction since the petition for review was filed beyond the
reglementary period allowed under Section 195 of the LGC
CBC insisted on the invalidity of the City Treasurer’s
assessment, this time, claiming that its petition for review filed
with the RTC was timely filed. It explained that the 60-day
period within which the City Treasurer should have acted on the
protest, and the consequent 30-day period within which it had to
appeal the inaction of the City Treasurer should have been
reckoned not from January 15, 2007, when it filed its letter
questioning the imposition and paid the assessed amount, but
from March 27, 2007, the day it filed the letter reiterating its
objection to the City Treasurer imposition of P154,398.50 and
demanding the return of the said amount. With the reckoning point
being March 27, 2007, CBC argued that the petition for review was
filed well within the reglementary period because it had until June
25, 2007 to file the said appeal.
Issue: Whether the reconning period to file the case must be
from the time it filed its letter questioning the assessed amount
or from March 27 the day it field a letter reiterating its
objection to the imposition of the City treasurer demanding the
return of the amount
Held
January 15 2007, is the reckoning period from the time it filed a
protest against the City treasurer questioning the imposition while
paying the assessed amount. As provided under the law, the
taxpayer has thirty days from the receipt of the denial of protest is
thirty days from the receipt of denial of the protest or from the
lapse of the sixty day period to appeal with the court of competent
jurisdiction. Herem the period had already lapsed. From
January 15 2007, CBC had sixty days or until March 16 2007,
or 30 days from MARCH 16 2007 TO appeal with the City
Treasurer since there is no action on its part. Hence, when the
petitioner filed its petition for review it was already a day late/
The RTC does not have jurisdiction, the RTC only has original
jurisidciton over local treasury cases. Ra 9282 provides that CTA
exercises exclusive appellate jurisdiction to review on appeal
decision, of the RTC in local tax cases resolved by them in
exercise of their appellate or origianl
V, International Container Terminal Service vs City of Manila
Doctrine :
Here, the City Treasurer filed a motion to dismiss since there was
no protest to the treasurer. Section 196: File a written claim with
the local treasurer within two years from the date of payment 2.
Date when the taxpayer is entitled to refund the credit. While the
petitioner paid these claim and filed a refund the subsequent denial
of these claims must have prompted the resort with the remedy
under SECTION 196 specifically the filing of the judicial case for
recover of tax allegally collected within two year period
Issue: Whether the issue of non exhaustion of administrative
remedy is present
No. Section 195 is different from 196. In 195, it is the written
protest with the local treasurer that constitutes as administrative
remedy. In Section 196 it is a written claim for refund filed within
the said office that constitutes as the administrative protest.
In this case, since there is no notice of assessment received by the
LGC article 195 cannot apply. While the petitioner paid these
claim and filed a refund the subsequent denial of these claims
must have prompted the resort with the remedy under SECTION
196 specifically the filing of the judicial case for recover of tax
allegally collected within two year period
vi. Treasurer of Manila vs. Philippine Berverage Partners, Inc.,
substituted by Coca-Cola Bottlers Philippines, G.R. No.
233556, 11 Sept 2019
Doctrine;
Where an assessment is issued the taxpayer cannot choose to pay
the assessment and thereafter seek a refund at any tme within the
full period of two years from the date of payment.
City Treasurer of Manila issued a statement of account to the
respondent Philippine Beverage Partners showing that the
Tabuzo, Tax Remedies
respondent is liable to pay local business tax and regulatory fee for
the first quarter of 2007. Th respondent protested this assessment
on the ground that it constitutes double taxation and the tax
ordinance amending the Revenue Code of Manila was declared as
null and void.
The protest was denied and was received with the petitioner on
February 6 2007/. The respondent paid the total amount and filed a
claim for refund for tax illegally collected, it also filed for revision
of the SOA and refund of local business taxes. The petitioner
argues that the respondent should have appealed the protest instead
of instituting the action for refund .
Issue: Whether the taxpayer who protested the assessment may
institute a judicial action for refund
Held:
Yes. When an assessment is to be protested or disputed the
taxpayer can either 1. Without payment 2. With payment of tax.
There must be a protest within sixty days from the time the
assessment was reached with the loca trasurer
If no payment was made , the taxpayer may appel the case with the
court of competent jurisdiction. If there is a payment the action
may be brought t court questioning the assessment and seeking
refund. In this case, after the respondent received the assessment
on January 17 2007, it protested theassessment on January 19 2007
. After payment, it wrote to the petitioner another letter asking for a
refund and reiterating the ground raised in the protest. The
rspodnent received the denial on February 6 2007.On March 8 (30
days after the receipt of denial the respondent brought the case
before the RTC, the respondent is justified in the filing of the claim
after protesting and paying the assessment)
b. Civil remedies of LGUs
1. Remedies
1. Administrative Action
a. Distraint of goods, chattel or effects and other personal property
of whatever charter including stock and other securities debt ,
credit bank account and interest in the rights to personal property ,
sale at public auction in a manner provided for by law
2. Levy upon real property and interest in or rights to real property
shall be sold at the public auction subject to a redemption period of
one year from the date of sale
2. Judicial Action
The Collection of delinquent taxes, fees , charges or other revenues
by civil action in any court of competent jurisdiction shall be filed
by the local treasurer no criminal action.
3. Enforcement of local government lien
i. Lanao Norte Electric Cooperative, Inc. vs. Provincial
Government of Lanao Del
Norte, GR No. 185420, 29 August 2017
RA 9136 prohibits electric cooperatives from transferring its
properties within a period of rehabilitation. Regardless of the
lien constituted on LANECO properties these cannot defeat the
right of PGLN to make those properties answerable for
delinquent real property tax since the local government servies
as superior lien over the properties subject to tax. Section 257 ,
the basic real property tax and other tax levied under this title
constitutes as a lien on the property subject to tax superior to all
lien and charges or encumbrances o any person . As a result ,
PGLN is well within the right to assess LANECO with real
property tax and to exercise its remedies under Section 256 of LGC
for the collection including administrative action through levy of
real property.
The provision of the law cited do not prohibited the local
government from resorting to administrative remedy of levy on
real property. Nothing in the said provision withdrew the remedy
of tax collection by administrative action from the LGU. Instead,
these provision merely ascribe limitation on and lay down the
consequences of any voluntary transfer and disposition of asset by
the electric cooperative themselves. They do not limit the LGU
remedies against electric cooperatives to judicial action in
collecting real property tax.
REAL PROPERTY TAX
V. Imposition and exemptions from real property taxes
Only the following LGU can impose real property tax
Tabuzo, Tax Remedies
1. Provinces
2.Cities
3. Municipalities within Metro Manila
Real Property and Machinery
1. The list of immovables under Article 415 of the Civil Code
Section 199: Machineries which are actually , directly and
exclusively used to meet the needs of the particular industry
business or activity are liable for real property tax.
-If the Machinery is only used for general purpose it is
not subject to real property tax.
Rules on Machinery
1. As long as permanently attached to land and
buildings
If not permanently attached
a. If essential and principal element of an industry,
work activity without which such cannot function
Note: Machinery- of non stock non profit educational institution
which are used actually, directly and exclusively used for
educational purpose are not subject to real property tax.
Between the Civil Code and the Local government Code the latter
shall prevail the LGC is a special law granting the LGU power to
impose Real property tax
Exception from real property tax
1. Real Property owned by the Republic of the Philippines or any
of its political subdivisions except when the beneficial use is
granted to taxable person.
2. Land, buildings and improvement that is actually , directly and
exclusively used for religious charitable and educational purpose
3. Machineries and equipment that are actually, directly and
exclusively used by local water district and GOCC engaged in the
supply and distribution of water and or generation and transmission
of electric power
4. RP owned by registered cooperatives
5. Machineries and equipment used for pollution control and
environmental protection.
a. MERACLO vs. Lucena, G.R. No. 166102, August 05, 2015
Meralco argued that the transformers are not subject to real
property tax since under the civil code 1. It must be placed in the
tenement by the owner 2. Destined for use in industry or work of
tenement. Issue is whether electric post, transmission line are
exempt from Real Property Tax? No. The Transformer is entitled
to real property tax because the LGC withdrew the exemption
under the law.The court ruled that real property tax can be imposed
even if machineries are not permanently attached as long as it
actually , directly and exclusively used to meet the needs of a
particular industry.

meet the needs of the particular industry and by their very nature
and purpose necessary for business purposes.
In this case, even though the electric facilities are not annexed to
the land but it was actually and directly used for industrial purpose
it is subject to real property tax.
b. FELS Energy, Inc. vs. Prov. of Batangas, GR No. 168557, 16
Feb 2007
DOCKS / STRUCTURE FLOATING: Docks, and structure
which though floating are intended by their nature and object to
remain fixed in the river are considered as immovable property.If
the essential and principal emenet of an industry, work or activity
without which such cannot function subject to real property tax.
The power barges are considered immovable by destination that
tends to meet industry of work Hence subject to real property
tax.
c. Capitol Wireless, Inc., vs. Prov. Treas. of Batangas, et al, 30
May 2016
Submarine or undersea communication cables are akin to electric
transmission lines that are no longer exempted from the real
property tax under the LGC . Both electric lines and
communication cables are in the strictest sense are not directly
adhered to the soil but pass through post, relays or landing station
but both may be classified as machinery as real property under the
Article 415(5) of the Civil Code for the simple reason that such
pieces of equipment serves the owner business or tend to meet his
industry or works that are on real estate.
Here, the pieces of equipment serve the owner of the business
which tend to meet the need of his industry or work that are on real
estate. Here the argument that the cable system is within
international water, the court applied the rule on UNCLOS 12
nautical miles.
d. LRTA vs. CBAA, G.R. No. 127316. October 12, 2000
Whether carriageway, passenger terminal station is subject to real
property tax, the petitioner argues that it should not be subject to
tax because it is created for public use
Under the Real Property Tax Code, real property "owned by the
Republic of the Philippines or any of its political subdivisions and
any government-owned or controlled corporation so exempt by its
charter, provided, however, that this exemption shall not apply to
real property of the abovenamed entities the beneficial use of
which has been granted, for consideration or otherwise, to a
taxable person. Therefore, the petitioner is not exempt from real
property tax since the beneficial use was granted to a taxable
person. LRT is accessible only to those who pay the required fare.
It is thus apparent that the petitioner does not exist solely for public
service and that the LRT carriage way and terminal station are not
exclusively for public use.
Tabuzo, Tax Remedies
e. City of Pasig vs. Republic, 24 August 2011
WHETHER PASIG city can assess real property tax from the
lessees of his property? It depends Under Section 234 (a) of RA
7160 states that properties owned by the Republic of Philippines
are exempt from real property tax except when the beneficial use
thereof is granted for consideration or otherwise to a taxable
portion. Hence the portion of the properties not leased to taxable
entities are exempt from real estate tax while the portion of the
properties leased to taxable entities are subject to real estate tax.
In the case at bar, the parcel of land are not properties of public
dominion because they are not intended for public use such as
road, canals , river torrents, port and bridges constructed by the
state. Neither are they intended for some public service or the
development of national wealth. MPLDC leases portion of its
properties to different business establishment , thus the portion
of the properties leased to taxable entities are not only subject to
real estate tax they can also be sold to public auction for tax
deficiency
f. NPC vs. Province of Quezon and Mun. of Pagbilao, 15 July
2009
. To claim exemption the claimant must prove that 1. The
machineries are actually , directly and exclusively used by the
local water district and government owned and controlled
corporation 2. The local water district and the government
owned and controlled corporation claimed exemption must be
engaged in the supply and distribution and generation of
electric power. Neither NPC or Mirant satisfies both requirement
although the Plant’s machineries are devoted for the generation of
electric power by the NPC own admission as pointed out , Mirant a
private corporation is the one who uses and operates them. That
Mirant operates the machineries solely in compliance with the will
of the NPC only underscores the fact that NPC does not actually
directly and exclusively use them.
Real Property owned by the RP or any of its political subdivision
and government owned and controlled corporation so exempt by its
charter provided that the exemption does not apply to real property
of above mentioned entities the beneficial use of which has been
granted to a taxable person. Therefore, if the beneficial ownership
is granted to the taxable person ( Mirant) it is not exempt from
paying RPT/
g. Republic vs. City of Paranaque, GR NO. 191109, 8 July 2012
Doctrine
Note: Differentiate a GOCC with a government instrumentality :
A GOVERNMENT INSTRUMENALITY IS EXEMPT FROM
PAYMENT OF REAL PROPERTY TAXThe Petitioner argues
that it is an Government instrumentality and hence it is exempted
to pay real property tax under the Local Government Code. The
LGU argues that PRA is a GOCC and not an instrumentality when
it entered into several contracts representing itself to be a GOCC
hence taxable under Section 193 of the LGC. The issue is whether
PRA is exempt from the payment of real property tax.
Yes. Since PRA is not a GOCC. To be a GOCC it must either be a
non stock corporation or a stock corporation. For it to be a stock
corporation 1, It has capital stock divided into shares 2. It is
authorized to distribute dividends and surplus profit. As for non
stock corporation it must have members and must not distribute
part of their income to members. Here ,PRA is not a stock
corporation because it is not authorized to distribute dividends to
stockholder. PRA cannot constitute a non stock corporation
because it does not have members organized for the purpose of 1.
Common Good 2. Economic Viability
PRA IS EXEMPT FROM REAL PROPERTY TAX
Section 234 provides that real property tax owned by
the republic of the Philippines or any of its political subdivision
except when the beneficial use thereof has been granted for
consideration or otherwise to
There is no showing that PRA leased the subject reclaimed
property to private taxable entity. This exemption must be read in
relation to Section 133 (o) which prohibits local government from
imposing taxes, fees and charges of any kind on the National
Government, agencies and its instrumentalities.
h. UP vs. City Treasurer of Quezon City, GR No. 214044, 19
June 2019
Doctrine :
RA 9500 Section 25 ( a) : All Revenue and assets o the
University of the Philippines used for educational purpose or in
support thereof are exempt form all taxes and duties. UP was
assessed real property tax on the property leased to Ayala land.
The issue is whether UP is liable to pay RPT on the land leased to
Ayala Land. The court ruled that no UP is exempt.
As a rule, Section 205 and Section 234 of the LGC provides for the
removal of exemption of government instrumentality when the
beneficial use of real property owned by the Government is
granted to a taxable person, But this does not apply in the case of
UP, Under RA 9500, (UP’s charter) , there is no longer a need to
distinguish the tax status of the possessor of the beneficial owner to
ascertain whether UP is exempt from tax. Therefore the point of
contention in exemption is whether the revenue and assets of the
University of the Philippines used for educational purpose or in
support thereof shall be exempt from taxes and duties – UP charter
i. National Grid Corporation of the Philippines VS. Ofeliam
Oliva, G.R. No. 213157, August 10,
2016
The issue here is whether NGCP is exempt for the payment of
real property tax.
Tabuzo, Tax Remedies
It depends:
1. Properties used in Connection with the Franchise: Are exempt
from tax. In accordance with the NGCP
2. Properties that are not used in connection with NGCP franchise
are subject to tax
c. Taxpayer’s remedies in real property taxation
Period to Collect
The period to collect by the government is five years from the date
the real property taxes are due.
Exception:
1. If there is fraud, or intent to evade payment of taxes the period is
ten years
Interruption:
a. The treasurer is legally prevented to collect
b. The taxpayer request for a reinvestigation and executes a written
waiver before the expiration of the prescriptive period
c. Taxpayer is out of the country or otherwise cannot be located.
Remedies in Real Property assessment
1. Erroneous Real Property assessment: Presupposes that the
taxpayer is subject to the tax but is disputing the correctness of the
amount assessed; the taxpayer claims that the local assessor erred
in determining any of the items before computing the real property
tax. The value of the real property or the portion thereof subject to
tax and the proper assessment levels.
2. Illegal Real Property assessment : An assessment is illegal if it
is made without authority under the law.
Erroneous Assessment :
This is resorted to when the taxpayer questions the
excessiveness of the amount imposed to him.
1. Pay the deficiency Real Property under Protest
- NB: The posting of the surety bond before the filing of an appeal
of the assessment with the LBAA is substantial compliance of the
requirement of payment under protest.
2. File a written protest within 30 days from the payment of the
tax to the local treasurer who shall decide the protest within 60
days from the receipt.
In case of denial or lapse of 60 days
a. Appeal to the LBAA within 60 days from the receipt
of notice of assessment. LBAA has 120 days to decide.
 b. Appeal to the CBAA within 30 days
c. Appeal to the CTA en banc within 30 days
Capitol Wireless: The general rule of a prerequisite recourse to
administrative remedies applies when the question of fact are
raised but exception of direct court action is allowed when purely
question of law are involved as to whether or not an indefeasible
right over the submarine capable that lies in the international water
is subject to RPT
The protest here is needed when there is a question on the
reasonableness or correctness of the amount assessed: It pertains to
a question of fact
1. A claim of tax exemption raises a question of correctness, hence
payment under protest is required. This does not question the
authority of the local assessor to assess real property tax
However: If the taxpayer questions the legality of validity of an
assessment: the resort to the local court is allowed m where what is
questioned was the authority of the assessor to impose the
assessment and the authority of the treasurer to collect real
property tax, The issue involved is a question of law.
Illegal Assessment
This is resorted to if you want to question an act of the assessor
as to when the assessor makes an appraisal on the real
property , classifies the property according to actual use, fixes
the assessed value of property and gives a notice of assessment
to the owner.
1. The taxpayer may directly resort to judicial action without
paying under the protest assessed tax and filing of an appeal with
the LBAA
2. File a complaint for injunction before the RTC to enjoin the
local government unit from collecting real property taxes the party
unsatisfied with the decision of the RTC shall file an appeal not a
petition for certiorari before the CTA the complaint being a local
tax case decided by the RTC
3. In case the LGU has issued a notice of delinquency the taxpayer
may file a complaint for injunction to enjoin the impeding sale of
the real property at a public auction
4. In case the LGU has already sold the property in auction the
taxpayer must first deposit with the court the amount for which the
real property was sold together with the interest of 2% per month
from the date of sale to the time of the institution of action and
then file a complaint to assail the validity of public auction
3. The decision of the RTC in this cases are to be appealed before
the CA.
IV: Claim for refund
1. The taxpayer files a claim within two years from the date the
taxpayer is entitled to such reduction or assessment .
2. The provincial or city treasurer decides the claim of tax refund
or credit within 60 days from receipt thereof
3. In case of claim for tax refund or credit, is denied the taxpayer
may avail of the remedies provided in Chapter 3 title II book III of
this code.
Tabuzo, Tax Remedies
i. Manila Electric Company, vs. Nelia A. Barlis, May 18, 2001
Doctrine
Payment under protest is required only when there has bee na tax
assessment the validity of which is being questioned.
Concomitantly the doctrine of exhaustion of administrative
remedies finds no application when no assessment was issued or
made
A notice of assessment must inform the taxpayer of the value of
specific property or the proportion thereof subject to tax , including
the discovery, listing classification and appraisal.
1. This Pertains to Erroneous Assessment : Therefore, there is a
need for payment under Protest
The Municipal Assessor of Muntinlupa assessed real properties of
Meralco for tax purpose. Several notices for Meralco were issued.
Meralco did not pay and that the Municipality warns that ordering
the attachment of bank deposit of Meralco with the PDIC. Meralco
filed a case with the RTC prohibition and mandatory injunction
seeking to enjoin the treasurer from garnishment. The trial court
issued an order allowing the garnishment, on appeal the CA
dismissed the case since Meralco did not exhaust administrative
remedies. Meralco alleged that it need not avail the
administrative remedies since the petition merely seek to assail
the validity of the issuance of warrant of garnishment.
Issue: Whether there is a need for payment under protest
Held
Yes. There is a need. Section 64 of the RPTC prohibits the court
from declaring any tax invalid by reason of irregularities in the
proceeding of officers charged with the assessment or collection of
taxes except upon the condition that the taxpayer must first pay the
amount of tax determined by the court pending proceeding.. Here,
since the petitioner failed to make a protest payment of tax, any
argument regarding notice is futile.
ii. Ty vs. Trampe, G.R. No. 117577. December 1, 1995
Illegal Assessment: The petitioner are questioning the very
authority and the power of the assessor acting solely and
independently to impose the assessment and of the treasurer to
collect the tax. These are not question merely as to the amount but
attacks on the validity of any increase. Therefore, in cases of illegal
assessment, the exhaustion of administrative remedies need not be
exhausted .
The Petitioner filed a Petition for review with the court raising
question of law as to the authority of the assessor and treasurer to
collect the tax. The CIR argues that there must first be exhaustion
of administrative remedies.
In this case there is no factual issues involved the petitioner is
questioning the very authority of the power of the assessor to
impose the assessment and the treasurer to collect tax. These are
not question of facts and it does not merely question the amount of
the increase but the validity of any increase.
iii. NPC vs. Prov. Treas. of Benguet, et al, G.R. No. 209303,
Nov 14, 2016
Erroneous: A claim for the exemption from payment of real
property tax does not actually question the assessor’s authority to
asses and collect such taxes but pertain to the reasonableness or
correctness of the assessment by the local accessor qa question of
fact which must be resolved at the very first instance by LBAA.
In this case. NPC challenged before the LBAA legality of the
assessment. LBAA deferred. An appeal was filed by NPC before
the CBAA claiming that the payment under protest is not required
before it can challenge the authority of the respondent to assess tax
on tax exempt properties before the LBAA.
Issue: Whether payment under protest is required before one
can challenge the authority of the respondent to assess tax on
tax exempt properties with the LBAA.
Held:
Yes, The claim for exemption from the payment of real property
does not question the assessor authority to assess and collect but
pertain to the correctness of the assessment by the local assessor
which is a question of fact. Therefore, every person by whom real
property is declared shall claim exemption from the payment of
real property tax imposed must file with the Municipal city
provincial assessor sufficient document to support the claim.The
burden of proving exemption from local taxation is upon the
subject real property is declared. If the property being taxed has
not been dropped from the assessment roll taxes must be paid
under protest if the exemption is insisted upon. Therefore, NPC
failure to comply with the mandatory requirement of payment
under protest is fatal to its appeal;
-Compare this case with the City of Lapu Lapu case where it is a
illegal assessment
iv. Davao Vs. Estate of Amado S. Dalisay, GR No. 207791, 15
Jul 2015
thee better theory is that the forfeiture of tax delinquent properties
transpired no later than the purchase made by the City due to lack
of bidder from the public . This happens on the date of the salea
and not on the date of issuance of declaration of forfeiture The
Estate of Dalisay owned four properties all situated in Davao.
These properties are all advertised for public auction for non
payment of real estate taxes. The public auction was scheduled no
bidders appeared in the date of public auction thus the properties
were acquired by the City Government of Davao pursuant to
Section 263 of the LGC.
Section 263 provides that within one year from the date of
forfeiture the taxpayer or any of his representative may redeem the
property by paying to the local treasurer the full amount of the real
property tax and related in terest and the cost of sale if the property
is not redeemd the ownership shall be vested with the LGU
concerned. More than a year after,
The RTC ruled in favor of the Estate finding the latter’s evidence
as acceptable in establishing the right of redemption. Aggrieved ,
the City appealed the RTC decision to the CA arguing that one
year period must be reckoned froom the date of forfeiture that s
when the properties were purchased by the City for want of a
bidder during a public auction. The CA affirmed the decision of
the RTC and observed that the City had been remiss in its duty to
Tabuzo, Tax Remedies
immediately issue a declaration of forfeiture within two days from
the purchase of the property as required under Section 263 of the
LGC
Issue : Whether the one year redemption period for forfeited
tax delinquent properties purchased by the local government
for want of a bidder is reckoned from the date of auction sale
or the date of declaration of forfeiture.
Within a year of forfeiture
Section 263 of the LGC takes effect because of one vital factor the
absence of a bidder in a public auction for tax delinquent
properties. Therefore, thee better theory is that the forfeiture of tax
delinquent properties transpired no later than the purchase made by
the City due to lack of bidder from the public . This happens on the
date of the salea and not on the date of issuance of declaration of
forfeiture. To rule otherwise would be similar to saying that prior
to the accrual of the local government right as purchaser another
additional requirement such as declaration of forfeiture is
necessary not only is this duty unfounded but is also places the
local government in a vacuum from the time of auction up to the
time it issues a document. The period to redeem the property had
expired and since then the forfeiture of the properties had already
become absolute the failure of the Estate to exercise its right of
redemption within the statutory period consolidates ownership over
the property
v. City of Lapu-Lapu Vs. PEZA, G.R. No. 184203, November
26, 2014
Illegal Assessment ( They should have filed an injunction with
the RTC and not the declaratory relief ) : PEZA filed a
declaratory relief with the RTC praying that the trial court declare
it exempt from the payment of real Property tax. The RTC granted
the relief and City appealed with the CA dismissed the petition for
being a question of law. In this case the City raised pure question
of law the issue is whether the RTC had jurisdiction over the
PEZA petition for declaratory relief is a matter that is a question of
law. The issue as to whether the government instrumentality is
exempt from payment of real property tax is likewise a question of
law requiring the examination of the PEZA charter
Note: A question of fact exist when there is a doubt as to the falsity
of the alleged fact, there is a question of law when the appellant
raises doubt as to the applicable law based on the certain state of
fact. Incase of illegal assessment where the assessment was
issued without any authority, exhaustion of administrative
remedies is not necessary and the taxpayer may directly resort to
judicial action without paying under protest the assessed tax and
filing of an appeal with the LCBAA. In this case the assessment s
illegal as it was issued without the authority of the Municipal
assessor reconciling provision of the real property tax code and
the Local Government Code this court held that the schedule of
market values must be jointly prepared by the provincial , city
and municipal assessor. The taxpayer shall filed a complaint
for injunction before the RTC to enjoin the LGU from
collecting property taxes. The property unsatisfied with the
decision of the RTC shall file an appeal and not a petition for
certiorari with the CTA. The appeal is to be fileed within 15 days
from th notice of trial court decision. The CTA decision may be
appealed to the SC through Rule 45 raising pure question of law.
In this case, when the issue pertains to a question of law,
exhaustion of administrative remedies are no longer allowed, In the
present case ,PEZA did not avail any of the remedies against a
notice of assessment, a peititon for declaratory relief is not proper
remedy once a notice of assessment is issued. Peza must have
directly resorted to a judicial action by filing of an injunction to
enjoin the city from enforcing its demand and collecting the
assessed taxes from PEZA. Therefore the RTC has no authority

PEZA filed a petition for injunction with prayer of issuance there is

failure to comply with the publciaiton requirement as provided
under the local government code.PEZA then file a petition for
certiorari with the CA praying for the CA. This is not a proper
remedy as Rule 65 is not a substitute for lost appeal.

ABC Inc owns a 950 square meter lot in Quezon City. It received a
notice of assessment from the City Assessor subjecting the
property to real property tax. Believing that the assessment is
erroneous, ABC filled a protest with the City treasurer, but
however due to the failing to file the correct RPT the City treasurer
dismissed the protest. A. Was the City Treasurer correct in
dismissing the protest b/ Assuming that ABC decides to appeal
where must it be filed?
A: The City treasurer is correct. Under the LGC, no protest shall be
entertained until the taxpayer first pay the real property tax. Here,
ABC did not pay the RPT in protest. Hence the City Treasurer is
correct
b. ABC must file with the LBAA. Under the LGC, the next step is
to appeal the same with the LBAA within 6- days from dismissal H. JU DIC IA L R EMEDIES [ RA 1125, A S
of the petitioner
AM END ED , AND THE R EVISED RULES OF THE
C TA]

1. The CTA has exclusive appellate jurisdiction to review by

appeal ( CTA division)
- Rule 42 : Petition for review 30 days
1. BIR: Decisions, and inaction and disputed assessment , refund
and other matters.
2. RTC: Local tax case
Appellate Jurisdiction: CTA en banc
Original Jurisdiction : CTA Division
3. BOC: Customs, duties and seizure, detention and other matters
4. SOF: Automatic Review of Customs case
5. DTI and DA: Dumping and Counterveiling Duties
6. CBAA: Appellate Jurisdiciton for Real Property case
CTA Division - MR / MNT (15 Days)  CTA En Banc

Jurisdiction over cases involving Criminal Offense

Tabuzo, Tax Remedies

1. Exclusive Original Jurisdiction: All criminal offense arising
form the violation of the NIRC or Tariff and customs code and
other laws administered by the BIR or BOC where the principal
amount of tax claimed is worth P1,000,000 or more
CTA division ( exclusive jurisdiction)  PFR 43 CTA En Banc
( exclusive appellate jurisdiction)  SC rule 45
If less than P1,000,000 or more or no specified amount
it exercises appellate jurisdiction
2. Exclusive Appellate Jurisdiction
a. Appeals from the RTC in tax cases originally decided by them.
b. Petition for review from the RTC in exercise of their appellate
jurisdiction over tax cases originally declared by the MTC.
Jurisdiction over tax collection cases
1. Exclusive Original Jurisdiction in tax collection cases involving
final and executory assessment for tax fees, where the amount
claimed is P1,000,000
- If less than P1M or no specified amount claimed it
exercises exclusive appellate jurisdiction.
2. Exclusive Appellate Jurisdiction
- Appeals from the RTC in tax cases originally decided
by them,
- Petition for review from the RTC in the exercise of
their appellate jurisdiction over tax cases originally
decided by the MTC
I. CTA Jurisdiction on Decision or Inactions of the CIR:
a. The CTA can review the decision of the CIR on protest
against an assessment but not the assessment itself
- The words used, specifically the words final decision
and appeal taken together led the petition to believe that a Final
Letter of Demand is the final decision of the CIR on the letter
protest and that the available remedy is to appeal the same with the
CTA ( Allied Banking)
The decisions under RA 9282 has been interpreted to mean the
decisions of the CIR on protest of the taxpayer against the
assessment. Definitely, said word does not signify the assessment
itself. Where a taxpayer questions an assessment and ask the CIR
to reconsider or cancel the same because he believes that he is not
liable therefore, the assessment becomes a disputed assessment that
the collection must decide and the taxpayer must appeal to the
CTA only upon the receipt of the receipt of the decision of the CIR
on disputed assessment.
b. Indirect denial of administrative protest
a. Filing of a civil action for collection during the pendency of the
protest
b. Final notice before seizure issued by the BIR
c. Demand letter reiterating the tax deficiency and requested for
payment failure to do so would result to the issuance of a WDL to
enforce its collection without further notice.
Tabuzo, Tax Remedies
The Collection letter constitutes as the final decision of the CIR
appealable to the CTA. The collection letter demanded from
AVON the payment of the deficiency tax assessment with a
warning that should it fail to do so within the required period
summary administrative remedies are to be instituted without
further notice. It demonstrated a character of finality such that
there can be no doubt that the CIR had already made a conclusion
to deny Avon request and she had a clear resolve to collect the
taxes.
c. CIR Jurisdiction for Other matters
The appellate jurisdiction of the CTA Is not limited to cases that
involve decision of the CIR on matters relating to assessment or
refund, The second part of the provision covers other cases that
arises out of the NIRC or related laws administered by the BIR
CTA Jurisdiction on Other matters
1. The issue of prescription being a matter provided by the NIRC is
well within the jurisdiction of the CTA to decide
2. CIR decision to enter into a compromise agreement
3. CIR refusal to enter into abatement
4. The adverse ruling of the SOF in the exercise of its power to
review under Section 4 is appealable to the CTA as other matters
arising under the NIRC or other laws administered by the BIR.
Is the question on the authority of revenue officers to examine the
books and records of any person cognizable by the CTA?
1. The assessment of internal revenue taxes is one of the duties of
the BIR under Section 2 of the NIRC. In connection therewith the
CIR may authorize the examination of any taxpayer and
correspondingly make an assessment whenever necessary. Thus
the authority to make an examination or an assessment being a
matter provided for by the NIRC is well within the exclusive and
appellate jurisdiction of the CTA.
II. CTA jurisdiction on decision of the RTC in Local Tax Cases
1. The CTA has jurisdiction to review by appeal decision,
resolution ruling and resolution of the RTC over local tax cases
which includes real property tax.
Herac Realty vs. Provincial Treasurer of Benguet
1. The appellate jurisdiction of the CTA over decision, order or
resolution of the RTC becomes operative when the latter has ruled
on the local tax cases ie: one which is in the nature of a tax case or
which primarily involves a tax issue
2. Local tax cases include those involving RPT , Among the
possible issues are the legality or validity of the RPT assessment,
protest of assessment disputed assessment surcharge or penalties or
legality of a tax ordinance, claims for tax refund credit ,claims for
tax exemption action to collect the tax due and even prescription.
Ignacio vs QC: The jurisdiction of the CTA over the decision of
the RTC only becomes operative when the RTC has ruled on a
local tax case. Thus before the case is raised on appeal to the CTA
the action must be filed before the RTC in the nature of the tax
case or one which involves a tax issue.
Napocor vs Provincial Government of Bataan: Although the
complaint filed with the Trial court is a petition for declaration of
nullity of a foreclosure sale with prayer for injunction, a reading of
the petition show that it essentially assails the correctness of a local
franchise tax assessment by the provincial government of bataan.
III. CTA decision on the Decision of the Commisisoner of
Customs
A. The immediate resort to judicial action was proper because the
COC already decided to deny the protest by Oilink and stressed
that the demand to pay was already final. The exhaustion of
administrative remedies would have been an exercise in futility
because it was already the COC who was demanding payment of
the deficiency taxes and duties.
IV: CTA jurisdiction over constitutionality of law or rule
Except for local tax cases action directly challenging the
constitutionality or validity of a tax law or regulation or
administrative issuance may be validly filed before the CTA.
Except for local tax cases: Appeals from the decision of quasi
judicial agencies on tax related issues are to be brought to the
CTA.
The CTA was granted the exclusive appellate jurisdiction to review
by appeal all cases involving disputed assessment of internal
revenue taxes, customs duties and real property tax. In general it
has jurisdiction over cases involving liability for payment of
money to the government or the administration of laws on the
National Internal Revenue Customs and Real property.
V: Rule 65 Petition to the CTA
The authority of the CTA to take cognizance of the petition for
certiorari questioning the interlocutory orders issued by the RTC in
a local tax case is included in the powers granted by the
Constitution which provides that the judicial power is vested by the
Supreme Court and in such lower court as may be established by
law as well as inherent in the exercise of its appellate jurisdiction.
The CTA has jurisdiction over a petition for certiorari assailing the
DOJ resolution in a preliminary investigation involving tax and
tariff offenses,
VI: Petition for Annulment
The Revised Rules of the CTA provides no instance in which the
en banc may reverse, annul or void a final decision of a division.
The silence of the Rules may be attirubted to the principles that
there can be no hierarchy within a collegial court between its
division and the en banc and that a court’s judgment once final
becomes immutable.
V: Incidental power of CTA to determine the proper category
of tax
Tabuzo, Tax Remedies
In an action for refund of taxes allegedly erroneously paid the CTA
may determine whether there are taxes that should have been paid
in lieu if the taxes paid, This determination as to proper category of
tax should have been paid is not an assessment , It is incidental to
determining whether there should be a refund.
VI: Whether evidence not presented I the administrative claim
for refund in the BIR can be presented with the CTA
1. CTA is a court of record : cases filed before it are litigated de
novo. As such parties are expected to litigate and prove every
aspect of their case anew and formally offer all their evidence. No
value is given to the documentary evidence submitted in the BIR
unless it is formally offered in the CTA.
2. The power of the CTA to exercise appellate jurisdiction does not
preclude it from considering evidence that was not presented in the
administrative claim in the BIR. The claimant mayp resent new
and additional evidence to the CTA as to support the case for tax
refund.
a. CIR vs. CTA and Petron Corp., G.R. No. 207843, 15 Jul
2015; MR dated 14 Feb 2018
Decision of the CIR involving disputed assessment refund or other
matters arising under the NIRC or other laws administered hence
CTA has jurisdiction to resolve all tax issues which includes
whether the interpretation of the CIR of Revenue Memorandum
Orders . The issue in the case at bar is whether the
Constitutionality of RRS , RMO pertaining to the importation of
Alkylate is within the jurisdiction of the CTA. The Court ruled that
No. The word other matters pertains to cases which are subject to
the appellate jurisdiction of the CTA over which it has quasi-
judicial power to decide. In this case it pertains to the power of the
CIR to exercise quasi Legislative function to determine whether
specific rules issued by the administrative agency contravenes the
law or the constitution which is within the jurisdiction of the
regular court.
MR: REVERSE: CTA jurisdiction to resolve all taxes which
includes the validity of CIR interpretation and consequent
imposition of excise tax
b. Philam Life vs. SOF and CIR, GR No.210987, 24 Nov 2014
The CTA can issue writs of certiorari as it exercises appellate
jurisdiction over the RTC on local tax cases. The issue here is
whether the decision of the Secretary of Finance in the exercise of
its power to review under Rule 43 is appealable to the CTA or to
the CA. The court ruled that the same is appealable to the CTA.
The CTA has the power to determine whether there has been grave
abuse of discretion on the RTC’s part in the issuance of
interlocutory order . This means that the transfer of jurisdiction
from the CA to the CTA transfers the power to issue certiorari as
well to the CTA.
c. Smart Communications, Inc. vs, Malvar, Batangas, G.R. No.
204429. Feb 18, 2014
CTA EN BANC DOES NOT HAVE JRUISDICTION when the
assessment is NOT a tax but a regulatory fee. In this case,
SMART received an assessment letter from the licensing office
with a schedule of payment. Smart challenged the protest
alleging lack of due process, and in the same time challenged
the validity of the ordinance in which assessment is based. The
issue in the case at bar is whether the CTA has jurisdiction over the
local tax case.
The court ruled that no. The CTA has jurisdiction over decision,
order or resolution of the RTC in local tax cases resolved by them
in the exercise of its original or appellate jurisdiction BUT this
does not apply when the ordinance is not a tax . In this case, the
primary purpose of the ordinance is to regulate placing, stringing
attaching, installing repair and construction of all gas mains ,
electric telegraph. Since the purpose of the oridnace is related to
the constriction and maintenance of various structure it is a
regulatory fee outside the jurisdiction of the CTA.
d. NAPOCOR Vs. Navotas, et al, G.R. No. 192300. November
24, 2014
Doctrine:
Decision orders or resolution of the RTC on local tax cases
originally decided or resolved by them ( This includes real
property taxes). The CTA en banc ruling that real properties have
always been treated by law separately from local taxes cannot
prosper.
The petitioner entered into a build operate transfer project
agreement with Mirant formerly known as Hope.The petitioner
paid respondent municipality real property taxes, in a letter dated
March 30 the petitioner informed the municipal assessor sent a
notice of tax deficiency, The petitioner reiterated their position that
the subject properties are exempt from payment of real property
tax. A warrant of levy was received from the respondent and also
they received two notice of sale of delinquent real property
scheduling public auction of the property. The petitioner filed
before the RTC a petition for declaratory relief, annulment and
delinquency and TRO. The TRO was denied by the RTC. The
RTC ruled that the petitioner should have appealed the
decision with the local board of assessment appeals within 60
days from the receipt of assessment if it is not satisfied with the
LBAA it must appeal with CHAA.On appeal with the CTA it
reversed the decision of the RTC and ruled that the CTA as
jurisdiction over the subject matter.
Issue: Whether the CTA has jurisdiction to review ,decision
and orderso f the RTC when it comes to real property tax.
Yes. The CTA sitting as division has the power to review by
appeal the decision, ruling and resolution of the RTC over local
tax cases which includes the payment of real property tax. This is
evident from LGC which includes the matter of real property tax as
one of its main chapter. And the power vested I the local
government to create their own revenue sources within the
limitation as set forth by law.
Therefore, the conclusion of the CTA en banc that real properties
have always been treated differently from local taxes cannot
prosper. Local taxes includes real property tax. In this case, what is
questioned is the legality of the appeals in question and not the
reasonableness or correctness of the appeals to the LBAA.
Tabuzo, Tax Remedies
e. Ce Casecnan Water & Energy, vs. Nueva Ecija, GR No.
196278, 17 Jun 2015
CTA is given the jurisdiction to issue writs of certiorari or to
determine whether there is grave abuse of discretion
amounting to lack of excess jurisdiction on the part of the RTC
in issuing an interlocutory order in cases falling within the
CTA exclusive appellate jurisdiction. ( Rule 65 petition) The
petitioners entered into a build operation transfer agreement for the
construction and development of Cascenan Multi Purpose
Irrigation and power plant. The petitioner received assessment of
Real Property Tax, the petitioner assailed the same with the LBAA
it was later appealed to the CBA. During pendency of the case
with the CBA,the respondent collected from the respondent
RPT due on the assessment. The petitioner filed a complaint with
the RTC for injunction and damages with the application of the
TRO and preliminary injunction to restrain the collection of tax
assessment on the ground that it is the NIA who is liable to pay for
RPT. The RTC dismissed the case. The petitioner appealed with
the CA . a petition for certiorari under Rule 65 to set aside the
order of the RTC. The CA dismissed the petition for certiorari on
the ground that it is the CTA and not the CA who has jurisdiction
over the case at bar
Issue Whether it is the CA or the CTA that has jurisdiction to
rule on a petition for certiorari assailing an interlocutory order
of the RTC that relates to a local tax case.
Held: The CTA is given the expanded jurisdiction including its
exclusive appellate jurisdiction to review on appeal decision,
orders or resolution of the RTC in local tax cases originally
resolved by the RTC . Likewise, CTA is given the jurisdiction to
issue writs of certiorari or to determine whether there is grave
abuse of discretion amounting to lack of excess jurisdiction on
the part of the RTC in issuing an interlocutory order in cases
falling within the CTA exclusive appellate jurisdiction.
Therefore, CTA has the power to determine whether there is a
grave abuse of discretion amounting to lack of excess jurisdiction
on the part of the RTC in the issuance of interlocutory order in
cases that fall within the appellate jurisdiction of the tax court
f. BDO VS. CIR, G.R. No. 198756, 13 January 2015; MR: 16
August 2016
The CA may take cognizance of the case and may directly take
challenge the constitutionality and validity of tax laws, or
regulations In the earlier case the respondent questioned the
propriety of the petitioner’s direct resort to this court. They argued
that the petitioner must have challenged first the 2011 BIR ruling
before the SEC of finance consistent with the doctrine of
exhaustion of admin remedies. In the main decision, the court ruled
that the Interpetative ruling of the BIR are reviewable by the SOF.
However due to the special circumstance “” Purely legal” the
urgency of judicial intervention given the impeding maturity of
peace bond and futility in the appeal with the SOJ there is no need
to exhaust all remedies.
The MR merely clarified the earlier ruling
With the enactment of Asia International, auctioneers the court of
tax appeals has exclusive jurisdiction to determine tax laiws, rules
and jurisdiction to determine the constitutionality or vaaldity of tax
laws and other laws, rule and regulation. With RA 9282, it elevated
the jurisdiction of the CTA and elevated its rank to the level of a
collegiate court with special jurisdiction . Section 1 specially
provides that the CTA is of the same level as the Court of appeals
and posses all inherent power of the Court of Justice.Therefore the
CA may likewise take cognizance of the cases that directly
challenge the constitutionality or validity of tax law, or regulation
or administrative issuance
g. Steel Corporation vs. BOC and BIR, GR No. 220502, 12
February 2018
The CTA has ample authority to issue injunctive writs to restrain
the collection of tax and even dispense with the deposit of the
amount claimed for the filing of the required bond whenever the
method employed by the CIR in collection of tax jeopardizes the
interest of taxpayer for being patently in violation of law.
SteelCorp maintains that CA erred when it sustained the trial
court’s act of giving due course to the OSG and BIR motion that
were set in hearing. Likewise it insist that the present controversy
does not assail its liability to pay customs duties, taxes or other
charges on importation of raw materials, rather the issue is whether
a corporation can avail the benefits of Section 19 of RA 10142
which issue is cognizable by the RTC and whose decision may be
appealed to the CA or the Supreme Court and not to any other
court like the CTA. Steelcorp stressed that it is not raising any
issue as to the amount of collectability of the taxes and duties on its
importation but is only seeking compliance under Section 19.
Issue : Whether the CTA has jurisdiction over the case at bar
Held:
YES. The CTA has exclusive jurisdiction to determine the
constitutionality and validity of tax laws, rules and regulation and
other administrative issuances. RA 1125 transferred to the CTA
jurisdiction over all matters involving assessment that were
previously cognizable by the RTC.When RA 9282 was enacted, it
expanded the jurisdiction of the CTA and elevated its rank to the
level of the collegiate court with special jurisdiction. Section 1
specifically provides that the CTA is on the same level of the court
of appeals and possess all powers of court of justice .
RA 1125 stated that except for local taxes, appeals form the
decisions of the quasi judicial agency in tax related problems must
be brought exclusively with the CTA.The law intends the Court of
Appeals to have exclusive jurisdiction to resolve all tax problems.
The petition for writs of certiorari against the acts and omission of
the quasi judicial agencies must be field with the CTA.
Dispense with the filing of the required bond
Appeal to the CTA will not suspend payment, levy or distraint and
or sale of any property of the taxpayer for the satisfaction of his tax
liability as provided by existing law. Nonethelsss when in the
opinion of the CTA the collection jeopardize the interest of the
government and or taxpayer, it may suspend the said collection
and require the taxpayer either to deposit the amount claimed or
to file a surety bond for not more than double the amount, Yet
the filing of the surety bond can be dispensed with. Whenever the
Tabuzo, Tax Remedies
method employed by the CIR in collection of tax 1.Jeopardizes the
interest of the taxpayer for being patently in violation of the law 2.
Such authority emantes from the jurisdiction conferred to it not
only by Section 11 but also by Section7 which states that
CTA : Has appellate jurisdiction on decision of the CIR in
revenue , refunds or internal revenue taxes fees or other charges
penalties imposed in relation thereto or other matters arising under
the NIR or other laws administered by the BIR
The authority of the courts to issue injunctive writs to restrain the
collection of tax and dispense with the deposit of the amount
claimed or the filing of the required bond is not confined to cases
where prescription sets in but whenvever it is determined by the
courts that the method employed by the CIR is not sanctioned by
law the bond requirement must be dispensed with.
h. PSALM Corporation vs. CIR, G.R. No. 198146, August 8,
2017
PD 242: This is an exception to the rule that the appeals must
be made to the CTA BIR alleged that DOJ has no jurisdiction
over the case at bar since the dispute involves tax laws
administered by the BIR and that the sale of the subject power
plants by PSALM to private entities is in the course of trade or
business as contemplated under Section 105 NIRC which covers
incidental transaction falls with the jurisdiction of the CTA.
Issue: Whether the dispute between government agencies and
offices are governed by the CTA or DOJ
Held
DOJ. As stated under PD 242, all disputes and claims solely
between the government agencies and offices including
government owned or controlled corporation shall be
administratively settled or adjudicated by the Secretary of
Justice, the Solicitor General and the Government Corporate
Counsel depending on the issues and government agencies
involved. The law is clear all disputes claims and controversies
solely between or among the departments , bureau offices and
agencies and instrumentalities of the National Government
including constitutional offices, or agencies arising from the
interpretation and application of statutes, contracts or agreements.
When the law states all disputes, claims and controversies the law
means all without exception. PD 242 applies only when the dispute
is solely between PSLAM, NPC both government owned and
controlled corporation and since the BIR a national government
office PD 442 applies in this case.
It sis only proper that intra-government disputes are settled
administratively since the opposing government offices, agencies
and instrumentalities are all under the control of the President
which states that the President shall have full control over the
executive department bureau and offices.This constitutional power
of control by the president cannot be diminished by the CTA. Thus
if two executive officers or agencies cannot agree it is only proper
and logical that the president as the sole executive authority take
cognizance of the case.
The second paragraph of Section 4 of the 1997 of NIR providing
for exclusive appellate jurisdiction of the CTA as to CIR decision
on matters involving disputed assessment refunds in internal
revenue taxes or other charges ,penalties imposed in relation
thereto or other matters arising under the NIRC is in conflict with
PD 242.
To harmonize
1. Private entities and BIR: The power to decide disputed
assessment , refund or internal revenue taxes, fees or other charges
penalties in relation thereto or other matters arising under the
NIRC or other laws administered by the BIR is vested with the
CIR subject to the exclusive appellate jurisdiction of the CTA
2. All public entities: Between the government entities the case is
governed by PD 242. ( this is considered as an exception to the
rule of NIRC ) covered by DOJ
i. City of Manila vs. Grecia-Cuerdo, G.R. No. 175723,
February 4, 2014
In exercise of its appellate jurisdiction it has the power to grant the
certiorari, prohibition and mandamus. City of Manila assessed the
respondent taxes for the taxable period from January to December
2022 against the respondent. The respondent filed with the RTC a
complaint instituted as one for refund or recovery of illegally and
erroneously collected local and business tax with prayer to issue a
TRO. The RTC granted the TRO , the petitioner filed an MR but
the RTC denied it. Petitioner filed an SCA with the CA. The CA
ruled that it is the CTA that has appellate jurisdiction of the
decision of RTC.
Issue: Whether the CTA has jurisdiction over SCA for certiorari
assailing interlocutory order issued by the RTC in local tax case
Held:
Yes. The CTA has excusive appellate jurisdiciton over decision,
order or resolution f the RTC in local tax cases decided by them in
their original or appellate jurisdiction. There is no statement under
RA 1125 which provides that CTA has jurisdiction over the
petition for certiorari assailing interlocutory order.
Notwithstanding the fact that there is no express grant of the power
to issue writ of certiorari, prohibition and mandamus with respect
to the CTA by the Constitution the constitution likewise provide
that the judicial power shall be vested in one Supreme Court and
in such lower court as may be provided by law. ( CA transfer
to CTA-> HENCE CTA also posses this judicial power) The
judicial power includes not only the duty of the court to settle
actual case and controversy but to determine whether there is
GADALEJ on any branch or instrumentality.
j. CIR vs. Kepco Ilijan Corporation, GR No. 199422, 21 June
2016
Rule 47: Em Banc ( must be higher court)THERE IS NO
ANNULMENT OF JUDGMENTOF A CO -EQUAL COURT,
THERE IS NO ANNULMENTO F JUDGMENT AS TO EN
BANC AND DIVISION LIKEWISE THERE IS NO
ANNULMENT OF JUDGMENT WITH THE CA and SC. .
KEPCO filed its return with the BIR, the BIR did not act on the
return therefore a petition for review was filed . The CTA division
rendered a decision in favor of the respondent the petitioner filed a
notice of annulment with the CTA en banc. In response the the
respondent filed a motion to deny due course arguing that the
petitioner is not lawfully entitled to annul the judgment on the
Tabuzo, Tax Remedies
ground that the CTA en banc does not have jurisdiction to hear or
entertain annulment of judgment of the division.
Issue: Whether the CTA en banc has jurisdiction to hear and
decide annulment of judgment
Held: No . The CTA en banc can annul a final judgment of its own
division. There is no hierarchy within a collegial court between its
division and the en banc and the court’s judgment once final is
immutable. There is also no direct petition for annulment of
judgment to the CTA to the SC. RA No. 9282, Section 1 puts
the CTA on the same level as the Court of Appeals, so that if
the latter’s final judgments may not be annulled before the
Supreme Court, then the CTA’s own decisions similarly may
not be so annulled. And more importantly, it has been previously
discussed that annulment of judgment is an original action, yet, it is
not among the cases enumerated in the Constitution, Article VIII,
Section 5, over which the Supreme Court exercises original
jurisdiction. Annulment of judgment also often requires an
adjudication of facts, a task that the Court loathes to perform,
as it is not a trier of facts. ( Available remedy is rule 65)
Injunctions:
Suspension of Collection of Taxes
1. No appeal taken to the CTA suspend the payment, levy and
distraint or sale of any property of the taxpayer for the satisfaction
of the tax liability.
CTA may suspend the collection of taxes subject to the ff :
1. The collection may jeopardize the interest of the government
and or taxpayer
2. The CTA requires the taxpayer either to deposit the amount
claimed or file a surety bond for not more than double the amount
with the court.
3. The Case is pending with the CTA.
May CTA dispense with the posting of the required bond under
Section 1125? Yes. The authority of the courts to issue injunctive
writs to restrain the collection of tax and to dispense with the
deposit of the amount claimed or filing of the required bond is not
simply confined to cases where the prescription has set in.
Whenever it is determined by the court that the method employed
by the CIR in the collection of taxes is not sanctioned by law, the
bond requirement is dispensed with.
k. Tridharma Marketing Corporation Vs. CTA & CIR, GR
No. 215950, 20 June 2016
If the amount of the surety bond is too high that it will practically
deny the taxpayer the meaningful opportunity to contest the
validity of assessment and would likely impoverish the taxpayer as
to force it out of its business then the amount of surety bond is to
be void and must be lowered even if it still double the amount as as
provided by law. BIR assessed the petitioner with various tax
deficiencies , a protest was field where the petitioner paid the
assessment and reiterated its interest to compromise the income tax
and vat deficiencies. The petitioner appealed the decision of the
CIR to the CIR second division and moved for the suspension of
tax collection against it. However the CTA required the taxpayer to
post a bond equivalent to 150%of the assessed value within 15
days from notice
Issue: Whether the issuance of the bond bythe CTA is proper
Held:
No. The CTA gravely abused its discretion in the issuance of the
bond. Although the CTA is given the power to suspend tax
collection by requiring either 1. Deposit of the tax claimed 2.
Surety bond for not more than double the amount . The taxpayer
was able to show that it would not be able to produce the bond
higher that its net worth.
The bond requirement is not properly issued: The requirement of
the bond as a condition precedent to suspension of the collection
applies only in cases where the process by which the collection
sought to be made by means thereof are carried out in consonance
with the law and not when the process is in plain violation of the
law that they have to be suspended in jeopardizing the interest of
the taxpayer.Therefore, since the method employed by the CIR in
its assessment jeopardized the interest of the taxpayer it is in
violation of the law and requires the reception of evidence
therefore the court is not in the position to rule on the correctness
of deficiency assessment.
l. Spouses Pacquiao Vs. CIR, GR No. 213394, 06 Apr 2016
The CTA can issue injunctive writs to retain the collection of taxes
and to even dispense with the deposit of the amount claimed or the
bond whenever the method employed by the CIR in collection of
the tax jeopardizes the interest of the taxpayer for being patently in
violation pof the law.
The authority of the courts to issue injunctive writs to restrain the
collection of tax and to dispense with the deposit of amount
claimed or filing of the required bond is not simply confined to
cases where prescription has set in . Whenever it is determined by
the
*mere reliance on the estimates based on best possible sources
casted doubt on the presumption of regularity consequently CTA
was ordered to determine whether the sources are substantial to
merit regularity of the FLD against spouses pacquiao
Spouses Pacquiaos filed a motion to lift the warrants of distraint,
levy and garnishment issued by the CIR in connection with
their deficiency income tax and VAT assessment. The CTA
issued a resolution granting the urgent motion ordering the CIR to
desist form the collection of deficiency tax assessment against the
petitioner.
Issue:
1. Whether the CTA may issue injunctive writ to restrain collection
of tax
Held:
Yes. The CIR has the power to issue injunctive writs to restrain the
collection of tax and to even dispense with the required bond
whenever the method employed by the CIR in the collection of
tax is patently in violation of the law. Such authority emanates
from the power to f the CTA appellate jurisdiction to review on
appeal other matters arising under the jurisdiction of the NIRC and
other laws.
Tabuzo, Tax Remedies
m. CIR vs. Standard Insurance Co., INc. GR No. 219340, 7
Nov 2018
RTC cannot issue an injunctive relief to collect tax neither can
the CAThe respondent received a demand for payment of
deficiency income tax VAT and premium DST expanded
withholding tax. The respondent commenced with the RTC the
issuance of the TRO with the writ of preliminary injunction of
Section 108 and Section 184. The RTC issued the TRO enjoining
the BIR form implementing the provision of the NIRC and
enjoining its agent and representatives from implementing the
provision of the NIRC in relation to the FDDA for the respondent
taxable year 2011 and to pending assessment for taxable year 2012
and2013.
Issue
1. Whether an injunctive relief is available as a remedy to
assail the collection of tax
Ruling
1. No. Section 218 of the NIRC provides that no court shall
have the authority to grant an injunction to restrain the
collection of any national internal revenue tax or fees charged
by the NIRC.Section 11 of RA 1125 likewise provides that rulings
of the Commissioner of Internal Revenue among others assessing
any tax, or levying or distraining or selling any property of the
taxpayer for the satisfaction of their tax liabilities are immediately
executory and their enforcement is not to be suspended by any
appeals thereof to the CTA unless in the opinion of the CTA the
collection may jeopardize the interest of the taxpayer in which
the CTA at any stage of the proceeding may suspend the said
collection and require the taxpayer to either deposit the
amount claimed or to file a surety bond for not more than
double the amount. Here, the RTC not only grossly erred n giving
due course to the petition for declaratory relief and in ultimately
deciding to permanently enjoin the enforcement of the specific
provision of the nIRC against the respondent.
Bar: In a criminal case where the CTA has exclusive original
jurisdiction may the right to file a separate civil action for the
recovery of taxes be reserved?
An: No. The criminal action and the corresponding civil action for
the recovery of liability for taxes and penalties shall at all times be
simultaneously instituted with and jointly determined in the same
proceeding by the CTA. The filing of the criminal action is deemed
to necessarily carry with it the filing of the civil action and no right
to reserve the filing of such civil action separately from the
criminal action is recognized.
n. Macario Gaw vs. CIR, G.R. No. 222837, July 23, 2018
1. The taxpayer’’s obligation to pay the tax is an obligation that is
created by law and does not arise from the offenses of tax evaision
as such the same is not deemed to be instituted with the criminal
case
2. What is deemed instituted in the criminal case is only the right
of the government to recover taxes and penalties relative to the
criminal case. The remedy of the taxpayer to appeal the disputed
assessment s not deemed to be instituted with the criminal case
3. The tax evasion case filed by the government against the erring
taxpayer has for purpose the imposition of criminal liability of the
latter. While the peititon for review filed by the petitioner was
aimed to question the FDDA and to prevent it from becoming
final. As such the PFR Ad Cautelam is not deemed instituted with
the criminal case for tax evasion
o. CIR vs. CTA and Wintelcom, Inc., GR No. 203403, 14
November 2018
An appeal with the CTA en banc can be made with the division:
Wintlecom received a final assessment on March 10 it filed a
protest on April 6 2004 which was denied by CIR. Wintelcom filed
a petition for review against the petitioner with the CTA in
division. A series of motion for extension to file an answer was
filed the CTA granted the same provided that it is the last final
extension. Notwitstanding this, CIR still failed to file motion for
reconsideration. The CTA then ruled in favor of the taxpayer.
Petitioner moved for reconsideration of the resolution , the CTA
denied the MR and set the case for ex parte presentation of
Wintlecom evidence.CIR questioned this through a petition with
the CA but the same was dismissed. The CTA rendered a decision
in favor of the peititoner. The petitioner questioned the decision
of the CTA division in ordering an ex parte presentation of
evidence for Witnthlecom without any motion from the later to
declare her in default and without hearing. The CTA en banc
granted the petitioner petition for review, it annulled the CTA
resolution and admitted the answer of the petitioner. The CIR
argues that it has the power to assess the proper tax based on
the best evidence obtainable. Both parties were ordered to file
their respective memoranda within 30 days, again CIR failed to file
their memoranda therefore, the CTA division allowed the taxpayer
to present his evidence. CIR appealed and requested that it be
allowed to present evidence for justice to prevail, the was denied
hence Rule 65 petition with the SC.
( from Division in appeal agad sa Sc)
Issue: Whether the CTA third division abused its discretion when
it denied the partial reconsideration to re-open the case
No. The resort to Rule 65 is not proper, the proper remedy is to file
an appeal before the CTA en banc under Rule 43. An appeal from
the decision o resolution of the court in division on motion for
reconsideration and new trial shall be taken to the court
through Rule 43. ( They should have appealed with the en banc )
Here, the resolution was received on August 1, the petitioner
has until fifteen days or until August 16 2012 to file an appeal
before the CTA en banc, Instead the petitioner field a petition
for certiorari under Rule 65 of the Rules of Court only on
October 1 2012. The decision dated December 7 2012 become
final and executory on August 19 2012 without any appeal
taken thereon.Certiorari is not a remedy for a lost appeal, one
of the requisite for certiorari is that there is no appeal plain
and speedy and adequate remedy when appeal is available the
certiorari will not prosper.
CTA denied the partial reconsideration to open the case
In this case, the petitioner submitted that there is no intent to waive
the right to present evidence as the delay was due to a limited pool
of lawyers. As stated under the law, the ff are grounds for motion
Tabuzo, Tax Remedies
for new trial 1. FAME 2. Newly discovered evidence. In the case at
bar, the failure of the petitioner to appear during the scheduled
hearing for presentation of evidence despite two postponement was
not due to 1. FAME 2. Newly discovered evidence. The CTA
found that the excuse of a heavy workload is not a valid
justification to disregard procedural rules. The court likewise
argued with the CTA that the repeated failure of the petitioner to
present his evidence is tantamount to inexcusable neglect.
p. Philippine Ports Authority vs. Davao, GR No. 190324, 6
June 2018
(5) Decisions of the Central Board of Assessment Appeals in the
exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals[.] -- > this includes
interlocutory
PPA received a letter from City Assessor of Davao for the
collection of real property taxes against administered properties
located in Sasa Port. It appealed the assessment with the LBAA
through the Office of City Treasurer. The office of City treasurer
received an appeal and forwarded it to the Chairman of Local
board of assessment appeals who received it on September 6 2004.
While the case was pending City Davao posted a notice of sale of
delinquent properties. The local board of assessment appeals
dismissed the PPA appeal for having been filed out of time and for
lack of jurisdiction. The PPA appealed with the CTA this wass
denied. PPA filed a petition for certiorari with the CA arguing that
City Davao taxation of its properties and subsequent auction and
sale to satisfy tax liabilities are issued without any basis. The CA
dismissed the petition and held that the case should have bene filed
with the cta.
ISSUE: Whether the CA has jurisdiction to issue injunctive
relief prayed for the petitioner PPA
Held:
No, The CTA has jurisdiction over the CBAA the exercise of its
appellate jurisdiction over cases that involve assessment of
properties that is originally decided by provincial city assessment
appeals. . The CBA assessment appealed by the petitioner before
the CA was rendered in the exercise of the appellate jurisdiction of
the CBAA. There is no dispute that this Central Board of
Assessment appeals decision constitutes as one of the cases
covered by the CTA exclusive jurisdiction.The supervisiory power
or jurisdiction of the CTA to issue a writ of certiorari in aid of its
appellate jurisdiction must co-exist with and be a complement to
its appellate jurisidciton to review, by appeal final orders, and
decision of the RTC in order to have complete supervision over the
acts of the latter.
q. BIR vs. Acosta, et al, GR No. 195320, 23 April 2018
Chevron filed an administrative claim or credit with the BIR. The
BIR did not act on the claim of Chevron , it then filed with the
CTA division. The Division partially granted the petition. The BIR
did not elevate the case with the CTA en banc hence the decision
became final and executory. Chevron movef for the issuance of the
CTA decision. BIR filed a motion before the CTA first division
on the ground that it wanted to exhaust administrative
remedies by filing with the SC rule 65 petition.
Issue: Whether RULE 65 is the proper remedy
Held:
No . A rule 65 peittion is a SCA for certiorari limited as a last
resort remedy. A writ of certiorari is not a substitute for lost
appeal, when appeal is available certiorari will not propser. In this
case, the remedy against a final judgment or order of the CTA
division is appealabe to the CTA en banc.
this case, the main issue was the entitlement of Chevron to
refund or credit because of its overpayment of excise taxes on
imported fuels. The CTA division found sufficient basis for the
claim of Chevron and partially granted the petition. The CTA
division clearly disposed the case in its entirety and no other issues
where left to rule pon hence the remedy is an appeal and not
certiorari.
The writ of certiorari wll not propser. The abuse of discretion must
be so patent and gross as to amount to an evasion of positive duty
or to a virtual regfusal to perform a duty. In this case BIR was not
able to show that the decision of the CTA division were patent
and gross as to warrant the striking down through certiorari.
r. Ignacio vs. Treasurer of Quezon City, GR No. 221620, 11
September 2017
* The CTA has no jurisdiction as this case pertain to a due
process issue compare this case with the case of Alcantara
CTA does not have jurisdiction over the decision, order of the RTC
if the nature of the case does not pertain to tax.
*The CTA has exclusive appellate jurisdiction only if the RTC
must rule on a local tax case on one that primarily involves a tax
issue.- this is one for the recovery of property and not pertain to
the tax assessmnetin in the property as it only claimed the lack fo
sue process. In other words the decision before the RTC cannot be
charac
.( Here it is not the assessment which was questioned) A
Complaint was filed by Teresa before the RTC for annulment of
warrant and levy against the Office of the City Treasurer. She
prayed that there be an annulment of judgment ordering the
cancellation of warrant of distraint and levy 2. Allow her to
pay real estate tax period stated in statement of tax liability.
Issue: Whether the case must be filed with the CA or the CTA
Held:
CA. before the CTA can have jurisdiction over the decision , order
of the RTC must be in the nature of tax case or one primarily
involving a tax issue. The CTA sitting as a division has the
jurisdiction to review by appeal decision , ruling and resolution
of the RTC over local tax cases that includes real property tax/
1. Here the allegation was that the respondent sent a notice of
delinquency to the wrong address
2. They knew her address as early as March 2007 or
before they sent notice of warrangt
3. A willful violation of the right to notice and levy and
auction deprived her of the right to take necessary steps to prevent
the sale of property.
Tabuzo, Tax Remedies
In the case at bar, the annulment of the complainant allegation do
not contest the tax assessment on the property as Teresa only
argues the lack of due process that deprived her the opportunity
to participate in the delqiency sale proceeding. As such the RTC
ruling could not be characterized as a local tax case over which
the CTA must have jurisdiction.
s. Alcantara vs. Republic, GR No. 192536, 15 March 2017
Although NAPCORO denominated its suit before the RTC as one
for declaration of nullity of foreclosure sale it is essentially a local
tax case questioning the validity of the imposition f local tax. In
this case, the complaint concerned the validity and eventual
collection of the taxes by the BIR, The declaration of nullity is
found on the validity of the assessment, hence the main relief is
to declare the assessment as null and void: CTA IT IS A TAX
CASE Demetrio filed his income tax return . The BIR informed
him that he has deficiency income tax , surcharge and interest and
he was invited to a notice of informal conference. Two demand
letters were issued by BIR with respect to the income assessment
notice. There was no response, hence CIR issue a notice of warrant
of distraint or levy against the properties of the defendant. The
appellant wanted to recover the properties hence a case was filed
with the RTC alleging that the TCT was cancelled without due
process and the BIR committed unlawful act affecting the sale.
The RTC dismissed the complaint holding that BIR cannot be
faulted for Alcantara failure to receive the assessment, on appeal
CA dismissed the case on the ground that RTC has no jurisdiction
over the case as it must be administratively protested with the CIR
before the RTC which it did not do so, and assuming RTC does
have jurisdiction the case must be filed with the CTA and not Ca.
Issue: Whether the case must first be appealed before the CIR
before RTC
CIR. The challenge in the assessment nand collection of taxes
made against him for being in violation f the right to due process.
The complaint concerned the validity and the collection of
taxes by the BIR. Therefore, the declaration of nullity was
founded on the validity of the assessment by the BIR. The main
relief sought in this case is to declare the assessment as null and
void. Hence, since it is a protest on the assessment it must first
be protested administratively by filing a request for reconsideration
or reinvestigation with the CIR before the RTC.
It is the CTA which has jurisdiction:The decision of the CIR in
cases of disputed assesmsnet, refund orinternal revenue taxes fee
and charges airisng form the NIRC must be appealed with the
CTA.
.
t. NAPOCOR vs. Provincial Government of Bataan, GR No.
180654, 6 March 2017
A warrant of levy on real properties was issued by Provincial
government of Bataan on properties of the NPC as a result of the
franchise tax deliquency. The properties were sold in a public
auction with the province as the winning bidder. Napcor received
copies of Certificate of Sale of real properties covering the auction
properties. NAPOCOR then field with the RTC a petition to
declare the nullity of the foreclosure sale alleging that it has no
legal basis since RA 7160 authorized the collection of local tax
has been modified by the EPIRA which provides that power
generaltion is not a public utility subject to franchise
tax.NAPOCOR asked the RTC to issue a preliminary injunction
enjoining the transfer of title and foreclosed land to Bataan and
after trial to make the injunction permanent and declare NAPCOR
exempt from local franchise tax. The RTC dismissed the petition
of NAPOCOR stating that the franchise tax was not based on
ownership of property but of the privilege to do business.
NAPOCOR appealed with the CA but province moved to dismiss
the case for lack of jurisdiction alleging that the declaration of
nullity of a foreclosure sale is a local tax case that questioned
the validity of province imposition of local franchise tax that
must be appealed with the CTA.

Issue: Whether the CTA has jurisdiction over the declaration

of nullity of a foreclosure sale of a local tax case.
Held: Yes. RA 9282 expanded the scope of the cases the CTA was
asked to her and adjudicate. Under Section 7, the CTA is vested
with the exclusive appellate jurisdiction over among
others,appeals from the decision, orders or resolution of the
Regional Trial Court in local tax cases originally decided or
resolved by them in the exercise of their original or appellate
jurisdiction.

In this case, the dispute arose between NAPOCOR and the CIR
over the former’s tax deficiency of NAPOCOR. Although the
complaint filed with the court if a petition for injunction of a
foreclosure sale, a further erading shows that they are assailing the
correctness of the local franchise tax assessment by the Province of
Bataan since one of the prayers is to declare NAPOCOR as
exempt from the payment of local franchise tax. In order for the
trial court to resolve the complaint it must look issues as to tax
assessment and collection must be dealt with. Hence since the
issue of the validity and legality of the foreclosure sale is related to
the issue and demandability of the local franchise tax it is within
the jurisdiction of the CTA. Hence the dismissal of NAPOCOR
appeal with the CA was in order.

Tabuzo, Tax Remedies