The Tax Court of Appeals (CTA) released a verdict rejecting a request to amend a claim brought by JG Summit Holdings, Inc., about the decision not to settle its tax liability for 2009 worth P1.3 billion.

The ruling was upheld by the appeals court on Dec. 11, confirmed in 22-page order.

The Court in March rejected a request to review the Evaluation letter ruling on contested assessment of Benjamin Kahn.

The firm claimed in its appeal that the revamped FDDA takes over the BIR’s determination.

The court cited Section 228 of the Tax Code, stating the local government unit (LGU) should file a protest against the tax conflict judgment from the revenue authority within 180 days.

It has been unanimously upheld that an individual impacted by a decision by Commissioner of Internal Revenue can file an appeal to the Court within 30 days.

The court said that it has the ultimate say in this matter and nothing will alter that reality.

According to revenue department regulations a judgment must be questioned within 30 days of the date issued.

In the decision, the court said that the applicant could submit a motion for reconsideration of the order made by them within 30 days.

While a judgment of a lower court is not automatically reviewable by a higher court, the recourse to this Court within 30 days constitutes a necessary and indispensable means for this Court to prohibit its decision from being complete, executory, and obligatory upon respondent.

JG Summit had already claimed the same assertion that the phrasing that the copy of the FDDA existed in the updated edition is rejected of much merits.

The court decided that even though it would assume jurisdiction, it still rules against it on the grounds cited in the argument for appeal.

The assessment is still acceptable under the rule even without the LoA.

It noted that current Revenue Memorandum Order No. 69-2010, which requires manual documentation to be retrieved and replaced with electronic LoAs (ELAs), does not state that an audit of a transaction would no longer be valid if the eLA is not submitted for review.

It said the only option would be to issue a new manual LoA since the one being used in the said Project is obsolete. And according to the amended manual, “as it is”, the old NIRC still validly clothed the examiners to effectively exercise authority to conduct an examination or assessment in accordance with Section 10 and 13 of the 1997 NEA Act.

The court also said that the period to evaluate the company’s formal petition to extend the search was also not moot.

Even if the agreement is faulty, they continue dealing with each other.

JG Summit had declared that the formal complaint letter issued was not accompanied by assessments notices. According to the records obtained by the CTAs, the firm responded to the subject assessment notices.

The court observed that the Bureau of Internal Revenue (BIR) did “properly serve” the FLD with the final assessment notice to the company, which contained the due date for payment.

The court ruling says that the absence of a fixed date for payment in the FDDA (FDDA) and revised FDDA do not render the assessment void.

Even if it can be concluded that the employers have yet to pay the previously dated interest, the assessment would still remain valid, as one part of the law does not imply the invalidity of another part of the law.

There is financial liability of approximately P6.55 billion under FDDA of JG Summit. The BIR secured an amount of deficiency income tax in the amount of P581.9 million, imputable value-added tax in the amount of P202.6 million, and documentary stamp tax in the amount of P555.3 million.


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