The Bureau of Internal Revenue (BIR) has lost its bid to collect P29-million in back taxes from a distributor of animal health care products for cutting the process in the serving of tax assessment and collection notices.
In a nine-page en banc resolution, the Court of Tax Appeals upheld the decision of its First Special Division that the BIR improperly sent the preliminary assessment notice (PAN) and final demand letter to Merial Philippines Inc.
The tax liabilities covered income, value-added and expanded withholding taxes for the year 2007.
In its petition for review, the BIR claimed court’s division erred in voiding the assessment as the taxpayer was accorded due process as evidence by the latter’s filing of protest over both the PAN and (FDL).
The full court noted, however, that the First Division was correct in voiding the assessment as the BIR violated its Revenue Regulations No. 12-99, implementing Section 228 of the Tax Code on the due process requirements.
It said the BIR sent the PAN to the taxpayer on December 29, 2010, followed by the FDL nine days later, or on January 7, 2011.
The court explained that under the same regulations a taxpayer is granted 15 days to answer, or protest the assessment. (Jun Ramirez)