BY JUN RAMIREZ
The Court of Tax Appeals (CTA) has voided the P286 million deficiency tax assessment imposed by the Bureau of Internal Revenue (BIR) against a Quezon City-based general Merchandising company for legal technicalities.
The court’s Third Division said the taxing agency did not follow the audit procedure in issuing the final assessment notice (FAN) against Robinsons Toys, Inc.
The company elevated the case to the tax court after the BIR denied it’s request for the cancellation of the alleged deficiency income, value-added, withholding and documentary stamp taxes incurred in 2009.
In siding with the petitioner, the court said the BIR failed to indicate in the FAN the amount of tax liabilities and the period when the tax should be as prescribed in the Tax Code.
“The issuance of a valid formal assessment is a substantive prerequisite for the collection of taxes,” the court said.
Citing a decision of the Supreme Court on similar issue, the court stated that “FAN is not valid if it does not contain a definitive due date for the payment by taxpayer.”
The 30-page resolution was written by Associate Justice Ma. Belen Ringpis-Liban and concurred by Associate Justices Ma. Rowena Modesto-San Pedro and Erlinda Uy. (Jun Ramirez)
