THIS is the link to the 49-page decision of the COURT OF TAX APPEALS (CTA), dated September 29, 2022, re: the much delayed TAX CASE of the SPOUSES EMMANUEL AND JINKEE PACQUIAO for taxable years 2008 and 2009 involving the amount of P2,261,217,439.92 - https://cta.judiciary.gov.ph/pdfv/web/viewer.html?file=https://cta.judiciary.gov.ph/home/download/0e0c25ef38183c703b08d2696c774c67
This is the link to the website of the COURT OF TAX APPEALS - https://cta.judiciary.gov.ph/.
THE ISSUES:
The parties stipulated the following issues for this Court's resolution, to wit:
"(1) Whether or not the Deficiency Tax Assessments are null and void for having been issued in contravention of petitioners' Constitutional right to due process;
(2) Whether the Honorable Court can validly examine and adjudicate on the CIR's exercise of his exclusive determination to issue Letters of Authority;
(3) Whether Petitioners are liable for deficiency income tax and value-added tax for taxable years 2008 and 2009 in the aggregate amount of P2,261,217,439.92 plus 50% surcharge, deficiency and delinquency interest pursuant to Sections 248 and 249 of the NIRC of 1997."
The CTA CANCELLED AND set ASIDE the 2013 DEFICIENCY INCOME TAX TAX ASSESSMENT issued by the BIR against the petitioners Spouses Pacquiao.
The DISPOSITION PORTION of the CTA decision reads:
"WHEREFORE, in light of the foregoing considerations, the instant Petition for Review is hereby GRANTED. Accordingly, the subject deficiency income tax assessment in the aggregate amount of P2,229,020,905.50, inclusive of interests and surcharges, for taxable years 2008 and 2009, the Preliminary Collection Letter dated July 19, 2013, the Warrants of Distraint and/or Levy and Garnishment dated July 1, 2013, and the Final Notice Before Seizure dated August 7, 2013, all issued against petitioners are CANCELLED and SET ASIDE. Respondent is hereby ENJOINED from proceeding with the collection of the said deficiency taxes against petitioners during the pendency of the instant case.
SO ORDERED."
IN SUMMARY, the CTA GRANTED THE PETITION OF THE SPOUSES PACQUIAO against the BIR for failure of the latter to respect the DUE PROCESS RIGHTS of the former and for LACK OF SUFFICIENT FACTUAL BASIS on the part of the BIR in issuing the questioned income tax deficiency assessment, to wit:
"The Court finds that the foregoing news articles are not sufficient basis for an assessment. In Representatives Edcel C. Lagman, et a/. vs. Han. Salvador C. Medialdea, et a/., 206 the Supreme Court held that news articles amount to "hearsay evidence, twice removed, and are thus without any probative value". The Supreme Court discussed as follows:
"However, the so-called counter-evidence were derived solely from unverified news articles on the internet, with neither the authors nor the sources shown to have affirmed the contents thereof. It was not even shown that efforts were made to secure such affirmation albeit the circumstances proved futile. As the Court has consistently ruled, news articles are hearsay evidence, twice removed, and are thus without any probative value, unless offered for a purpose other than proving the truth of the matter asserted. This pronouncement applies with equal force to the Cullamat Petition which likewise submitted online news articles as basis for their claim of insufficiency of factual basis." (Emphasis supplied)
Applying the foregoing, considering that the documents presented by respondent as basis for the assessment of petitioners' deficiency taxes consists of UNVERIFIED NEWS ARTICLES and that the AUTHORS HAVE NO PERSONAL KNOWLEDGE on the transactions involved, the same CANNOT be given any PROBATE VALUE.
Further, a perusal of the records shows that there is NO INDICATION that the news articles were CORROBORATED. Likewise, there is NO SHOWING that the revenue officers performed DUE DILIGENCE TO CONFIRM THE VERACITY OF THE INFORMATION contained in the said articles before issuing the subject assessment.
Clearly, the UNVERIFIED NEWS ARTICLES CANNOT BE CONSIDERED AS PROPER AND SUFFICIENT FACTUAL BASIS FOR THE ASSESSMENT. Thus, finding the subject assessment without sufficient basis, the same SHOULD BE CANCELLED AND WITHDRAWN.
In sum, the Court finds that the subject assessment for deficiency income tax is VOID FOR VIOLATION OF PETITIONERS' RIGHT TO DUE PROCESS AND FOR LACK OF SUFFICIENT FACTUAL BASIS. Needless to state, a VOID ASSESSMENT bears no fruit.
Consequently, the issuance of the PCL, FNBS, and the Warrants of Distraint and/or Levy and Garnishment are likewise VOID AND INEFFECTUAL.
With the foregoing, it becomes unnecessary to address the remaining arguments raised by the parties in this case."
I expect the BIR, through the OSG, to seasonably APPEAL the CTA decision to the SUPREME COURT via a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
(For lack of time, I read only the salient parts of the decision, i.e., issues, dispositive part, and the main ratio decidendi).
Related -
Republic Act No. 9282
March 30 2004
AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OR REPUBLIC ACT NO. 1125, AS AMENDED, OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES.
https://lawphil.net/statutes/repacts/ra2004/ra_9282_2004.html
A.M. No. 05-11-07-CTA
November 22, 2005
REVISED RULES OF THE COURT OF TAX APPEALS
https://lawphil.net/courts/supreme/am/am_05_11_07_cta_2005.html
