the court of tax appeals

8/8/2019 The Court of Tax Appeals

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Chaguile, Michelle

Liria, Carmel

Masacayan, Earl Louie



Introductiony The Philippine Court of Tax Appeals (CT A) is the

special court of limited jurisdiction, and has the same

level with the Court of Appeals.T

he court consists of 8 Associate Justices and 1 Presiding Justice.

y It is located at Agham Road, National GovernmentCenter, Diliman, Quezon City in Metro Manila.

yIt is created under R.A. 1125, the CT A is highly specialized body which reviews tax cases.



Nature and Characteristics of

the CTAy Highly specialized body which can review tax cases

y Proceeding that are judicial in nature

y Not bound by technical rules of evidence

y Same level with Court of Appeals, possessing allinherent powers of a court of justice.



Goals of the CTAy To achieve its vision, the court is guided by the following

goals:

1. to ensure the fair collection of taxes by the Government;

2. to provide adequate judicial remedies to taxpayers againstunreasonable and unjustified tax assessments andthrough the refund of excess taxes paid;

3. promotion of the common good through the proper

interpretation of tax statutes;4. adherence to the independence of the judiciary; and

5. enhancement of the public trust and confidence in the judiciary.



The Justices



Historyy Its predecessor is the Board of Tax Appeals.

y It was originally created by virtue of Republic Act. No. 1125 which was enacted on June 16, 1954 and was recently

amended by Republic Act. No. 9282 on March 30, 2004, which took effect on April 23, 2004.

y Under Section 1 of the new law, the Court is headed by aPresiding Justice and assisted by five Associate Justices.

y Gloria Macapagal-Arroyo on June 12, 2008 signed into lawRepublic Act 9503, which added 3 more members to theCourt. The divisions were also increased from 2 to 3



Historyy The new law was enacted to expedite disposition of

tax-evasion cases and increase revenues forgovernment to fund social services, food, oil andeducation subsidies and infrastructure.

y Previously, only decision, judgment, ruling or inactionof the Commissioner of Internal Revenue, theCommissioner of Customs, the Secretary of Finance,

the Secretary of Trade and Industry, or the Secretary of Agriculture, involving the National Internal RevenueCode and the Tariff and Customs Code on civil mattersare appeallable to the Court of Tax Appeals.



Constructiony The Rules shall be liberally construed in order to

promote their objective of securing a just, speedy, and

inexpensive determination of every action andproceeding before the Court.

y The Rules of Court in the Philippines shall apply suppletorily to these Rules.



Jurisdiction of the Courty The Court shall exercise exclusive original jurisdiction

over or appellate jurisdiction to review by appeal the

cases specified in Republic Act No. 1125, Section 7, asamended by Republic Act No. 9282, Section 7.

y CT A has jurisdiction only if there is a decision of theCommissioner of Internal Revenue or Commissioner

of Customs except if:y The Commissioner of Customs has not rendered a

decision and the suit is about to prescribe.



Jurisdiction of the Courty The Commissioner of Internal Revenue has not acted in

a refund case and the 2 year prescriptive period is aboutto expire

y The tax payer can still file a refund case to the BIR evenbeyond two year period but if the decision is adverse, thetaxpayer has no remedy.

y The Commissioner of Internal Revenue has not acted

upon a protested assessment within 180 days fromsubmission of all relevant document supporting theprotest .



Expanded Jurisdictiony Exclusive jurisdiction over criminal cases arising from

violations of NIRC or the Tariff and Customs Code and

other laws administered by BIR and the BOC wherethe principal amount of taxes and penalties involved isP1 million or more and appellate jurisdiction in lieu of CA over decisions of R TC where the amount is lessthan P1 million;



Expanded Jurisdictiony Exclusive original Jurisdiction over tax collection cases

where the principal amount of taxes and penalties

involved P1 million or more and the appellate jurisdiction over decisions of R TC where the amount isless than P1 million;

y Appellate jurisdiction over decisions of R TC in local

tax cases.y Appellate jurisdiction over decisions of the Central

board of Assessment Appeals over cases involvingassessment of taxation of real property (RA 9282).



Criminal and Civil Casesy The criminal action and the corresponding civil action

for the recovery of civil liability for taxes and penalties

shall at all times be simultaneously instituted jointly determined in the proceeding before the CT A.

y The filing of the criminal action being deemednecessarily carry with it the filling of the civil action,

no right to reserve the filing of such civil actionseparately from the criminal action be recognized.

y Assessment is required on civil cases but not requiredon criminal cases.



Exclusive Original Jurisdiction in

Criminal Offensesy violations of NIRC, Tarrif and Customs Code and other

laws administered by the BIR or the BOC, where the

principal amount of taxes and fees, exclusive of charges and penalties claimed is P1 million and above.

y violations of NIRC, Tariff and Customs Code and otherlaws administered by the BIR and the BOC originally

decided by the regular courts where the principalamount of taxes and fees is less than P1 million or nospecified amount claimed.



Exclusive Appellate Jurisdiction in

Criminal Offensesy Judgements, resolutions or orders of the R TC in tax

cases originally decided by them.

y Judgements, resolutions or orders of the R TC in theexercise of their appellate jurisdiction over tax casesoriginally decided by the first level courts via a petitionfor review.



Exclusive Original Jurisdiction over

Tax Collection Casesy Tax collection cases involving final and executory

assessments for taxes, fees, charges and penalties or

undisputed assessments where the principal amountof taxes and fees, exclusive of charges and penaltiesclaimed is P1M or more.

y Undisputed assessments are assessments which arealready final and collectible because the taxpayer failedto seasonably protest the assessment within a period of 30 days.



Exclusive Appellate Jurisdiction

over Tax Collection Casesy Judgements, resolutions or orders of the R TC

originally decided by them via an ordinary appeal.

y

Judgments, resolutions or orders of the R TC inexercise of its appellate jurisdiction in tax collectioncases originally decided by first level courts via apetition for review.

y

Collection cases where the principal amount is lessthan P1M.



Exclusive appellate jurisdiction to

review by appealy Decisions of the BIR Commissioner in cases involving

disputed assessments, refunds of internal revenue taxes,fees or other charges, penalties in relation thereto, or othermatters arising under the NIRC or other laws administeredby BIR (via Rule 42).

y Inaction by the BIR Commissioner in cases involvingdisputed assessments, refunds of internal revenue taxes,

fees or other charges, penalties in relation thereto, or othermatters arising under the NIRC or other laws administeredby BIR, where NIRC provides a specific period for action, in which the inaction shall be deemed a denial (via Rule 42).




review by appealy Decision of Secretary of Finance on customs cases elevated

to them automatically for review from decisions of Commissioner of Customs which are adverse to thegovernment under Section 2315 of the Tariff and CustomsCode (via Rule 42).

y Decisions of the Commissioner of Customs in casesinvolving liability of customs duties, fees or other money

charges, seizure, detention or release of property affected,fines, forfeitures or other penalties in relation thereto, orother matters arising under the Customs Law or other lawsadministered by BOC (via Rule 42)




review by appealy Decisions of the DTI Secretary in cases of non

agricultural product, commodity or article, and the DA

Secretary in cases of agricultural product, commodity or article involving dumping and countervailing dutiesunder section 301 and 302, respectively, of the Tarrif and Customs Code, and safeguard measures underR.A. 8808, where either party may appeal the decisionto impose or not to impose said duties (via Rule 42).



Procedures of Appeal to CTAy Appeal may be made by filing a petition for review

under a procedure analogous to that provided for

under Rule 42 within 30 days from the receipt of thedecision or ruling or from expiration of the periodfixed by law for the official concerned to act, in casesof inaction and all other cases involving rulings, ordersor decisions as provided in Section 7 of RA 9882 ,before the CT A. a Division of the CT A shall hear theappeal.



Procedures of Appeal to CTAy Appeals with respect to decisions and rulings of the

Central Board of Assessment Appeals and the R TC in

exercise of their appellate jurisdiction, may be madeby filing a petition for review under a procedureanalogous to that provided for under Rule 43 with theCT A which shall hear the case en banc.



Effect of appeal to the prior

rulingy In procedure analogous to that provided for under

Rule 42, the decision of the agency is stayed by the

appeal.T

he actual findings from the previous rulingare not conclusive to the CT A.

y In procedure analogous to that provided for underRule 43, the decision of the R TC or Central Board of

Assessment Appeals is immediately executory except if the CT A shall direct otherwise upon such term as itmay deem just. The actual findings from the previousruling are conclusive to the CT A if supported by substantial evidence.



Power to Administer Oaths; Issue

Subpoena; Punish for Contempt.y The Court shall have the power to administer oaths,

receive evidence, summon witnesses by subpoena

duces tecum, subject in all respects to the samerestrictions and qualifications as applied in judicialproceedings of a similar nature.

y The Court shall, in accordance with Rule 71, have the

power to punish for contempt for the same causes,under the same procedure and with the same penaltiesprovided therein.



Suspension of Collection of Taxy Appeal to CT A shall not suspend payment, levy

distraint and or/sale of any property of tax payer forthe satisfaction of his liability

y except if in the opinion of the CT A, the collection may jeopardize the interest of the government and/or taxpayer. (National Tax Only) In this case, collection may be suspended at any stage of the proceeding but

taxpayer shall required either to:y Deposit to the court the amount claimed.

y File a surety bond with the court for not more thandouble the amount of tax due.



Suspension of Collection of Taxy The motion for the suspension of the collection of the

tax may be filed together with the petition for review

or with the answer, or in a separate motion filed by theinterested party at any stage of the proceedings.

y Unless a shorter period is fixed by the Court because of the urgency of the motion, the adverse party shall,

within five days after receipt of a copy of the motion,file an opposition thereto, if any, which shall stateclearly and distinctly the facts and the grounds reliedupon in support of the opposition.



Pre-Trialy In civil cases, the Clerk of Court shall set the case for

pre-trial on the first available date immediately

following the tenth day after the filing of the answer.y In criminal cases, the Clerk of Court shall set the case

for pre-trial not later than ten days after arraignment,if the accused is detained, nor later than thirty days if

the accused is on bail.



Disqualification of Justicesy Mandatory. No justice or other officer or employee of the

Court shall intervene, directly or indirectly, in themanagement or control of any private enterprise which inany way may be affected by the functions of the Court.

y Justices of the Court shall be disqualified from sitting inany case on the same grounds provided under the firstparagraph, Section 1, Rule 137 of the Rules of Court.

y No person who has once served in the Court either aspresiding justice or as associate justice shall be qualified topractice as counsel before the Court for a period of one yearfrom his retirement or resignation as such.



Disqualification of Justicesy Discl osure and consent of parties and l awyer s. A

justice disqualified under the first paragraph, Section 1

of Rule 137 of the Rules of Court, may, instead of withdrawing from a case or proceeding, disclose on therecords the basis of his disqualification. If, based onsuch disclosure, the parties and lawyers,independently of the justices participation, all agree in

writing that the reason for the inhibition is immaterialor unsubstantial, the justice may participate in theaction or proceeding.



Disqualification of Justicesy The agreement, signed by all parties and lawyers, shall

be incorporated in the record of the action or

proceeding.y V oluntary. A justice of the Court may, in the exercise

of his sound discretion, disqualify himself from sittingin a case or proceeding, for just or valid reasons otherthan those mentioned above.



Inhibitiony A justice of the Court who inhibits himself from sitting

in a case or proceeding shall immediately notify in

writing the presiding justice and the members of hisDivision

y When a motion for inhibition of a justice is filed, theCourt, en banc or in Division, shall act upon themotion.However, if the motion for inhibition is basedon a discretionary ground, the Court shall refer themotion to the justice involved for his appropriateaction.



Trialy The Court shall conduct the trial in accordance with

Rule 30 of the Rules of Court in civil cases and Rule 119

thereof in criminal cases.y The Court may receive evidence in the following cases:

y In all cases falling within the original jurisdiction of theCourt in Division pursuant to Section 3, Rule 4 of theseRules; and

y In appeals in both civil and criminal cases where theCourt grants a new trial pursuant to Section 2, Rule 53and Section 12, Rule 124 of the Rules of Court.



Trial by a Commissionery A party desiring to present voluminous documents in

evidence before the Court may secure the services of

an independent certified Public Accountant (CPA) atits own expense. The Court shall commission the latteras an officer of the Court solely for the purpose of performing such audit functions as the Court may direct.



Duties of independent CPAy Examination and verification of receipts, invoices,

vouchers and other long accounts;

y Reproduction of, and comparison of suchreproduction with, and certification that the same arefaithful copies of original documents, and pre-markingof documentary exhibits consisting of voluminousdocuments;

y Preparation of schedules or summaries containing achronological listing of the numbers, dates andamounts covered by receipts or invoices or otherrelevant documents and the amount(s) of taxes paid;



Duties of independent CPAy Making findings as to compliance with substantiation

requirements under pertinent tax laws, regulationsand jurisprudence;

y Submission of a formal report with certification of authenticity and veracity of findings and conclusionsin the performance of the audit;

y Testifying on such formal report; and

y Performing such other functions as the Court may direct.



Findings of an Independent CPAy The submission by the independent CPA of pre-

marked documentary exhibits shall be subject to verification and comparison with the original

documents, the availability of which shall be theprimary responsibility of the party possessing suchdocuments and, secondarily, by the independent CPA.

y The findings and conclusions of the independent CPA

may be challenged by the parties and shall not beconclusive upon the Court, which may, in whole or inpart, adopt such findings and conclusions subject to

verification.



The Court in Divisions; quorum and

votingy The chairman of the Division or, in his absence, its

senior member shall preside over the sessions of theCourt in Divisions.

y The attendance of at least two justices of the Courtshall be necessary to constitute a quorum for itssessions in Divisions.

y The presence at the deliberation and the affirmative vote of at least two justices shall be required for the

pronouncement of a judgment or final resolution of the Court in Divisions.



Court en banc; quorum and voting.y The presiding justice or, in his absence, the most

senior justice in attendance shall preside over thesessions of the Court en banc.

y The attendance of four justices of the Court shallconstitute a quorum for its sessions en banc.

y The presence at the deliberation and the affirmative

vote of four justices of the Court en banc shall benecessary for the rendition of a decision or resolutionon any case or matter submitted for its consideration.



Distraint of Personal Property/

Levy on Real Propertyy Upon issuance of any ruling, order or decision of by

the CT A favorable to the national government, theCT A shall issue an order authorizing the BIR, throughthe Commissioner to seize and distraint any goods, orchattels and / or levy the real property of such personsto satisfy the tax or charge together with any increment thereto incident to delinquency.

y This remedy shall not be exclusive and shall notpreclude the Court from availing other means underthe Rules of Court.



Remedies against CTA Decisionsy Decisions of CT A are no longer appealable to CA.

y A party adversely affected by a ruling, order or decision

of a division may file a MR or new trial before the samedivision.

y A party adversely affected by a resolution of a Divisionon a MR or new trial may file a petition for review with

the en banc.y The decision of a division may be appealed to CT A en

banc which may in turn be directly appealed to SC only on a question of law via Rule 45.



As to decision or ruling orinaction of the:CIR, Sec of Finance, Sec of

Trade and Industry, Sec of

Agriculture

Appeal: Petition for review underRule 42 within 30 days- Division of CT A shall hear

MR or New Trial before the samedivision within 15 days

Petition for review with CT A en

Banc

Decision or ruling of:Central Board of

Assessment Appeals andR TC in the exercise of theirappellate jurisdiction

Appeal: Petition for review underRule 43 within 30 days- CT A shall hear en banc

Petition for review on certiorariunder Rule 45



Jurisprudencey Final notice before seizure constitutes as a decision on

a disputed or protested assessment, hence, appealableto CT A (Commissioner of Internal Revenue vs. IsabellaCultural Corporation, 361 SCRA 71).

y A demand letter for tax deficiency assessments issuedand signed by the Chief of BIR Accounts Receivableand Billing Division is deemed final and executor y and subject to an appeal to CT A (Oceanic WirelessNetwork, Inc., vs. CIR, 477 SCRA 205, 212).



Jurisprudencey The CT A has jurisdiction over dispute between PNB

and BIR relative to deficiency withholding taxassessment. PD 242 is a general law while RA 1125 is aspecial law therefore following the statutory construction the latter should prevail (PhilippineNational Oil Company vs. CA, 457 SCRA 32).



Jurisprudencey A petition for reconsideration of an assessment may

affect the suspension of the prescriptive period for thecollection of taxes, but not the prescriptive period of acriminal action for violation of law. The protest of thetaxpayer against the assessment of the DistrictRevenue Officer cannot stop his prosecution for

violation of the NIRC (Ibid).

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