CLAIMS FOR REFUND OF ERRONEOUSLY COLLECTED TAXES ARE NOT ALWAYS TAX EXEMPTIONS & MAY BE GRANTED WHEN PROVEN DE NOVO BEFORE THE CTA

Petitioner Commissioner of Internal Revenue (CIR) sought reversal of the CTA Special 1^st Division’s Amended Decision and Resolution granting the Respondent Tullet Prebon (Philippines), Inc. a partial refund on excess and unutilized Creditable Withholding Taxes (CWT) for Calendar Year 2017. The Petitioner argues that the Respondent is not entitled to the refund of the alleged excess and unutilized CWT for failure to prove both legal entitlement and full compliance with the documentary requirements, stressing that refund claims are strictly construed against the taxpayer and in favor of the government. On the other hand, the Respondent counters that the submitted evidence, including BIR Form No. 2307, sufficiently proves that the claimed CWTs were withheld from income reported in its ITR, and that compliance with Revenue Memorandum Order (RMO) No. 53-98 and Revenue Regulations (RR) No. 2-2006 as well as presentation of the payors are unnecessary. It further maintains that CTA cases are litigated de novo, allowing the admission of additional evidence. In ruling, the Court held that the factual findings of the Court a quo are binding absent grave abuse of discretion and that CTA cases are litigated de novo, allowing the taxpayer to present additional evidence. Also, refund claims based on erroneous or excess tax payments are not strictly construed against the taxpayer and found no reason to reverse the grant of the CWT refund absent any abuse. Consequently, the Petition is DENIED. [COMMISSIONER OF INTERNAL REVENUE VS. TULLET PREBON (PHILIPPINES), INC., CTA EN BANC CASE NO. 3016, MARCH 16, 2026]

[THE OSG CONTINUES TO BE THE PRINCIPAL COUNSEL & THEREFORE, SERVICE ON IT OF LEGAL PROCESSES & NOT THAT ON THE DEPUTIZED BIR LAWYERS, IS DECISIVE] [PERIOD FOR THE FILING THE MOTION FOR RECONSIDERATION SHOULD BE RECKONED FROM THE RECEIPT OF THE DECISION BY THE OSG, NOT THE BIR]

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review challenging the Decision and Resolution of the CTA 1^st Division, which had previously cancelled the deficiency assessments issued against Respondent First Telecom Philippines, Inc. Petitioner argued that although the Office of the Solicitor General (OSG) is his official counsel, it deputized BIR legal officers who actually handled the case before the CTA. Therefore, the period for filing the Motion for Reconsideration (MR) should be reckoned from the BIR’s receipt of the Decision, allowing the handling lawyers to fully use the prescribed period. He also invoked the principle that “technicalities must yield to substantial justice”. Additionally, there was no violation of due process, asserting that the Respondent was properly informed about the Revenue Officers (ROs) conducting the audit and was given full opportunity to contest the assessment and present its defense. On the other hand, the Respondent countered that a Letter of Authority (LOA) is essential and jurisdictional, regardless of BIR practices. It argued that the chance to refute the assessment does not cure the lack of proper authority, and merely informing the taxpayer of the assigned ROs does not satisfy the LOA requirement. Also, the Petitioner failed to state why it rejected the Respondent’s arguments, violating due process. Lastly, the lifeblood doctrine cannot justify any breach of due process rights. In ruling, the Court held that the period for filing the MR should be reckoned from the receipt of the decision by the OSG, not the BIR, since the OSG remains the principal counsel despite deputizing BIR legal officers. Thus, the Petitioner’s late filing cannot be excused, and practical considerations or internal arrangements cannot override procedural rules and jurisprudence. Even if technicalities were ignored, the Petitioner’s arguments would still fail on the merits, as existing rulings require a valid LOA and uphold due process rights. Thus, the Petition was DENIED. [COMMISSIONER OF INTERNAL REVENUE VS. FIRST TELECOM PHILIPPINES, INC., CTA EN BANC CASE NO. 3140, MARCH 11, 2026]

[UNDER THE LIM DOCTRINE, FILING OF INFORMATION IN COURT INTERRUPTS THE RUNNING OF THE PRESCRIPTION] [THE APRIL 2025 CONSEBIDO DOCTRINE, WHICH ALLOWS TOLLING UPON FILING WITH THE PROSECUTION OFFICE, APPLIES PROSPECTIVELY ONLY]

Petitioner People of the Philippines filed a Petition for Review seeking to reverse the CTA 2^nd Division’s dismissal of the criminal case against Respondents AJ Corinthian Hauling Corporation and its officers. Petitioner argued that the reliance on Emilio E. Lim, Sr. vs. Court of Appeals was outdated and should no longer apply. It further claimed that the filing of a criminal complaint for preliminary investigation with the Department of Justice (DOJ) should interrupt the running of the five‑year prescriptive period under Section 281 of the Tax Code, following the Court’s decisions in Tupaz vs. Ulep, Perez vs. Sandiganbayan, Panaguiton, Jr. vs. DOJ, Ingco vs. Sandiganbayan, Sanrio vs. Lim, and People vs. Pangilinan, which recognize that prescription is tolled upon initiation of proceedings before the Prosecution Office, not merely upon filing of the Information in court. On the other hand, Respondents countered that only the filing of the Information in court interrupts the prescriptive period for criminal tax offenses. They maintained that the Information was filed only on May 27, 2024, long after the five‑year prescriptive period had expired, considering that the DOJ preliminary investigation commenced on June 29, 2016. Thus, the criminal action was already time‑barred. In ruling, the Court held that Section 281 of the Tax Code is a replication of Section 354 of the 1939 Tax Code, as interpreted in Emilio E. Lim, Sr. vs. Court of Appeals. Under this doctrine, the prescriptive period begins upon discovery of the offense and the institution of judicial proceedings for investigation and punishment, but prescription is interrupted only by the filing of the Information in court. Since the preliminary investigation began on June 29, 2016, the Prosecution had until June 29, 2021 to file the Information. The filing in 2024 was therefore belated. While the Court acknowledged the Supreme Court’s ruling in People v. Consebido on April 2, 2025, which holds that the filing of a complaint before the Prosecution office tolls prescription, it ruled that this doctrine applies prospectively only and does not benefit the Petitioner. Hence, the Petition is DENIED for lack of merit. [PEOPLE OF THE PHILIPPINES VS. AJ CORINTHIAN HAULING CORPORATION, ARCELI S. SAJONAS & JOHN FITZ JERALD CLAUDIO, CTA EN BANC CRIMINAL CASE NO. 162, JANUARY 30, 2026]

FILING A MOTION FOR RECONSIDERATION OF AN AMENDED DECISION AT THE DIVISION LEVEL IS MANDATORY BEFORE APPEAL TO THE EN BANC

Petitioner Dole Philippines, Inc. and Respondent Commissioner of Internal Revenue (CIR) filed their separate Petition for Review with the Petitioner seeking a higher Value-Added Tax (VAT) refund than what was partially granted by the CTA Division, arguing that its export sales were validly zero‑rated and sufficiently substantiated, while the Respondent insisting that the Petitioner failed to comply with mandatory substantiation and procedural requirements. Respondent further argued that the Petitioner improperly elevated the case without first filing a Motion for Reconsideration (MR) of the Amended Decision. In ruling, the Court held that the filing of an MR of an Amended Decision is mandatory. Failure to do so renders an appeal dismissible. As regards the Respondent’s appeal, the Court found no reversible error in the CTA Division’s findings and affirmed that cases before the CTA are litigated de novo, allowing the Court discretion to weigh evidence presented, even if not all were submitted at the administrative level. Hence, the CTA En Banc DISMISSED the Petitioner’s Petition for lack of jurisdiction and DENIED the Respondent’s Petition for lack of merit. [DOLE PHILIPPINES, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2879 & COMMISSIONER OF INTERNAL REVENUE VS. DOLE PHILIPPINES, INC., CTA EN BANC CASE NO. 2960, FEBRUARY 3, 2026]

IN CRIMINAL CASES FOR TAX EVASION FOR WILLFUL FAILURE TO PAY TAXES, A VALID ASSESSMENT IS CRUCIAL TO ESTABLISH THE OBLIGATION TO PAY; ACTUAL RECEIPT OF THE PAN IS INDISPENSABLE

Petitioner People of the Philippines filed two Information indicting Accused Jimmy Baro Sadongdong of violation of Section 255 of the Tax Code, as amended, for alleged willful failure to pay deficiency Income Tax and Value-Added Tax (VAT) for Taxable Year (TY) 2015. Petitioner argued that all elements of Section 255 were present, asserting that the Accused was duly assessed, properly notified through personal service and registered mail, and that his non-payment despite notice and demand constituted willful failure to pay taxes within the five-year prescriptive period. On the other hand, the Accused countered that he could not be held criminally liable because he did not receive the Preliminary Assessment Notice (PAN), making the assessment void for lack of due process. He further argued that the Information alleged that the crime was committed “on or before March 18, 2018,” yet the Final Assessment Notice and Formal Letter of Demand (FAN/FLD) issued on October 22, 2018 gave him until November 22, 2018 to pay. Thus, no tax was yet due on the date alleged in the Information. In ruling, the Court held that, while the erroneous date in the Information was not fatal, the Prosecution failed to prove actual receipt of the PAN, a mandatory requirement under Section 228 of the Tax Code, thereby rendering the entire assessment void. Absent a valid assessment, no legal obligation to pay arose and the elements of failure and willfulness were not established beyond reasonable doubt, warranting acquittal and precluding any determination of civil liability for lack of competent proof. Hence, the Accused is ACQUITTED for failure of the Prosecution to prove his guilt beyond reasonable doubt. [PEOPLE OF THE PHILIPPINES VS. JIMMY BARO SADONGDONG, CTA CRIMINAL CASE NO. O-915 & O-916, JANUARY 29, 2026]

CTA JURISDICTION OVER CUSTOMS CASES IS LIMITED TO DECISIONS OF THE COC; INACTION OF THE COC IS NOT APPEALABLE TO THE CTA, UNLIKE IN CASES INVOLVING THE CIR

Petitioner Philippines AirAsia, Inc. filed a Petition for Review challenging the Bureau of Customs’ assessment of ₱359.98 million in penal bonds arising from alleged non‑exempt importations in 2016 and 2017. Petitioner argued that its congressional franchise exempted it from taxes and duties, that the Customs Modernization and Tariff Act (CMTA) did not repeal its tax privileges, and that any non‑submission of Department of Finance (DOF) tax exemption certificates was due to delays beyond its control. Further, the CTA had jurisdiction over the Respondent Commissioner of Customs (CoC)’s inaction on its protest. On the other hand, the Respondent countered that the Petitioner failed to exhaust administrative remedies and that the CTA lacked jurisdiction over inaction in customs cases. In ruling, the Court held that, under Republic Act (R.A.) No. 1125 (An Act Creating the CTA), as amended, and the CMTA, the CTA has appellate jurisdiction only over decisions of the CoC —not over his inaction. Statutory provisions expressly allow CTA to review inaction only in cases involving the Commissioner of Internal Revenue (CIR), not the CoC. Jurisdiction is conferred strictly by law and that Petitioner should have appealed the Respondent’s eventual decision, not prematurely resorted to the CTA. Hence, the Petition is DISMISSED on jurisdictional grounds. [PHILIPPINES AIRASIA, INC. VS. COMMISSIONER OF CUSTOMS, CTA CASE NO. 10144, JANUARY 20, 2026]