MANILA — The Court of Tax Appeals (CTA) has junked the motions filed by power generation and distribution firm First Philippine Holdings Corp. (FPHC) and the Bureau of Internal Revenue (BIR) in connection with the firm’s PHP1.56 -billion tax case pending before the tribunal.
In its amended decision dated March 2, the tax court en banc said the BIR and FPHC had jumped the gun on the tax court’s second division which has yet to make a final ruling.
“The petitions for review filed by the CIR (BIR) in CTA EB 1625 and FPHC in CTA EB 1626 are dismissed for prematurity and lack of jurisdiction, without prejudice to their right to appeal the second division’s resolutions upon full disposition of the entire case on the merits, ” the court said.
The decision amended an earlier one dated September 3, 2018, where the Court en banc denied petitions for review separately filed by both parties.
The firm said the court should declare the right of the government to assess it for taxable year 2009, in the aggregate amount of PHP1.56 billion, as “already prescribed.”
It also asked the CTA to “declare void ab initio” the formal letter of demand and final assessment notice which imputed deficiency taxes against the firm.
On June 2, 2014, FPHC received a preliminary assessment notice (PAN) assessing it for deficiency income tax, value-added tax, expanded withholding tax, withholding tax on compensation, fringe benefits tax, and documentary stamp tax for 2009.
In February 2015, it filed its petition for review before the tax court’s second division. The resolution partially granted FPHC’s motion but upheld the BIR’s right to assess FPHC for deficiency taxes for the third and fourth quarters of 2009.
The BIR said the right to assess did not prescribe since there was an under-declaration on the part of FPHC.
The under-declaration, the government said, justified the application of the 10-year period to assess from discovery from BIR’s audit examination in 2014.
The BIR maintained that withholding tax assessments are imprescriptible or cannot be taken away by prescription or by lapse of time. (PNA)