The Court of Tax Appeals upheld the dismissal of a tax case against the mother of Senator Emmanuel Pacquiao, citing legal shortcuts on the part of local revenue officials.
In a 19-page decision dated July 5 and released to media on Wednesday, the tax court en banc through Associate Justice Esperanza R. Fabon-Victorino denied the petition for review filed by Bureau of Internal Revenue Region No. 18 Director Thelma S. Milabao and affirmed the CTA division’s ruling in the case.
“Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. However, such collection should be made in accordance with law as any arbitrariness will negate the very reason for the government itself,” the CTA said in siding with Dionisia Pacquiao.
The BIR said Pacquiao is liable for P1.39 million in tax deficiencies for 2010.
Justices Roman G. Del Rosario, Juanito C. Castañeda Jr., Erlinda P. Uy, Cielito N. Mindaro-Grulla, Ma. Belen M. Ringpis-Liban and Catherine T. Manahan concurred in the decision.
The case arose from an undated Letter Notice (LN) No. 110-TRS-10-00-00019/ where the BIR computerized-matching system noted inconsistencies between the information/data provided by withholding agents/payors and payees/income recipients against respondent’s declarations in her Income/VAT/Percentage/Withholding tax returns for 2010.
Pacquiao, a registered taxpayer of the BIR Revenue Region No. 18, Revenue District No. 1106 with registered address at Purok Acharon Labangal General Santos City 9500 was given an opportunity to reconcile or explain such discrepancies.
The tax court noted that the validation examination by Revenue Officers ROs) Sittie Skhanesa Jalila A. Ali and Leilah Jane L. Dohinog on the respondent was based on the said letter notice.
Among other things, the tax court said that the LN itself is insufficient and should have been turned into a Letter of Authority for the BIR’s subsequent moves.
“The record is bereft of any showing that such LN was transformed into a LOA as decreed by both Revenue Memorandum Order No. 32-2005 and jurisprudence. This means that the investigation/audit on respondent commanded by ROs Ali and Dohinog from which the subject assessments were predicated has no prior legal authorization from the CIR (Commissioner of Internal Revenue) or petitioner (regional director Milabao) rendering the FLD/FAN (Formal Letter of Demand/ Final Assessment Notice) void and without legal consequence,” the CTA en banc said.