CTA EB Case No. 01958

REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS

QUEZON CITY
ENBANC
COMMISSIONER OF CTA EB NO. 1958

INTERNAL REVENUE, (CTA Case No. 8837)
Petitioner,
Present:
DEL ROSARIO, EJ_.,

CASTANEDA, JR. ,
- versus - UY,
RING PIS-LIBAN,
MANAHAN,
BACORRO-VILLENA, and
MODESTO-SAN PEDRO, Jl.
GS MTE GRAINS
PORATION,
COR Respondent.
)( - - --- - - - - - - - - -- - --- - ---- --- - --
RESOLUTION
BACORRO-VILLENA, L:
For the Court En Bane's resolution is petitioner Commissioner of

Internal Revenue's (petitioner-movant's/CIR's) Motion for
2
Reconsideratiod (MR), filed on 21 July 202o , without respondent GS
MTE Grains Corporation's (respondent's/ GS MTE's) comment, per
Records Verification Report3 dated 22 February 2021/
Rollo, pp. 8 1-88.

Received by the Coun on 28 July 2020.
ld., p. 98.
RESOLUTION
CTA EB NO. 1958 (CTA Case No. 8837)
CIR v. GS MTE Grains Corporation
Page 2 of 6
x--- --------------------------- x
Petitioner-movant seeks the reconsideration of the Decision 4

dated o6 July 2020 (assailed Decision) on the ground that "the
Honorable Court En Bane erred in resolving the case on an issue not
raised by the parties, resolving the case on the assumption that
petitioner-movant failed to issue assessment notices". He contends
that the Court committed error in granting respondent a relief that
was not prayed for and that his right to fair play and due process was
violated.
Petitioner-movant maintains that the non-issuance of the

Assessment Notices (ANs) was not raised in the original Petition for
Review before the First Division. He posits that the reliefs that ought
to be granted to a litigant are only those specifically prayed for in the
complaint; other reliefs prayed for may be granted only when related
to the specific prayer(s) in the pleadings and supported by evidence on
record. Thus, he claims to have been denied procedural and
substantive due process as he was not given the opportunity to be
heard on the particular issue.
Petitioner-movant is of the view that Section 1, Rule 14 of the

Revised Rules of the Court of Tax Appeals (RRCTA), which provides
that the Court may not limit itself to the issues stipulated by the
parties but may also rule upon related issues necessary to achieve an
orderly disposition of the case, is intended to allow the Court to
resolve the main issue under the proper perspective but not to resolve
as a main issue a matter not derived from the pleadings. Petitioner-
movant argues that the aim to achieve an orderly disposition of the
cases should not result in the violation of litigants' basic right to fair
play and due process.
The Court En Bane's resolves below.
After considering petitioner-movant's arguments and upon a

second hard look on the case records, We find the instant MR bereft of
merit.
The last paragraph of Section 1, Rule 14 of the RRCTA statey
4
Id., pp. 69-80.
RESOLUTION
Page 3 of 6
x--------- -------------- -------x
Section 1. Rendition ofjudgment. -
In deciding the case, the Court may not limit itself to the
issues stipulated by the parties but may also rule upon related issues
necessary to achieve an orderly disposition of the case.
Apropos, one of the issues raised by the parties before the Court
Division is "whether petitioner-[movant] is liable to pay the assessed
amount of ~12,970,415.01 representing its deficiency income tax,
expanded withholding tax [EWT] and compromise penalty for taxable
year 2oo6" .5
The issue raised by the parties as quoted above necessarily

prompted the Court to inquire into the assessment as a whole,
including its validity and the correctness of the amount imposed
against respondent. Certainly, prior to determining respondent's actual
tax liability, if any, it presupposes that the Court must have first
ascertained that the assessment issued against respondent is valid.
Contrary to petitioner-movant's contention, the non-issuance of

the ANs is actually an integral part in the full resolution of the main
issue, i.e., whether respondent is liable for deficiency taxes. Thus,
although not specifically raised as an issue or alleged in the pleading,
the Court can look into the circumstances and documents surrounding
the assessment.
In the often cited case of Commissioner of Internal Revenue v.

Lancaster Philippines, Inc. 6, the Supreme Court affirmed this Court's
power to resolve an issue not raised by the parties, thus:
On whether the CTA can resolve an issue which was not

raised by the parties, we rule in the affirmative.
Under Section 1, Rule 14 of A.M. No. os-n-o7-CTA, or the

Revised Rules of the Court of Tax Appeals, the CTA is not bound by \
the issues specifically raised by the parties but may also rule upo/
Id., p. 37.
6
G.R. No. 183408. 12 July 2017; Citation omitted and italics in the original text.
RESOLUTION
Page 4 of6
x----------------------------- -x
related issues necessary to achieve an orderly disposition of the case.

The text of the provision reads:
SECTION 1. Rendition ofjudgment.- xxx
In deciding the case, the Court may not limit itself to

the issues stipulated by the parties but may also rule
upon related issues necessary to achieve an orderly
disposition of the case.
The above section is clearly worded. On the basis thereof, the

CTA Division was, therefore, well within its authority to consider in
its decision the question on the scope of authority of the revenue
officers who were named in the LOA even though the parties had
not raised the same in their pleadings or memoranda. The CTA En
Bane was likewise correct in sustaining the CTA Division's view
concerning such matter.
Petitioner-movant likewise claims to have been deprived of his

basic right to fair play and due process considering that the non-
issuance of AN was not alleged.
We disagree.
Records reveal that Ms. Leila Jane L. Dohinog, OIC-Assistant

Chief of Assessment Division of Revenue Region 18, in her Judicial
Affidavit7, identified the ANs and stated that they were attached to the
Formal Letter of Demand (FLD) in the Bureau of Internal Revenue
(BIR) Records, as follows: 8
Q: What happened after the PAN with attached Details of

Discrepancies were issued to petitioner?
A: Petitioner was unable to file a protest against the PAN, so we

issued a Formal Letter of Demand, with attached Details of
Discrepancies and assessment notices, thereafter.
Q: I have with me documents denominated as "Formal Letter of

Demand with attached Details of Discrepancies and assessment
notices found in pages 107 to 112 of the BIR Records, marked as -
Exhibit "R-g", for the respondent, what relation do these documeny
Exhibit"R-11", Division Docket, Volume I, pp. 379-383.

ld., pp. 80-81.
RESOLUTION
C!R v. GS MTE Grains Corporation
Page 5 of6
X----------------------------- -X
have to the Formal Letter of Demand, with attached Details of

Discrepancies and assessment notices that you mentioned earlier?
A: These are the same Formal Letter of Demand, with attached

Details of Discrepancies and assessment notices that I mentioned
earlier. 9
Unfortunately, although, petitioner-movant also claims to have

offered the FLD with Details of Discrepancies and the supposed ANs in
evidence, no ANs can be found in the BIR Records. There is thus no
evidentiary support to petitioner-movant issuance of the ANs with the
FLD and Details of Discrepancies, as required by Section 3.1.4 of
10
Revenue Regulations (RR) No. 12-99. Petitioner-movant cannot now
assert that he was denied due process as he, in fact, had actually
testified as to the issuance of the ANs, albeit not existing in the
records.
All told, We find no cogent reason to deviate from our earlier

ruling. The assessment against respondent for deficiency taxes
covering taxable year 2oo6 is cancelled and set aside.
WHEREFORE, with the foregoing premises, petitioner-movant's

Motion for Reconsideration is DENIED for lack of merit.;
9
Emphasis supplied.
10
Implementing the Provisions of the National Internal Revenue Code of 1997 Governing the Rules
on Assessment of National internal Revenue Taxes, Civil Penalties and Interest and the Extra-
Judicial Settlement of a Taxpayer's Criminal Violation of the Code Through Payment of a
Suggested Compromise Penalty.
SEC. 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment.-
3.1.4 Formal Letter of Demand and Assessment Notice. - The formal letter of
demand and assessment notice shall be issued by the Commissioner or his duly authorized
representative. The letter of demand calling for payment of the taxpayer's deficiency tax or taxes
shall state the facts, the law, rules and regulations, or jurisprudence on which the assessment is
based, otherwise, the formal letter of demand and assessment notice shall be void (see illustration
in ANNEX B hereof). The same shall be sent to the taxpayer only by registered mail or by
personal delivery. If sent by personal delivery, the taxpayer or his duly authorized representative
shall acknowledge receipt thereof in the duplicate copy of the letter of demand, showing the
following: (a) His name; (b) signature; (c) designation and authority to act for and in behalf of the
taxpayer, if acknowledged received by a person other than the taxpayer himself; and (d) date of
receipt thereof.(Emphasis and underscoring supplied)
RESOLUTION
CJR v. GS MTE Grains Corporation
Page 6 of6
x----------------------------- -x
SO ORDERED.
JEAN lvtn.tu.c. 'P.t1. '- v IU\.V-VILLENA
WE CONCUR:
Presiding Justice
Sk~ c. ~-ole.
JUANITO C. CASTANEiiA:, fR.
9.;
ERL~.UY
Associate Justice Associate Justice
~. ~ //'---- /?.. n_. ."""

c~~ /-/~···« .....
MA. BELEN M. RINGPIS-LIBAN CATHERINE T. MANAHAN
Associate Justice Associate Justice

CTA EB Case No. 01958

Uploaded by

CTA EB Case No. 01958

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REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

COMMISSIONER OF CTA EB NO. 1958

DEL ROSARIO, EJ_.,

)( - - --- - - - - - - - - -- - --- - ---- --- - --

For the Court En Bane's resolution is petitioner Commissioner of

Rollo, pp. 8 1-88.

Petitioner-movant seeks the reconsideration of the Decision 4

Petitioner-movant maintains that the non-issuance of the

Petitioner-movant is of the view that Section 1, Rule 14 of the

The Court En Bane's resolves below.

After considering petitioner-movant's arguments and upon a

The last paragraph of Section 1, Rule 14 of the RRCTA statey

Section 1. Rendition ofjudgment. -

The issue raised by the parties as quoted above necessarily

Contrary to petitioner-movant's contention, the non-issuance of

In the often cited case of Commissioner of Internal Revenue v.

On whether the CTA can resolve an issue which was not

Under Section 1, Rule 14 of A.M. No. os-n-o7-CTA, or the

related issues necessary to achieve an orderly disposition of the case.

SECTION 1. Rendition ofjudgment.- xxx

In deciding the case, the Court may not limit itself to

The above section is clearly worded. On the basis thereof, the

Petitioner-movant likewise claims to have been deprived of his

Records reveal that Ms. Leila Jane L. Dohinog, OIC-Assistant

Q: What happened after the PAN with attached Details of

A: Petitioner was unable to file a protest against the PAN, so we

Q: I have with me documents denominated as "Formal Letter of

Exhibit"R-11", Division Docket, Volume I, pp. 379-383.

have to the Formal Letter of Demand, with attached Details of

A: These are the same Formal Letter of Demand, with attached

Unfortunately, although, petitioner-movant also claims to have

All told, We find no cogent reason to deviate from our earlier

WHEREFORE, with the foregoing premises, petitioner-movant's

SEC. 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment.-

JEAN lvtn.tu.c. 'P.t1. '- v IU\.V-VILLENA

~. ~ //'---- /?.. n_. ."""

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