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Cir v. Transitions

This case involved a dispute over tax assessments by the Commissioner of Internal Revenue (CIR) against Transitions Optical Philippines for the tax year 2004. Transitions Optical claimed the assessments were barred by prescription, but the CIR argued prescription was waived by two waivers executed in 2006 and 2008. The Supreme Court ruled the waivers were void because they lacked notarized written authorization from Transitions Optical and did not indicate the RDO's acceptance date or Transitions Optical's receipt of acceptance. As both parties continued dealing with each other despite known defects in the waivers, their situation was open to abuse. The Court also ruled Transitions Optical was estopped from claiming the waivers were invalid since it benefited from them

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66 views

Cir v. Transitions

This case involved a dispute over tax assessments by the Commissioner of Internal Revenue (CIR) against Transitions Optical Philippines for the tax year 2004. Transitions Optical claimed the assessments were barred by prescription, but the CIR argued prescription was waived by two waivers executed in 2006 and 2008. The Supreme Court ruled the waivers were void because they lacked notarized written authorization from Transitions Optical and did not indicate the RDO's acceptance date or Transitions Optical's receipt of acceptance. As both parties continued dealing with each other despite known defects in the waivers, their situation was open to abuse. The Court also ruled Transitions Optical was estopped from claiming the waivers were invalid since it benefited from them

Uploaded by

aypod
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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CIR v.

Transitions Optical Philippines


G.R. no. 227544, November 22, 2017

Facts:
In 2006, Transitions Optical received a Letter of Authority from the BIR, signed by the Officer-in-charge-
Regional Director and authorized by Regional Officers to examine Transitions Optical’s books of accounts
for internal revenue tax purposes for taxable year 2004. In 2006 the parties allegedly executed a waiver
of the defense of prescription (first waiver) extending the assessment to June 20, 2008. This was followed
by a second waiver dated June 2, 2008, extending the prescriptive period to November 30, 2008. The
CIR issued a PAN dated November 11, 2008 assessing Transitions Potical for deficiency taxes for
taxable year of 2004. Transitions Optical protested. The CIR issued FAN and FLD dated November 28,
2008 which was again protested alleging prescription of FAN as it was mailed on Dec. 2, 2008, and
pointing out that it was void because FAN indicated 2006 as a return period, but the assessment covered
2004. The CIR issued a FDDA dated Jan. 24, 2012. On March 16, 2012, Transitions Optical filed a
petition for review before the CTA which held that waivers are void and defective. The CTA en banc
affirmed First Division’s decision. Hence, this petition.

Issue:

Whether the 2 waivers are valid.

Ruling: No. The waivers were void because they were not accompanied by a notarized written authority
from transitions optical authorizing representatives to act on its behalf. Likewise, RDO’s acceptance date
nor Transitions Optical’s receipt of BIR’s acceptance was indicated. Hence, when both parties continued
to deal with each other in spite of knowing and without rectifying the defects, their situation is dangerous
and open to abuse by unscrupulous taxpayers. Further, Transitions Optical is estopped from claiming that
they were invalid and that prescription had set in, having benefited from the waivers executed at its
instance when it did not dispute CIR’s assertion that it repeatedly failed to comply with CIR’s notices,
directing it to submit books of accounts and related records for examination by the BIR.

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