G.R. No.
211449, January 16, 2019
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, v. TRANSFIELD PHILIPPINES,
INC., RESPONDENT.
DECISION
REYES, J. JR., J.:
Assailed in this petition for review on certiorari are the August 5, 2013 Decision1and the February
19, 2014 Resolution2 of the Court of Tax Appeals (CTA) En Banc in CTA EB Case No. 907 which
affirmed the February 28, 2012 Amended Decision3and the May 14, 2012 Resolution4 of the CTA
First Division in CTA Case No. 7842.
The Antecedents
On May 30, 2007, respondent Transfield Philippines, Inc. (respondent) received copies of Final
Assessment Notice (FAN) Nos. LTDO-122-IT-2002-00014, LTDO-122-WE-2002-00011, LTDO-122-
VT-2002-00012, and LTDO-122-PEN-2002-00002 issued by petitioner Commissioner of Internal
Revenue (CIR), through Nestor S. Valeroso, Officer-in-Charge, Assistant Commissioner for the
Large Taxpayers Service.5 Respondent was assessed the total sum of P563,168,996.70 for
deficiency income tax, Expanded Withholding Tax (EWT), and Value-Added Tax (VAT), inclusive of
interest and compromise penalties for the Fiscal Year July 1, 2001 to June 30, 2002. The details of
the assessments are as follows:
Kind of Basic Interest Compromise Total
Tax
Income 291,320,169.28 271,335,605.67 25,000.00 562,680,774.95
Tax
EWT 66,497.56 69,996.28 14,000.00 150,493.84
VAT 147,156.30 164,071.61 24,500.00 335,727.91
VAT
2,000.00 2,000.00
penalty
Total 291,533,823.14 271,569,673.56 65,500.00 563,168,996.70
On June 5, 2007, respondent filed a protest with the Bureau of Internal Revenue (BIR).6 Without
acting on respondent's protest, the BIR issued the First Collection Letter7 dated August 3, 2007,
demanding immediate payment of the assessments. Respondent received a copy of the First
Collection Letter on August 28, 2007.
Then, on January 17, 2008, petitioner constructively served a Final Notice Before Seizure8 dated
December 20, 2007, to respondent's office.
On February 29, 2008, respondent availed of the benefits of Republic Act (R.A.) No. 9480 by
submitting the following documents to the Development Bank of the Philippines (DBP), an
authorized agent bank of the BIR: 1) Notice of Availment of Tax Amnesty; 2) Tax Amnesty Return
(BIR Form No. 2116); 3) Statement of Assets, Liabilities and Net Worth (SALN) as of December
31, 2005; and 4) Tax Amnesty Payment Form (BIR Form No. 0617). On the same day, respondent
paid the BIR, through DBP, an amnesty tax in the amount of P112,500.00. On April 23, 2008,
respondent paid P2,000.00 to the BIR in relation to FAN No. LTDO-122-PEN-2002-00002 for
compromise penalties on alleged failure to file summary of sales and purchase from the first and
second quarters of 2002.
On May 5, 2008, respondent informed the BIR Large Taxpayers District Office (LTDO) of Makati
City in a letter dated April 28, 2008, that it availed of the benefits of R.A. No. 9480 and furnished
the LTDO with copies of the tax amnesty documents.9 The said letter was received by the BIR
LTDO of Makati City on the same day.
On July 10, 2008, petitioner wrote respondent, advising the latter that under Revenue
Memorandum Circular (RMC) No. 19-2008, those "with delinquent accounts/accounts receivable
considered as assets of the BIR/ Government, including self-assessed tax," are not allowed to avail
of the benefits of R.A. No. 9480.10
On September 8, 2008, petitioner issued a Warrant of Distraint and/or Levy (WDAL) directing the
seizure of respondent's goods, chattels or effects, and other personal properties, and/or levy of its
real property and interest in/or rights to real property to the extent of P563,168,996.70.11 A copy
of the WDAL was constructively served on respondent's offices on September 11, 2008. On the
same day, the Bank of the Philippine Islands (BPI) informed respondent that the latter's account
was being put on hold because of the WDAL.
The CTA First Division Ruling
In an Amended Decision12 dated February 28, 2012, the CTA First Division ruled that the CTA has
jurisdiction not only over decisions or inactions of the CIR in cases involving disputed assessments,
refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, but also over
other matters arising under the National Internal Revenue Code (NIRC) or other laws administered
by the BIR. It declared that petitioner is already barred from collecting from respondent the
alleged tax liabilities because it is undisputed that respondent had complied with all the legal
requirements pertaining to its application for tax amnesty by submitting to the BIR its Notice of
Availment of Tax Amnesty, Tax Amnesty Return, SALN, and Tax Amnesty Payment Form together
with the BIR Tax Payment Deposit Slip evidencing payment of amnesty tax amounting to
P112,500.00. The CTA First Division added that when respondent complied with all the
requirements of R.A. No. 9480, it is deemed to have settled in full all its tax liabilities for the years
covered by the tax amnesty. It held that the July 10, 2008 Letter of petitioner is void as it
disqualifies respondent from availing of the immunity from payment of tax liabilities under R.A. No.
9480 on the ground that its account has been considered delinquent or receivable asset of the
government, which reason is not in consonance with the provisions of R.A. No. 9480.
The fallo reads:
WHEREFORE, the Motion for Reconsideration (from the Decision dated 20 September
2011) dated October 11, 2011 filed by petitioner is hereby GRANTED.
Consequently, the Warrant of Distraint and/or Levy dated September 08, 2008 is
hereby declared NULL and VOID and of no legal effect. Respondent is now precluded
from collecting the amount of P563,168,996.70, representing petitioner's tax liability
for taxable year 2002, which is deemed settled.
SO ORDERED.13
Petitioner moved for reconsideration, but the same was denied by the CTA First Division in a
Resolution14 dated May 14, 2012. Aggrieved, petitioner filed a petition for review before the
CTA En Banc.
The CTA En Banc Ruling
In a Decision15 dated August 5, 2013, the CTA En Banc opined that it has jurisdiction to rule on
the petition because it is not an appeal of the disputed assessment which is subject to a
reglementary period, but it is a case to determine whether the issuance of the WDAL is proper. It
added that the issue to be addressed is not the timeliness of the protest, but rather, whether
petitioner may validly collect taxes from respondent despite the latter having availed of the tax
amnesty. The CTA En Banc concluded that respondent properly availed of the immunity from
payment of taxes under R.A. No. 9480, and as such, the issuance of a WDAL was invalid, which
justified the filing of a petition within 30 days from receipt of the warrant. It disposed the case in
this wise:
WHEREFORE, the petition is DENIED. The Amended Decision dated February 28,
2012, rendered by the First Division of this Court in CTA Case No. 7842, and its
Resolution dated May 14, 2012 are AFFIRMED. No pronouncement as to costs.
SO ORDERED.16
Petitioner moved for reconsideration, but the same was denied by the CTA En Banc on February
19, 2014. Hence, this petition for review on certiorari, wherein petitioner raises the following
issues:
I. WHETHER THE CTA COMMITTED REVERSIBLE ERROR WHEN IT ASSUMED
JURISDICTION OVER THE CASE.
II. WHETHER THE CTA COMMITTED REVERSIBLE ERROR WHEN IT RULED THAT
RESPONDENT IS ENTITLED TO THE IMMUNITIES UNDER THE TAX AMNESTY
PROGRAM PROVIDED IN REPUBLIC ACT NO. 9480.17
Petitioner argues that Section 9 of R.A. No. 9282 provides that a party adversely affected by a
decision, ruling or inaction of the CIR may file an appeal with the CTA within 30 days after the
receipt of such decision or ruling; that the 30-day period for filing an appeal with the CTA should
be reckoned from respondent's receipt of the Final Notice Before Seizure, or at the latest, its
receipt of the Letter dated July 10, 2008; that it is erroneous to consider receipt of the WDAL as
the date of reckoning the period to file an appeal to the CTA because the WDAL is merely a means,
an instrument, or a mechanism to implement the Final Notice Before Seizure, or at the latest, the
July 10, 2008 Letter; that whatever decision, action, or ruling petitioner had with respect to
respondent's claims and/or defenses was set forth in the aforementioned issuances and not in the
WDAL; and that in providing for the exception that delinquent accounts, or accounts receivable
considered assets of the government are not eligible under the tax amnesty program, RMC No. 19-
2008 merely supplied the gap in the law where assessments have become final and incontestable
upon the lapse of the reglementary period for appeal.18
In its Comment,19 respondent counters that the CTA is vested with jurisdiction to determine
whether a taxpayer is immune from the payment of taxes insofar as it is given the exclusive
appellate jurisdiction to review by appeal matters arising from the laws administered by the BIR
such as tax amnesty statutes; that in Pantoja v. David,20 the Court ruled that petitions for the
annulment of distraint orders of the BIR do not violate the prohibition against injunctions to
restrain the collection of taxes because the proceedings were not directed against the right of the
BIR to collect per se, but against the right of the BIR to do so by distraint and levy; that while it
did not file any petition for review from its receipt of the Final Notice Before Seizure, or the July
10, 2008 Letter, it availed of the tax amnesty on February 29, 2008 by complying with the
requirements of R.A. No. 9480; that in CS Garment, Inc. v. Commissioner of Internal
Revenue,21 the Court ruled that a taxpayer immediately enjoys the immunities granted by R.A.
No. 9480 as soon as the taxpayer complies with the conditions under the law and the BIR may not
prevent or delay a taxpayer from immediately enjoying immunity from the payment of taxes by
making the tax amnesty application contingent on the BIR's confirmation or agreement; that
in Union Bank of the Philippines v. Commissioner of Internal Revenue,22 decided by the CTA, the
latter held that Section 4 of R.A. No. 9480 limits petitioner's remedy to assailing the taxpayer's
SALN within a period of one year from the date of filing; that after the one-year period mandated
by R.A. No. 9480, the tax amnesty could no longer be disputed by the BIR; and that to allow
petitioner to enforce collection of assessments covered by the amnesty availed by respondent
through the perfunctory and summary issuance of a WDAL would sanction a disregard of the law,
and to punish respondent for its compliance therewith.
In its Reply,23 petitioner contends that the July 10, 2008 Letter was the adverse decision or ruling
appealable to the CTA and respondent's receipt of the letter is the proper reckoning point for filing
a petition for review with the CTA; that respondent received the said letter on August 5, 2008,
thus, it was already apprised of petitioner's adverse decision regarding its application for tax
amnesty at that time; that respondent had until September 4, 2008 to appeal the decision,
however, respondent's petition for review was filed with the CTA only on October 10, 2008; and
that assessments which have become final and executory upon the taxpayer's failure to appeal
therefrom are outside the coverage of R.A. No. 9480.
The Court's Ruling
I.
A tax amnesty operates as a general pardon or intentional overlooking by the State of its authority
to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law. It
is an absolute forgiveness or waiver by the government of its right to collect what is due it and to
give tax evaders who wish to relent a chance to start with a clean slate. A tax amnesty, much like
a tax exemption, is never favored nor presumed in law. The grant of a tax amnesty is akin to a tax
exemption; thus, it must be construed strictly against the taxpayer and liberally in favor of the
taxing authority.24
On May 24, 2007, R.A. No. 9480 took effect and authorized the grant of a tax amnesty to qualified
taxpayers for all national internal revenue taxes for the taxable year 2005 and prior years, with or
without assessments duly issued therefor, that have remained unpaid as of December 31,
2005.25 The pertinent provisions of R.A. No. 9480 are:
SEC. 1. Coverage. — There is hereby authorized and granted a tax amnesty which shall
cover all national internal revenue taxes for the taxable year 2005 and prior
years, with or without assessments duly issued therefor, That have remained
unpaid as of December 31, 2005: Provided, however, that the amnesty hereby
authorized and granted shall not cover persons or cases enumerated under Section 8
hereof.
xxxx
SEC. 6. Immunities and Privileges. — Those who availed themselves of the tax amnesty
under Section 5 hereof, and have fully complied with all its conditions shall be entitled
to the following immunities and privileges:
(a) The taxpayer shall be immune from the payment of taxes, as well
as additions thereto, and the appurtenant civil, criminal or administrative
penalties under the National Internal Revenue Code of 1997, as amended,
arising from the failure to pay any and all internal revenue taxes for taxable
year 2005 and prior years. (Emphases supplied)
xxxx
To implement R.A. No. 9480, the Department of Finance (DOF) issued DOF Department Order No.
29-07 (DO 29-07). Section 6 thereof outlines the method for availing a tax amnesty under R.A.
No. 9480, viz.:
SEC. 6. Method of Availment of Tax Amnesty.
1. Forms/Documents to be filed. — To avail of the general tax amnesty, concerned
taxpayers shall file the following documents/requirements:
a. Notice of Availment in such form as may be prescribed by the BIR;
b. Statement of Assets, Liabilities and Networth (SALN) as of December 31,
2005 in such [form], as may be prescribed by the BIR;
c. Tax Amnesty Return in such form as may be prescribed by the BIR.
2. Place of Filing of Amnesty Tax Return. — The Tax Amnesty Return, together with the
other documents stated in Sec. 6 (1) hereof, shall be filed as follows:
a. Residents shall file with the Revenue District Officer (RDO)/Large
Taxpayer District Office of the BIR which has jurisdiction over the legal
residence or principal place of business of the taxpayer, as the case may be.
b. Non-residents shall file with the office of the Commissioner of the BIR, or
with the RDO.
c. At the option of the taxpayer, the RDO may assist the taxpayer in
accomplishing the forms and computing the taxable base and the amnesty
tax payable, but may not look into, question or examine the veracity of the
entries contained in the Tax Amnesty Return, [SALN], or such other
documents submitted by the taxpayer.
3. Payment of Amnesty Tax and Full Compliance. — Upon filing of the Tax Amnesty
Return in accordance with Sec. 6 (2) hereof, the taxpayer shall pay the amnesty tax to
the authorized agent bank or in the absence thereof, the Collection Agents or duly
authorized Treasurer of the city or municipality in which such person has his legal
residence or principal place of business.
The RDO shall issue sufficient Acceptance of Payment Forms, as may be prescribed by
the BIR for the use of — or to be accomplished by — the bank, the collection agent or
the Treasurer, showing the acceptance by the amnesty tax payment. In case of the
authorized agent bank, the branch manager or the assistant branch manager shall sign
the acceptance of payment form.
The Acceptance of Payment Form, the Notice of Availment, the SALN, and the Tax
Amnesty Return shall be submitted to the RDO, which shall be received only after
complete payment. The completion of these requirements shall be deemed full
compliance with the provisions of [R.A. No.] 9480. x x x (Emphasis supplied)
In this case, it remains undisputed that respondent complied with all the requirements pertaining
to its application for tax amnesty by submitting to the BIR a Notice of Availment of Tax Amnesty,
Tax Amnesty Return, SALN as of December 31, 2005 and Tax Amnesty Payment Form. Further, it
paid the corresponding amnesty taxes. Hence, respondent has successfully availed itself of the tax
amnesty benefits granted under R.A. No. 9480 which include immunity from "the appurtenant civil,
criminal, or administrative penalties under the NIRC of 1997, as amended, arising from the failure
to pay any and all internal revenue taxes for taxable year 2005 and prior years."
II.
The CIR, however, insists that respondent is still liable for deficiency taxes, contending that under
RMC No. 19-2008, respondent is disqualified to avail of the tax amnesty because it falls under the
exception of "delinquent accounts or accounts receivable considered as assets by the BIR or the
Government, including self-assessed tax." In Commissioner of Internal Revenue v. Philippine
Aluminum Wheels, Inc.,26 petitioner therein raised a similar argument which the Court did not
sustain and instead ruled that "in case there is a discrepancy between the law and a regulation
issued to implement the law, the law prevails because the rule or regulation cannot go beyond the
terms and provisions of the law. x x x To give effect to the exception under RMC No. 19-2008 of
delinquent accounts or accounts receivable by the BIR, as interpreted by the BIR, would unlawfully
create a new exception for availing of the Tax Amnesty Program under [R.A. No.] 9480."27
Moreover, it must be noted that under Section 8 of R.A. No. 9480, only the following persons are
disqualified from availing of the tax amnesty:
SEC. 8. Exceptions. — x x x
(a) Withholding agents with respect to their withholding tax liabilities;
(b) Those with pending cases falling under the jurisdiction of the Presidential
Commission on Good Government;
(c) Those with pending cases involving unexplained or unlawfully acquired wealth or
under the Anti-Graft and Corrupt Practices Act;
(d) Those with pending cases filed in court involving violation of the Anti-Money
Laundering Law;
(e) Those with pending criminal cases for tax evasion and other criminal offenses under
Chapter II of Title X of the National Internal Revenue Code of 1997, as amended, and
the felonies of frauds, illegal exactions and transactions, and malversation of public
funds and property under Chapters III and IV of Title VII of the Revised Penal Code;
and
(f) Tax cases subject of final and executory judgment by the courts.28
It is a basic precept of statutory construction that the express mention of one person, thing, act,
or consequence excludes all others as expressed in the maxim expressio unius est exclusio
alterius. In implementing tax amnesty laws, the CIR cannot now insert an exception where there is
none under the law. Indeed, a tax amnesty must be construed strictly against the taxpayer and
liberally in favor of the taxing authority. However, the rule-making power of administrative
agencies cannot be extended to amend or expand statutory requirements or to embrace matters
not originally encompassed by the law. Administrative regulations should always be in accord with
the provisions of the statute they seek to implement, and any resulting inconsistency shall be
resolved in favor of the basic law.29
III.
As regards the issue on the propriety and timeliness of the petition for review, suffice it to say that
in this case, the reckoning point of the 30-day period to appeal the assessments is immaterial
because the assessments have already been extinguished by respondent's compliance with the
requirements for tax amnesty under R.A. No. 9480. To sustain petitioner's contention that
respondent should have elevated an appeal to the CTA when it received the Final Notice Before
Seizure, or at most, when it received the July 10, 2008 Letter of the BIR, would lead to an absurd
and unjust situation wherein the taxpayer avails of the benefits of a tax amnesty law, yet the BIR
still issues a WDAL simply because the taxpayer did not appeal the assessment to the CTA. The
requirement of filing an appeal with the CTA even after the taxpayer has already complied with the
requirements of the tax amnesty law negates the amnesty granted to the taxpayer and creates a
condition which is not found in the law. It is worthy to note that respondent filed a protest to the
assessments, but because of the passage of R.A. No. 9480, it no longer pursued its legal remedies
against the assessments. Thus, respondent cannot be faulted for filing a petition for review with
the CTA only upon receipt of the WDAL for it rightfully relied on the provision of R.A. No. 9480 that
"those who availed themselves of the tax amnesty x x x, and have fully complied with all its
conditions x x x shall be immune from the payment of taxes x x x." Finally, in CS Garment, Inc. v.
Commissioner of Internal Revenue,30 the Court pronounced that taxpayers may immediately enjoy
the privileges and immunities under R.A. No. 9480 as soon as they fulfill the suspensive condition
imposed therein, i.e., submission of 1) Notice of Availment of Tax Amnesty Form; 2) Tax Amnesty
Return Form (BIR Form No. 2116); 3) SALN as of December 31, 2005; and 4) Tax Amnesty
Payment Form (Acceptance of Payment Form or BIR Form No. 0617). In fine, the deficiency taxes
for Fiscal Year July 1, 2001 to June 30, 2002 are deemed settled in view of respondent's
compliance with the requirements for tax amnesty under R.A. No. 9480.
WHEREFORE, the petition is DENIED. The August 5, 2013 Decision and the February 19, 2014
Resolution of the Court of Tax Appeals in CTA EB Case No. 907 are AFFIRMED.
