The Court of Tax Appeals has dismissed a P3.7-billion tax case against Robinson’s Land Corp. due to an invalid tax assessment.
In a 17-page decision, the tax court said the assessment notices sent to the company had not indicated the due dates for payments, citing such was a violation of the Tax Code requiring assessment notices to have a provision demanding payment within a prescribed period.
The final letter of demand did not show the exact amount of tax liability of Robinson’s Land.
“Given that there was failure to state a date certain for the payment of the deficiency taxes in the subject assessments, as well as to provide a definite amount of taxes to be paid, petitioner’s obligation for payment of the alleged deficiency taxes in the subject assessment is not deemed to have legally accrued,” the tax court said.
“Simply put, petitioner (Robinson’s Land) may not be adjudged to account for deficiency taxes which in the first place are not legally demandable,” it added.
The final decision on disputed assessment said the payment of deficiency taxes must be settled immediately upon receipt by Robinson’s Land, and that it failed to provide the exact amount of tax liability to be adjusted depending on the time of payment.
The court invoked a Supreme Court ruling on the Commissioner of Internal Revenue vs. Fitness by Design Inc., citing that “taxpayers must be informed in writing of the law and the facts upon which a tax assessment is based; otherwise, the assessment is void.”
“We cannot condone errant or enterprising tax officials, as they are expected to be vigilant and law-abiding. Wherefore, the instant Petition for Review is hereby granted,” it said.
“Accordingly, the assessments against petitioner for deficiency income tax, value-added tax, expanded withholding tax, withholding tax on compensation, final withholding tax, documentary stamp tax and compromise penalties in the aggregate amount of P3,762,799,564 billion, inclusive of penalties and increments, for fiscal year ended September 30, 2009, are cancelled and set aside,” it noted. (Rio)