October 2010 - Philippine Supreme Court Resolutions
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[G.R. No. 182176 : October 04, 2010] BELLE CORPORATION, PETITIONER, VERSUS COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. :
[G.R. No. 182176 : October 04, 2010]
BELLE CORPORATION, PETITIONER, VERSUS COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Sirs/Mesdames:
Please take notice that the Court, Third Division, issued a Resolution dated 04 October 2010, which reads as follows:
G.R. No. 182176 - BELLE CORPORATION, petitioner, versus COMMISSIONER OF INTERNAL REVENUE, respondent.
RESOLUTION
Petitioner Belle Corporation filed a petition for review on certiorari assailing the Decision[1] and Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 73071 affirming the April 4, 2002 Decision[3] of the Court of Tax Appeals (CTA) in CTA Case No. 5930 which ordered petitioner to pay respondent Commissioner of Internal Revenue (1) the sum of P26.06 million as deficiency income, capital gains and documentary stamp taxes for taxable year 1995, inclusive of surcharge and deficiency interest, and (2) delinquency interest equivalent to 20% of said amount, computed from March 1, 1999 until full payment. Also affirmed in the assailed CA decision is the September 10, 2002 Resolution[4] of the CTA denying petitioner's motion for reconsideration and motion for presentation of the originals of the annexes attached to the motion for reconsideration.
Later, however, petitioner informed us that it availed of the One-Time Administrative Abatement Program of the Bureau of Internal Revenue (BIR) and prayed that we declare this case moot and academic.[5] Attached to its Manifestation and motion were copies of the termination letter[6] and certification[7] issued by the BIR.
In its comment, respondent agreed that petitioner's liability for deficiency income tax was mooted by the termination letter issued by the BIR which (1) noted petitioner's availment of the One-Time Administrative Abatement Program and payment of P9.24 million, the basic income tax assessed, and (2) declared petitioner's income tax liability closed and terminated. On the certification issued by the BIR acknowledging petitioner's payment of P14.88 million as capital gains tax and P99,000.00 as documentary stamp tax for taxable year 1995, respondent said that petitioner paid the assessed amounts, excluding the 20% delinquency interest awarded by the CTA. Respondent thus prayed that petitioner be still ordered to pay said delinquency interest.[8]
Thereafter, petitioner also informed us that it likewise availed of tax amnesty under Republic Act (R.A.) No. 9480 or the Tax Amnesty Act of 2007 and that its availment thereof rendered this case moot and academic.[9]
Considering the above, we note that there is no more issue regarding petitioner's liability for deficiency income tax, capital gains tax and documentary stamp tax for taxable year 1995, including surcharge and deficiency interest. The parties agreed that petitioner's deficiency income tax liability has become moot. Petitioner has also settled its liability for deficiency capital gains tax by paying the surcharge, interest and compromise penalty. Likewise, petitioner has settled its liability for deficiency documentary stamp tax.[10] All that remains for our consideration is respondent's prayer that petitioner still be ordered to pay the 20% delinquency interest awarded by the CTA and affirmed by the CA.
Is petitioner still liable to pay this delinquency interest after it availed of tax amnesty?
We hold that petitioner is no longer liable to pay the 20% delinquency interest because of the immunity it gained as a consequence of its availment of the Tax Amnesty Program under R. A. No. 9480.
The tax amnesty under R.A. No. 9480 covered all national internal revenue taxes, including income tax, capital gains tax and documentary stamp tax,[11] for taxable year 2005 and prior years that have remained unpaid as of December 31, 2005[12] whether or not assessments have been duly issued therefor. Full compliance with the conditions for the availment of the tax amnesty entitles one to immunity from the payment of taxes, as well as addition thereto, and the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997 (NIRC), as amended, arising from his failure to pay any internal revenue taxes for taxable year 2005 and prior years.[13]
To avail of the tax amnesty, it is required that a concerned taxpayer file the following documents: (1) Notice of Availment; (2) Statement of Assets, Liabilities and Networth (SALN) as of December 31, 2005; and (3) Tax Amnesty Return. The Acceptance of Payment Form, Notice of Availment, SALN, and Tax Amnesty Return were all to be submitted to the Revenue District Officer who is authorized to receive the same only after complete payment has been made. The rules and regulations further provide that completion of those requirements shall be deemed full compliance with the provisions of R.A. No. 9480.[14]
In Philippine Banking Corporation (Now: Global Business Bank, Inc.) v. Commissioner of Internal Revenue,[15] we ruled that upon full compliance with the conditions for the availment of tax amnesty, the taxpayer gains immunity from the payment of taxes, as well as addition thereto, and the appurtenant civil, criminal or administrative penalties under the NIRC. In that case, the petitioner was found liable to pay documentary stamp tax on its Special/Super Savings Deposit Account for the years 1996 and 1997. The CTA ordered the petitioner to pay also the 20% delinquency interest. But Metrobank, which absorbed the petitioner, availed of tax amnesty under R.A. No. 9480, complied with the conditions for its availment, and gained aforesaid immunity. Thus, we set aside the decision of the CTA in view of petitioner's availment of tax amnesty.
In this case, petitioner has duly filed the required Notice of Availment of Tax Amnesty,[16] SALN as of December 31, 2005,[17] and Tax Amnesty Return.[18] Petitioner has also paid the amnesty tax per the Tax Amnesty Payment Form (Acceptance of Payment Form)[19] and payment deposit slip.[20] Its full compliance with the conditions for the availment of tax amnesty has entitled petitioner to immunity from the payment of taxes, as well as addition thereto. Thus, petitioner need not pay the 20% delinquency interest awarded by the CTA. We note that the 20% delinquency interest is now provided under Section 249(A)(C)(3), Chapter I (Additions to the Tax), Title X (Statutory Offenses and Penalties) of the NIRC.[21] The 20% delinquency interest was under Section 249(a)(c)(3), Chapter 1 (Additions to the Tax), Title X (Statutory Offenses and Penalties) of the previous Tax Code.[22] Hence, it is covered by the immunity gained by petitioner.
WHEREFORE, we GRANT the petition and SET ASIDE the Decision dated May 18, 2007 and Resolution dated March 5, 2008 of the Court of Appeals in CA-G.R. SPNo. 73071.
The instant case is hereby declared MOOT with the availment by the petitioner of the BIR's One-Time Administrative Abatement Program and tax amnesty under the Tax Amnesty Act of 2007, as well as payment of the subject tax liabilities due.
No costs.
SO ORDERED.
G.R. No. 182176 - BELLE CORPORATION, petitioner, versus COMMISSIONER OF INTERNAL REVENUE, respondent.
Petitioner Belle Corporation filed a petition for review on certiorari assailing the Decision[1] and Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 73071 affirming the April 4, 2002 Decision[3] of the Court of Tax Appeals (CTA) in CTA Case No. 5930 which ordered petitioner to pay respondent Commissioner of Internal Revenue (1) the sum of P26.06 million as deficiency income, capital gains and documentary stamp taxes for taxable year 1995, inclusive of surcharge and deficiency interest, and (2) delinquency interest equivalent to 20% of said amount, computed from March 1, 1999 until full payment. Also affirmed in the assailed CA decision is the September 10, 2002 Resolution[4] of the CTA denying petitioner's motion for reconsideration and motion for presentation of the originals of the annexes attached to the motion for reconsideration.
Later, however, petitioner informed us that it availed of the One-Time Administrative Abatement Program of the Bureau of Internal Revenue (BIR) and prayed that we declare this case moot and academic.[5] Attached to its Manifestation and motion were copies of the termination letter[6] and certification[7] issued by the BIR.
In its comment, respondent agreed that petitioner's liability for deficiency income tax was mooted by the termination letter issued by the BIR which (1) noted petitioner's availment of the One-Time Administrative Abatement Program and payment of P9.24 million, the basic income tax assessed, and (2) declared petitioner's income tax liability closed and terminated. On the certification issued by the BIR acknowledging petitioner's payment of P14.88 million as capital gains tax and P99,000.00 as documentary stamp tax for taxable year 1995, respondent said that petitioner paid the assessed amounts, excluding the 20% delinquency interest awarded by the CTA. Respondent thus prayed that petitioner be still ordered to pay said delinquency interest.[8]
Thereafter, petitioner also informed us that it likewise availed of tax amnesty under Republic Act (R.A.) No. 9480 or the Tax Amnesty Act of 2007 and that its availment thereof rendered this case moot and academic.[9]
Considering the above, we note that there is no more issue regarding petitioner's liability for deficiency income tax, capital gains tax and documentary stamp tax for taxable year 1995, including surcharge and deficiency interest. The parties agreed that petitioner's deficiency income tax liability has become moot. Petitioner has also settled its liability for deficiency capital gains tax by paying the surcharge, interest and compromise penalty. Likewise, petitioner has settled its liability for deficiency documentary stamp tax.[10] All that remains for our consideration is respondent's prayer that petitioner still be ordered to pay the 20% delinquency interest awarded by the CTA and affirmed by the CA.
Is petitioner still liable to pay this delinquency interest after it availed of tax amnesty?
We hold that petitioner is no longer liable to pay the 20% delinquency interest because of the immunity it gained as a consequence of its availment of the Tax Amnesty Program under R. A. No. 9480.
The tax amnesty under R.A. No. 9480 covered all national internal revenue taxes, including income tax, capital gains tax and documentary stamp tax,[11] for taxable year 2005 and prior years that have remained unpaid as of December 31, 2005[12] whether or not assessments have been duly issued therefor. Full compliance with the conditions for the availment of the tax amnesty entitles one to immunity from the payment of taxes, as well as addition thereto, and the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997 (NIRC), as amended, arising from his failure to pay any internal revenue taxes for taxable year 2005 and prior years.[13]
To avail of the tax amnesty, it is required that a concerned taxpayer file the following documents: (1) Notice of Availment; (2) Statement of Assets, Liabilities and Networth (SALN) as of December 31, 2005; and (3) Tax Amnesty Return. The Acceptance of Payment Form, Notice of Availment, SALN, and Tax Amnesty Return were all to be submitted to the Revenue District Officer who is authorized to receive the same only after complete payment has been made. The rules and regulations further provide that completion of those requirements shall be deemed full compliance with the provisions of R.A. No. 9480.[14]
In Philippine Banking Corporation (Now: Global Business Bank, Inc.) v. Commissioner of Internal Revenue,[15] we ruled that upon full compliance with the conditions for the availment of tax amnesty, the taxpayer gains immunity from the payment of taxes, as well as addition thereto, and the appurtenant civil, criminal or administrative penalties under the NIRC. In that case, the petitioner was found liable to pay documentary stamp tax on its Special/Super Savings Deposit Account for the years 1996 and 1997. The CTA ordered the petitioner to pay also the 20% delinquency interest. But Metrobank, which absorbed the petitioner, availed of tax amnesty under R.A. No. 9480, complied with the conditions for its availment, and gained aforesaid immunity. Thus, we set aside the decision of the CTA in view of petitioner's availment of tax amnesty.
In this case, petitioner has duly filed the required Notice of Availment of Tax Amnesty,[16] SALN as of December 31, 2005,[17] and Tax Amnesty Return.[18] Petitioner has also paid the amnesty tax per the Tax Amnesty Payment Form (Acceptance of Payment Form)[19] and payment deposit slip.[20] Its full compliance with the conditions for the availment of tax amnesty has entitled petitioner to immunity from the payment of taxes, as well as addition thereto. Thus, petitioner need not pay the 20% delinquency interest awarded by the CTA. We note that the 20% delinquency interest is now provided under Section 249(A)(C)(3), Chapter I (Additions to the Tax), Title X (Statutory Offenses and Penalties) of the NIRC.[21] The 20% delinquency interest was under Section 249(a)(c)(3), Chapter 1 (Additions to the Tax), Title X (Statutory Offenses and Penalties) of the previous Tax Code.[22] Hence, it is covered by the immunity gained by petitioner.
WHEREFORE, we GRANT the petition and SET ASIDE the Decision dated May 18, 2007 and Resolution dated March 5, 2008 of the Court of Appeals in CA-G.R. SPNo. 73071.
The instant case is hereby declared MOOT with the availment by the petitioner of the BIR's One-Time Administrative Abatement Program and tax amnesty under the Tax Amnesty Act of 2007, as well as payment of the subject tax liabilities due.
No costs.
SO ORDERED.
Very truly yours,
LUCITA ABJELINA-SORIANO
Clerk of Court
By:
(Sgd.) WILFREDO V. LAPITAN
Asst. Clerk of Court
LUCITA ABJELINA-SORIANO
Clerk of Court
By:
(Sgd.) WILFREDO V. LAPITAN
Asst. Clerk of Court
Endnotes:
[1] Rollo, pp. 46-66. Dated May 18, 2007. Penned by Associate Justice Edgardo F. Sundiam (now deceased) with the concurrence of Presiding Justice Ruben T. Reyes (now a retired member of this Court) and Associate Justice Remedios A. Salazar-Fernando.
[2] Id. at 87-98. Dated March 5, 2008. Also penned by Associate Justice Edgardo F. Sundiam (now deceased) with the concurrence of Associate Justices Remedios Salazar-Fernando and Rosmari D. Carandang.
[3] Id. at 133-148. Penned by Associate Judge Amancio Q. Saga with the concurrence of Presiding Judge (now Presiding Justice) Ernesto D. Acosta and Associate Judge (now Associate Justice) Juanito C. Casta�eda, Jr.
[4] Id. at 174-183.
[5] Id. at 293-295.
[6] Id. at 301.
[7] Id. at 302.
[8] Id. at 366.
[9] Id. at 385.
[10] Id. at 299, 300 & 302.
[11] Revenue Memorandum Circular No. 19-2008: Circularizing the Full Text of "A Basic Guide on the Tax Amnesty Act of 2007" for Taxpayers Who Wish to Avail of the Tax Amnesty Pursuant to Republic Act No. 9480 (Tax Amnesty Act of 2007).
[12] R.A. No. 9480, Section 1.
SECTION 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.
[13] Id., Section 6(a).
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.
x x x x
[14] Department of Finance Department Order No. 29-07, Rules and Regulations to Implement Republic Act No. 9480, August 15, 2007, Rule III, Section 6.
[15] G.R. No. 170574, January 30, 2009, 577 SCRA 366, 392-393.
[16] Rollo, p. 407.
[17] Id. at 411.
[18] Id. at 408.
[19] Id. at 409.
[20] Id. at 410.
[21] SEC. 249. Interest. -
(A) In General. - There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment until the amount is fully paid.
x x x x
(C) Delinquency Interest. - In case of failure to pay:
x x x x
(3) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the tax.
x x x x
[22] SEC. 249. Interest, (a) In general. - There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by regulations, from the date prescribed for payment until the amount is fully paid.
x x x x
(c) Delinquency interest. - In case of failure to pay:
x x x x
(3) A deficiency tax, or any surcharge or interest thereon, on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected, on the unpaid amount, interest at the rate prescribed in paragraph (a) hereof until the amount is fully paid, which interest shall form part of the tax.
