BIR loses P1.3-B tax evasion case vs businessman due to technicality
MANILA, Philippines – The Bureau of Internal Revenue (BIR) has lost a P1.3 billion tax evasion case against a businessman due to a technicality.
The Supreme Court's 1st Division upheld the September 2018 decision and July 2019 resolution of the Court of Tax Appeals (CTA) junking the tax assessment issued by the BIR to businessman Macario Lim Gaw Jr in 2007.
In 2016, the CTA earlier granted Gaw's petition disputing the tax assessment amounting to P1.3 billion for taxable year 2007. The BIR appealed the decision but the CTA en banc favored Gaw, saying that the BIR failed to comply with the rules of verification and certification of non-forum shopping as required under the rules of court.
“After a judicious study of the case, the Court resolves to deny the instant petition and affirm the September 20, 2018 decision and July 3, 2019 resolution of the Court of Tax Appeals en banc for failure of petitioner Commissioner of Internal Revenue to sufficiently show that the CTA EB committed any reversible error in dismissing its petition for lack of proper verification and certification of non-forum shopping as required by the Rules of Court (Rules),” the SC resolution read.
The High Court said that "while the existence of compelling reasons or special circumstances has been recognized as valid reasons for the relaxation of the Rules, such does not obtain in this case, considering that the CIR failed to rectify the procedural error despite having ample opportunity to do so, and no timely attempt at substantial compliance was made."
The SC also said that issues raised by Gaw only focused on the inclusion of taxable year 2007.
“It is settled that when a LOA authorizes an examination for a taxable year and ‘unverified prior years,’ in contravention of Revenue Memorandum Order No. 43-90, it is not void in its entirety and shall be valid as to the declared taxable year,” the SC said. – Rappler.com