1. SMI-Ed Phil Technology Inc.

, vs Commissioner of Internal Revenue

GR No. 175410 – November 12, 2014
Facts:
 SMI-Ed Philippines is a PEZA-registered corporation. However, SMI-Ed Philippines "failed
to commence operations even after its registration or even after it constructed buildings and
purchased machineries and equipment.
 Its factory was temporarily closed and later it sold its buildings and some of its installed
machineries and equipment to Ibiden Philippines, Inc., another PEZA-registered enterprise.
After requesting the cancellation of its PEZA registration and amending its articles of
incorporation to shorten its corporate term, SMI-Ed Philippines filed an administrative claim
for the refund.
 Since BIR did not act on SMI-Ed Philippines’ claim, it prompted the latter to file a petition for
review before the Court of Tax Appeals which was denied. Later, the CTA second division
found that since SMI-Ed Philippines had not commenced operations, it was not entitled to
the incentives of either the income tax holiday or the 5% preferential tax rate. Payment of
the 5% preferential tax was erroneous.
Issue:
 Whether or not the determination of the Court of Tax Appeals was necessary to settle the
question regarding the tax consequence of the sale of the properties.
 Whether or not Petitioner is liable to pay any tax.
Held:
 The term "assessment" refers to the determination of amounts due from a person obligated
to make payments. In the context of national internal revenue collection, it refers the
determination of the taxes due from a taxpayer under the National Internal Revenue Code
of 1997. The power and duty to assess national internal revenue taxes are lodged with the
BIR.
 Only the presumed gain from the sale of petitioner’s land and/or building may be subjected
to the 6% capital gains tax. The income from the sale of petitioner’s machineries and
equipment is subject to the provisions on normal corporate income tax. However, the BIR
did not make a deficiency assessment for this declaration. Since more than a decade have
lapsed from the filing of petitioner's return, the BIR can no longer assess petitioner for
deficiency capital gains taxes.

2. Commissioner of Internal Revenue vs Fitness by Design Inc.,

GR No. 215957 – November 09, 2016
Facts:
 Fitness filed its Annual Income Tax Return for the taxable year of 1995 and later received a
copy of a Final Assessment Notice for deficiency. Fitness filed a protest to the Final
Assessment Notice since accordingly the Commissioner's period to assess had already
prescribed. Further, the assessment was without basis. Later, the Commissioner issued a
Warrant of Distraint and/or Levy. Fitness filed before the First Division of the Court of Tax
Appeals a Petition for Review.
 In its Answer, the Commissioner posited that the Warrant of Distraint and/or Levy was
issued in accordance with law. The Commissioner claimed that its right to assess had not
yet prescribed because the 1995 Income Tax Return filed by Fitness was false and
fraudulent for its alleged intentional failure to reflect its true sales. The alleged fraudulent
return was discovered through a tip from a confidential informant.
 The Court of Tax Appeals First Division granted Fitness' Petition on the ground that the
assessment has already prescribed. It cancelled and set aside the Final Assessment Notice
as well as the Warrant of Distraint and/or Levy issued by the Commissioner. It ruled that the
 Final Assessment Notice is invalid for failure to comply with the requirements of Section
228 of the NIRC.
 The Commissioner's Motion for Reconsideration which were denied by the Court of Tax
Appeals First Division. Aggrieved, the Commissioner filed an appeal before the Court of
Tax Appeals En Banc. The Commissioner asserted that it had 10 years to make an
assessment due to the fraudulent income tax return filed by Fitness.
 Fitness argued that the Final Assessment Notice issued to it could not be claimed as a valid
deficiency assessment that could justify the issuance of a warrant of distraint and/or levy. It
asserted that it was a mere request for payment as it did not provide the period within which
to pay the alleged liabilities.
 The Court of Tax Appeals En Banc ruled in favor of Fitness. It affirmed the Decision of the
Court of Tax Appeals First Division.
 In its Comment, respondent argues that the Final Assessment Notice issued was merely a
request and not a demand for payment of tax liabilities. The Final Assessment Notice
cannot be considered as a final deficiency assessment because it deprived respondent of
due process when it failed to reflect its fixed tax liabilities. Moreover, it also gave
respondent an indefinite period to pay its tax liabilities. Respondent points out that an
assessment should strictly comply with the law for its validity. Jurisprudence provides that
"not all documents coming from the BIR containing a computation of the tax liability can be
deemed assessments, which can attain finality. Therefore, the Warrant of Distraint and/or
Levy cannot be enforced since it is based on an invalid assessment. Respondent likewise
claims that since the Final Assessment Notice was allegedly based on fraud, it must show
the details of the fraudulent acts imputed to it as part of due process.
Issue:
 Whether or not the Final Assessment Notice issued against respondent Fitness by Design,
Inc. is a valid assessment.
Held:
 An assessment refers to the determination of amounts due from a person obligated to make
payments. In the context of national internal revenue collection, it refers to the
determination of the taxes due from a taxpayer under the National Internal Revenue Code
of 1997.
 The assessment process starts with the filing of tax return and payment of tax by the
taxpayer. The initial assessment evidenced by the tax return is a self-assessment of the
taxpayer.58 The tax is primarily computed and voluntarily paid by the taxpayer without need
of any demand from government. If tax obligations are properly paid, the Bureau of Internal
Revenue may dispense with its own assessment.
 After filing a return, the Commissioner or his or her representative may allow the
examination of any taxpayer for assessment of proper tax liability. The failure of a
taxpayer to file his or her return will not hinder the Commissioner from permitting the
taxpayer's examination. The Commissioner can examine records or other data relevant to
his or her inquiry in order to verify the correctness of any return, or to make a return in case
of noncompliance, as well as to determine and collect tax liability.
 The revenue officer who audited the taxpayer's records shall state in his or her report
whether the taxpayer concurs with his or her findings of liability for deficiency taxes.
If the taxpayer does not agree, based on the revenue officer's report, the taxpayer shall be
informed in writing of the discrepancies in his or her payment of internal revenue taxes for
"Informal Conference. The informal conference gives the taxpayer an opportunity to present
his or her side of the case.
 The taxpayer is given 15 days from receipt of the notice of informal conference to
respond. If the taxpayer fails to respond, he or she will be considered in default. The
 revenue officer endorses the case with the least possible delay to the Assessment Division
of the Revenue Regional Office or the Commissioner or his or her authorized
representative. The Assessment Division of the Revenue Regional Office or the
Commissioner or his or her authorized representative is responsible for the "appropriate
review and issuance of a deficiency tax assessment, if warranted.
 If, after the review conducted, there exists sufficient basis to assess the taxpayer
with deficiency taxes, the officer 'shall issue a preliminary assessment notice
showing in detail the facts, jurisprudence, and law on which the assessment is
based. The taxpayer is given 15 days from receipt of the pre-assessment notice to
respond. If the taxpayer fails to respond, he or she will be considered in default, and a
formal letter of demand and assessment notice will be issued.
 The formal letter of demand and assessment notice shall state the facts,
jurisprudence, and law on which the assessment was based; otherwise, these shall
be void. The taxpayer or the authorized representative may administratively protest the
formal letter of demand and assessment notice within 30 days from receipt of the notice.
 The issuance of a valid formal assessment is a substantive prerequisite for collection of
taxes. Neither the National Internal Revenue Code nor the revenue regulations provide for
a specific definition or form of an assessment. However, the National Internal Revenue
Code defines its explicit functions and effects. An assessment does not only include a
computation of tax liabilities; it also includes a demand for payment within a period
prescribed. Its main purpose is to determine the amount that a taxpayer is liable to pay.
 A pre-assessment notice does not bear the gravity of a formal assessment notice. A pre-
assessment notice merely gives a tip regarding the Bureau of Internal Revenue's findings
against a taxpayer for an informal conference or a clarificatory meeting. A final assessment
is a notice to the effect that the amount therein stated is due as tax and a demand for
payment thereof. This demand for payment signals the time when penalties and interests
begin to accrue against the taxpayer and enabling the latter to determine his
remedies. Thus, it must be sent to and received by the taxpayer, and must demand
payment of the taxes described therein within a specific period.
 The disputed Final Assessment Notice is not a valid assessment. First, it lacks the definite
amount of tax liability for which respondent is accountable. Second, there are no due dates
in the Final Assessment Notice.
 Petition is DENIED. The Decision of the Court of Tax Appeals En Banc and Resolution are
hereby AFFIRMED.

3. Philippine National Oil Company vs Court of Appeals

GR No. 109976 – April 26, 2005
Facts:
 Through his sworn statement, private respondent Savellano informed the BIR that PNB had
failed to withhold the 15% final tax on interest earnings and/or yields from the money
placements of PNOC with the said bank. BIR requested PNOC to settle its liability for taxes
on the interests earned by its money placements with PNB and which PNB did not withhold.
Later, PNOC wrote the BIR and made an offer to compromise its tax liability. PNOC
proposed to set-off its tax liability against a claim for tax refund/credit of the National Power
Corporation (NAPOCOR), then pending with the BIR.
 Later, the BIR sent a demand letter to PNB, as withholding agent, for the payment of the
final tax on the interest earnings and/or yields from PNOC's money placements with the
bank and on the same date, the BIR also mailed a letter to PNOC informing it of the
demand letter sent to PNB.
 PNOC, in another letter, reiterated its proposal to settle its tax liability through the set-off of
the said tax liability against NAPOCOR'S pending claim for tax refund/credit. The BIR
replied that the proposal for set-off was premature since NAPOCOR's claim was still under
process.
Issue:
 Whether or not PNOC's tax liability could not be considered a delinquent account since it
was not self-assessed.
Held:
 Where tax liabilities are self-assessed, the compromise payment shall be computed
based on the tax return filed by the taxpayer. On the other hand, where the BIR
already issued an assessment, the compromise payment shall be computed based
on the tax due on the assessment notice.
 A self-assessed tax, as the term implies, is self-assessed by the taxpayer without the
intervention of an assessment by the taxing authority to create the tax liability. A self-
assessed tax means a tax that the taxpayer himself assesses or computes and pays to the
taxing authority. A self-assessed tax is one where "no further assessment by the
government is required to create the tax liability." A self-assessed tax falls due without need
of any prior assessment by the BIR, and non-payment of a self-assessed tax on the date
prescribed by law results in penalties even in the absence of any assessment by the BIR.

4. Commissioner of Internal Revenue v Liquigaz Philippines Corporation

GR No. 215534 – April 18, 2016
Facts:
 Liquigaz received an undated letter purporting to be a Notice of Informal Conference (NIC),
as well as the detailed computation of its supposed tax liability. Subsequently, it received a
copy of the Preliminary Assessment Notice (PAN) together with the attached details of
discrepancies for the calendar year. Thereafter, it received a Formal Letter of Demand
(FLD)/Formal Assessment Notice (FAN), together with its attached details of discrepancies,
for the calendar year.
 Liquigaz filed its protest against the FLD/FAN and subsequently submitted its supporting
documents. However, it received a copy of the Final Decision on Disputed Assessment
(FDDA) covering the tax audit under an LOA for the calendar year. As reflected in the
FDDA, the CIR still found Liquigaz liable for deficiency withholding tax liabilities, inclusive of
interest. Consequently, Liquigaz filed its Petition for Review before the CTA Division
assailing the validity of the FDDA issued by the CIR. The CTA Division noted that unlike the
PAN and the FLD/FAN, the FDDA issued did not provide the details thereof, hence,
Liquigaz had no way of knowing what items were considered by the CIR in arriving at the
deficiency assessments.
Issue:
 Whether or not there was a valid final decision on disputed assessment.
Held:
 Under Section 228 of the NIRC, a taxpayer shall be informed in writing of the law and the
facts on which the assessment is made, otherwise, the assessment shall be void. However,
a void FDDA does not ipso facto render the assessment void. A decision of the CIR
on a disputed assessment differs from the assessment itself. Hence, the invalidity of
one does not necessarily result to the invalidity of the other—unless the law or
regulations otherwise provide. The taxpayer may then appeal the decision on the
disputed assessment or the inaction of the CIR. As such, the FDDA is not the only means
that the final tax liability of a taxpayer is fixed, which may then be appealed by the taxpayer.
Under the law, inaction on the part of the CIR may likewise result in the finality of a
 taxpayer's tax liability as it is deemed a denial of the protest filed by the latter, which may
also be appealed before the CTA.

5. Commissioner of Internal Revenue vs Ayala Securities Corporation

L-29485 – March 31, 1976
Facts:
 Respondent Ayala Securities Corporation, a domestic corporation organized and existing
under the laws of the Philippines, filed its income tax returns with the office of the petitioner
for its fiscal year which ended on September 30, 1955. Attached to its income tax return
was the audited financial statements of the respondent corporation as of September 30,
1955, showing a surplus. The income tax due on the return of the respondent corporation
was duly paid for within the time prescribed by law.
 Later, Petitioner advised the respondent corporation of the assessment on its accumulated
surplus reflected on its income tax return for the fiscal year which ended September 30,
1955. The respondent corporation, on the other hand, in a letter dated April 19, 1961,
protested against the assessment on its retained and accumulated surplus pertaining to the
taxable year 1955 and sought reconsideration thereof for the reasons (1) that the
accumulation of the surplus was for a bona fide business purpose and not to avoid the
imposition of income tax on the individual shareholders, and (2) that the said assessment
was issued beyond the five-year prescriptive period. Eventually, respondent corporation
received a letter dated February 18, 1963, from Office of herein petitioner calling the
attention of the respondent corporation to its outstanding and unpaid tax and thereby
requesting for the payment.
 Believing the aforesaid letter to be a denial of its protest, the herein respondent corporation
filed with the Court of Tax Appeals a Petition for Review of the assessment. After trial the
Court of Tax Appeals rendered its decision cancelling the assessment and declaring it of no
force and effect.
Issue:
 Whether or not the instant case falls within the jurisdiction of the respondent Court of Tax
Appeals.
 Whether or not the applicable provision of law to this case is Section 331 of the National
Internal Revenue Code, which provides for a five-year period of prescription of assessment
from the filing of the return.
Held:
 The applicable provision of law in this case is Section 331 of the National Internal Revenue
Code which provides that except as provided in the succeeding section, internal revenue
taxes shall be assessed within five years after the return was filed, and no
proceeding in court without assessment for the collection of such taxes shall be
begun after the expiration of such period. For the purposes of this section, a return filed
before the last day prescribed by law for the filing thereof shall be considered as filed on
such last day.
 Fraud is a question of fact and the circumstances constituting fraud must be alleged and
proved in the court below. The finding of the trial court as to its existence and non-
existence is final and cannot be reviewed here unless clearly shown to be erroneous. As
the assessment received by the Ayala Securities Corporation was made beyond the five-
year period prescribed under Section 331 of said Code, the same was made after the
prescriptive period had expired and, therefore, was no longer binding on the Ayala
Securities Corporation.

6. Basilan Estates vs Commissioner of Internal Revenue

 GR No. L-22492 – September 05, 1967
Facts:
 Petitioner filed on March 24, 1954 its income tax returns for 1953. On February 26, 1959,
the Commissioner of Internal Revenue, per examiners' report, assessed Basilan Estates,
Inc., a deficiency income tax and a 25% surtax on unreasonably accumulated profits. On
non-payment of the assessed amount, a warrant of distraint and levy was issued but the
same was not executed because Basilan Estates, Inc. succeeded in getting the Deputy
Commissioner of Internal Revenue to order the Director of the district in Zamboanga City to
hold execution and maintain constructive embargo instead. Because of its refusal to waive
the period of prescription, the corporation's request for reinvestigation was not given due
course, and a notice was eventually served to the corporation that the warrant of distraint
and levy would be executed.
 The assessment of the deficiency tax was made on February 26, 1959; but the petitioner
claims that it never received notice of such assessment or if it did, it received the notice
beyond the five-year prescriptive period. The notice of assessment shows the assessment
to have been made on February 26, 1959, well within the five-year period. On the right side
of the notice is also stamped "Feb. 26, 1959" — denoting the date of release, according to
Bureau of Internal Revenue practice.
Issue:
 Whether or not the assessment was made beyond the prescriptive period.
Held:
 Under Section 331 of the Tax Code requiring five years within which to assess deficiency
taxes, the assessment is deemed made when notice to this effect is released, mailed
or sent by the Collector to the taxpayer and it is not required that the notice be
received by the taxpayer within the aforementioned five-year period.

7. Medicard Philippines Inc., vs Commissioner of Internal Revenue

GR No. 222743 – April 5, 2017
Facts:
 Upon finding some discrepancies between MEDICARD's Income Tax Returns (ITR) and
VAT Returns, the CIR informed MEDICARD and, in lieu of an LOA, an LN was issued to
MEDICARD informing it of the discrepancies between its ITRs and VAT Returns and this
procedure is authorized under a Revenue Memorandum Order. Subsequently, the CIR
issued a Preliminary Assessment Notice (PAN) against MEDICARD for deficiency VAT. A
Memorandum was likewise issued recommending the issuance of a Formal Assessment
Notice (FAN) against MEDICARD. Later, MEDICARD received CIR's FAN for alleged
deficiency VAT inclusive of penalties. The CIR argued that since MEDICARD. does not
actually provide medical and/or hospital services, but merely arranges for the same, its
services are not VAT exempt.
 MEDICARD argued that: (1) the services it render is not limited merely to arranging for the
provision of medical and/or hospital services by hospitals and/or clinics but include actual
and direct rendition of medical and laboratory services; (2) some membership fees was
received from clients that are registered with the Philippine Export Zone Authority (PEZA)
and/or Bureau of Investments, among others.
 The CIR issued a Tax Verification Notice authorizing Revenue Officer (RO) to verify the
supporting documents of MEDICARD's Protest. MEDICARD also submitted additional
supporting documentary evidence in aid of its Protest. Subsequently, MEDICARD received
CIR's Final Decision on Disputed Assessment denying its protest.
 Consequently, MEDICARD proceeded to file a petition for review before the CTA,
reiterating its position before the tax authorities. However, the CTA Division rendered a
 Decision affirming with modifications the CIR's deficiency VAT assessment. Undaunted,
MEDICARD filed a Motion for Reconsideration but it was denied. Hence, MEDICARD
elevated the matter to the CTA en banc. In a Decision, the CTA en banc partially granted
the petition only insofar as the 10% VAT rate is concerned but sustained the findings of the
CTA Division in all other matters
Issue:
 Whether or not the absence of the LOA is fatal.
Held:
 An LOA is the authority given to the appropriate revenue officer assigned to perform
assessment functions. It empowers or enables said revenue officer to examine the books of
account and other accounting records of a taxpayer for the purpose of collecting the correct
amount of tax. An LOA is premised on the fact that the examination of a taxpayer who has
already filed his tax returns is a power that statutorily belongs only to the CIR himself or his
duly authorized representatives. Unless authorized by the CIR himself or by his duly
authorized representative, through an LOA, an examination of the taxpayer cannot
ordinarily be undertaken. The absence of an LOA violated MEDICARD's right to due
process.
 Petition is hereby GRANTED. The Decision and Resolution issued by the Court of Tax
Appeals en bane are REVERSED and SET ASIDE.

8. Commissioner of Internal Revenue vs GJM Philippines Manufacturing

GR No. 202695 – February 29, 2016
Facts:
 GJM filed its Annual Income Tax Return and thereafter, its parent company, Warnaco (HK)
Ltd., underwent bankruptcy proceedings, resulting in the transfer of ownership over GJM
and its global affiliates to Luen Thai Overseas Limited. Consequently, GJM informed the
Revenue District Officer regarding the cancellation of its registered address in Makati, and
the transfer of its tax registration in another address in Cavite. GJM's request for transfer of
its tax registration was confirmed through a Transfer Confirmation Notice.
 Later, the Bureau of Internal Revenue (BIR) sent a letter of informal conference informing
GJM that the report of investigation on its income and business tax liabilities had been
submitted. The report disclosed that GJM was still liable for an income tax deficiency and
the corresponding interest, as well as for the compromise penalty. Said tax deficiency
allegedly resulted from certain disallowances/understatements.
 Subsequently, the Bureau of Internal Revenue (BIR) issued a Pre-Assessment Notice and
Details of Discrepancies against GJM and it issued an undated Assessment Notice,
indicating a deficiency income tax assessment. Later, the BIR issued a Preliminary
Collection Letter requesting GJM to pay said income tax deficiency for the taxable year.
Said letter was addressed to GJM's former address in Makati. Although the BIR sent a Final
Notice Before Seizure to GJM's address in Cavite, the latter claimed that it did not receive
the same.
 GJM received a Warrant of Distraint and/or Levy from the BIR Makati. The company then
filed its Letter Protest which the BIR denied. Hence, GJM filed a Petition for Review before
the CTA. The CTA First Division rendered a Decision in favor of GJM. When its Motion for
Reconsideration was denied, the CIR brought the case to the CT A En Banc. However, the
CTA En Banc denied the CIR's petition
Issue:
 Whether or not the BIR is under the obligation to prove that GJM did, in fact, received the
Final Notice.
Held:
 The CIR has three (3) years from the date of the actual filing of the return or from the
last day prescribed by law for the filing of the return, whichever is later, to assess
internal revenue taxes. Here, GJM filed its Annual Income Tax Return for the taxable year
1999 on April 12, 2000. The three (3)-year prescriptive period, therefore, was only until April
15, 2003. The records reveal that the BIR sent the FAN through registered mail on
April 14, 2003, well-within the required period. The Court has held that when an
assessment is made within the prescriptive period, as in the case at bar, receipt by the
taxpayer may or may not be within said period. But it must be clarified that the rule does
not dispense with the requirement that the taxpayer should actually receive the
assessment notice, even beyond the prescriptive period. GJM, however, denies ever
having received any FAN.
 If the taxpayer denies having received an assessment from the BIR, it then becomes
incumbent upon the latter to prove by competent evidence that such notice was
indeed received by the addressee. Here, the onus probandi has shifted to the BIR to
show by contrary evidence that GJM indeed received the assessment in the clue course of
mail. It has been settled that while a mailed letter is deemed received by the addressee in
the course of mail, this is merely a disputable presumption subject to controversion, the
direct denial of which shifts the burden to the sender to prove that the mailed letter was, in
fact, received by the addressee.
 To prove the fact of mailing, it is essential to present the registry receipt issued by
the Bureau of Posts or the Registry return card which would have been signed by the
taxpayer or its authorized representative. And if said documents could not be located,
the CIR should have, at the very least, submitted to the Court a certification issued by the
Bureau of Posts and any other pertinent document executed with its intervention. The BIR's
failure to prove GJM's receipt of the assessment leads to no other conclusion but
that no assessment was issued. Consequently, the government's right to issue an
assessment for the said period has already prescribed.
 The CIR offered in evidence Transmittal Letter prepared and signed by the Chief of the
Assessment Division of BIR Makati, to show that the FAN was actually served upon GJM.
However, it never presented Guerrero to testify on said letter, considering that GJM
vehemently denied receiving the subject FAN and the Details of Discrepancies. Also, the
CIR presented the Certification signed by the Postmaster of Cavite, which supposedly
proves the fact of mailing of the FAN and Details of Discrepancy. It also adduced evidence
of mail envelopes which were meant to prove that the Preliminary Assessment Notice
(PAN) and the FAN were delivered. However, according to the Postmaster's Certification, of
all the mail matters addressed to GJM which were received by the Cavite Post Office only
two (2) came from the Makati Central Post Office. These two (2) were received by the
Cavite Post Office but the registered mail could not have been the PAN since, although
mailed, was not proven to be the mail received as the FAN. The CIR likewise failed to show
that said mail matters received indeed came from it. It could have simply presented the
registry receipt or the registry return card accompanying the envelope purportedly
containing the assessment notice, but it offered no explanation why it failed to do so.
Hence, the CTA aptly ruled that the CIR failed to discharge its duty to present any evidence
to show that GJM indeed received the FAN sent through registered mail.
 Petition is DENIED. The Decision of the Court of Tax Appeals En Banc and its Resolution
are hereby AFFIRMED.

9. Barcelon Roxas Securities Inc., vs Commissioner of Internal Revenue

GR No. 157064 – August 7, 2006
Facts:
 After petitioner filed its Annual Income Tax Return, an audit investigation conducted by the
Bureau of Internal Revenue (BIR), respondent Commissioner of Internal Revenue (CIR)
issued an assessment for deficiency income tax arising from the disallowance of the item
on salaries, bonuses and allowances as part of the deductible business expense. This
assessment was covered by a Formal Assessment Notice, which, respondent alleges, was
sent to petitioner through registered mail. However, petitioner denies receiving the formal
assessment notice.
 Later, Petitioner was served with a Warrant of Distraint and/or Levy to enforce collection of
the deficiency income tax. Petitioner filed a formal protest against the Warrant of Distraint
and/or Levy, requesting for its cancellation. However, petitioner received a letter from the
respondent denying the protest with finality.
 Petitioner filed a petition for review with the CTA. After due notice and hearing, the CTA
rendered a decision in favor of petitioner (Barcelona). The CTA ruled on the primary issue
of prescription and found it unnecessary to decide the issues on the validity and propriety of
the assessment. It maintained that while a mailed letter is deemed received by the
addressee in the course of mail, this is merely a disputable presumption. It reasoned that
the direct denial of the petitioner shifts the burden of proof to the respondent that the mailed
letter was actually received by the petitioner. The CTA found the BIR records submitted by
the respondent immaterial, self-serving, and therefore insufficient to prove that the
assessment notice was mailed and duly received by the petitioner.
 Respondent moved for reconsideration of the aforesaid decision but was denied by the
CTA in a Resolution. Thereafter, respondent appealed to the Court of Appeals. In reversing
the CTA decision, the Court of Appeals found the evidence presented by the respondent to
be sufficient proof that the tax assessment notice was mailed to the petitioner; therefore the
legal presumption that it was received should apply.
 Petitioner moved for reconsideration of the said decision but the same was denied by the
Court of Appeals
Issue:
 Whether or not the court of appeals was correct in reversing the subject decision of the
court of tax appeals.
Held:
 While the general rule is that factual findings of the Court of Appeals are binding on this
Court, there are, however, recognized exceptions thereto, such as when the findings are
contrary to those of the trial court or, in this case, the CTA.
 Jurisprudence is replete with cases holding that if the taxpayer denies ever having received
an assessment from the BIR, it is incumbent upon the latter to prove by competent
evidence that such notice was indeed received by the addressee. The onus probandi was
shifted to respondent to prove by contrary evidence that the Petitioner received the
assessment in the due course of mail. The Supreme Court has consistently held that
while a mailed letter is deemed received by the addressee in the course of mail, this is
merely a disputable presumption subject to controversion and a direct denial thereof shifts
the burden to the party favored by the presumption to prove that the mailed letter was
indeed received by the addressee (Republic vs. Court of Appeals, 149 SCRA 351).
 The facts to be proved to raise this presumption are (a) that the letter was properly
addressed with postage prepaid, and (b) that it was mailed. Once these facts are
proved, the presumption is that the letter was received by the addressee as soon as
it could have been transmitted to him in the ordinary course of the mail. But if one of
the said facts fails to appear, the presumption does not lie. In the instant case,
Respondent utterly failed to discharge this duty. No substantial evidence was ever
 presented to prove that the assessment notice or other supposed notices subsequent
thereto were in fact issued or sent to the taxpayer.
 What is essential to prove the fact of mailing is the registry receipt issued by the Bureau of
Posts or the Registry return card which would have been signed by the Petitioner or its
authorized representative. And if said documents cannot be located, Respondent at the
very least, should have submitted to the Court a certification issued by the Bureau of Posts
and any other pertinent document which is executed with the intervention of the Bureau of
Posts. This Court does not put much credence to the self serving documentations made by
the BIR personnel especially if they are unsupported by substantial evidence establishing
the fact of mailing.
 While the Court has held that an assessment is made when sent within the prescribed
period, even if received by the taxpayer after its expiration (Coll. of Int. Rev. vs. Bautista,
L-12250 and L-12259, May 27, 1959), this ruling makes it the more imperative that the
release, mailing or sending of the notice be clearly and satisfactorily proved. Mere notations
made without the taxpayer’s intervention, notice or control, without adequate supporting
evidence cannot suffice; otherwise, the taxpayer would be at the mercy of the revenue
offices, without adequate protection or defense (Nava vs. CIR, 13 SCRA 104, January 30,
1965). The failure of the respondent to prove receipt of the assessment by the
Petitioner leads to the conclusion that no assessment was issued. Consequently, the
government’s right to issue an assessment for the said period has already
prescribed.
 Jurisprudence has consistently shown that this Court accords the findings of fact by the
CTA with the highest respect. In Sea-Land Service Inc. v. Court of Appeals, this Court
recognizes that the Court of Tax Appeals, which by the very nature of its function is
dedicated exclusively to the consideration of tax problems, has necessarily developed an
expertise on the subject, and its conclusions will not be overturned unless there has been
an abuse or improvident exercise of authority. Such findings can only be disturbed on
appeal if they are not supported by substantial evidence or there is a showing of gross error
or abuse on the part of the Tax Court. In the absence of any clear and convincing proof to
the contrary, this Court must presume that the CTA rendered a decision which is valid in
every respect.
 Petition is GRANTED. The assailed Decision of the Court of Appeals is hereby REVERSED
and SET ASIDE, and the Decision of the Court of Tax Appeals cancelling the Deficiency
Tax Assessment against Barcelon, Roxas Securitites, Inc. (now known as UPB Securities,
Inc.) for being barred by prescription, is hereby REINSTATED.

10. Fishwealth Canning Corp., vs Commissioner of Internal Revenue

GR No. 179343 – January 21, 2010
Facts:
 The Commissioner of Internal Revenue (respondent), by Letter of Authority, ordered the
examination of the internal revenue taxes of Fishwealth Canning Corp. (petitioner). The
investigation disclosed that petitioner was liable for income tax, value added tax (VAT),
withholding tax deficiencies and other miscellaneous deficiencies.
 Respondent reinvestigated petitioner’s books of accounts and other records of internal
revenue taxes for the purpose of which it issued a subpoena duces tecum requiring
petitioner to submit its records and books of accounts. Petitioner requested the cancellation
of the subpoena on the ground that the same set of documents had previously been
examined.
 As petitioner did not heed the subpoena, respondent thereafter filed a criminal complaint
against petitioner which complaint was dismissed for insufficiency of evidence. Respondent
 sent then petitioner a Final Assessment Notice of income tax and VAT deficiencies which
assessment was contested by petitioner.
 Respondent thereafter issued a Final Decision on Disputed Assessment (FDDA) which
denied petitioner’s letter of protest, apprising it of its income tax and VAT liabilities, and
requesting the immediate payment thereof, inclusive of penalties incident to delinquency.
Respondent added that if petitioner disagreed, it may appeal to the Court of Tax Appeals
(CTA) within thirty (30) days from date of receipt hereof, otherwise our said deficiency
income and value-added taxes assessments shall become final, executory, and
demandable.
 Instead of appealing to the CTA, petitioner filed a Letter of Reconsideration on September
06, 2005. By a Preliminary Collection Letter, respondent demanded payment of petitioner’s
tax liabilities, drawing petitioner to file a Petition for Review before the CTA on October 20,
2005.
 In his Answer, respondent argued, among other things, that the petition was filed out of time
which argument the First Division of the CTA upheld and accordingly dismissed the petition.
Petitioner filed a Motion for Reconsideration which was denied. Consequently, petitioner
filed a petition for review before the CTA En Banc which held that the petition before the
First Division, as well as that before it, was filed out of time.
Issue:
 Whether or not petitioner’s appeal before the CTA was filed out of time.
Held:
 Section 228 of the 1997 Tax Code provides that an assessment may be protested
administratively by filing a request for reconsideration or reinvestigation within thirty
(30) days from receipt of the assessment in such form and manner as may be prescribed
by implementing rules and regulations. Within sixty (60) days from filing of the protest, all
relevant supporting documents shall have been submitted; otherwise, the assessment shall
become final.
 If the protest is denied in whole or in part, or is not acted upon within one hundred eighty
(180) days from submission of documents, the taxpayer adversely affected by the decision
or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the
said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise, the
decision shall become final, executory and demandable.
 Since petitioner received the denial of its administrative protest on August 4, 2005, it had
until September 3, 2005 to file a petition for review before the CTA Division. It filed one,
however, on October 20, 2005, hence, it was filed out of time. For a motion for
reconsideration of the denial of the administrative protest does not toll the 30-day
period to appeal to the CTA.
 Petition is DISMISSED.