CIR versus - GONAZLES

G.R. No. 177279

October 13, 2010
!IR" "I#ISION
$ACS AS O %EIIONER
Pursuant to Letter of Authority dated August 25, 2000 issued by then (petitioner) conducted
a fraud investigation for all internal revenue taxes to ascertain/deterine the tax liabilities of
respondent! A criinal coplaint "as instituted by the #ureau of $nternal %evenue (#$%)
against L&'('!$t "as discovered that L&'(' filed fraudulent tax returns "ith substantial
underdeclarations of taxable incoe for the years )**+, )**, and )***! Assessent notices
together "ith a foral letter of deand dated August +, 2002 "ere sent to L&'('
$ACS AS O RES%ON"EN
L&'(' argued that petitioner is no" estopped fro further ta-ing any action against it and
its corporate officers concerning the taxable years )**+ to )***! .ith the grant of iunity
fro audit fro the copany/s availent 0AP, "hich have a feature of a tax anesty, the
eleent of fraud is negated the oent the #ureau accepts the offer of coproise or
payent of taxes by the taxpayer! $t is also respondent/s contention that the assessent
notices "ere invalid for being unnubered! 1n 2epteber 22, 2003, the 'hief 2tate
Prosecutor issued a %esolution
2+
finding no sufficient evidence to establish probable cause
against respondents L&'(', 'aus and &endo4a! Petitioner appealed to respondent
2ecretary of 5ustice but the latter denied! Petitioner challenged the ruling of respondent
2ecretary via a certiorari petition in the 'A "hich also denied the sae!
ISS&ES RAISE '( %EIIONER
)! Petitioner contends that the assessent notices are valid despite being unnubered
2! Petitioner also argues that respondents availent of (%AP is not a grant of absolute
iunity fro audit and investigation!
ISS&ES RAISE '( RES%ON"EN
)! Petitioner contends that the assessent notices "ere invalid for being unnubered
2! %espondent also argues that "ith the grant of iunity fro audit fro the
copany/s availent of (%AP and 0AP, "hich have a feature of a tax anesty, the
eleent of fraud is negated
R&LING O$ !E S&%RE)E CO&R
)! As to the issue "hether assessent notices "ere invalid for being unnubered, the
2' ruled in favor of petitioner!
6he foral letter of deand calling for payent of the taxpayer/s deficiency tax or
taxes shall st*te t+e ,*ct, t+e -*., ru-es */0 re1u-*t2o/s or 3ur2s4ru0e/ce o/
.+2c+ t+e *ssess5e/t 2s b*se0, ot+er.2se t+e ,or5*- -etter o, 0e5*/0 */0 t+e
/ot2ce o, *ssess5e/t s+*-- be vo20!
77
As it is, the forality of a control nuber in the assessent notice is not a
re8uireent for its validity but rather the contents thereof "hich should infor the
taxpayer of the declaration of deficiency tax against said taxpayer!
2! As to the issue "hether respondent/s availent of the 0AP grants it absolute
iunity fro audit and investigations, the 2' ruled in favor of petitioner!
private respondents cannot invo-e L&'('/s availent of 0AP to foreclose any
subse8uent audit of its account boo-s and other accounting records in vie" of the
strong finding of underdeclaration in L&'('/s payent of correct incoe tax liability
by ore than 309! 6his conclusion finds support in 2ection 2 of %% :o! ,;200) as
"hich provides< A taxpayer "ho has availed of the 0AP shall not be audited except
upon authori4ation and approval of the 'oissioner of $nternal %evenue "hen
there is strong evidence or finding of understateent in the payent of taxpayer/s
correct tax liability by ore than thirty percent (309)
%ERSONAL EN" NOES
#oth the foral letter of deand and the notice of assessent shall be void if the
forer failed to state the fact, the la", rules and regulations or =urisprudence on "hich
the assessent is based, "hich is a andatory re8uireent under 2ection 22, of the
:$%'
2ection 22, of the :$%' provides that the taxpayer shall be infored in "riting of the
la" and the facts on "hich the assessent is ade! 1ther"ise, the assessent is
void!