THE Court of Tax Appeals (CTA) has declined a tax bureau appeal to review a division ruling partially cancelling the tax liabilities of Izone Technologies Philippines dating back to 2008.
In a 31-page decision on May 5, the CTA, sitting en banc, affirmed its First Division’s ruling that the demand being made on Izone had exceeded the three-year prescription period.
The tax court also varied the Commissioner on Internal Revenue (CIR) from collecting any deficiency taxes assessed in 2008 against Izone.
“Internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period,” according to a copy of the ruling written by CTA Associate Justice Jean Marie A. Bacorro-Villena.
The tax court’s Special First Division earlier canceled the Bureau of Internal Revenue (BIR) Fringe Benefits Tax (FBT) assessment on the company, which amounted to P195,199.14, but upheld its assessment of Expanded Withholding Tax (EWT) and Documentary Stamp Tax (DST) for the same year. It ordered the company to pay the BIR P2.5 million in EWT and DST liabilities for 2008, inclusive of penalties and interest.
The division ruling earlier ruled that the last day for the CIR to issue the FBT assessment was April 10, 2011. The company received the assessment a year beyond that date.
“Accordingly, we find no cogent reason to reverse the cancellation of petitioner’s (CIR) deficiency FBT assessment against the respondent (Izone Technologies Philippines),” the court ruled. — John Victor D. Ordoñez