CIR vs Farcon Marketing income tax assessment in the amount fo
516, 502.26
June 13, 2008 - Tax Verification Notice
was issued by the BIR, authorizing MR by petitioner
Officer Diokno to verify the Opposition by respondent
respondent’s supporting documents
and pertinent records relative to all its
revenue taxes Issue:
Diokno sent several requests to
respondent WON the CTA erred in cancelling and
June 1, 2010 – Revenue Officers withdrawing the deficiency income tax
Ordonez requested respondent to assessment because the assessment is valid.
submit books fo acounts and other
acctg records necessary for BIR
examination – responden stated in its Ruling:
letter to BIR that the accounting records
and the books of accounts were The subject assessment is a naked
destroyed by typhoons ondoy and assessment or one that is utterly without
pepeng foundation, arbitrary and capricious
Respondent received a Notice of
Informal Conference – with an attached When a report required by law as a basis for
computation fo deficiency tax (511, the assessment of any national internal
441.08) revenue tax shall not be forthcoming within
On 2011, respondent asked the RD the time fixed by the laws or rules and
Valeroso for a period of 30 days to regulations,
reconstruct its accounting records and
dispute or protest its alleged tax liability Or
April 28, 2011 – respondent received an
assessment notice with formal letter of When there is reason to believe that any
demand, demanding the payment of such report is false, incomplete or
516, 502; erroneous,
Respondent sent its protest letter to
petitioner CIR shall assess the proper tax on the BEST
Subsequently, respondent received a EVIDENCE OBTAINABLE
letter from petitioner granting its
request for reinvestigation CIR is mandated to assess the propert tax
Respondent received petitioner’s final on the BEST EVIDENCE that he can obtain in
decision reiterating the assessed tax case of the said situations or scenarios.
deficiency of 516, 502
Respondent filed a petition for review In the absence of the accounting records or
documents necessary for the proper
CTA granted the Petition for Review – detrmination of the tax liability, Sec 6(B) of
cancelled and withdrew the deficiency the NIRC requires that the assessment of
the tax be determined based on Best Courage vs CIR
Evidence Obtainable. Determine whether the act done by CIR is a
quasi-legislative or quasi-judicial?
Assessment issued is a nullity because there Quasi-judicial –
was no valid grant of authority Sec of Finance CTA
A revenue officer assigned to perform Determine action first
assessment functions in any district may, QJ/QL
pursuant to a LETTER OF AUTHORITY issued
byt eh RDO, examine taxpayers to collect
the correct amount of tax or to recommend Hantex –
assessment of any deficiency tax due in the Eaten by termites
same manner that said acts could have Photocopies cannot be used as basis for the
been performed by the RDO himself. assessments. No probative value.
In this case, the authority to examine and Assessments cannot be based on unverified
verify the respondents records for taxable information.
year 2007 was made only pursuant to TVN
dated 2008, signed by the Revenue District Coverage
Officer Francisco Diokno .
Procedure for the refund of VAT
Considering that the said authority was not Admin remedies under VAT system
given by the Regional Director,the subject
tax assessment or examination is a nullity. People vs Tan
Discussions after the Midterm Exams
CIR can make certain amounts of expenses Dates; what happened
When return was prepared; amended, tax
Application of Best evidence obtainable rule paid, when LOA was issued; taxpayer filed a
reply; PN issued; reply; FAN; Protest
Jacinto – taxpayer not able to justify the Petition for Review
loss, CIR estimation at 50%
Process of assessment
Jarcon – BIR did not estimate but disallowed
all expenses;
CIR disallowed all the expenses altogether.
BIR vs Ombudsman
Issuance of RMO
CIR
Taxpayer filed a petition before the RTC.
