Taxation Law - CTA

Taxation Law Review
Report on Court of Tax Appeals
Submitted By:
Juan Paolo Ollero
Antonio Pagsibigan
Ria Kriselle Petrache
Maria Leonila Villegas
Submitted to:
Atty. Bernaldo
I. POWERS OF THE COURT OF TAX APPEALS
 To require PRODUCTION of papers or documents by subpoena duces tecum;

 To punish for CONTEMPT for the same causes under the same procedure
and with the same penalties provided for in the Rules of Court;
 To summon witnesses by SUBPOENA;
 To SUSPEND collection of tax pending appeal;
 To administer OATH ;
 To issue ORDER authorizing distraint of personal property and levy of real
property;
 To prescribe RULES and regulations for the conduct of its business;
 To receive EVIDENCE;
 To assess DAMAGES against the appellant if the appeal to CTA is found to be
frivolous and dilatory;
 To render DECISION on cases brought before it.
II. JURISDICTION OF THE COURT OF TAX APPEALS
Republic Act No. 1125 was amended by Republic Act No. 9503
Significant changes:
1. It enlarged the organizational structure of the Court of Tax Appeals.
2. The number of justices was increased from 6 to 9.
3. The divisions were also increased from 2 to 3.
Expanded Jurisdiction of the CTA

(Section 7, RA 9282)
1. Exclusive Appellate Jurisdiction to review by appeal
2. Jurisdiction over cases involving criminal offenses
3. Jurisdiction over tax collection cases
Exclusive Appellate Jurisdiction to review by appeal

1. Decisions of the CIR
a) disputed assessments
b) refunds of internal revenue taxes, fees or other charges, penalties in
relation thereto
c) or other matters arising under the National Internal Revenue or other
laws administered by the BIR;
2. Inaction by the Commissioner of Internal Revenue in cases involving

- Same cases as previous but with the qualification of where the NIRC provides
a specific period of action, in which case the inaction shall be deemed a denial
3. Decisions, orders or resolutions of the RTC in local tax cases in the exercise of
their original or appellate jurisdiction;
4. Decisions of the Commissioner of Customs in cases involving
- liability for customs duties,
- fees or other money charges,
- seizure,
- detention or release of property affected,
- fines, forfeitures or other penalties in relation thereto,
- or other matters arising under the Customs Law or other laws administered
by the Bureau of Customs;
5. Decisions of the Central Board of Assessment Appeals in the exercise of its

appellate jurisdiction over cases involving
- the assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals;
6. Decisions of the Secretary of Finance on customs cases elevated to him

automatically for review from decisions of the Commissioner of Customs
which are adverse to the Government under Section 2315 of the Tariff and
Customs Code;
7. Decisions of the Secretary of Trade and Industry, in the case of

nonagricultural product, commodity or article, and the Secretary of
Agriculture in the case of agricultural product, commodity or article,
involving dumping and countervailing duties under Section 301 and 302,
respectively, of the Tariff and Customs Code, and safeguard measures under
Republic Act No. 8800, where either party may appeal the decision to impose
or not to impose said duties.
Jurisdiction over cases involving criminal offenses

1. Exclusive original jurisdiction over all criminal offenses arising from
violations of the National Internal Revenue Code or Tariff and Customs Code
and other laws administered by the Bureau of Internal Revenue or the
Bureau of Customs:
Provided, however, where the principal amount o taxes and fees,
exclusive of charges and penalties, claimed is less than P1M or where
there is no specified amount claimed - shall be tried by the regular
Courts and the jurisdiction of the CTA shall be appellate.
2. Exclusive appellate jurisdiction in criminal offenses:

a. Over appeals from the judgments, resolutions or orders of the RTC in
tax cases :
o originally decided by the RTC or
o In their appellate jurisdiction
Jurisdiction over tax collection cases as herein provided:

1. Exclusive original jurisdiction in tax collection cases involving
final and executory assessments for taxes, fees, charges and
penalties
2. Exclusive appellate jurisdiction in tax collection cases
III. PROCEDURE IN CIVIL CASES
SECTION 1. Review of cases in the Court en banc. – In cases falling under the
exclusive appellate jurisdiction of the Court en banc, the petition for review of a
decision or resolution of the Court in Division must be preceded by the filing of a
timely motion for reconsideration or new trial with the Division. (n)
WHO MAY APPEAL?
1. A party adversely affected by a decision, ruling or the inaction of the: CIR,

Customs, Secretary of Finance, Secretary of Trade and Industry. The adverse
party may appeal to the Court:
by Petition for Review filed within 30 days after receipt of a copy of such
decision or ruling; OR
after expiration of the period fixed by law for the CIR to act on the disputed
assessments, in which case, the inaction is deemed denial.
2. A party adversely affected by a decision or ruling of the Central Board of
Assessment Appeals(CBAA) and the Regional Trial Court (RTC) in the
exercise of their appellate jurisdiction.
- The adverse party may appeal to the Court by filing before it a petition for
review within thirty days from receipt of a copy of the questioned decision or
ruling.
MODES OF APPEAL
 By filing a Petition for Review under Rule 42 of the Rules of Court, within
30 days from the receipt of the decision or ruling or from the expiration
of the period fixed by law or inaction of the CIR on disputed assessments
or claim for refund of internal revenue taxes erroneously or illegally
collected.
15 days from receipt of decision or resolution of the Court in Division
on a motion for reconsideration or new trial.
30 days from from a decision or ruling of the CBAA of the RTC in the
exercise of their appellate jurisdiction.
Remedy of a party affected by a ruling or decision of a Division of the CTA

 The adverse party may file a motion for reconsideration or new trial before
the same Division of the CTA within fifteen (15) days from notice thereof.
Remedy of a party affected by a decision or ruling of the CTA en banc
 The adverse party may file a Petition for Review on Certiorari under Rule 45
of the 1997 Rules of Civil Procedure, through a verified petition before the
Supreme Court, within 15 days from receipt thereof.
EFFECT OF THE PERFECTION OF AN APPEAL

 GR: An appeal to the CTA shall not suspend payment, levy, distraint and/or
sale of any property of taxpayer
 XPN: However, the Court may suspend or restrain collection of tax and
require the taxpayer either to:
1. To deposit (with the court) the amount claimed
2. To file a surety bond (with the court) for not more than double the amount
of the tax due.
Collection of taxes should not be enjoined except upon clear showing of a right
to an exemption.
 Reason: Lifeblood theory (Northern Lines Inc. v. CA, G.R. No. L-41376-77, June
29, 1988).
 GR: Collection of internal revenue taxes and customs duties cannot be
enjoined.
 XPN: in the opinion of the court, the collection may jeopardize the interest of
the Gov’t and/or the taxpayer, the court may suspend the collection and
require the taxpayer to deposit the amount claimed or file a surety bond.
All criminal actions before the Court in Division in the exercise of its original
jurisdiction shall be instituted by the filing of an information in the name of the
People of the Philippines.
 In criminal actions involving violations of the National Internal Revenue
Code (NIRC) and other laws enforced by the Bureau of Internal Revenue, the
Commissioner of Internal Revenue must approve their filing.
 In criminal actions involving violations of the Tariff and Customs Code (TCC)
and other laws enforced by the Bureau of Customs, the Commissioner of
Customs must approve their filing
APPEALS AND PERIODS

 An appeal to the Court in criminal cases decided by a Regional Trial Court in
the exercise of its original jurisdiction shall be taken by filing a notice of
appeal pursuant to Sections 3(a) and 6, Rule 122 of the Rules of Court within
fifteen (15) days from receipt of a copy of the decision or final order with
the court which rendered the final judgment or order appealed from and by
serving a copy upon the adverse party. The Court in Division shall act on the
appeal.
 An appeal to the CTA en banc in criminal cases decided by the Court in
Division or the Regional Trial Courts in the exercise of their appellate
jurisdiction shall be taken by filing a petition for review as provided in Rule
43 of the Rules of Court within fifteen (15) days from receipt of a copy of
the decision or resolution appealed from.
Summary of the CTA procedure:
CASE DOCTRINES
CE Casecnan Water and Energy Company v. Province of Nueva Ecija (2015)

 It is the CTA which has the power to rule on a Petition for Certiorari assailing
an interlocutory order of the RTC relating to a local tax case.
Smart Communications, Inc. vs Municipality of Malvar, Batangas (2014)

 The CTA’s jurisdiction is limited to questions over “decisions, orders or
resolutions of the Regional Trial Courts in local tax cases originally decided
or resolved by them in the exercise of their original or appellate jurisdiction.”
DUTY FREE PHILIPPINES vs. BIR

 The Supreme Court has no jurisdiction to review a decision rendered by a
division of the CTA. The exclusive appellate jurisdiction over decisions
rendered by a CTA division is vested on the CTA en banc. A party adversely
affected by the decision of the CTA division may, on motion for
reconsideration, file a petition for review with the CTA en banc. Thereafter,
the decision or ruling of the CTA en banc may be elevated to the Supreme
Court. No decision of the CTA division may be elevated to the Supreme Court
under Rule 45 of the Rules of Civil Procedure without passing through the
CTA En Banc.
PHIL. AMERICAN LIFE AND GENERAL INSURANCE COMPANY vs SEC OF

FINANCE
 Decision of the Secretary of Finance falls under “other matters, which is
appealable to the CTA. The CIR’s power to interpret tax laws is subject to
review by the Secretary of Finance under Section 4 of the Tax Code. The
decision of the Secretary of Finance is appealable to the CTA as this falls
under the ambit of “other matters” arising under the Tax Code or other laws
administered by the BIR under Sec. 7(a)(1) of RA 1125.
 The CTA is granted with powers of certiorari. The CTA may rule on the
validity of a particular administrative rule or regulation so long as it is within
its appellate jurisdiction. The CTA may now rule not only on the propriety of
an assessment or tax treatment of a certain transaction, but also on the
validity of the revenue regulation or revenue memorandum circular on
which the assessment is based.

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Taxation Law Review

Report on Court of Tax Appeals

 To require PRODUCTION of papers or documents by subpoena duces tecum;

II. JURISDICTION OF THE COURT OF TAX APPEALS

Expanded Jurisdiction of the CTA

Exclusive Appellate Jurisdiction to review by appeal

2. Inaction by the Commissioner of Internal Revenue in cases involving

5. Decisions of the Central Board of Assessment Appeals in the exercise of its

6. Decisions of the Secretary of Finance on customs cases elevated to him

7. Decisions of the Secretary of Trade and Industry, in the case of

Jurisdiction over cases involving criminal offenses

2. Exclusive appellate jurisdiction in criminal offenses:

Jurisdiction over tax collection cases as herein provided:

III. PROCEDURE IN CIVIL CASES

WHO MAY APPEAL?

1. A party adversely affected by a decision, ruling or the inaction of the: CIR,

Remedy of a party affected by a ruling or decision of a Division of the CTA

EFFECT OF THE PERFECTION OF AN APPEAL

APPEALS AND PERIODS

Summary of the CTA procedure:

CE Casecnan Water and Energy Company v. Province of Nueva Ecija (2015)

Smart Communications, Inc. vs Municipality of Malvar, Batangas (2014)

DUTY FREE PHILIPPINES vs. BIR

PHIL. AMERICAN LIFE AND GENERAL INSURANCE COMPANY vs SEC OF

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