Court junks P3.7 billion tax case vs. Robinson's Land Corp.

The Court of Tax Appeals (CTA) has junked a P3.76 billion case against Robinson’s Land Corporation due to an invalid tax assessment by authorities.

In a 17-page decision, the tax court said that the assessment notices sent to the company did not indicate the due dates for payment—a violation of the Tax Code which requires assessment notices to have a provision demanding payment within a prescribed period.

Likewise, the tax court noted the Final Letter of Demand (FLN) did not show the exact amount of tax liability that Robinson’s Land was obligated to pay.

“Given that there was failure to state a date certain for the payment of the deficiency taxes in the subject assessments, as well as to provide a definite amount of taxes to be paid, petitioner's obligation for payment of the alleged deficiency taxes in the subject assessment is not deemed to have legally accrued,”  the CTA said.

“Simply put, petitioner (Robinson's Land) may not be adjudged to account for deficiency taxes which in the first place are not legally demandable,” the CTA added.

The tax court also noted that while the Final Decision on Disputed Assessment stated that the payment of deficiency taxes contained should be made immediately upon receipt by petitioner Robinson's Land, it still failed to provide the exact amount of tax liability which will still be adjusted depending on the time of payment made.

The CTA then invoked the Supreme Court ruling on Commissioner of Internal Revenue vs. Fitness by Design, Inc. which states that “taxpayers must be informed in writing of the law and the facts upon which a tax assessment is based; otherwise, the assessment is void.”

“We cannot condone errant or enterprising tax officials, as they are expected to be vigilant and law-abiding. Wherefore, the instant Petition for Review is hereby granted,” the CTA said.

“Accordingly, the assessments against petitioner for deficiency income tax, value-added tax, expanded withholding tax, withholding tax on compensation, final withholding tax, documentary stamp tax and compromise penalties in the aggregate amount of P3,762,799,564 billion, inclusive of penalties and increments, for fiscal year ended September 30, 2009, are cancelled and set aside,” the CTA added.—AOL, GMA News