G.R. No. 255473 . February 13, 2023.
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. MANILA MEDICAL SERVICES, INC. (MANILA DOCTORS HOSPITAL), RESPONDENT.

FACTS

The Commissioner of Internal Revenue (CIR) issued a Preliminary Assessment Notice (PAN) to Manila Medical Services, Inc. (MMS) on October 19, 2010, which MMS protested. A Final Assessment Notice (FAN) was issued on March 25, 2013, which MMS also protested on April 16, 2013. On September 12, 2014, MMS received a Warrant of Distraint or Levy (WDL) demanding payment of alleged deficiency taxes. MMS filed a Petition for Review before the Court of Tax Appeals (CTA), which declared the FAN and WDL null and void. The CIR argued that a Final Decision on Disputed Assessment (FDDA) was the appealable decision and that MMS had received it. The CTA and the CTA En Banc found that the CIR failed to prove MMS received the FDDA and that the assessment was invalid due to the absence of a valid Letter of Authority (LOA) issued to the Revenue Officer who conducted the examination.

ISSUE

Did the CTA En Banc commit any reversible error when it denied the CIR’s Petition for Review?

RULING

No. The Supreme Court denied the CIR’s Petition for Review. The Court held that the WDL was the adverse decision appealable to the CTA, not a FDDA, as the CIR failed to prove MMS received any FDDA. Even assuming receipt, such FDDA would be void for failing to state the facts and legal bases as required by Revenue Regulations. Furthermore, the assessment itself was invalid because no valid Letter of Authority was issued to the Revenue Officer who examined MMS’s records, violating mandatory revenue regulations. The CTA correctly exercised jurisdiction over the case, as its appellate power includes reviewing the validity of warrants of distraint and levy. The factual findings of the CTA, being supported by substantial evidence, are accorded respect and finality.