GR 225809; (March, 2021) (Digest)
G.R. No. 225809, March 17, 2021
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. SOUTH ENTERTAINMENT GALLERY, INC., RESPONDENT.
FACTS
South Entertainment Gallery, Inc. (South Entertainment), a corporation operating bingo games under a PAGCOR grant, received a Preliminary Assessment Notice for tax deficiencies in 2008. The Commissioner of Internal Revenue (CIR) sent a Formal Letter of Demand and Assessment Notice by registered mail in April 2008, which South Entertainment denied receiving. In June 2008, South Entertainment received a Preliminary Collection Letter demanding payment of tax liabilities. South Entertainment replied, claiming exemption under PAGCOR’s charter and stating it had paid the withholding tax deficiency. In June 2010, the CIR issued a Warrant of Distraint and/or Levy. South Entertainment requested its cancellation in September 2010, reiterating non-receipt of the Final Assessment Notice and its claimed exemption. In March 2011, South Entertainment received a letter from the Revenue District Officer reiterating the tax collection demand. On March 31, 2011, South Entertainment filed a Petition for Review with the Court of Tax Appeals (CTA), arguing the warrant was premature and invalid due to lack of receipt of a Formal Assessment Notice. The CTA Second Division granted the petition, cancelling the assessment and ordering the warrant’s withdrawal, a decision affirmed by the CTA En Banc. The CTA En Banc held the petition was timely filed, reckoning the 30-day appeal period from the March 25, 2011 letter. The CIR filed this Petition, contending the appeal period should be reckoned from the June 22, 2010 receipt of the Warrant of Distraint and Levy, making the March 31, 2011 petition filed 282 days late and thus time-barred.
ISSUE
Whether the Court of Tax Appeals correctly assumed jurisdiction over South Entertainment Gallery, Inc.’s Petition for Review filed on March 31, 2011, specifically, whether the 30-day reglementary period to appeal should be reckoned from the receipt of the Warrant of Distraint and Levy on June 22, 2010, or from the subsequent letter dated March 25, 2011.
RULING
The Supreme Court ruled in favor of the Commissioner of Internal Revenue. The Warrant of Distraint and Levy issued on June 22, 2010, constituted a constructive and final denial of South Entertainment’s belated protest. Consequently, the 30-day period to appeal to the Court of Tax Appeals under Section 11 of Republic Act No. 1125, as amended, should be reckoned from South Entertainment’s receipt of the warrant. Since South Entertainment filed its Petition for Review on March 31, 2011, which was 282 days after the reckoning date, the petition was filed out of time. The Court of Tax Appeals therefore lacked jurisdiction over the appeal. The Supreme Court reversed the CTA En Banc’s Decision and Resolution and dismissed South Entertainment’s Petition for Review for being time-barred.