G.R. No. 244202 . July 10, 2023.
MANNASOFT TECHNOLOGY CORPORATION, PETITIONER, VS. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

FACTS

The Commissioner of Internal Revenue (CIR) issued deficiency tax assessments against Mannasoft Technology Corporation for calendar year 2008. A Notice of Informal Conference (NIC) and Preliminary Assessment Notice (PAN) were purportedly served on petitioner through a “Ms. Gladys Badocdoc,” a Client Service Assistant. A Formal Assessment Notice (FAN) was later personally served on a reliever security guard, “Angelo Pineda,” on November 16, 2011. Petitioner filed a protest to the FAN on December 22, 2011, and submitted supporting documents on February 20, 2012. Despite this, the CIR issued a Warrant of Distraint and/or Levy (WDL) on October 23, 2012. Petitioner protested the WDL. On November 14, 2013, the BIR sent a letter-reply denying petitioner’s request for reinvestigation and stating it was the “final decision on the matter.” Petitioner received this on November 25, 2013, and filed a Petition for Review before the Court of Tax Appeals (CTA) on December 10, 2013. The CTA Third Division granted the petition and canceled the assessments and WDL, ruling they were void for violating due process as they were not served on authorized representatives. The CIR appealed to the CTA En Banc, which reversed the Third Division, holding that the proper reckoning point for appeal was the receipt of the WDL, and since petitioner failed to appeal within 30 days from the WDL, it deprived the CTA of jurisdiction. Petitioner’s motion for reconsideration was denied.

ISSUE

1. Whether the CTA properly acquired jurisdiction over the petition, i.e., whether petitioner timely filed its Petition for Review before the CTA Third Division.
2. Whether the proper reckoning point for the 30-day period to appeal under Section 228 of the Tax Code is from receipt of the WDL or from receipt of the BIR’s final decision letter-reply.
3. Whether the assessment notices (NIC, PAN, FAN) and the WDL are void for violating due process.

RULING

The Supreme Court granted the petition, reversing the CTA En Banc and reinstating the CTA Third Division’s decision.
1. The Petition for Review before the CTA Third Division was timely filed. The proper reckoning point for the 30-day period to appeal was from petitioner’s receipt of the BIR’s letter-reply dated November 14, 2013, which constituted the final decision on the disputed assessment. Petitioner received this on November 25, 2013, and filed its petition on December 10, 2013, well within the 30-day period.
2. The Supreme Court applied the doctrine in Rizal Commercial Banking Corporation v. Commissioner of Internal Revenue (RCBC), which provides two mutually exclusive options for a taxpayer after filing a protest: (a) file an appeal with the CTA within 30 days after the expiration of the 180-day period for the CIR to act; or (b) await the final decision of the CIR and appeal such decision within 30 days from receipt. Petitioner clearly opted for the second option by repeatedly requesting reinvestigation and awaiting the CIR’s action. The BIR’s letter-reply explicitly stated it was the “final decision,” making it appealable. The issuance of the WDL did not constitute a final decision appealable under Section 228 of the Tax Code.
3. The assessment notices (NIC, PAN, FAN) and the WDL are void. Revenue Regulations No. 12-99 requires that pre-assessment notices (NIC and PAN) and the FAN be served on the taxpayer itself or its duly authorized representative. Service on a client service assistant and a reliever security guard, who were not shown to be authorized representatives, did not constitute valid service. This violated petitioner’s right to due process. The fact that petitioner subsequently protested the FAN did not cure this fatal defect. A void assessment cannot give rise to a valid WDL.