CTA turns down memorial chapel's tax claim

THE COURT of Tax Appeals (CTA) has turned down a Cagayan memorial chapel’s challenge to PHP6.939 million in deficiency taxes assessed against it in 2015.  

In its 19-page decision dated March 10 written by Associate Justice Castañeda, the tax court dismissed the petition for review filed by the Ortiz Memorial Chapel Inc.

On October 30, 2015, a formal letter of demand (FLD) with details of discrepancies was issued to the memorial chapel which has been found with an aggregate amount of PHP6.939 million as deficiency income tax, value-added tax, documentary stamp tax, and registration fee, inclusive of legal increments.

In 2017 and 2018, the memorial chapel sent two letters of protest to the Bureau of Internal Revenue (BIR), which on March 12, 2018 informed that the memorial chapel had failed to file a protest within the reglementary period and the tax assessment had already become final and demandable. The memorial chapel then filed a petition for review before the tax court on April 11, 2018.

In ruling against the petition, the tax court said the memorial chapel’s two letters of protest sent to the BIR are both void since they did not conform to requirements such as stating whether it was requesting a reconsideration of the assessment or a reinvestigation. The letters likewise failed to indicate the date of the assessment notice it was disputing or the applicable legal provision on which the protest is based.

As the protests are void, the tax court explained the firm had not validly questioned the BIR’s ruling and that consequentially the appeal to the CTA is premature.

“When a taxpayer files a petition for review before the Court of Tax Appeals without validly contesting the assessment with the Commissioner of Internal Revenue, the appeal is premature and the Court of Tax Appeals has no jurisdiction,” the tribunal said in dismissing the suit. ( Benjamin Pulta)