Last 24 April, the Supreme Court, in Commissioner of Internal Revenue v. South Entertainment Gallery Inc. or SEGI, said that in tax disputes, the timely filing of a petition for review before the Court of Tax Appeals or CTA is crucial in determining the court’s jurisdiction.
The case revolved around the issue of whether the petition was filed within the period prescribed by law. The petitioner, SEGI, filed a petition for review with the CTA in response to a disputed assessment issued by the Commissioner of Internal Revenue or CIR.
The CIR argued that the petition was filed out of time and should not be entertained by the CTA.
According to the CIR, the failure to file the petition within the reglementary period rendered the assessment final, executory, and demandable.
SEGI, however, insisted that its petition for review was timely filed. It argued that the appealable decision was the letter dated 28 March 2011, which denied their request for the withdrawal or cancellation of the assessment. SEGI claimed that the filing of their petition on 11 May 2011 was within the 30-day reglementary period counting from the denial of their request.
The CTA en banc ruled in SEGI’s favor, holding that the petition for review was filed on time. The court discussed the relevant provisions of the National Internal Revenue Code or NIRC and the procedural rules governing the filing of protests and appeals.
The CTA referred to Section 228 of the NIRC, which outlines the procedure for protesting assessments and appealing decisions to the CTA. The NIRC states that the taxpayer must respond to the notice of assessment and file a protest within 30 days. If the protest is denied or not acted upon within 180 days, the taxpayer may appeal to the CTA within 30 days.
Moreover, the CTA considered the provisions of the Revised Rules of the Court of Tax Appeals, which specify the period for filing for a petition for review. The rules state that a party adversely affected by a decision or ruling of the CIR may file an appeal with the CTA within 30 days from receipt of the decision or ruling.
Based on these aforementioned provisions, the CTA concluded that SEGI’s petition for review was indeed filed within the prescribed reglementary period. The CTA emphasized that the appealable decision was the denial of SEGI’s request for withdrawal or cancellation of the assessment, and the 30-day period for filing the petition should be reckoned from the receipt of this decision.
The Supreme Court upheld the timeliness of SEGI’s petition for review. The Court clarified that it was the decision or ruling of the CIR on the protest or disputed assessment that was the subject of an appeal by petition for review before the CTA within 30 days from receipt of the decision or ruling.
It is essential for taxpayers to be aware of the reglementary periods prescribed by law and to file their petitions for review within the specified time frame to ensure the jurisdiction of the court.
Understanding the procedural rules and provisions is crucial in protecting taxpayers’ rights and achieving fair resolutions governing tax dispute cases.