GLOBAL METAL vs. CIR (Tax 2)

GLOBAL METAL TECH CORPORATION vs. COMMISSIONER OF INTERNAL REVENUE 

CTA Case No. 8329

CTA

Case

No

.

8329

FACTS:

Respondent issued Letter of Authority to examine petitioner's books of accounts and other accounting records for all internal revenue taxes for the period covering October 1, 2005 to September 30, 2006. 

Petitioner was eventually found to be liable for deficiency tax; thus, respondent sent to petitioner a Notice of Informal Conference dated July 16, 2008. On September 12, 2008, RDO issued  an Assessment Notice against petitioner. On February 5, 2009, petitioner received the Preliminary Assessment Notice (PAN).

On February 20, 2009, petitioner protested the PAN by filing a letter dated February 19, 2009 with respondent, disputing the deficiency FWT assessment. Respondent issued the Formal Letter of Demand all dated February 17, 2009, which petitioner received on February 25, 2009.

On May 15, 2009, petitioner filed its protest letter dated May 12, 2009 against the Formal Letter of Demand. Respondent denied petitioner's protest through a letter dated July 12, 2011, which was received by the latter on August 2, 2011. 

ISSUE:

WHETHER OR NOT THE RIGHT OF PETITIONER TO DUE PROCESS WAS VIOLATED BY RESPONDENT WHEN RESPONDENT ISSUED THE FORMAL ASSESSMENT NOTICE BEFORE THE LAPSE OF THE 15- DAY PERIOD FROM DATE OF RECEIPT OF PRELIMINARY ASSESSMENT NOTICE GRANTED BY LAW FOR PETITIONER TO RESPOND TO THE PRELIMINARY ASSESSMENT NOTICE.

RULING:

Yes, the CTA En Banc explained that a protest against the PAN, unlike the protest against the FAN, is not indispensable. A PAN may or may not even be protested to by the taxpayer, and the fact of non-protest shall not in any way make the PAN final and unappealable. Therefore, the issuance of the FAN before the lapse of the 15-day period for the taxpayer to file its protest to the PAN, inflicts no prejudice on the taxpayer for as long as the latter is properly served a FAN and that it was able to intelligently contest the FAN by filing a protest letter within the period provided by 

law. Moreover, this Court observed that petitioner was afforded the procedural due process required by law when it was fully apprised of the legal and factual bases of the assessment issued against it and that petitioner was given the opportunity to substantially protest or dispute the assailed assessments via its protest letter. 

Considering the afore-cited cases and the PAN with attached Details of Discrepancies, petitioner was afforded due process by apprising it of the legal and factual bases of 

the assessment.