Aristocrat Franchise Corporation vs CIR

THE ARISTOCRAT FRANCHISE CORPORATION, 

Petitioner,

-versus-

THE COMMISSIONER OF INTERNAL REVENUE, 

Respondent, CTA Case No. 8731

FACTS:

Preliminary Assessment Notice (PAN) for deficiency income tax for taxable year 2006 was issued against petitioner, after replying to PAN, Final Assessment Notice (FAN) was issued as well with Formal Letter of Demand (FLD), demanding payment of the amount of Eleven Million Sixteen Thousand Five Hundred Thirty-Five Pesos and 09/100 (P11,016,535.09).

Petitioner protested the FAN however, petitioner received a Final Notice Before Seizure (FNBS) from respondent seeking to collect the alleged final and executory deficiency assessments of the 2006. Thereafter, a Warrant of Distraint and/or Levy was issued against petitioner. 

Petitioner's application or offer for compromise settlement of its 2006 tax liability on the ground of doubtful validity was disapproved by the National Evaluation Board via Notice of Denial. A request for reconsideration was filed however denied.

Petitioner filed Petition for Review before CTA.

ISSUE:

Whether or not the Court has jurisdiction over the case.

RULING:

YES.

"The Court finds that it has jurisdiction over the  instant case. Section 7(a)(1) of RA No. 1125, as amended, by RA Nos. 9282 and 9503 states: 

SEC. 7. Jurisdiction. - The CTA shall exercise: 

(a) Exclusive appellate jurisdiction to review by appeal, as herein provided: 

( 1) Decisions of the Commissioner of Internal Revenue in cases involving disputed sessments, refunds of internal revenue taxes, fees or other charges, penalties in relation.

Likewise, Section 3(a)(1) of Rule 4 of the Revised Rules of the Court of Tax Appeals, as amended, provides: 

SEC. 3. Cases within the jurisdiction of the Court in Division. - The Court in Division shall exercise: 

(a) Exclusive original over or appellate jurisdiction to review by appeal the following: 

( 1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal.

Moreover, citing the case of the Philippine National Oil Company v. Court of Appeals, it was held that the Court of Tax Appeals has jurisdiction over the decision of the Bureau of Internal Revenue to  enter into a compromise agreement with the taxpayer. The allegations in the instant Petition for Review clearly show that petitioner is disputing the action of respondent in denying the former's offer of compromise of its tax assessment. 

The allegations in the instant Petition for Review are considered as matters arising from the NIRC and other laws being administered by the BIR. Being so, it is appealable to this Court.