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G.R. No. 165451. December 3, 2014.*

 
LG ELECTRONICS PHILIPPINES, INC., petitioner, vs.
COMMISSIONER OF INTERNAL REVENUE, respondent.

Taxation; Tax Amnesty; Taxpayers who availed themselves of

the tax amnesty program are entitled to the immunities and
privileges under Section 6 of the law.—Taxpayers who availed
themselves of the tax amnesty program are entitled to the
immunities and privileges under Section 6 of the law: SEC. 6.
Immunities and Privileges.—Those who availed themselves of the
tax amnesty under Section 5 hereof, and have fully complied with
all its conditions shall be entitled to the following immunities and
privileges: (a) The taxpayer shall be immune from the payment of
taxes, as well as additions thereto, and the appurtenant civil,
criminal or administrative penalties under the National Internal
Revenue Code of 1997, as amended, arising from the failure to
pay any and all internal revenue taxes for taxable year 2005 and
prior years. (b) The taxpayer’s Tax Amnesty Return and the
SALN as of December 31, 2005 shall not be admissible as
evidence in all proceedings that pertain to taxable year 2005 and
prior years, insofar as such proceedings relate to internal revenue
taxes, before judicial, quasi-judicial or administrative bodies in
which he is a defendant or respondent, and except for the purpose
of ascertaining the net worth beginning January 1, 2006, the
same shall not be examined, inquired or looked into by any person
or government office. However, the taxpayer may use this as a
defense, whenever appropriate, in cases brought against him. (c)
The books of accounts and other records of the taxpayer for the
years covered by the tax amnesty availed of shall not be
examined: Provided, That the Commissioner of Internal Revenue
may authorize in writing the examination of the said books of
accounts and other records to verify the validity or correctness of
a claim for any tax refund, tax credit (other than refund or credit
of taxes withheld on wages), tax incentives, and/or exemptions
under existing laws. All these immunities and privileges shall not
apply where the person failed to file a SALN and the Tax
Amnesty Return, or where the amount of net worth as of
December 31, 2005 is proven to be under-

_______________

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*  SECOND DIVISION.

512

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

stated to the extent of thirty percent (30%) or more, in

accordance with the provisions of Section 3 hereof.
Same; Same; Words and Phrases; A tax amnesty is a general
pardon or the intentional overlooking by the State of its authority
to impose penalties on persons otherwise guilty of violation of a tax
law.—In several cases, this court explained the nature of a tax
amnesty. In Metropolitan Bank and Trust Co. v. Commissioner of
Internal Revenue, 595 SCRA 234 (2009): A tax amnesty is a
general pardon or the intentional overlooking by the State of its
authority to impose penalties on persons otherwise guilty of
violation of a tax law. It partakes of an absolute waiver by the
government of its right to collect what is due it and to give tax
evaders who wish to relent a chance to start with a clean slate. A
tax amnesty, much like a tax exemption, is never favored or
presumed in law. The grant of a tax amnesty, similar to a tax
exemption, must be construed strictly against the taxpayer and
liberally in favor of the taxing authority.
Same; Same; Under Republic Act (RA) No. 9480 and Bureau
of Internal Revenue (BIR) Memorandum Circular No. 55-2007, the
qualified taxpayer may immediately avail of the immunities and
privileges upon submission of the required documents.—Under
Republic Act No. 9480 and BIR Revenue Memorandum Circular
No. 55-2007, the qualified taxpayer may immediately avail of the
immunities and privileges upon submission of the required
documents. This is clear from Section 2 of Republic Act No. 9480:
SEC. 2. Availment of the Amnesty.—Any person, natural or
juridical, who wishes to avail himself of the tax amnesty
authorized and granted under this Act shall file with the Bureau
of Internal Revenue (BIR) a notice and Tax Amnesty Return
accompanied by a Statement of Assets, Liabilities and Net Worth
(SALN) as of December 31, 2005, in such form as may be
prescribed in the implementing rules and regulations (IRR) of this
Act, and pay the applicable amnesty tax within six months from
the effectivity of the IRR.
Same; Same; Only final and executory judgments are excluded
from the coverage of the tax amnesty program.—The law is clear.
Only final and executory judgments are excluded from the
coverage of the tax amnesty program, hence: SEC. 8. Exceptions.

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—The tax amnesty provided in Section 5 hereof shall not extend

to the following persons or cases existing as of the effectivity of
this Act: . . . .

513

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

(f) Tax cases subject of final and executory judgment by the

courts. (Emphasis supplied) This exception was reproduced in the
Implementing Rules and Regulations of the law: SEC. 5.
Exceptions.—The tax amnesty shall not extend to the following
persons or cases existing as of the effectivity of RA 9480: . . . . 7.
Tax cases subject of final and executory judgment by the courts.
We hold that only cases that involve final and executory judgments
are excluded from the tax amnesty program.
Same; Income Taxation; Words and Phrases; In the seminal
case of Fisher v. Trinidad, 43 Phil. 973 (1922), the Supreme Court
(SC) defined income tax as “a tax on the yearly profits arising from
property, professions, trades, and offices.”—Income tax is different
from withholding tax, with both operating in distinct systems. In
the seminal case of Fisher v. Trinidad, 43 Phil. 973 (1922), this
court defined income tax as “a tax on the yearly profits arising
from property, professions, trades, and offices.” Otherwise stated,
income tax is the “tax on all yearly profits arising from property,
professions, trades or offices, or as a tax on a person’s income,
emoluments, profits and the like.”
Same; Withholding Tax; Words and Phrases; Withholding tax
is a method of collecting income tax in advance.—Withholding tax
is a method of collecting income tax in advance. “In the operation
of the withholding tax system, the payee is the taxpayer, the
person on whom the tax is imposed, while the payor, a separate
entity, acts no more than an agent of the government for the
collection of the tax in order to ensure its payment. Obviously, the
amount thereby used to settle the tax liability is deemed sourced
from the proceeds constitutive of the tax base.” There are three
reasons for the utilization of the withholding tax system: “first, to
provide the taxpayer a convenient manner to meet his probable
income tax liability; second, to ensure the collection of income tax
which can otherwise be lost or substantially reduced through
failure to file the corresponding returns[;] and third, to improve
the government’s cash flow.”
Remedial Law; Civil Procedure; Parties; The Office of the
Solicitor General (OSG) is the proper party to represent the

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interests of the government through the Bureau of Internal

Revenue (BIR).—We find that the Office of the Solicitor General is
the proper party to represent the interests of the government
through the Bureau of

514

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

  Internal Revenue. The Legal Division of the Bureau of

Internal Revenue should be mindful of this procedural lapse in
the future. However, records show that the Office of the Solicitor
General has been apprised of developments in the case since the
beginning of the proceedings. We, thus, rule that the interests of
the government have been duly protected.

PETITION for review on certiorari of the decision and

resolution of the Court of Tax Appeals.
The facts are stated in the opinion of the Court.
  Rodrigo, Berenguer & Guno for petitioner.
  Philip A. Mayo for respondent.

 
LEONEN, J.:
 
This case involves the determination of whether
petitioner LG Electronics Philippines, Inc. is entitled to the
immunities and privileges granted under Tax Amnesty Act
of 1997.
This is a Petition for Review on Certiorari1 assailing the
Court of Tax Appeals’ Decision2 dated May 11, 2004 and
Resolution3 dated September 22, 2004.
LG Electronics Philippines, Inc. (LG) is a corporation
duly organized and existing under the laws of the
Philippines.4
On March 21, 1998, LG received a formal assessment
notice and demand letter from the Bureau of Internal
Revenue.

_______________

1  Rollo, pp. 55-82.

2  Id., at pp. 86-104. The case was docketed as C.T.A. Case No. 5715.
The decision was penned by Associate Justice Juanito C. Castañeda, Jr.
and concurred in by Presiding Justice Ernesto D. Acosta and Associate
Justice Lovell R. Bautista.
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3   Id., at pp. 119-127. The resolution was signed by Presiding Justice

Ernesto D. Acosta and Associate Justices Lovell R. Bautista and Juanito
C. Castañeda, Jr.
4  Id., at pp. 58 and 86.

515

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

LG was assessed deficiency income tax of

P267,365,067.41 for the taxable year of 1994.5
The deficiency was computed on the basis of (a)
disallowed interest expenses for being unsupported; (b)
disallowed salary expenses for not being subjected to
withholding tax on compensation; (c) imputation of alleged
undeclared sales; and (d) disallowed brokerage fees for not
being subjected to expanded withholding tax.6 The
Commissioner of Internal Revenue computed the deficiency
as follows:7
alt
 

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5  Id., at p. 86.
6  Id., at pp. 86-87.
7  Id., at p. 87.

516

516 SUPREME COURT REPORTS ANNOTATED

LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

LG, through its external auditor, Sycip Gorres Velayo &

Company (SGV), filed on April 17, 1998 an administrative
protest with the Bureau of Internal Revenue against the
tax assessment.8
On June 16, 1998, LG filed a supplemental protest. It
requested for a reconsideration and reinvestigation of the
tax assessment. It claimed that the assessment did not
have factual and legal bases. LG also subsequently
submitted supporting documents.9
Without waiting for the Commissioner of Internal
Revenue’s resolution of the protest, LG filed a Petition for
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Review before the Court of Tax Appeals on January 11,

1999.10
The Commissioner of Internal Revenue argued before
the Court of Tax Appeals that the assessment issued was
in accordance with law since the interest expenses claimed
by LG were unsupported by sufficient proof. LG had
undeclared income. Brokerage fees and other charges were
not subjected to expanded withholding tax. Moreover, the
details in the assessment notice substantially complied
with the provisions of Section 228 of the Tax Code, the
taxpayer having been informed in writing of the law and
the facts on which the assessment was based.11
Meanwhile, the Commissioner of Internal Revenue
issued the Report dated March 3, 1999, which
recommended the reduction of LG’s liability for deficiency
income tax to P10,557,736.28.12
In its Decision dated May 11, 2004, the Court of Tax
Appeals ruled that LG was liable for the payment of
P27,181,887.82, representing deficiency income tax for
taxable year 1994, in-

_______________

8  Id.
9  Id., at pp. 87-88.
10  Id., at p. 88.
11  Id.
12  Id.

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

cluding 20% delinquency interest computed from March

18, 1998.13
According to the Court of Tax Appeals, “[w]hile
petitioner submitted documents to substantiate its interest
expense by bank statements, bank debit memoranda and
letters of authority to debit its account, computations of
interest and bank reconciliation, it failed to submit in
evidence a vital document, which is the loan agreement.
Except for a photocopy of a pre-marked document . . . [,] the
court is unable to find any document purporting to be a
loan agreement.”14
The Court of Tax Appeals summarized LG’s deficiency
income tax:15
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alt
 
The dispositive portion of the Court of Tax Appeals’
decision reads:

_______________

13  Id., at p. 104.
14  Id., at p. 93.
15  Id., at p. 103.

518

518 SUPREME COURT REPORTS ANNOTATED

LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

Accordingly, petitioner is ORDERED to PAY the respondent

Commissioner of Internal Revenue the amount of P27,181,887.82
representing petitioner’s deficiency income tax for the taxable
year 1994, plus 20% delinquency interest from March 18, 1998
until the amount is fully paid pursuant to Section 249(c)(3) of the
1994 Tax Code.
SO ORDERED.16

 
LG filed a Motion for Partial Reconsideration17 on June
4, 2004. On September 22, 2004, the Court of Tax Appeals
partially granted the Motion.18 It reduced LG’s liability to
P27,054,879.11.19 The liability was reduced as follows:20
 
alt

_______________

16  Id., at p. 104.
17  Id., at pp. 105-118.
18  Id., at p. 127.
19  Id.
20  Id., at p. 126.

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Internal Revenue

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alt
 
On November 18, 2004, LG filed the present Petition for
Review on Certiorari.21 On January 19, 2005, the
Commissioner of Internal Revenue was required to file its
Comment.22 This Comment23 was noted on March 1,
2006.24 Petitioner was then required to submit its Reply.25
After receipt of its Reply,26 this court resolved to require
the parties to submit their Memoranda.27
Petitioner filed a Manifestation dated January 29, 2008
stating that it availed itself of the tax amnesty provided
under Republic Act No. 948028 by paying the total amount
of P8,647,565.50.29 In addition, the Bureau of Internal
Revenue, through Assistant Commissioner James Roldan,
issued a ruling30 on January 25, 2008, which held that
petitioner complied with the provisions of Republic Act No.
9480.31 Petitioner is, thus, entitled to the immunities and
privileges provided for under the law including “civil,
criminal or administrative penalties under the National
Internal Revenue Code

_______________

21  Id., at p. 55.
22  Id., at p. 170.
23  Id., at pp. 181-185.
24  Id., at p. 187.
25  Id.
26  Id., at pp. 197-206.
27  Id., at p. 208.
28   An Act Enhancing Revenue Administration and Collection by
Granting an Amnesty on All Unpaid Internal Revenue Taxes Imposed by
the National Government for Taxable Year 2005 and Prior Years.
29  Rollo, p. 256. Petitioner stated that it paid P500,000.00 on October
26, 2007 and P8,147,565.50 on January 14, 2008.
30  Id., at pp. 267-272.
31  Id., at p. 257.

520

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

of 1997 . . . arising from the failure to pay any and all

internal revenue taxes for taxable year 2005 and prior

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years.”32
The following documents were attached to petitioner’s
manifestation: (1) Notice of Availment of Tax Amnesty;33
(2) Tax Amnesty Return (BIR Form No. 2116);34 (3) Tax
Amnesty Payment Form (BIR Form No. 0617);35 (4)
Statement of Assets, Liabilities and Net Worth (SALN);36
and (5) BTR-BIR deposit slip.37
Respondent was required to comment on the
Manifestation within 10 days from notice.38 According to
respondent, petitioner cannot claim the tax amnesty
provided under Republic Act No. 9480 for the following
reasons: (1) accounts receivable by the Bureau of Internal
Revenue as of the date of amnesty are not covered since
these constitute government property; (2) cases that have
already been favorably ruled upon by the trial court or
appellate courts prior to the availment of tax amnesty are
not covered; and (3) petitioner’s case involves withholding
taxes that are not covered by the Tax Amnesty Act.39
The parties raised the following original issues in their
pleadings:
(1) Whether questions of fact may be touched upon in a
Petition for Review on Certiorari under Rule 45 of the
Rules of Court;

i. Whether . . . the Honorable Court of Tax Appeals, while

holding the amount of P120,985.99 as a valid deduction
representing a portion of

_______________

32  Id.
33  Id., at p. 260.
34  Id., at p. 261.
35  Id., at p. 262.
36  Id., at p. 263.
37  Id., at p. 264.
38  Id., at p. 279.
39  Id., at pp. 287-288.

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

employees benefits, erred in disallowing the amount of

P1,754,860.36 as deduction from the gross income for alleged

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failure of the petitioner to properly and substantially support the

same by evidence[;] [and]
ii. Whether . . . the Honorable Court of Tax Appeals, while
holding the amount of P185,333.01 as a valid deduction
representing brokerage fees not subject to 5% withholding tax,
erred in disallowing expenses for allege[d] failure of the petitioner
to duly support the claim with official receipts.40

 
(2) Whether the Court of Tax Appeals erred in ruling that
interest expense is deductible from gross income only if
supported by a written agreement of the indebtedness,
which includes a stipulation for the payment of interest;
and
 
(3) Whether the Court of Tax Appeals erred in ruling that
LG Electronics cannot claim the amount of P6,989,338.00
as deduction from its gross income for alleged failure to
withhold income tax on accrued bonuses.
 
However, in view of petitioner’s Manifestation stating
that it availed of the tax amnesty provided under Republic
Act No. 9480, the only issue for disposition is whether
petitioner is entitled to the immunities and privileges under
the Tax Amnesty Law or Republic Act No. 9480.
We deny the Petition for being moot and academic.
 
I
Petitioner claimed that it perfected the availment of tax
amnesty under Republic Act No. 9480 when it paid the
correct amount and submitted the required documents. It
also relied

_______________

40  Id., at pp. 229-230.

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

on the Bureau of Internal Revenue’s ruling dated

January 25, 2008, which categorically ruled on petitioner’s
tax amnesty. Pertinent provisions of the ruling state:

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On the basis of the foregoing, LGE should pay a tax amnesty

rate equivalent to five percent (5%) of its total declared networth
as of Balance Sheet dated December 31, 2005. Per attached
certified true copy of Balance Sheet of LGE dated December 31,
2005, LGE has a total declared networth of One Hundred Seventy-
Two Million Nine Hundred Fifty-One Thousand Three Hundred
Ten Pesos (P172,951,310.00). As such, LGE is liable for the
amount of Eight Million Six Hundred Forty-Seven Thousand Five
Hundred Sixty-Five Pesos and Fifty Centavos (P8,647,565.50).
It appears that LGE initially paid the amount of Five Hundred
Thousand Pesos (P500,000.00) on October 26, 2007 when it first
availed of the tax amnesty and it subsequently paid the amount of
Eight Million One Hundred Forty-Seven Thousand Five Hundred
Sixty-Five Pesos and Fifty Centavos (P8,147,565.50) on January
11, 2008 when it amended its tax amnesty returns. As such, LGE
has fully paid its liabilities under the Act.
....
Considering that LGE has paid the amnesty tax due for
corporation and has submitted its tax amnesty forms to Revenue
District Office No. 47 of the BIR of Pasig City, there is deemed full
compliance with the provisions of the Act. As such, LGE is
entitled to the immunities and privileges provided for under
Section 6 of the Act and Section 10 of RMC No. 55-2007 which
provides, among others, immunity from payment of tax liabilities,
as well as additions thereto, and the appurtenant civil, criminal
or administrative penalties under the National Internal Revenue
Code of 1997, as amended, arising from its failure to pay any and
all internal revenue taxes for taxable year 2005 and prior years.
This includes immu-

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

nity from payment of any internal revenue tax liability except

those provided for under Section 5 of the Act.41

 
On the other hand, respondent’s counsel from BIR
Revenue Region No. 7 Legal Division argued that
petitioner cannot avail itself of the tax amnesty program
under Republic Act No. 9480. In its Comment on the
Manifestation dated January 29, 2008, it said that:

Under Question No. 47 of Revenue Memorandum Circular 69-

2007, delinquent accounts/accounts receivable, including unpaid

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self-assessed taxes, in the records of the BIR which are already

accounts receivable of the BIR/assets of the government as of date
of amnesty are NOT COVERED by the tax amnesty because the
same are already properties of the government prior to/upon
taxpayer’s date of amnesty availment. Further, Question No. 49 of
the same revenue issuance likewise states that tax assessments
that are disputed administratively or judicially are, as a general
rule, covered by the tax amnesty, except those cases excluded
from the coverage of the Tax Amnesty Program as discussed in
this Circular and those cases involving issues that have already
been ruled by the trial court/appellate court in favor of the
BIR/Government prior to the taxpayer’s availment of the amnesty
law. It is to be emphasized that the case of the herein Petitioner
had already been resolved by the Court of Tax Appeals under CTA
Case No. 5715 as early as 11 May 2004[.]
Further, Section 8 of Republic Act No. 9480 specifically
provides for the exception to the coverage of the Tax Amnesty
Program, one of which is the withholding agents with respect to
their withholding tax liabilities. . . .
It is crystal clear from the foregoing provisions of Republic Act
No. 9480 that withholding taxes are not covered by the amnesty
program. Since the case of the Petitioner also involves withholding
taxes, the Respondent could not claim immunity under Republic
Act No. 9480. The Bu-

_______________

41  Id., at pp. 269-272.

524

524 SUPREME COURT REPORTS ANNOTATED

LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

reau of Internal Revenue does not have the power to grant

immunity for those types of taxes which are not covered by the
tax amnesty law.42 (Emphasis in the original, underscoring
supplied)

 
This court finds that petitioner has properly availed itself
of the tax amnesty granted under Republic Act No. 9480.
 
The pertinent provisions on the grant and availment of
tax amnesty state:

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SECTION 1. Coverage.—There is hereby authorized and

granted a tax amnesty which shall cover all national internal
revenue taxes for the taxable year 2005 and prior years, with or
without assessments duly issued therefore, that have remained
unpaid as of December 31, 2005: Provided, however, That the
amnesty hereby authorized and granted shall not cover persons or
cases enumerated under Section 8 hereof.
SEC. 2. Availment of the Amnesty.—Any person, natural or
juridical, who wishes to avail himself of the tax amnesty
authorized and granted under this Act shall file with the Bureau
of Internal Revenue (BIR) a notice and Tax Amnesty Return
accompanied by a Statement of Assets, Liabilities and Net Worth
(SALN) as of December 31, 2005, in such form as may be
prescribed in the implementing rules and regulations (IRR) of this
Act, and pay the applicable amnesty tax within six months from
the effectivity of the IRR.
....
SEC. 5. Grant of Tax Amnesty.—Except for the persons or
cases covered in Section 8 hereof, any person, whether natural or
juridical, may avail himself of the benefits of tax amnesty under
this Act, and pay the amnesty tax due thereon, based on his net
worth as of December 31, 2005 as declared in the SALN as of said
period, in accordance with the following schedule of am-

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42  Id., at pp. 287-288.

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Internal Revenue

nesty tax rates and minimum amnesty tax payments required:

alt

 
Taxpayers who availed themselves of the tax amnesty
program are entitled to the immunities and privileges
under Section 6 of the law:

SEC. 6. Immunities and Privileges.—Those who availed

themselves of the tax amnesty under Section 5 hereof, and have
fully complied with all its conditions shall be entitled to the
following immunities and privileges:
(a) The taxpayer shall be immune from the payment of taxes,
as well as additions thereto, and the appurtenant civil, criminal

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or administrative penalties under the National Internal Revenue

Code of 1997, as amended, arising from the failure to pay any and
all internal revenue taxes for taxable year 2005 and prior years.
(b) The taxpayer’s Tax Amnesty Return and the SALN as of
December 31, 2005 shall not be admissible as

526

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LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

  evidence in all proceedings that pertain to taxable year 2005

and prior years, insofar as such proceedings relate to internal
revenue taxes, before judicial, quasi-judicial or administrative
bodies in which he is a defendant or respondent, and except for
the purpose of ascertaining the net worth beginning January 1,
2006, the same shall not be examined, inquired or looked into by
any person or government office. However, the taxpayer may use
this as a defense, whenever appropriate, in cases brought against
him.
(c) The books of accounts and other records of the taxpayer for
the years covered by the tax amnesty availed of shall not be
examined: Provided, That the Commissioner of Internal Revenue
may authorize in writing the examination of the said books of
accounts and other records to verify the validity or correctness of
a claim for any tax refund, tax credit (other than refund or credit
of taxes withheld on wages), tax incentives, and/or exemptions
under existing laws.
All these immunities and privileges shall not apply where the
person failed to file a SALN and the Tax Amnesty Return, or
where the amount of net worth as of December 31, 2005 is proven
to be understated to the extent of thirty percent (30%) or more, in
accordance with the provisions of Section 3 hereof.

 
In addition to the above provisions of law, BIR Revenue
Memorandum Circular (RMC) No. 55-2007,43 which
reproduces the Department of Finance Department Order
29-07,44 provides:

_______________

43   Publishing the Full Text of Department Order No. 29-07 Dated

August 15, 2007, “Implementing Rules and Regulations (IRR) of Republic
Act (RA) No. 9480,” Otherwise Known as “Tax Amnesty Act of 2007.”
44  Implementing Rules and Regulations (IRR) of Republic Act (RA) No.
9480 (2007).

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527

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SEC. 3. Taxes Covered.—The tax amnesty shall cover all

national internal revenue taxes imposed by the National
Government for the taxable year 2005 and prior years, with or
without assessments duly issued therefor, that have remained
unpaid as of December 31, 2005.
SEC. 4. Who May Avail of Tax Amnesty.—The following
may avail of the tax amnesty under RA 9480:
1. Individuals, whether resident or nonresident citizens, or
resident or nonresident aliens;
2. Estates and trusts;
3. Corporations;
4. Cooperatives and tax exempt entities that have become
taxable as of December 31, 2005; and
5. Other juridical entities including partnerships.
For this purpose, an individual taxpayer in his/her own
capacity shall be treated as a different taxpayer when he acts as
administrator/executor of the estate of a deceased taxpayer. The
pertinent provisions of Sec. 236 of the Tax Code on the
registration of the estate of the decedent by the administrator or
executor and the issuance of new TIN shall be complied with.
Therefore, an individual taxpayer, seeking to avail of the tax
amnesty and who at the same time is an executor or
administrator of the estate of a deceased taxpayer who would also
like to avail of the tax amnesty, shall file two (2) separate
amnesty tax returns, one for himself as a taxpayer and the other
in his capacity as executor or administrator of the estate of the
decedent with respect to the revenue and other income earned or
received by the estate.
....
RULE III
AVAILMENT AND PAYMENT OF AMNESTY
 
SEC. 6. Method of Availment of Tax Amnesty.—

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1. Forms/Documents to be filed.—To avail of the general tax

amnesty, concerned taxpayers shall file the following
documents/requirements:
a. Notice of Availment in such form as may be prescribed by
the BIR.
b. Statements of Assets, Liabilities and Net Worth (SALN) as
of December 31, 2005 in such form, as may be prescribed by the
BIR.
c. Tax Amnesty Return in such form as may be prescribed by
the BIR.
2. Place of Filing of Amnesty Tax Return.—The Tax
Amnesty Return, together with the other documents stated in
Sec. 6(1) hereof, shall be filed as follows:
a. Residents shall file with the Revenue District Officer
(RDO)/Large Taxpayer District Office of the BIR which has
jurisdiction over the legal residence or principal place of business
of the taxpayer, as the case may be.
b. Nonresidents shall file with the office of the Commissioner of
the BIR, or with any RDO.
c. At the option of the taxpayer, the RDO may assist the
taxpayer in accomplishing the forms and computing the taxable
base and the amnesty tax payable, but may not look into, question
or examine the veracity of the entries contained in the Tax
Amnesty Return, Statement of Assets, Liabilities and Net Worth,
or such other documents submitted by the taxpayer.
3. Payment of Amnesty Tax and Full Compliance.—Upon
filing of the Tax Amnesty Return in accordance with Sec. 6(2)
hereof, the taxpayer shall pay the amnesty tax to the authorized
agent bank or in the absence thereof, the Collection Agent or duly
authorized Treasurer of the city or municipality in which such
person has his legal residence or principal place of business.

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The RDO shall issue sufficient Acceptance of Payment Forms,

as may be prescribed by the BIR for the use of — or to be
accomplished by — the bank, the collection agent or the
Treasurer, showing the acceptance of the amnesty tax payment.
In case of the authorized agent bank, the branch manager or the
assistant branch manager shall sign the acceptance of payment
form.
The Acceptance of Payment Form, the Notice of Availment, the
SALN, and the Tax Amnesty Return shall be submitted to the
RDO, which shall be received only after complete payment. The
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completion of these requirements shall be deemed full compliance

with the provisions of RA 9480.
....
RULE V
IMMUNITIES AND PRIVILEGES
 
SEC. 10. Immunities and Privileges.—Taxpayers who
have fully complied with the conditions under RA 9480 and these
rules shall be entitled to the following immunities and privileges:
1. The taxpayer shall be immune from the payment of taxes, as
well as additions thereto, and the appurtenant civil, criminal or
administrative penalties under the National Internal Revenue
Code of 1997, as amended, arising from the failure to pay any and
all internal revenue taxes for taxable year 2005 and prior years.
2. The taxpayer’s Tax Amnesty Return and the SALN as of
December 31, 2005 shall not be admissible as evidence in all
proceedings that pertain to taxable year 2005 and prior years,
insofar as such proceedings relate to internal revenue taxes,
before judicial, quasi-judicial or administrative bodies in which he
is a de-

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fendant or respondent and, except for the purpose of

ascertaining the net worth beginning January 1, 2006, the same
shall not be examined, inquired or looked into by any person or
government office. However, the taxpayer may use this as a
defense, whenever appropriate, in cases brought against him.
3. The books of accounts and other records of the taxpayer for
the years covered by the tax amnesty availed of shall not be
examined by the BIR. However, the Commissioner of Internal
Revenue may authorize in writing the examination of the said
books of accounts and other records to verify the validity or
correctness of a claim for any tax refund, tax credit (other than
refund or credit of taxes withheld on wages), tax incentives,
and/or exemptions under existing laws.
The above stated immunities and privileges shall not apply
where the person failed to file a SALN and the Tax Amnesty
Return, or where the amount of net worth as of December 31,
2005 is proven to be understated to the extent of thirty percent
(30%) or more, in accordance with the provisions of Section 4 of
RA 9480 and Section 9, Rule IV hereof. (Emphasis supplied)

 
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In several cases, this court explained the nature of a tax

amnesty. In Metropolitan Bank and Trust Co. v.
Commissioner of Internal Revenue:45

A tax amnesty is a general pardon or the intentional

overlooking by the State of its authority to impose penalties on
persons otherwise guilty of violation of a tax law. It partakes of an
absolute waiver by the government of its right to collect what is
due it and to give tax evaders who wish to relent a chance to start
with a clean

_______________

45   612 Phil. 544; 595 SCRA 234 (2009) [Per J. Chico-Nazario, Third
Division].

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slate. A tax amnesty, much like a tax exemption, is never

favored or presumed in law. The grant of a tax amnesty, similar
to a tax exemption, must be construed strictly against the
taxpayer and liberally in favor of the taxing authority.46

 
This court in Commissioner of Internal Revenue v.
Gonzalez47 further described the role of tax amnesties in
the government’s collection of taxes:

Tax amnesty is a general pardon to taxpayers who want to

start a clean tax slate. It also gives the government a chance to
collect uncollected tax from tax evaders without having to go
through the tedious process of a tax case.48

 
Under Republic Act No. 9480 and BIR Revenue
Memorandum Circular No. 55-2007, the qualified taxpayer
may immediately avail of the immunities and privileges
upon submission of the required documents. This is clear
from Section 2 of Republic Act No. 9480:

SEC. 2. Availment of the Amnesty.—Any person, natural or

juridical, who wishes to avail himself of the tax amnesty
authorized and granted under this Act shall file with the Bureau
of Internal Revenue (BIR) a notice and Tax Amnesty Return
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accompanied by a Statement of Assets, Liabilities and Net Worth

(SALN) as of December 31, 2005, in such form as may be
prescribed in the im-

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46  Id., at p. 565; p. 254, citing Philippine Banking Corporation (Now:

Global Business Bank, Inc.) v. Commissioner of Internal Revenue, 597
Phil. 363, 388; 577 SCRA 366, 392 (2009) [Per J. Carpio, First Division].
47   647 Phil. 462; 633 SCRA 139 (2010) [Per J. Villarama, Jr., Third
Division].
48  Id., at p. 487; p. 165, citing Bañas, Jr. v. Court of Appeals, 382 Phil.
144, 156; 325 SCRA 259, 273 (2000) [Per J. Quisumbing, Second Division].

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plementing rules and regulations (IRR) of this Act, and pay the
applicable amnesty tax within six months from the effectivity of the
IRR. (Emphasis supplied)

 
Meanwhile, Section 6 of BIR Revenue Memorandum
Circular No. 55-2007 and Department of Finance
Department Order 20-07 provide:

SEC. 6. Method of Availment of Tax Amnesty.—

1. Forms/Documents to be filed.—To avail of the general tax
amnesty, concerned taxpayers shall file the following
documents/requirements:
a. Notice of Availment in such form as may be prescribed by
the BIR.
b. Statements of Assets, Liabilities and Net Worth (SALN) as
of December 31, 2005 in such form, as may be prescribed by the
BIR.
c. Tax Amnesty Return in such form as may be prescribed by
the BIR.
2. Place of Filing of Amnesty Tax Return.—The Tax
Amnesty Return, together with the other documents stated in
Sec. 6(1) hereof, shall be filed as follows:
a. Residents shall file with the Revenue District Officer
(RDO)/Large Taxpayer District Office of the BIR which has
jurisdiction over the legal residence or principal place of business
of the taxpayer, as the case may be.

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b. Nonresidents shall file with the office of the Commissioner of

the BIR, or with any RDO.
c. At the option of the taxpayer, the RDO may assist the
taxpayer in accomplishing the forms and computing the taxable
base

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 and the amnesty tax payable, but may not look into, question
or examine the veracity of the entries contained in the Tax
Amnesty Return, Statement of Assets, Liabilities and Net Worth,
or such other documents submitted by the taxpayer.
3. Payment of Amnesty Tax and Full Compliance.—Upon
filing of the Tax Amnesty Return in accordance with Sec. 6(2)
hereof, the taxpayer shall pay the amnesty tax to the authorized
agent bank or in the absence thereof, the Collection Agent or duly
authorized Treasurer of the city or municipality in which such
person has his legal residence or principal place of business.
The RDO shall issue sufficient Acceptance of Payment Forms,
as may be prescribed by the BIR for the use of — or to be
accomplished by — the bank, the collection agent or the
Treasurer, showing the acceptance of the amnesty tax payment.
In case of the authorized agent bank, the branch manager or the
assistant branch manager shall sign the acceptance of payment
form.
The Acceptance of Payment Form, the Notice of Availment, the
SALN, and the Tax Amnesty Return shall be submitted to the
RDO, which shall be received only after complete payment. The
completion of these requirements shall be deemed full compliance
with the provisions of RA 9480. (Emphasis supplied)

 
In Philippine Banking Corporation (Now: Global
Business Bank, Inc.) v. Commissioner of Internal
Revenue,49 this court ruled that the completion of the
requirements and compliance with the procedure laid down
in the law and the implement-

_______________

49  Supra note 46.

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ing rules entitle the taxpayer to the privileges and

immunities under the tax amnesty program.50
In this case, petitioner showed that it complied with the
requirements laid down in Republic Act No. 9480.
Pertinent documents were submitted to the Bureau of
Internal Revenue and attached to the records of this case.
Petitioner’s compliance was also affirmed by the Bureau of
Internal Revenue in its ruling dated January 25, 2008.
Petitioner is, therefore, entitled to the immunities and
privileges granted under Section 6 of Republic Act No.
9480.
We now proceed to the arguments against petitioner’s
availment of tax amnesty raised by respondent.
 
II
Respondent erred when it relied on the answers to
questions numbered 47 and 49 of BIR Revenue
Memorandum Circular No. 69-200751 reproduced below:

Q-47 Are Delinquent Accounts/Accounts Receivable, including

unpaid self-assessed taxes, in the records of the BIR which are
already Accounts Rec[ei]vable of the BIR/assets of the
Government as of date of amnesty availment by the taxpayer still
covered by such amnesty availment?

_______________

50  Id., at p. 388; pp. 392-393. This court held that “[c]onsidering that
the completion of these requirements shall be deemed full compliance with
the tax amnesty program, the law mandates that the taxpayer shall
thereafter be immune from the payment of taxes, and additions thereto,
as well as the appurtenant civil, criminal or administrative penalties
under the NIRC of 1997, as amended, arising from the failure to pay any
and all internal revenue taxes for taxable year 2005 and prior years.”
51   Clarification of Issues Concerning The Tax Amnesty Program
Under Republic Act No. 9480 as Implemented by Department Order No.
29-07.

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A-47 No. This is so because these are already properties/assets

of the Government prior to/upon taxpayer’s date of amnesty
availment.
....
Q-49 Are tax assessments that are disputed administratively
or judicially still covered by the tax amnesty law?
A-49 As a rule yes, except those cases excluded from the coverage
of the Tax Amnesty Program as discussed in this CIRCULAR and
those cases involving issues that have already been ruled by the
trial court/appellate court in favor of the BIR/Government prior to
taxpayer’s availment of the amnesty law. (Emphasis supplied)

 
The law is clear. Only final and executory judgments are
excluded from the coverage of the tax amnesty program,
hence:

SEC. 8. Exceptions.—The tax amnesty provided in Section 5

hereof shall not extend to the following persons or cases existing
as of the effectivity of this Act:
....
(f) Tax cases subject of final and executory judgment by the
courts.52 (Emphasis supplied)

 
This exception was reproduced in the Implementing
Rules and Regulations of the law:

SEC. 5. Exceptions.—The tax amnesty shall not extend to

the following persons or cases existing as of the effectivity of RA
9480:
....
7. Tax cases subject of final and executory judgment by the
courts.53

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52  Rep. Act No. 9480, Sec. 8.

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We hold that only cases that involve final and executory

judgments are excluded from the tax amnesty program.
This court has already ruled on the Bureau of Internal
Revenue’s unjustified expansion of cases not covered under
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the tax amnesty program.

In Philippine Banking Corporation (Now: Global
Business Bank, Inc.), this court categorically found that
“BIR’s inclusion of ‘issues and cases which were ruled by
any court (even without finality) in favor of the BIR prior to
amnesty availment of the taxpayer’ as one of the exceptions
. . . is misplaced.”54 This court said that:

RA 9480 is specifically clear that the exceptions to the tax

amnesty program include “tax cases subject of final and executory
judgment by the courts.” The present case has not become final
and executory when Metrobank availed of the tax amnesty
program.55

_______________

53  DOF D.O. 29-07 and BIR RMC No. 55-2007.

54  Philippine Banking Corporation (Now: Global Business Bank, Inc.)
v. Commissioner of Internal Revenue, supra note 46 at
p. 389; p. 393. This case involved the assessment of deficiency
documentary stamp taxes of petitioner Philippine Banking Corporation
(Now: Global Business Bank, Inc.) for the taxable years 1996 and 1997. (p.
368; p. 370) Petitioner availed of the tax amnesty program under Rep. Act
No. 9480 during pendency of the case. (p. 387; p. 393)
BIR RMC No. 19-2008, which the court pronounced as erroneous in
Philippine Banking Corporation (Now: Global Business Bank, Inc.) v.
Commissioner of Internal Revenue, is substantially the same as BIR RMC
No. 69-2007 with regard to the inclusion of “issues and cases which were
ruled by any court (even without finality) in favor of the BIR prior to
amnesty availment of the taxpayer” as an exception to the coverage of the
tax amnesty program, (p. 389; p. 393) and on which respondent relies on
in the present case.
55  Id.

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In the recent case of CS Garment, Inc. v. Commissioner

of Internal Revenue56 we declared that:

While tax amnesty, similar to a tax exemption, must be

construed strictly against the taxpayer and liberally in favor of
the taxing authority, it is also a well-settled doctrine that the rule-
making power of administrative agencies cannot be extended to
amend or expand statutory requirements or to embrace matters not

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originally encompassed by the law. Administrative regulations

should always be in accord with the provisions of the statute they
seek to carry into effect, and any resulting inconsistency shall be
resolved in favor of the basic law. We thus definitively declare
that the exception “[i]ssues and cases which were ruled by any
court (even without finality) in favor of the BIR prior to amnesty
availment of the taxpayer” under BIR RMC 19-2008 is invalid, as
the exception goes beyond the scope of the provisions of the 2007
Tax Amnesty Law.57 (Emphasis supplied, citations omitted)

 
BIR Revenue Memorandum Circular No. 19-2008,
declared by this court as erroneous, is substantially the
same as the answers to the questions numbered 47 and 49
in BIR Revenue Memorandum Circular No. 69-2007, which
respondent relied upon in the present case. Pertinent
provisions of BIR Revenue Memorandum Circular No. 19-
2008 are the following:

A BASIC GUIDE ON THE TAX AMNESTY ACT OF 2007

 
The following is a basic guide for taxpayers who wish to avail
of tax amnesty pursuant of Republic Act No. 9480 (Tax Amnesty
Act of 2007).

_______________

56   CS Garment, Inc. v. Commissioner of Internal Revenue, G.R. No.

182399, March 12, 2014, 718 SCRA 614 [Per CJ. Sereno, First Division].
57  Id., at pp. 633-634.

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Who may avail of the amnesty?

....
EXCEPT:

Issues and cases which were ruled by any court (even without
finality) in favor of the BIR prior to amnesty availment of the
taxpayer. (e.g., Taxpayers who have failed to observe or follow
BOI and/or PEZA rules on entitlement to Income Tax Holiday
Incentives and other incentives).

....

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Delinquent Accounts/Accounts Receivable considered as assets

of the BIR/Government, including self-assessed tax.

 
Accordingly, answers to the questions numbered 47 and
49 of BIR Revenue Memorandum Circular No. 69-2007 are
declared invalid for going beyond the text of the law.
 
III
 
Furthermore, contrary to respondent’s argument, the case
does not involve withholding taxes. This is readily seen in
Republic Act No. 9480 and BIR Revenue Memorandum
Circular No. 55-2007. Section 8 of Republic Act No. 9480
provides:

SEC. 8. Exceptions.—The tax amnesty provided in Section 5

hereof shall not extend to the following persons or cases existing
as of the effectivity of this Act:
(a) Withholding agents with respect to their withholding tax
liabilities[.] (Emphasis supplied)

 
Similarly, BIR Revenue Memorandum Circular No. 55-
2007 states:
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SEC. 5. Exceptions.—The tax amnesty shall not extend to

the following persons or cases existing as of the effectivity of RA
9480:
1. Withholding agents with respect to their withholding tax
liabilities[.]

 
Income tax is different from withholding tax, with both
operating in distinct systems.
In the seminal case of Fisher v. Trinidad,58 this court
defined income tax as “a tax on the yearly profits arising
from property, professions, trades, and offices.”59 Otherwise
stated, income tax is the “tax on all yearly profits arising
from property, professions, trades or offices, or as a tax on a
person’s income, emoluments, profits and the like.”60
On the other hand, withholding tax is a method of
collecting income tax in advance.61 “In the operation of the
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withholding tax system, the payee is the taxpayer, the

person on whom the tax is imposed, while the payor, a
separate entity, acts no more than an agent of the
government for the collection of the tax in order to ensure
its payment. Obviously, the amount thereby used to settle
the tax liability is deemed sourced from the proceeds
constitutive of the tax base.”62
There are three reasons for the utilization of the
withholding tax system: “first, to provide the taxpayer a
convenient manner to meet his probable income tax
liability; second, to ensure the collection of income tax
which can otherwise be

_______________

58  43 Phil. 973 (1922) [Per J. Johnson, En Banc].

59  Id., at p. 981.
60   Mamalateo, Victorino C., Reviewer on Taxation, p. 66 (2nd ed.,
2008), citing Tax Code, Sec. 43 and Fisher v. Trinidad, id.
61  See Filipinas Synthetic Fiber Corporation v. Court of Appeals, 374
Phil. 835, 841; 316 SCRA 480, 485 (1999) [Per J. Purisima, Third
Division].
62   Bank of America NT & SA v. Court of Appeals, G.R. No. 103092,
July 21, 1994, 234 SCRA 302, 310 [Per J. Vitug, Third Division].

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lost or substantially reduced through failure to file the

corresponding returns[;] and third, to improve the
government’s cash flow.”63
In Rizal Commercial Banking Corporation v.
Commissioner of Internal Revenue,64 this court ruled that
“the liability of the withholding agent is independent from
that of the taxpayer.”65 Further:

The [withholding agent] cannot be made liable for the tax due
because it is the [taxpayer] who earned the income subject to
withholding tax. The withholding agent is liable only insofar as he
failed to perform his duty to withhold the tax and remit the same
to the government. The liability for the tax, however, remains
with the taxpayer because the gain was realized and received by
him.66

 
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The cause of action for failure to withhold taxes is

different from the cause of action arising from nonpayment
of income taxes.67 “Indeed, the revenue officers generally
disallow the expenses claimed as deductions from gross
income, if no withholding of tax as required by law or the
regulations was withheld and remitted to the BIR within
the prescribed dates.”68

_______________

63  Chamber of Real Estate and Builders’ Associations, Inc. v. Romulo,

628 Phil. 508, 536; 614 SCRA 605, 632-633 (2010) [Per J. Corona, En
Banc].
64  Rizal Commercial Banking Corporation v. Commissioner of Internal
Revenue, G.R. No. 170257, September 7, 2011, 657 SCRA 70 [Per J.
Mendoza, Third Division].
65  Id., at p. 83.
66  Id.
67   See Commissioner of Internal Revenue v. Malayan Insurance Co.,
Inc., 129 Phil. 165, 170; 21 SCRA 944, 949 (1967) [Per J. Reyes, En Banc].
68  Mamalateo, Reviewer on Taxation, supra note 60 at p. 264.

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In Asia International Auctioneers, Inc. v. Commissioner

of Internal Revenue,69 respondent therein argued that
petitioner was not entitled to the grant of tax amnesty
under Republic Act No. 9480 as petitioner was deemed a
withholding agent of the assessed deficiency value added
tax and deficiency excise tax.70 Petitioner was, thus,
disqualified under Section 8 of the law.71 This court
rejected such contention:

The CIR did not assess AIA as a withholding agent that failed
to withhold or remit the deficiency VAT and excise tax to the BIR
under relevant provisions of the Tax Code. Hence, the argument
that AIA is “deemed” a withholding agent for these deficiency
taxes is fallacious.
Indirect taxes, like VAT and excise tax, are different from
withholding taxes. To distinguish, in indirect taxes, the incidence
of taxation falls on one person but the burden thereof can be
shifted or passed on to another person, such as when the tax is
imposed upon goods before reaching the consumer who ultimately
pays for it. On the other hand, in case of withholding taxes, the
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incidence and burden of taxation fall on the same entity, the

statutory taxpayer. The burden of taxation is not shifted to the
withholding agent who merely collects, by withholding, the tax
due from income payments to entities arising from certain
transactions and remits the same to the government. Due to this
difference, the deficiency VAT and excise tax cannot be “deemed”
as withholding taxes merely because they constitute indirect
taxes. Moreover, records support the conclusion that AIA was
assessed not as a withholding agent but, as the one directly liable
for the said deficiency taxes.72 (Citations omitted)

_______________

69  G.R. No. 179115, September 26, 2012, 682 SCRA 49 [Per J. Perlas-
Bernabe, Second Division Resolution].
70  Id., at p. 56.
71  Id.
72  Id., at p. 57.

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In this case, petitioner was assessed for its deficiency

income taxes due to the disallowance of several items for
deduction. Petitioner was not assessed for its liability as
withholding agent. The two liabilities are distinct from and
must not be confused with each other.
The main reason for the disallowance of the deductions
was that petitioner was not able to fully substantiate its
claim of remittance through receipts or relevant
documents.
 
IV
 
Furthermore, we find it appropriate to pronounce that
the Bureau of Internal Revenue Legal Division is not the
proper representative of respondent.
We observe that respondent is represented by a lawyer
from the Legal Division of Revenue Region No. 7 of the
Bureau of Internal Revenue and not by the Office of the
Solicitor General.
We are mindful of Section 220 of Republic Act No. 8424
or the Tax Reform Act of 1997, which provides that legal
officers of the Bureau of Internal Revenue are the ones

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tasked to institute the necessary civil or criminal

proceedings on behalf of the government:

Section 220. Form and Mode of Proceeding in Actions

Arising under this Code.—Civil and criminal actions and
proceedings instituted in behalf of the Government under the
authority of this Code or other law enforced by the Bureau of
Internal Revenue shall be brought in the name of the Government
of the Philippines and shall be conducted by legal officers of the
Bureau of Internal Revenue but no civil or criminal action for the
recovery of taxes or the enforcement of any fine, penalty or
forfeiture under this Code shall be filed in court without the
approval of the Commissioner. (Emphasis supplied)

543

VOL. 743, DECEMBER 3, 2014 543

LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

Nonetheless, this court has previously ruled on the issue

of the Bureau of Internal Revenue’s representation in
appellate proceedings, particularly before this court:

The institution or commencement before a proper court of civil

and criminal actions and proceedings arising under the Tax
Reform Act which “shall be conducted by legal officers of the
Bureau of Internal Revenue” is not in dispute. An appeal from
such court, however, is not a matter of right. Section 220 of the Tax
Reform Act must not be understood as overturning the long-
established procedure before this Court in requiring the Solicitor
General to represent the interest of the Republic. This Court
continues to maintain that it is the Solicitor General who has the
primary responsibility to appear for the government in appellate
proceedings. This pronouncement finds justification in the various
laws defining the Office of the Solicitor General, beginning with
Act No. 135, which took effect on 16 June 1901, up to the present
Administrative Code of 1987. Section 35, Chapter 12, Title III,
Book IV, of the said Code outlines the powers and functions of the
Office of the Solicitor General which includes, but not limited to,
its duty to —
(1) Represent the Government in the Supreme Court and the
Court of Appeals in all criminal proceedings; represent the
Government and its officers in the Supreme Court, the Court of
Appeals, and all other courts or tribunals in all civil actions and
special proceedings in which the Government or any officer
thereof in his official capacity is a party.
....

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(3) Appear in any court in any action involving the validity of

any treaty, law, executive order or proclamation, rule or
regulation when in his judgment his intervention is necessary or
when requested by the Court.
In Gonzales v. Chavez, the Supreme Court has said that, from
the historical and statutory perspectives, the Solici-

544

544 SUPREME COURT REPORTS ANNOTATED

LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

tor General is the “principal law officer and legal defender of

the government.”73 (Emphasis in the original, citations omitted)

 
From the foregoing, we find that the Office of the
Solicitor General is the proper party to represent the
interests of the government through the Bureau of Internal
Revenue. The Legal Division of the Bureau of Internal
Revenue should be mindful of this procedural lapse in the
future.
However, records show that the Office of the Solicitor
General has been apprised of developments in the case
since the beginning of the proceedings. We, thus, rule that
the interests of the government have been duly protected.
As petitioner is found entitled to the immunities and
privileges granted under the tax amnesty program, the
issue on the assessed deficiency income taxes is, thus, moot
and academic.
WHEREFORE, in view of petitioner LG Electronics
Philippines, Inc.’s availment of the tax amnesty program
under Republic Act No. 9480, the petition is DENIED for
being MOOT and ACADEMIC. Petitioner’s deficiency
taxes for taxable year 2005 and prior years are deemed
fully settled.
SO ORDERED.

Carpio (Chairperson), Del Castillo, Villarama, Jr. **

and Mendoza, JJ., concur.

Petition denied for being moot and academic.

_______________

73  Commissioner of Internal Revenue v. La Suerte Cigar and Cigarette

Factory, 433 Phil. 463, 467-468; 384 SCRA 117, 119 (2002) [Per J. Vitug,

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En Banc Resolution].
* *  Designated acting member per Special Order No. 1888 dated
November 28, 2014.

545

VOL. 743, DECEMBER 3, 2014 545

LG Electronics Philippines, Inc. vs. Commissioner of
Internal Revenue

Notes.—A tax amnesty is a general pardon or the

intentional overlooking by the State of its authority to
impose penalties on persons otherwise guilty of violating a
tax law. (Asia International Auctioneers, Inc. vs.
Commissioner of Internal Revenue, 682 SCRA 49 [2012])
While tax amnesty, similar to a tax exemption, must be
construed strictly against the taxpayer and liberally in
favor of the taxing authority, it is also a well-settled
doctrine that the rule-making power of administrative
agencies cannot be extended to amend or expand statutory
requirements or to embrace matters not originally
encompassed by the law. (CS Garment, Inc. vs.
Commissioner of Internal Revenue, 718 SCRA 614 [2014])
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