3Republic of tbe ~bilippines

$,Upreme QCourt
;!ffilanila

THIRD DIVISION

MANNASOFTTECHNOLOGY G.R. No. 244202

CORPORATION,
Petitioner, Present:

CAGUIOA, Chairperson,
INTING,
- versus - GAERLAN,
DIMAAMPAO
'
SING H, JJ

COMMISSIONER OF INTERNAL Promulgated :

REVENUE,
Respondent. July 10, 2023
x- - - - - - - - - - - - - - - - - - - \-1\\~~~-~+---------------------x

DECIS I ON

DIMAAMPAO, J.:

Challenged in this Petition for Review on Certiorari 1 are the Decision2

and the Resolution3 of the Court of Tax Appeals (CTA) sitting en bane, which
upheld the deficiency tax assessments issued against Mannasoft Technology
Corporation (petitioner) for calendar year 2008 owing to its failure to timely
file a petition for review within the reglementary period provided by law, and

Rollo, pp. 8-46.

Id. at 130- 139. The Decision dated June 19, 2018 was penned by Associate Justice Cielito N. Mindaro-
Grulla, with the concurrence of Associate Justices Love ll R. Bautista, Erlinda P. Uy, and Esperanza R.
Fabon-Victorino. Presiding Justice Roman G. Del Rosario issued a Concurring Opinion , id. at 140- 144 .
Associate Justice Ma. Belen M. Ringpis-Liban issued a Concurring & Dissenting Opinion, which was
joined by Associate Justices Juanito C. Castaneda Jr. , Caesar A. Casanova, and Catherine T. Manahan,
id. at 145-1 47 .
Id. at 165-170. The Resolution dated January 18, 20 19 was penned by Associate Justice Cielito N.
Mindaro-Grulla, with the concurrence of Presiding Justice Roman G. Del Rosario, Associate Justices
Erlinda P. Uy and Esperanza R. Fabon-Victorino . Associate Justice Ma. Belen M. Ringp is-Liban , who
maintained her Concurring & Dissenting Opinion in the Decision dated June 19, 2018 , was joined by
Associate Justices Juanito C. Castaneda Jr. and Catherin e T. Manahan, see id. at 145- 14 7.
Decision 2 G.R. No. 244202

which denied the Motion for Reconsideration4 thereof, respectively, in CTA

EB No. 1637.

The factual backdrop of this case is uncomplicated.

Pursuant to Letter of Authority No. 00042459, 5 the Commissioner of

Internal Revenue (respondent), through its duly authorized revenue officers,
conducted a tax investigation on petitioner for calendar year 2008. 6

Respondent then issued a Notice of Informal Conference (NIC) and

Preliminary Assessment Notice (PAN), which was purportedly personally
served upon petitioner through a certain "Ms. Gladys Badocdoc," whose
indicated position was "Client Service Assistant.'' 7

Eventually, respondent issued a Formal Assessment Notice (FAN) 8 on

November 16, 2011, finding petitioner liable for deficiency income tax in the
amount of ?13,475,472.84, deficiency value-added tax (VAT) amounting to
P57,102,109.92, and expanded withholding tax (EWT) of P8,212,654.77. 9
The parties stipulated that the FAN was personally served upon a certain
"Angelo Pineda," who was petitioner's reliever security guard at that time. 10

Petitioner filed its protest 11 to the FAN on December 22, 2011, 12 while
its supporting documents were submitted on February 20, 2012. 13 Despite this,
respondent wrote petitioner that it had yet to submit its records to support its
protest. 14 Consequently, respondent issued on October 23, 2012 a Warrant of
Distraint and/or Levy (WDL) 15 against petitioner. On October 29, 2012,
petitioner again protested the WDL for being premature since the Bureau of
Internal Revenue (BIR) had not yet evaluated the documents it had
submitted. 16

On November 13, 2012, pet1t1oner requested anew for the

reinvestigation of its case, 17 but this was rejected by the BIR via a letter-reply,
which was received by petitioner on November 25, 20 13. 18 In the same letter,
the BIR declared that this was its "final decision on the matter," and that
petitioner had 30 days from receipt thereof to pay the deficiency taxes,

Id. at 148- 164.

ld.at79.
Id. at 10 .
Id. at 116-117.
Id. at 82-90.
9
Id. at 10.
10
Id. at 11 and 118.
11
ld. at 91.
12
Id.atl05.
13 Id.
14
Id. at 94.
15
Id. at 95.
16
Id. at 96-97.
17
Id. at 98 .
18
Id.at99-100.
Decision 3 G.R. No. 244202

otherwise the BIR would enforce collection through summary remedies. 19

Accordingly, petitioner filed on December 10, 2013 20 a Petition for

Review 21 before the CTA. Pre-trial, followed by the trial proper, then
ensued. 22

Petitioner argued, inter alia, that the assessment notices and the WDL
were void because: ( 1) its right to due process was violated as it never received
the NIC and the PAN; 23 (2) the FAN failed to state the facts and the law on
which the assessment was based; 24 (3) respondent failed to evaluate the
documents it submitted in support of its protest; 25 (4) both the FAN and the
WDL were not received by petitioner's duly authorized officer; 26 and (5) some
of the assessed deficiency VAT and EWT had already prescribed. 27 Petitioner
then presented documentary and testimonial evidence in support of its
arguments. 28

For its part, respondent countered that the assessment notices were
made and issued in accordance with law, and applicable rules and regulations,
and that the same were issued within the prescriptive period under the law. 29

Ruling of the Court of Tax Appeals

The CTA Third Division rendered a Decision30 granting the petition and
ordering the cancellation of the assessment notices and the WDL.
Preliminarily, it properly took cognizance of the case under its "other matters"
jurisdiction pursuant to Section 7(a)( l) of Republic Act (RA) No . 1125, 3 1 as
amended by RA No. 9282 .32 It also held that the NIC, the PAN, and the FAN
were void for failing to comply with the due process requirements under the
law and Revenue Regulations No. 12-99. It decreed that the assessment
notices were served upon individuals other than the taxpayer's authorized
representatives, hence, it cannot constitute receipt by the taxpayer. 33 The fact
19
Id. at I 00 .
20
Id.at 105 .
21
Id. at 47-78 .
22
Id. at l 06 .
23
Id . at 57-59.
24
Id. at 59- 60.
25
Id. at 60-63 .
26
Id. at 63-64.
27
Id. at 65-69 .
28
Id. at I 06-107.
29
Id. at 108.
30
Id. at 103 - 122. The Decis ion dated Janu ary 13 , 2017 was penned by Associate Justice Lovel l R. Bauti sta,
with the concurrence of Associate Justices Esperanza R. Fabon - Victor ino and M a. Be len M. Ringpis-
L iban.
31
Entitled, A N ACT CREATING TH E COURT OF T AX APP EALS. Approved on June 16, 1954.

r
32 Entitled, AN ACT EXPANDING TH E JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING ITS
RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPEC IAL JURISDI CT ION AND ENLARGING ITS
M EMBERS HIP, AM EN DING FOR TH E PURPOSE CERTA IN SECTI ONS OR REPUBLI C A CT NO. 1125, AS
A MENDED, OTHERWISE KNOWN AS TH E L AW CREATING THE COU RT OF TAX APPEALS, AN D FOR O THER
PUR POSES. Approved on March 20 , 2004. See also id. at 111 - 11 4.
33 Id.
Decision 4 G.R. No. 244202

that petitioner was able to protest the FAN did not cure the violation to
petitioner's right to due process. 34 Necessarily, the void assessment also
rendered the WDL invalid. 35

Respondent's motion for reconsideration of the foregoing Decision

having been rebuffed by the CTA Third Division, 36 it sought recourse before
the CTAEn Banc through a petition for review. 37

Ruling of the Court of Tax Appeals En Banc

In the impugned Decision, the CTA En Banc granted respondent's

appeal, thereby reversing and setting aside the assailed rulings of its Third
Division. 38 It held that in accordance with prevailing jurisprudence, the proper
reckoning point to invoke the jurisdiction of the tax court was from
petitioner's receipt of the WDL. Considering that petitioner failed to seek
judicial relief within the 30-day period provided by law, the WDL attained
finality which, in tum, deprived the CTA of jurisdiction to act on petitioner's
original petition for review.39 Resultantly, petitioner was ordered to pay the
assessed deficiency taxes, inclusive of deficiency and delinquency interest. 40

Petitioner moved for reconsideration, 4 1 but the same was denied in the
disputed Resolution. 42 The CTAEn Banc further elucidated that before the tax
court may pass upon the correctness and validity of the WDL and underlying
assessment, it was incumbent upon petitioner to have first fi led its appeal
thereto within the period fixed by law, which it failed to do. 43

Aggrieved, petitioner instituted the present Petition before this Court.44

Issues

The issues tendered for the Court's resolution are whether the CTA En
Banc erred in: (1) giving a restrictive interpretation to the "other matters"
jurisdiction of the tax court under Section 7(a)(l) ofRANo. 1125, as amended,
as pertaining only to the receipt of the WDL and nothing more; and (2)
disregarding the void assessment rendered by the respondent.

34
Id . at121.
35 Id .
36 Id. at 124- 129. The Resolution dated March 16, 2017 was penned by Associate Justice Lovell R. Bautista,
with the concurrence of Associate Justices Esperanza R. Fabon -Victorino and Ma. Belen M . Ringpis-
Liban.
37
Id . at 130.
38
Id. at 137.
39
Jd. at 135- 137.
40
Id. at 137-138.
41
Id. at 148-164.
42
Id . at 164.
43
Id . at 167-169.
44
Id. at 8-43.
Decision 5 G.R. No. 244202

THE COURT'S RULING

The Petition is meritorious.

At the outset, it bears to point out that petitioner's framing of the first
issue is wholly misleading as the assailed Decision did not at all give a
restrictive interpretation to the "other matters" jurisdiction of the CTA. Rather,
the tax court merely applied what it perceived to be the applicable
jurisprudence to the facts in this case. In sooth, the essence of the first issue
raised by petitioner is whether the CTA properly acquired jurisdiction over the
present controversy. As restated, the Court is tasked to determine whether
petitioner timely filed its Petition for Review before the CTA Third Division.
Related thereto is the resolution of whether the proper reckoning point for the
commencement of the 30-day period provided under Section 228 45 of RA No .
8424 (Tax Code) should be from petitioner's receipt of the WDL or from its
receipt of the BIR's letter-reply denying its request for reinvestigation.

The Petition for Review before the

CTA Third Division was timely filed
within the reglementary period
provided by law.

Section 228 of the Tax Code governs the protest of assessments for
deficiency taxes :

SECTION 228. Protesting of Assessment.- When the Commissioner or

his duly authorized representative finds that proper taxes should be
assessed, he shall first notify the taxpayer of his findings: Provided,
however, That a preassessment notice shall not be required in the following
cases:

xxxx

The taxpayers shall be informed in writing of the law and the facts on
which the assessment is made; otherwise, the assessment shall be void.

Within a period to be prescribed by implementing rules and regulations,

the taxpayer shall be required to respond to said notice. If the taxpayer fails
to respond, the Commissioner or his duly authorized representative shall
issue an assessment based on his findings.

Such assessment may be protested administratively by filing a request for

45 SECTION 228 . Protesting of Assessment.- When the Commissioner or his duly authorized
representative finds that proper taxes shou ld be assessed, he shall first notify the taxpayer of his findings:
Provided, however, That a preassessment notice shall not be required in the following cases:
xx x x
If the protest is denied in whole or in part, or is not acted upon within one hundred eighty ( 180) days
from submission of documents, the taxpayer adversely affected by the decision or inaction may
appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or
from the lapse of the one hundred eighty (180)-day period; otherwise, the decision shall become fina l,
executory and demandable. (Emphasis supplied). 1
Decision 6 G.R. No . 244202

reconsideration or reinvestigation within thirty (30) days from receipt of

the assessment in such form and manner as may be prescribed by
implementing rules and regulations. Within sixty (60) days from filing of
the protest, all relevant supporting documents shall have been submitted;
otherwise, the assessment shall become final.

If the protest is denied in whole or in part, or is not acted upon within one
hundred eighty (180) days from submission of documents, the taxpayer
adversely affected by the decision or inaction may appeal to the Court of
Tax Appeals within thirty (30) days from receipt of the said decision, or
from the lapse of the one hundred eighty (180)-day period; otherwise, the
decision shall become final , executory and demandable.

As may be gleaned from the foregoing, when a taxpayer protests the

FAN issued by respondent, the latter has 180 days from receipt of the relevant
supporting documents within which to act on the fonner's request for
reconsideration or reinvestigation. After the lapse of the 180-day period, or
from the denial of the protest, whichever is earlier, the taxpayer must appeal
the same to the CTA. However, jurisprudence has also recognized an
alternative recourse in case of respondent's inaction to a protest. In Rizal
Commercial Banking Corporation v. Commissioner of Internal Revenue 46
(RCBC) , as recently reiterated in Light Rail Transit Authority v. Bureau of
Internal Revenue47 (LRTA case), the taxpayer may either:

(1) file a petition for review with the Court of Tax Appeals within 30 days
after the expiration of the 180-day period fixed by law for the Commissioner
of Internal Revenue to act on the disputed assessment; or

(2) await the final decision of the Commissioner on the disputed

assessments and appeal such final decision to the Court of Tax Appeals
within 30 days after receipt of a copy of such decision. This is true even if
the 180-day period for the Commissioner to act on the disputed assessment
had already expired.

The two options are mutually exclusive and resort to one bars the
48
other. This is also consistent with Section 3(a)(2), Rule 4 of A.M. No. 05 -
11 -07-CTA,49 or the Revised Rules of the Court of Tax Appeals, which states
that "should the taxpayer opt to await the final decision of the Commissioner
of Internal Revenue on the disputed assessments beyond the one hundred
eighty day-period abovementioned, the taxpayer may appeal such final
decision to the Court under Section 3(a), Rule 8 of these Rules."

As adumbrated above, petitioner timely filed its protest to the FAN 50

and submitted its supporting documents thereto on February 20, 2012. 51 From

46
550 Phil. 316 (2007).
47
G .R. No. 231238, June 20, 2022.
48
Id. at 11.
49
Promulgated on November 22, 2005.
50
Rollo, p. I 05.
51 Id .
Decision 7 G.R. No. 244202

this date, the 180-day period began to run. Undoubtedly, when respondent
issued the WDL on October 23, 2012, the 180-day period had already lapsed.
Nonetheless, petitioner 's immediate letter-protest to the WDL on October 29,
2012 made it perfectly clear that it was awaiting respondent's action on its
request for reinvestigation. 52 This is an express indication that petitioner was
opting for the second recourse provided in RCBC in response to respondent's
inaction to its protest. This is again apparent in petitioner's subsequent letter
dated November 13, 2012, which reiterated its appeal for reinvestigation. 53

When respondent finally replied to petitioner in the letter dated

November 14, 2013, denying its request for reinvestigation, the response
constituted the final decision on the disputed assessment, which was
appealable to the CTA in accordance with the remedies espoused in RCBC. 54
It is not amiss to add that in actual fact, the letter-reply explicitly stated that it
"constitutes [the BIR's] final decision on the matter." 55

The Court is mindful of certain cases where it held that the issuance of
the WDL constitutes constructive and final denial to the taxpayer's protest,
which would trigger the running of the 30-day period to elevate the case to
the CTA. 56 This is the doctrine laid down in Philippine Journalists, Inc. v.
Commissioner ofInternal Revenue 57 (P JI case), which was cited by both the
CTA Third Division and En Banc. However, as will be explained below, the
ruling in the said case rests on different grounds.

The LRTA case 58 is particularly instructive :

Commissioner of Internal Revenue v. Isabel a Cultural Corporation cannot

be made basis to claim that the Final Notice Before Seizure is the final
decision on the protest appealable to the Court of Tax Appeals. When
Isabela was promulgated in 2001, Section 7 of Republic Act No. 1125
had yet to be amended by Republic Act No. 9282 to add inactions of the
Commissioner as appealable to the Court of Tax Appeals . Moreover,
this Court had yet to promulgate Rizal Commercial Banking
Corporation and Lascona, where it was clarified that taxpayers have the
option to await the decision of the Commissioner in protests of disputed
assessments before they file an appeal with the Court of Tax Appeals.
In other words, in lsabela, the taxpayer still had no choice of awaiting the
decision of the Commissioner on its protest. This is why in lsabela, this
Court considered the Final Notice Before Seizure as the Commissioner's
decision on the protest. More so because it was the only response Isabela
Cultural Corporation received from the Commissioner after it had filed its
protest. 59 (Emphasis supplied)
52
Id . at 96-97.
53
Id. at 98.
54
Supra note 46.
55
Rollo, p. I 00.
56 See Commissioner of Internal Revenue v. South Enterwinment Galle,y, In c. , G.R. No. 225809, March

57
58
59
17 , 2021.
488Phil.218(2004).
Supranote47 .
q
Id. at 14.
Decision 8 G.R. No. 244202

Appositely, the PJI case 60 was also promulgated prior to the passage of
RA No . 9282, which recognized inactions of the respondent as appealable to
the CTA. Thus, the CTA En Banc erred in relying on this particular
jurisprudence to buttress its dismissal of petitioner's case.

It should also be emphasized that availing of the summary collection

remedies under the Tax Code, such as the issuance of a WDL, are premised
first and foremost on the existence of "delinquent taxes." 61 This premise is
lacking when the matter of the taxpayer's civil liability is subject of a valid
request for reinvestigation which is still pending resolution by the respondent
and its authorized agents, 62 as in the case at bench.

In synthesis, the CTA properly took cognizance of petitioner's original

petition for review.

The assessment notices, and, by

extension, the WDL, are void for
violating petitioner's right to due
process.

As to the second issue raised, petitioner delves into the actual validity
of the assessment notices based on its alleged non-receipt of the NIC, the PAN,
and the FAN.

On this score, it should be stressed that whether or not respondent

validly served the assessment notice to petitioner in order to comply with the
basic requirements of due process is a question of fact that is normally beyond
the purview of petition for review on certiorari under Rule 45. 63 Indeed, it is
not the Court's duty to once again analyze or weigh evidence that has already
been duly considered by the lower courts. 64 The Court of Tax Appeal's
findings can only be disturbed on appeal if they are not supported by
substantial evidence, or there is a showing of gross error or abuse on the part
of the tax court. 65

Interestingly, the CTA En Banc mainly focused on the timeliness of

petitioner's resort to judicial recourse and did not reverse the factual finding
of its Third Division that respondent failed to properly serve the assessment
notices upon petitioner in the challenged rulings . Moreover, a thorough review
of the pronouncements of the CTA Third Division reveals that its findings
were adequately supported by substantial evidence.

60
Supra note 57.
61
See Light Rail Transit Authority v. Bureau of Internal Revenue, supra note 47.
62 Id.
63
See Commissioner ofinternal Revenue v. T Shuttle Services, In c., G.R. No. 240729 (Resolution), August
24,2020 . ~
64 Id .
65 Id.
Decision 9 G.R. No . 244202

In any event, even if the Court takes a second look at the facts of the
case, it will still arrive at the same conclusion.

It is undisputed that the NIC, the PAN, and the FAN bear indications
that they were personally served. However, those who received them were not
authorized representatives of petitioner. To recall, the NIC and the PAN
appeared to have been served upon one "Ms. Gladys Badocdoc," whose
indicated position was "Client Service Assistant." 66 The FAN, on the other
hand, was personally served upon a certain "Angelo Pineda," who was a
reliever security guard at that time, and who was not even an employee of
petitioner. 67

Section 228 of the Tax Code explicitly provides that when the
respondent finds that proper taxes should be assessed, the taxpayer must be
properly notified of its findings . Moreover, under Section 3 .1.4 of Revenue
Regulations No. 12-99, 68 personal delivery must be acknowledged by the
taxpayer or his duly authorized representative, viz.:

SECTION 3. Due Process Requirement in the Issuance of a

Deficiency Tax Assessment. -

xxxx

3.1.4 Formal Letter of Demand and Assessment Notice. - The

formal letter of demand and assessment notice shall be issued by the
Commissioner or his duly authorized representative. The letter of demand
calling for payment of the taxpayer's deficiency tax or taxes shall state the
facts, the law, rules and regulations, or jurisprudence on which the
assessment is based, otherwise, the formal letter of demand and assessment
notice shall be void (see illustration in ANNEX B hereof). The same shall
be sent to the taxpayer only by registered mail or by personal delivery. If
sent by personal delivery, the taxpayer or his duly authorized
representative shall acknowledge receipt thereof in the duplicate copy
of the letter of demand, showing the following: (a) His name; (b) signature;
(c) designation and authority to act for and in behalf of the taxpayer, if
acknowledged received by a person other than the taxpayer himself; and (d)
date of receipt thereof. (Emphasis supplied)

The very same provision even requires that the signee-recipient must
indicate their "designation and authority to act for and in behalf of the
taxpayer," which further emphasizes that personal delivery must be
discriminate.

66
Rollo, pp. 116- 117.
67
Id. at 11 and 118.
68
Subject: IMPLEMENTING THE PROV ISJONS OF THE NATIONAL INTERNAL REVENUE CODE OF 1997
GOVERNlNG T HE RULES ON ASSESSMENT OF NATIONAL INTERNAL REVENUE TAXES, CIVI L PENALTIES
AND )NTEREST AND THE EXTRA- JUD ICIAL SETTLEMENT OF A TAXPAYER'S CRIMINAL VIOLATION OF THE
CODE THROUGH PAYMENT OF A SUGG ESTED COMPROMISE PENALTY, REVENUE REGULATIONS NO. 12-99.
Issued on September 6 , 1999.
Decision G.R. No . 244202

The wisdom for such a requirement is readily apparent - unless the

recipient possesses a certain degree of authority or discretion, they would be
unable to grasp the gravity of the service of an assessment notice and the
potential financial impact it would have to the taxpayer they purport to serve
and represent. This is especially true for juridical entity taxpayers who can
only act through its officers and employees, and who would otherwise be
prejudiced by such recipient's simple ignorance.

While Sections 3.1.1. 69 and 3.1.2. 70 of Revenue Regulations No. 12-99,

which govern the NIC and the PAN, respectively, bear no similar
qualifications for personal delivery as those found under Section 3 .1.4, the
Court deems it more in keeping with the spirit of the law that these should
likewise be served only upon the taxpayer or, especially for juridical entities,
their duly authorized representatives.

This is consistent with the oft-repeated principle that the sending and
actual receipt of the PAN is part and parcel of the due process requirement in
the issuance of a deficiency tax assessment that the BIR must strictly comply
with.71 Certainly, the importance of this preliminary stage of the assessment
process cannot be discounted as it presents an opportunity for both the
taxpayer and the BIR to settle the case at the earliest possible time without
need for the issuance of a FAN.72

Having failed to properly serve petitioner with the NIC and the PAN, it
necessarily follows that the succeeding FAN was void and without effect.

Assuming arguendo that the Court applied a strictly plain reading of the

69
3.1 . 1 Notice for informal conference. - The Revenue Officer who audited the taxpayer's records shall,
among others, state in his report whether or not the taxpayer agrees with his findings that the taxpayer is
liable for deficiency tax or taxes . If the taxpayer is not amenable, based on the said Officer's submitted
report of investigation, the taxpayer shall be informed, in writing, by the Revenue District Office or by
the Special Investigation Division, as the case may be (in the case Revenue Regional Offices) or by the
Chief of Division concerned (in the case of the BIR National Office) of the discrepancy or discrepancies
in the taxpayer's payment of his internal revenue taxes , for the purpose of "Informal Conference," in
order to afford the taxpayer with an opportunity to present his side of the case. If the taxpayer fails to
respond within fifteen (15) days from date of receipt of the notice for infonnal conference, he shall be
considered in default, in which case, the Revenue District Officer or the Chief of the Special
Investigation Division of the Revenue Regional Office, or the Chief of Division in the National Office,
as the case may be, shall endorse the case with the least possible delay to the Assessment Division of the
Revenue Regional Office or to the Comm issioner or his du ly authorized representative, as the case may
be, for appropriate review and issuance of a deficiency tax assessment, if warranted .
70
3.1.2 Preliminary Assessment Notice (PAN). - If after review and evaluation by the Assessment
Division or by the Commissioner or his duly authorized representative, as the case may be, it is
detennined that there exists suffic ient basis to assess the taxpayer for any deficiency tax or taxes, the
said Office shall issue to the taxpayer, at least by registered mail , a Preliminary Assessment Notice (PAN)
for the proposed assessment, showing in detail , the facts and the law, rules and regulations, or
jurisprudence on which the proposed assessment is based (see illustration in ANNEX A hereof). If the
taxpayer fails to respond within fifteen ( I 5) days from date of receipt of the PAN , he shall be considered
in default, in which case, a formal letter of demand and assessment notice shall be caused to be issued
by the said Office, calling for payment of the taxpayer's deficiency tax liability, inclusive of the
applicable penalties.
71

72
See Commissioner of Internal Revenue v. Metro Star Superama, Inc., 652 Phil. 172, 186 (20 l 0). _J
See Commissioner of Internal Revenue v. Transitions Optical Philippines, Inc., 821 Phil. 664, 679(2017)4"
Decision 11 G.R. No. 244202

requirements laid down in Sections 3 .1.1. and 3 .1.2 . and validate the receipt
thereof by petitioner's receptionist, the service of the FAN remains glaringly
problematic.

The parties stipulated that the FAN was personally served upon Mr.
Angelo Pineda, who, at that time, was merely the reliever security guard at
petitioner's premises. However, as astutely observed by the CTA Third
Division in its Resolution dated March 16, 201 7, the stamp receipt found on
the FAN shows that there was no indication of his authority to act on behalf
of petitioner, 73 contrary to the clear requirement under Section 3 .1.4 of
Revenue Regulations No . 12-99. The fact that Angelo Pineda is not even an
employee of petitioner serves to further exacerbate his lack of authority to
represent the corporation. 74

Notably, this defect in complying with the requirements of due process

was not cured by the fact that the taxpayer was able to file a protest to the
FAN. 75 This Court has repeatedly enjoined strict observance by the BIR of the
prescribed procedure for issuance of the assessment notices in order to uphold
the taxpayers' constitutional rights .76

Well-settled is the rule that an assessment that fails to strictly comply

with the due process requirements set forth in Section 228 of the Tax Code
and Revenue Regulations No. 12-99 is void and produces no effect. 77
Consequently, given that the assessment notices were void, the resulting WDL
is likewise invalid and without effect.

THE FOREGOING DISQUISITIONS CONSIDERED, the Petition

for Review on Certiorari is hereby GRANTED. The Decision dated June 19,
2018 and the Resolution dated January 18, 2019 of the Court of Tax Appeals
En Banc in CTA EB No. 1637 are REVERSED and SET ASIDE. The
deficiency tax assessments and warrant of distraint and/or levy issued against
petitioner Mannasoft Technology Corporation for calendar year 2008 are
declared NULL and VOID and accordingly CANCELLED.

SO ORDERED.

. ARB.DIMA
Associate Justice

73
Rollo, p. 128.
74 Id.
75 See Commissioner of Internal Revenue v. Yumex Philippines Corp. , G.R. No. 222476, May 5, 2021.
76
See id.
77 See Commissioner of Intern ed Revenue v. Avon Products Manufacturing, Inc. , 841 Phil. 11 4, i 56 (20 18).
Decision 12 G.R. No . 244202

WE CONCUR:

HENR . E s ~
Associate Justice Associate Justice

•
GH
Associate Justice

ATTESTATION

I attest that the conclusions in the above

consultation before the case was assigned to opinion of the
Court's Division.

'
A . CAGUIOA
e
·o , Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the

Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of this Comi.