CASE DIGEST: CIR vs. Apo Cement (G.R. No. 193381; February 8, 2017)

CASE DIGEST: COMMISSIONER OF INTERNAL REVENUE, Petitioner vs. APO CEMENT CORPORATION, Respondent. (G.R. No. 193381; February 8, 2017)

FACTS:
BIR sent Apo cement a Final Assessment Notice (FAN) for deficiency taxes for the taxable year 1999, totalling to more than 144 million pesos. Apo Cement protested the FAN. However, BIR denied the protest. A Final Decision on Disputed Assessment (FDDA) was issued.

Apo Cement petitioned for review with the CTA. The CIR admiteed that Apo Cement had already paid the deficieny assessment in the FDDA, except the documentary stamp taxes (DST) based on several real property transactions.

In the meantime, Apo Cement availed of the tax amnesty under Republic Act No. 9480, particularly affecting the 1999 deficiency. Hence, it filed a motion to cancel tax assessment. The CTA granted the motion.

The CIR motioned for reconsideration and appealed but failed. One of the requirements for tax amnesty under said law is the submission of SALN. The CIR wished to question the correctness of Apo Cement's SALN.

ISSUES:
[1] Is Apo Cement entitled to tax amnesty under RA 9480?
[2] What is the effect of the CIR's act of questioning the correctness of Apo Cement's SALN?
[3] Can the CIR question the correctness of Apo Cement's SALN?
[4] How can the correctness of SALN be questioned for purposes of disqualifying a taxpayer from the amnesty benefit?
HELD:
[1] Yes, Apo Cement is entitled to tax amnesty. Submission of the documentary requirements and payment of the amnesty tax is considered full compliance with Republic Act No. 9480 and the taxpayer can immediately enjoy the immunities and privileges enumerated in Section 6 of the law.

[2] Proceedings must be initiated to question the correctness of the Statement of Assets, Liabilities, and Net Worth (SALN) within the one-year period stated in Section 4 of the law. Here, no such action has been taken by the CIR. This one-year period referred to in the law should be considered only as a prescriptive period within which third parties, meaning 'parties other than the BIR or its agents,' can question the SALN - not as a waiting period during which the BIR may contest the SALN and the taxpayer prevented from enjoying the immunities and privileges under the law.

[3] No, the CIR cannot question the correctness of Apo Cement's SALN. Under Section 4 of the law, there is a presumption of correctness of the SALN and only parties other than the Bureau of Internal Revenue or its agents may dispute the correctness of the SALN. Even assuming that petitioner has the standing to question the SALN, Republic Act No. 9480 provides that the proceeding to challenge the SALN must be initiated within one year following the date of filing of the Tax Amnesty documents.

[4] The amnesty granted under the law is revoked once the taxpayer is proven to have under-declared his assets in his SALN by 30% or more. Pursuant to Section 1060 of the Tax Amnesty Law, amnesty taxpayers who willfully understate their net worth shall not only be liable for perjury under the Revised Penal Code, but, upon conviction, also subject to immediate tax fraud investigation in order to collect all taxes due and to criminally prosecute for tax evasion. Here, the requisites to overturn the presumption of correctness of respondent's 2005 SALN were not met.

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