Enjay Hotels, Inc. v.

Commissioner of Internal Revenue

CTA Case No. 8545
January 28, 2016
The Court has jurisdiction to rule on the issue of disallowed rental income still
pending appeal with the Office of the President
Taxpayer is a BOI-registered enterprise enjoying Income Tax Holiday (ITH) benefit
pursuant to its BOI Certificate of Registration. The BOI approved taxpayers application
for ITH, which covers its income tax exemption in its 2008 ITR. However, BOI
disallowed taxpayers rental income holding that it did not arise from taxpayers
registered activity. BIR assessed the taxpayer for deficiency income tax which included
tax on said disallowed income. Taxpayer appealed BOIs decision with the Office of the
President.
On the question of whether the Court has jurisdiction to rule on the issue of disallowed
rental income pending appeal with the Office of the President, the Court, citing Sections
4 and 228 of the NIRC and Sections 7 and 11 of RA No. 1125, as amended, held that it
has exclusive appellate jurisdiction to review by appeal the decision of respondent
involving, inter alia, disputed assessments.
In addition, the case may proceed independently of the appeal of the subject BOI
decision. This must be so because while the subject assessment and the assailed
FDDA were influenced by the BOl's treatment or decision as regards the disallowed
rental income, that does not change the fact that the said FDDA, which is one decided
by respondent as the Commissioner of Internal Revenue by virtue of her power to
decide disputed assessments under Section 4 of the NIRC of 1997, is still the subject
matter of this appeal, to which this Court has exclusive appellate jurisdiction under the
aforecited laws.