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TAX REVIEW

1. What is the composition of the Court of Tax Appeals and by whom are the
members thereof appointed?

SUGGESTED ANSWER: The CTA consists of a Presiding Justice and eight (8)
Associate Justices each of whom shall be appointed by the President of the
Philippines upon nomination by the Judicial and Bar Council for each vacancy.

2. Does the Court of Tax Appeals have the power to review tax cases motu propio?
Explain your answer.

SUGGESTED ANSWER: No. The CTA has no power motu propio to review tax
cases.

It can resolve cases only if a civil action for collection of sum of money is filed
before it in the exercise of its exclusive original jurisdiction, or a petition for
review is filed in the exercise of its exclusive appellate jurisdiction. An information
may be filed with the CTA directly where the principal amount of taxes and fees,
exclusive of charges and penalties is Ᵽ1 million pesos or more.

3. State the cases under the exclusive appellate jurisdiction of the CTA. (2016)

SUGGESTED ANSWER: The Court en banc shall exercise exclusive appellate

jurisdiction to review by appeal the following:

a. Decisions or resolutions on motion for reconsideration or new trial of the

Court in Divisions in the exercise of its exclusive appellate jurisdiction
over:

1. Cases arising from administrative agencies – Bureau of Internal

Revenue, Bureau of Customs, Department of Finance, Department of
Trade and Industry, Department of Agriculture;
2. Local tax cases decided by the Regional Trial Courts in the
exercise of their original jurisdiction; and
3. Tax collection cases decided by the Regional Trial Court in the
exercise of their original jurisdiction involving final and executory
assessments for taxes, fees, charges and penalties, where the
principal amount of taxes and penalties claimed is less than one
million pesos;

b. Decisions, resolutions or orders of the Regional Trial Courts in local taxes

decided or resolved by them in the exercise of their appellate jurisdiction.

c. Decisions, resolutions or orders of the RTC in tax collection cases decided

or resolved by them in the exercise of their appellate jurisdiction.

d. Decisions, resolutions or orders on motions for reconsideration or new trial of

the Court in division in the exercise of its exclusive original jurisdiction over tax
collection cases.

e. Decisions of the Central Board of Assessment Appeals (CBAA) in the

exercise of its appellate jurisdiction over cases involving the assessment
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and taxation of real property originally decided by the Provincial or city

board of assessment appeals.

f. Decisions, resolutions or orders on motions for reconsideration or new trial

of the Court in Division in the exercise of its exclusive original jurisdiction
over cases involving criminal offenses arising from violations of the NIRC
or the Tariff and Customs Code and other laws administered by the BIR or
Bureau of Customs.

g. Decisions, resolutions or orders on motion for reconsideration or new trial

of the Court in Division in the exercise of its exclusive appellate jurisdiction
over criminal offenses mentioned in the preceding subparagraph.

h. Decisions, resolutions or orders of the Regional Trial Court in the exercise

of their appellate jurisdiction over criminal offenses mentioned in
subparagraph (f).

EXCLUSIVE ORIGINAL OR APPELLATE JURISDICTION OF THE COURT OF

TAX APPEALS IN DIVISIONS OVER:

1. Decisions of the Commissioner of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties in relation thereto, or other matters arising under the
National Internal Revenue Code or other laws administered by the BIR.

2. Inaction by the Commissioner of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties in relation thereto, or other matters arising under the
NIRC or other laws administered by the BIR where the NIRC or other
applicable law provides a specific period for action: Provided, that in case
of disputed assessments, the inaction of the Commissioner of Internal
Revenue within the 180 day-period under Section 228 of the NIRC shall
be deemed a denial for purposes of allowing the taxpayer to appeal his
case to the Court and does not necessarily constitute a formal decision of
the Commissioner of Internal Revenue on the tax case; Provided, further,
that should the taxpayer opt to await the final decision of the
Commissioner of Internal Revenue on the disputed assessments beyond
the 180 day-period, the taxpayer may appeal such final decision to the
Court under Section 3(a), Rule 8 of these Rules; and Provided, still further,
that in the case of claims for refund of taxes erroneously or illegally
collected, the taxpayer must file a petition for review with the Court prior to
the expiration of the two-year period under Section 229 of the NIRC.

4. Which of the following propositions may now be untenable?

a. The court should construe a law granting tax exemption strictly against the
taxpayer.
b. The court should construe a law granting a municipal corporation the
power to tax most strictly.
c. The Court of Tax Appeals has jurisdiction over decisions of the Customs
Commissioner in cases involving liability for customs duties.
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d. The Court of Appeals has jurisdiction to review decisions of the Court of

Tax Appeals.
e. The Supreme Court has jurisdiction to review decisions of the Court of
Appeals. (2004)

SUGGESTED ANSWER: d

5. After filing an information for violation of Section 254 of the NIRC (Attempt to
Evade or Defeat Tax) with the CTA, the Public Prosecutor manifested that the
People is reserving the right to file the corresponding civil action for the recovery
of the civil liability for taxes. As counsel for the accused, comment on the
People’s manifestation. (2015)

SUGGESTED ANSWER: The manifestation is not proper.

No right to reserve the filing of such civil action separately from the
criminal action shall be recognized.

In cases within the jurisdiction of the Court of Tax Appeals, the criminal
action and the corresponding civil action for the recovery of the civil liability for
taxes and penalties shall be deemed jointly instituted in the same proceeding.
The filing of the criminal action shall necessarily carry with it the filing of the civil
action.

6. The prescriptive period to file a criminal action is:

a. Ten (10) years from the date of discovery of the commission of fraud or
non-filing of tax return.
b. Five (5) years from the date of issuance of the final assessment notice.
c. Three (3) years from the filing of the annual tax return.
d. Five (5) years from the commission of the violation of the law, and if the
same be not known at the time, from the discovery thereof and the
institution of judicial proceedings for its investigation and punishment.

SUGGESTED ANSWER: d