REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

ENBANC

COMMISSIONER OF CTA EB NO. 2447

INTERNAL REVENUE, (CTA Case No. 9005)
Petitioner,
Present:

DEL ROSARIO, P.J.,

UY,
RINGPIS-LIBAN,
-versus- MANAHAN,
BACORRO-VILLENA,
MODESTO-SAN PEDRO,
REYES-FAJARDO,
CUI-DAVID, and
FERRER-FLORES , JJ.

JOLLIBEE WORLDWIDE PTE. Promulgated:

LTD., JAN 10 2023
Respondent.
)(- - - - - - - - - - - - --- -- - - - -- - -- - - - - -
DECISION

MANAHAN, J .:

Before the Court En Bane is a Petition for Review1 filed by

the Commissioner of Internal Revenue (CIR) assailing the
Decision and Resolution of the Court of Ta)( Appeals (CTA)
Third Division in CTA Case No. 9005, which cancelled the
deficiency assessments for income ta)(, withholding ta)( on
compensation, and e)(panded withholding ta)( for ta)(able year
2009 against Jollibee Worldwide Pte. Ltd. (Jollibee), and
further granting the refund or issuance of a ta)( credit
certificate to Jollibee, in the amount of Php18,483,928.77,
representing erroneously collected ta)(es.

FACTS

The CTA Third Division narrated the antecedents, as

follows :

1 EB docket, pp. 1- 12. ~

DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 2 of 12

Petitioner [now, respondent] Jollibee Worldwide Pte.

Ltd. is a multinational company organized and existing
under the laws of Singapore, with license to operate in the
Philippines as regional operating headquarters granted by
the Securities and Exchange Commission (SEC) on
November 29, 2005 with license and registration no.
FS200519494. It is registered with the Bureau of Internal
Revenue (BIR) under Taxpayer Identification Number 243-
204-387-000 with BIR Certificate of Registration No.
3RC0000732181 dated January 30, 2006. Its registered
address is at Jollibee Center Building, San Miguel Avenue,
San Antonio, Ortigas Center, Pasig City.

On the other hand, respondent is the duly appointed

Commissioner of Internal Revenue (CIR) vested under the
appropriate laws with the authority to carry out the
functions, duties and responsibilities of his office, including
inter alia, the power to decide disputed assessments, cancel
and abate tax liabilities pursuant to the provisions of the
National Internal Revenue Code (NIRC) of 1997 and other tax
laws, rules and regulations.

On September 22, 2011, Letter of Authority No. LOA-

43A-2011-00000579 was issued by Jonas DP. Amora, OIC-
Regional Director of BIR Revenue Region No. 007, Revenue
District No. 43A East Pasig, authorizing Revenue Officer (RO)
Lilibeth Nazario and Group Supervisor (GS) Maricar Favis to
examine the petitioner's books of accounts and other
accounting records for all internal revenue taxes for the
period from January 1, 2009 to December 31, 2009
pursuant to Audit Criteria for Taxable Years 2009 and 2010.

Subsequently, a Notice of Informal Conference was

issued by Revenue District Office[r] Florante R. Aninag of
BIR Revenue District No. 43A East Pasig informing petitioner
of the report of investigation on all its internal revenue tax
liabilities for CY 2009.

On December 28, 2012, a Preliminary Assessment

Notice (PAN) was issued by OIC Regional Director Jonas DP.
Amora, informing the latter of its deficiency tax liabilities
including increments for the year 2009, xxx

XXX

Thereafter, petitioner received the Formal Letter of

Demand FLO No. 043A-B158-09 with Assessment Notices on
January 15, 2013, requesting payment of the tax liabilities
including interest in the total amount of P18,483,928. 77,
broken down as follows:
TaxTvoe Basic Amount Interest Total
Income Tax 5,338,828. 72 3,030,699.48 8,369,528.20
Withholding Tax
5,479,773.23 3,380,945.02 8,860,718.25
on Compensation
Exoanded 775,320.31 478,362.01 1,253,682.32
~
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 3 of 12

Withholdin
TOTAL 11,593,922.26 1 6,890,006.51 18,483,928.77

On January 25, 2013, petitioner filed a Reply to the

PAN stating its disagreement with the findings of the BIR in
the PAN and the related deficiency tax assessment against
petitioner covering TY 2009.

On February 14, 2013, petitioner filed its Protest Letter

to the FAN, disagreeing with the findings to the deficiency tax
assessments of the BIR and requesting for reconsideration
and re-investigation of the results of the BIR audit covering
the taxable year 2009.

On September 3, 2013, petitioner received the Final

Decision dated August 28, 2013 issued by Regional Director
Jonas DP. Amara, requesting [from] petitioner the payment
of the alleged tax deficiency in FLO I FAN No. 043A-B 158-09.

Thus, petitioner elevated its administrative appeal to

the CIR praying for the cancellation of the deficiency tax
assessment for the TY 2009 on October 3, 2013.

On February 4, 2015, petitioner received a Final

Decision dated January 23, 2015 from respondent denying
its appeal against Assessment Notice No. 043A-B158-09 and
ordering it to pay the deficiency taxes due plus increments
that have accrued thereon until the date of actual payment.

Aggrieved, petitioner filed the instant Petition for

Review on March 5, 2015.

On March 18, 2015, Revenue Officer Michael R.

Nitafan served a Warrant of Distraint and/ or Levy (WDL)
dated March 18, 2015 to petitioner seeking to enforce the
collection of the alleged deficiency taxes amounting to
P18,483,928.77.

XXX

On August 24, 2015, petitioner filed a Motion for Leave

to Admit Attached Supplemental Petition for Review (with
Motion to Defer Pre-Trial Conference) alleging, among others,
that respondent, by way of garnishment, collected from
petitioner the amount of P18,483,928.77 on June 4, 2015,
xxx. Thus, on August 20, 2015, petitioner filed a letter-
request to claim the refund of or issuance of tax credit
certificate (TCC) in the amount of P18,483,928.77
representing the taxes collection (sic) from petitioner by way
of garnishment.

XXX

During the hearing held on August 25, 2015,

petitioner's counsel manifested that she received the <Po,..1oc.._ _
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 4 of 12

Resolutio n dated August 13, 2015 denying petitione r's

motion for reconside ration assailing the WDL. However, in
view of an interveni ng event, the alleged garnishm ent of
bank deposit undertak en by the BIR on June 4, 2015, the
Court allowed petitione r to file an Amended Petition for
Review xxx. 2

After trial, the CTA Third Division rendere d a Decision ,

dated August 26, 2020, cancelli ng the assessm ents and
granting the refund of the amount s garnish ed, as follows:

WHEREF ORE, in light of the foregoing considera tions,

the instant Amended Petition for Review is hereby
GRANTED.

According ly, the Final Assessm ent Notices, Formal

Letter of Demand dated January 15, 2013 for deficiency
income tax, withhold ing tax, and expanded withhold ing tax
for taxable year 2009 issued against petitione r is hereby
CANCELLED and SET ASIDE. The Warrant of Distraint
and/or Levy issued by responde nt on March 18, 2015 is
declared NULL and VOID.

Respond ent is hereby ORDERE D to refund or issue a

tax credit certificat e to petitione r the amount of
P18,483, 928.77, represent ing illegally assessed and
erroneou sly collected income tax, withhold ing tax on
compens ation and expanded withhold ing tax for taxable year
2009.

SO ORDERE D.3

The CIR's Motion for Reconsi deration was later denied in

the Resolut ion dated January 29, 2021, as follows:

WHEREF ORE, in light of the foregoing considera tions,

responde nt's Motion for Reconsid eration is DENIED for being
filed beyond the reglemen tary period.

On the other hand, petitione r's prayer for the issuance

of a writ of execution is GRANTED. According ly, let entry of
judgmen t be made in due course, and thereafte r, the
correspo nding Writ of Executio n be issued to enforce the
Decision dated August 26, 2020.

SO ORDERE D.4

2 Division Decision dated August 26, 2020, EB docket, pp. 13-18.

3 Division Decision dated August 26, 2020, EB docket, p. 28.
• EB docket, p. 44. ~
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 5 of 12

On March 4, 2021, the CIR filed the instant Petition for

Review with the Court En Bane praying that the Decision and
Resolution of the CTA Third Division be reversed and set aside,
and also praying that a writ of execution not be issued and
that no entry of judgment be made.

On July 23, 2021, respondent Jollibee filed its

Comment/ Opposition (Re: Petition for Review dated March 4,
2021).5

On October 26, 2021, the Court received the parties' No

Agreement to Mediate,6 thus, the instant case was submitted
for decision on January 10, 2022. 7

ISSUES

The CIR states the following grounds for his Petition for
Review:

I. With all due respect, the Honorable Court in

Division erred in ruling that provisions on
reglementary periods are strictly applied.

II. The Honorable Court in Division erred in ruling

that respondent Jollibee was denied due
process. 8

CIR's arguments

The CIR states that the CTA, in the exercise of its equity
jurisdiction, has the prerogative to relax the application of
procedural rules where strong consideration s of substantive
justice are manifest. The CIR also states that the delayed filing
of the Motion for Reconsiderat ion before the CTA Third
Division was not meant to be frivolous or dilatory and that the
cause of the delay was not entirely attributable to his fault or
negligence, and that the relaxation of the rules on
reglementary periods would not unjustly prejudice respondent
Jollibee.

s EB docket, pp. 59-77.

6 EB docket, p. 81.
7 EB docket, pp. 83-84.
s Petition for Review, EB docket, p. 4. ~
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 6 of 12

The CIR also argues that the issuaric e of the Formal

Letter of Demarid arid Assessm ent Notices (FLD/FAN) did not
violate respond ent Jollibee 's right to due process . The
Prelimin ary Assessm ent Notice (PAN) arid FLD /FAN were duly
served arid received , arid respond ent Jollibee was notified of
the assessm ent arid was given ample time arid opportu nity to
protest the findings of the assessm ent against it.

In addition , petition er CIR argues that despite the slight

infirmity regardin g the date of issuaric e of the FLD/FA N, this
does not necessa rily result to a violation of due process
conside ring that respond ent Jollibee was able to intellige ntly
contest the PAN arid FAN, was informe d of the factual arid
legal bases of the assessm ent arid was afforded opportu nity to
defend itself. In view of the foregoin g, the CIR states that
respond ent Jollibee should be liable to pay the assesse d
deficien cy taxes arid the examine r's assessm ent should be
given full weight arid credit as there was no violation of due
process.

Jollibee's argume nts

Respon dent Jollibee states that the CIR failed to timely

file his Motion for Reconsi deration of the CTA Third Division 's
Decision dated August 26, 2020, thus, said Decision has
already become final arid executo ry. Respon dent also states
that there exists no justifiab le arid meritori ous reason for
petition er CIR's belated filing of his/her Motion for
Reconsi deration .

Respon dent also disagree s with petition er's contenti on

that respond ent Jollibee will not be unjustly prejudic ed if the
rules on regleme ntary periods will be relaxed. Respond ent
Jollibee avers that since petition er CIR filed the Petition for
Review before the CTA En Bane, respond ent is now
constrai ned to await the En Bane's decision to finally settle the
issues in this case, instead of being able to receive the refund
or TCC grarited by the CTA Third Division .

Even assumin g that the CIR's Motion for Reconsi deration

was timely filed, the instarit Petition for Review deserve s scarit
conside ration because the CTA Third Division did not err in
holding that the assessm ents are void because of violation of
respond ent Jollibee 's right to due process. ~
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 7 of 12

Respon dent also states that it is entitled to its claim for

refund in the amount of Php18,4 83,928. 77, represen ting
paymen t for illegally assesse d and collecte d tax.

RULING OF THE COURT

The Petition for Review is denied.

The CTA Third Division correctl y denied CIR's Motion for

Reconsi deration for being filed beyond the regleme ntary
period.

The Revised Rules of the Court of Tax Appeals (RRCTA)

provides for the period within which to file a motion for
reconsid eration or new trial, as follows:

Rule 15
Motion for Reconsid eration or New Trial

Section 1. Who may and when to file motion. - Any

aggrieved party may seek reconside ration or new trial of any
decision, resolutio n or order of the Court by filing a motion
for reconside ration or new trial within fifteen days from the
date of receipt of notice of the decision, resolutio n or order of
the Court in question.

Thus, the reckoni ng point of the fifteen (15)-day period to

file the motion for reconsid eration is from the date of receipt of
the notice of the decision .

The Suprem e Court has emphas ized the significa nce of

the rules of procedu res and the rules prescrib ing the time to
do specific acts:

Procedur al rules, we must stress, should be treated

with utmost respect and due regard since they are designed
to facilitate the adjudicat ion of cases to remedy the
worsenin g problem of delay in the resolutio n of rival claims
and in the administ ration of justice. The requirem ent is in
pursuanc e to the bill of rights inscribed in the Constitut ion
which guarante es that all persons shall have a right to the
speedy dispositio n of their cases before all judicial, quasi-
judicial and administr ative bodies, the adjudicat ory bodies
and the parties to a case are thus enjoined to abide strictly
by the rules.

Corolarill y, "rules prescribi ng the time for doing

specific acts or for taking certain proceedin gs are considere d ~
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 8 of 12

absolute ly indispen sable to prevent needless delays and to

orderly and promptly discharge judicial business . By their
very nature, these rules are regarded as mandator y." 9
(Emphasi s in the originaQ

The CIR alleged in his Motion for Reconsi deration before

the CTA Third Division that the Decision dated August 26,
2020 was received on October 10, 2020 10 , which was a
Saturda y. The CTA Third Division disregar ded this allegatio n
in view of the evidenc e on record, to wit:

A perusal of the records of the case shows that the

Notice of Decision issued by the Court on Septemb er 3, 2020
and the assailed Decision attached thereto were received by
responde nt [CIRJ on October 7, 2020. Thus, counting fifteen
(15) days therefrom , responde nt [CIR] had until October 22,
2022, within which to seek reconside ration of the assailed
Decision dated August 26, 2020. However, responde nt [CIR]
belatedly filed the instant Motion for Reconsid eration on
October 26, 2020, or four (4) days after the last date
prescribe d by the rules for filing the same, or until October
22, 2020.1 1

Indeed, the Notice of Decision 12 clearly shows that it was

received by the Legal Division of Revenue Region No. 7B East
NCR on October 7, 2020. Thus, the CTA Third Division
correctl y ruled that the CIR's motion for reconsid eration was
filed out time.

In the subject Petition for Review, the CIR now prays for
the relaxati on of the applicat ion of procedu ral rules in view of
strong conside rations of substan tive justice. 13

While it is true that the Suprem e Court may relax the

applicat ion of procedu ral rules for the greater interest of
substan tial justice, it must be pointed out that:

... resort to a liberal applicatio n, or suspensi on of the

applicatio n of procedur al rules remains the exception to the
well-settl ed principle that rules must be complied with for
the orderly administ ration of justice. It can only be upheld

9 Ng Ching Ting v. Philippine Business Bank, Inc., G.R. No. 224972, July 9, 2018, citing
Fortich v. Corona, G.R. No. 131457, November 17, 1998, and Laguna Metts Corporation
v. Court of Appeals, et al., G.R. 185220, July 27, 2009 Resolution .
10 Division docket, CTA
Case No. 9005, Vol. 3, p. 1283.
11 Division
Resolution dated January 29, 2021, EB Docket, p. 41.
12 Division docket, CTA Case No. 9005, Vol. 3, p. 1265.
13 Petition for Review, EB docket, pp. 4-7. ~ -----
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 9 of 12

"in proper cases and under justifiable causes and

circumstances. "l4

In the Petition for Review, petitioner CIR states that the

Court "in the exercise of its equity jurisdiction, has the
prerogative to relax the application of procedural rules where
strong consideratio ns of substantive justice are manifest". 15
Petitioner further states that "the delayed filing of the Motion
for Reconsiderat ion was not meant to be frivolous or dilatory
and that the cause of the delay was not entirely attributable to
the fault or negligence of the petitioner." 16 Unfortunatel y, these
are not compelling or justifiable causes and circumstance s
which would warrant the relaxation of the rules on
reglementary periods.

The Supreme Court has held that while rules of

procedure are liberally construed, the provisions on
reglementary periods are strictly applied, indispensabl e as
they are for the prevention of needless delays and are
necessary to the orderly and speedy discharge of judicial
business. 17 After all, rules of procedure do not exist for the
convenience of litigants, and they are not to be trifled with
lightly or overlooked by the mere expedience of invoking
"substantial justice."18

Considering that the CIR's motion for reconsiderati on

was filed out of time, the Decision dated August 26, 2020 and
Resolution dated January 29, 2021 in CTA Case No. 9005,
have become final and executory. Finality of judgment
becomes a fact upon the lapse of the reglementary period to
appeal if no appeal is perfected. 19 The failure of a party to
perfect an appeal within the period fixed by law renders final
the decision sought to be appealed.

Even if we brush aside the procedural lapse in the

motion for reconsiderati on before the CTA Third Division, the
subject Petition for Review is still denied. We affirm the
findings of the CTA Third Division that the FLD/FAN were
issued in violation of respondent Jollibee's right to due
process, as follows:
14 Ng Ching Ting v. Philippine Business Bank, Inc., G.R. No. 224972, July 9, 2018.
15 Petition for Review, EB docket, pp. 4·5.
16 Petition for Review, EB docket, p. 7.
17 Dr. Lorna Villa
v. Heirs of Enrique Altavas, G.R. No. 162028, July 14, 2008.
18 Heirs of Antonio
Feraren v. Court of Appeals, G.R. No. 159328, October 5, 2011.
19 City of Manila represented
by Mayor Gemiliano C. Lopez, Jr. v. Han. Court of Appeals,
G.R. No. 100626, November 29, 1991. ~
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 10 of 12

In the instant case, petitioner [Jollibee] received a copy

of the PAN on January 10, 2013. Therefore, respondent [CIR]
should have granted petitioner [Jollibee] a period of fifteen
(15) days from said date or until January 25, 2013 to protest
or respond to the PAN. As a corollary, it is only after the
lapse of the said period that respondent [CIR] may issue the
FLD or FAN. Contrary to respondent [CIR]'s stand, the said
15-day period is reckoned from the date of actual receipt of
the PAN by petitioner [Jollibee], and not the date of issuance
of the PAN.

Therefore, the Court finds that the FAN and FLD were
prematurely issued and received by petitioner [Jollibee] on
January 15, 2013, or five days after petitioner [Jollibee]
received the PAN. Respondent [CIR], in failing to await the
lapse of the fifteen (15) day period, correspondingly
disregarded the mandatory due process requirement laid
down under RR No. 12-99. As a consequence, petitioner
[Jollibee] was denied of its right to due process.

It is well-settled that failure to strictly comply with the

notice requirements prescribed under Section 228 of the
NIRC of 1997, as amended, and RR No. 12-99 is tantamount
to denial of due process. As a result, the assessments issued
in this case are void, and all the proceedings and order
emanating from there are likewise void. As a rule, a void
assessment bears no valid fruit.2o

Thus, the Warrant of Distraint and/or Levy issued by

petitioner CIR on March 18, 2015 is null and void. Likewise,
the amount of Php18,483,928.77 garnished by petitioner CIR
from respondent Jollibee's bank account was not legally due to
the government. Hence, the refund of the amount of
Php18,483,928.77 is in order.

WHEREFORE, the Petition for Review is DENIED. The

Decision dated August 26, 2020 and Resolution dated January
29, 2021 in CTA Case No. 9005 are AFFIRMED.

SO ORDERED.

/1-,~ \1'.~
6\Sfii:E:Ri:NE T. MANAHAN
Associate Justice

2o Decision dated August 26, 2020, EB docket, p. 25.

DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page II ofl2

WE CONCUR:

Presiding Justice

ERL~.UY
Ass~!~stice
~ ~ -t~~
MA. BELEN M. RINGPIS-LIBAN
Associate Justice
'1:

Justice

~~r.~.~
MARIAN ~. RE\fts-F.AiJARDO
Associate Justice

114uu~
LANEE S. CUI-DAVID
Associate Justice

(ON OFFICIAL BUSINESS)

CORAZON G. FERRER-FLORES
Associate Justice

C»?,)
DECISION
CTA EB No. 2447 (C.T.A. Case No. 9005)
Page 12of12

CERTIFICATION

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

is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to
the writer of the opinion of the Court.

Presiding Justice

Cln---