commissioner of internal vs menguito

7/25/2019 Commissioner of Internal vs Menguito

1/12

COMMISSIONER OF INTERNAL G.R. No. 167560

REVENUE,

Petitioner, Present:

YNARES-SANTIAGO,J.,

Chairperson,

- versus - AUSTRIA-MARTINEZ,

CHICO-NAZARIO,

NACHURA, and

REYES,JJ.

DOMINADOR MENGUITO, Promul!te":

Res#on"ent$ Se#tem%er &', ())*

+ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - +

D E C I S I O N

AUSTRIA-MARTINEZ,J.:

eore t.e Court is ! Petition or Revie/ on Certiorariun"er Rule 01 o

t.e Rules o Court, !ss!ilin t.e M!r2. 3&, ())1 4e2ision 5&6o t.e Court o A##e!ls

7CA8 /.i2. reverse" !n" set !si"e t.e Court o T!+ A##e!ls 7CTA8 A#ril (, ())(

4e2ision5(6!n" O2to%er &), ())( Resolution536or"erin 4omin!"or Menuito

7res#on"ent8 to #!9 t.e Commissioner o Intern!l Revenue 7#etitioner8 "ei2ien29

in2ome !n" #er2ent!e t!+es !n" "elinuen29 interest$

!se" on t.e ;oint Sti#ul!tion o

CTA summ!ri=e" t.e !2tu!l !n" #ro2e"ur!l !nte2e"ents o t.e 2!se, t.e relev!nt

#ortions o /.i2. re!":

Petitioner 4omin!"or Menuito 5.erein res#on"ent6 is ! or 2!eteri! %usiness$ re2or"s8$

+ + + +
http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn1


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Subsequently, BIR Baguio received information that

Petitioner [herein respondent] has undeclared income

from e!as Instruments and "lub John #ay, prompting the BIR to

conduct another investigation$ hrough a letter dated July %&, '((),

Spouses *ominador +enguito and Jeanne +enguito Spouses+enguito- .ere informed by the /ssessment *ivision of the said office

that they have underdeclared sales totaling P0&,)%',111$(2 3!hibit

'', p$ &4, BIR records-$ his .as follo.ed by a Preliminary en '5-

*ay 6etter dated /ugust '', '((), informing Petitioner [herein

respondent] that in the investigation of his '((', '((% and '((4

income, business and .ithholding ta! case, it .as found out that there

is still due from him the total sum of P40,'(4,50'$11 as deficiency

income and percentage ta!$

7n September %, '((), the assessment notices sub8ect of the

instant petition .ere issued$ hese .ere protested by +s$ Jeanne

+enguito, through a letter dated September %&, '(() 3!hibit '0, p$

''%, BIR Records-, on the ground that the 059 deduction allo.ed on

their computed gross revenue, is unrealistic$ +s$ Jeanne +enguito

requested for a period of thirty 45- days .ithin .hich to coordinate

.ith the BIR regarding the contested assessment$

On O2to%er &), &??', IR !uio re#lie", inormin t.e

S#ouses Menuito t.!t t.e sour2e o !ssessment /!s not t.rou. t.e

"is!llo/!n2e o 2l!ime" e+#enses %ut on "!t! re2eive" rom Clu% ;o.n

H!9 !n" Te+!s Instruments P.ils$, In2$ S!i" letter !ve t.e s#ouses ten

7&)8 "!9s to #resent evi"en2e 7E+.i%it &1, #$ &&), IR Re2or"s8$

In an effort to clear an alleged confusion regarding "opper

:ettle "afeteria Specialist ":"S- being a sole proprietorship o.ned

by the Spouses, and "opper :ettle "atering Services, Inc$ ":"S,

Inc$- being a corporation .ith .hom e!as Instruments and "lub

John #ay entered into a contract, Petitioner [respondent] submitted to

BIR Baguio a photocopy of the S3" Registration of "opper :ettle"atering Services, Inc$ on +arch %4, '((( pp$ '40;'0', BIR

Records-$

On A#ril &(, &???, IR !uio /rote ! letter to S#ouses

Menuito, inormin t.e l!tter t.!t ! reinvesti!tion or re2onsi"er!tion

2!nnot %e iven "ue 2ourse %9 t.e mere su%mission o !n un2ertiie"

#.oto2o#9 o t.e Certii2!te o In2or#or!tion$ T.us, it !vers t.!t t.e

!men"ment issue" is still v!li" !n" enor2e!%le$

On M!9 (, &???, Petitioner 5res#on"ent6 ile" t.e #resent2!se, #r!9in or t.e 2!n2ell!tion !n" /it."r!/!l o t.e "ei2ien29

in2ome t!+ !n" #er2ent!e t!+ !ssessments on !22ount o #res2ri#tion,

/.imsi2!l !2tu!l in"ins, viol!tion o #ro2e"ur!l "ue #ro2ess on t.e

issu!n2e o !ssessment noti2es, erroneous !""ress o noti2es !n"

multi#le 2re"it> investi!tion %9 t.e Res#on"ent 5#etitioner6 o


3/12

PetitionerBs 5res#on"ents6 %ooDs o !22ounts !n" ot.er rel!te" re2or"s

or t.e s!me t!+ 9e!r$

Inste!" o ilin !n Ans/er, Res#on"ent 5.erein #etitioner6

move" to "ismiss t.e inst!nt #etition on ;ul9 &, &???, on t.e roun" ol!2D o uris"i2tion$ A22or"in to Res#on"ent 5#etitioner6, t.e

!ssessment .!" lon %e2ome in!l !n" e+e2utor9 /.en Petitioner

5res#on"ent6 !ile" to 2om#l9 /it. t.e letter "!te" O2to%er &), &??'$

Petitioner o##ose" s!i" motion on ;ul9 (&, &???, 2l!imin

t.!t t.e in!l "e2ision on PetitionerBs 5res#on"ents6 #rotest is t.e A#ril

&(, &??? letter o t.e !uio Reion!l Oi2eF t.ereore, t.e ilin o t.e

!2tion /it.in t.irt9 73)8 "!9s rom re2ei#t o t.e s!i" letter /!s

se!son!%l9 ile"$ Moreover, Petitioner 5res#on"ent6 !sserte" t.!t r!ntin

t.!t t.e A#ril &(, &??? letter in uestion 2oul" not %e 2onstrue" to me!n

!s ! "eni!l or in!l "e2ision o t.e #rotest, still PetitionerBs 5res#on"ents6

!##e!l /!s timel9 ile" sin2e Res#on"ent 5#etitioner6 issue" ! !rr!nt o

4istr!int !n">or ev9 !!inst t.e Petitioner 5res#on"ent6 on M!9 3,

&???, /.i2. /!rr!nt 2onstitute" ! in!l "e2ision o t.e Res#on"ent

5#etitioner6 on t.e #rotest o t.e t!+#!9er$

On Se#tem%er 3, &???, t.is Court "enie" Res#on"entBs

5#etitioners6 BMotion to 4ismissB or l!2D o merit$

Res#on"ent 5#etitioner6 ile" .is Ans/er on Se#tem%er (0, &???,

r!isin t.e ollo/in S#e2i!l !n" Airm!tive 4eenses:

+ + + +

1$ Investi!tion "is2lose" t.!t or t!+!%le 9e!rs &??&, &??( !n" &??3,

#etitioner 5res#on"ent6 ile" !lse or r!u"ulent in2ome !n" #er2ent!e

t!+ returns /it. intent to ev!"e t!+ %9 un"er "e2l!rin .is s!les$

$ T.e !llee" "u#li2!tion o investi!tion o #etitioner 5res#on"ent6 %9

t.e IR Reion!l Oi2e in !uio Cit9 !n" %9 t.e Revenue 4istri2tOi2e in P!s!9 Cit9 is ustiie" %9 t.e in"in o r!u" on t.e #!rt o t.e#etitioner 5res#on"ent6, /.i2. is !n e+2e#tion to t.e #rovision in t.e T!+

Co"e t.!t t.e e+!min!tion !n" ins#e2tion o %ooDs !n" re2or"s s.!ll %e

m!"e onl9 on2e in ! t!+!%le 9e!r 7Se2tion (31, T!+ Co"e8$ At !n9 r!te,

#etitioner 5res#on"ent6, in ! letter "!te" ;ul9 &*, &??0, /!ive" .is ri.t to

t.e 2onsoli"!tion o s!i" investi!tion$

)$ he aforementioned falsity or fraud .as discovered on /ugust 1,

'(()$ he assessments .ere issued on September %, '((), or .ithin

ten '5- years from the discovery of such falsity or fraud Section %%4,

a! "ode-$ #ence, the assessments have not prescribed$

&$ Petitionerno.ledgment in his protest letter dated September %&, '(() that he

received the assessments$

($ Respondent [petitioner] complied .ith the provisions of Revenue

Regulations ?o$ '%;&1 by informing petitioner [respondent] of the


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findings of the investigation in letters dated July %&, '(() and /ugust

'', '(() prior to the issuance of the assessments$

'5$ Petitioner [respondent] did not allege in his administrative protest

that there .as a duplication of investigation, that the assessments have

prescribed, that they .ere not properly addressed, or that the provisionsof Revenue Regulations ?o$ '%;&1 .ere not observed$ ?ot having

raised them in the administrative level, petitioner [respondent] cannot

raise the same for the first time on appeal /guinaldo Industries "orp$

vs$ "ommissioner of Internal Revenue, ''% S"R/ '42-$

&&$ T.e !ssessments /ere issue" in !22or"!n2e /it. l!/ !n"

reul!tions$

&($ All #resum#tions !re in !vor o t.e 2orre2tness o t!+ !ssessments

7CIR vs$ Constru2tion Resour2es o Asi!, In2$, &01 SCRA '8, !n" t.e

%ur"en to #rove ot.er/ise is u#on #etitioner 5res#on"ent6$516 7Em#.!sis

su##lie"8

On A#ril (, ())(, t.e CTA ren"ere" ! 4e2ision, t.e "is#ositive #ortion o

/.i2. re!"s:

A22or"inl9, Petitioner 5.erein res#on"ent6

is ORDEREDto PAY t.e Res#on"ent 5.erein #etitioner6 t.e !mount

o P&&,333,(33$?0 !n" P(,1'3,11$*( !s "ei2ien29 in2ome !n"

#er2ent!e t!+ li!%ilities, res#e2tivel9 or t!+!%le 9e!rs &??&, &??( !n"

&??3 #lus () "elinuen29 interest rom O2to%er (, &??' until ull

#!9ment t.ereo$

SO OR4ERE4$56

Res#on"ent ile" ! motion or re2onsi"er!tion %ut t.e CTA "enie" t.e s!me

in its Resolution o O2to%er &), ())($5'6

T.rou. ! Petition or Revie/5*6ile" /it. t.e CA, res#on"ent uestione"

t.e CTA 4e2ision !n" Resolution m!inl9 on t.e roun" t.!t Co##er @ettle C!terin

Servi2es, In2$ 7C@CS, In2$8 /!s ! se#!r!te !n" "istin2t entit9 rom Co##er @ettleC!eteri! S#e2i!list 7C@CS8F t.e s!les !n" revenues o C@CS, In2$ 2oul" not %e

!s2ri%e" to C@CSF neit.er m!9 t.e t!+es "ue rom one, 2.!re" to t.e ot.erF nor t.e

noti2es to %e serve" on t.e ormer, 2ourse" t.rou. t.e l!tter$ 5?6Res#on"ent 2ite"

t.e ;oint Sti#ul!tion in /.i2. #etitioner !2Dno/le"e" t.!t its 7res#on"ents8

%usiness /!s 2!lle" Co##er @ettle C!eteri! S#e2i!list, not Co##er @ettle C!terin

Servi2es, In2$5&)6

!se" on t.e unreute"5&&6CTA summ!r9, t.e CA ren"ere" t.e 4e2ision

!ss!ile" .erein, t.e "is#ositive #ortion o /.i2. re!"s:

HERE


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!n" P(,1'3,11$*( or t!+!%le 9e!rs &??&, &??( !n" &??3 #lus t.e ()

"elinuen29 interest t.ereon !re !nnulle"$

SO OR4ERE4$5&(6

Petitioner ile" ! motion or re2onsi"er!tion %ut t.e CA

"enie" t.e s!me in its O2to%er &), ())( Resolution$5&36

Hen2e, .erein re2ourse to t.e Court or t.e revers!l o t.e CA "e2ision !n"

resolution on t.e ollo/in roun"s:

I

T.e Court o A##e!ls erre" in reversin t.e "e2ision o t.e Court o T!+

A##e!ls !n" in .ol"in t.!t Co##er @ettle C!eteri! S#e2i!list o/ne" %9res#on"ent !n" Co##er @ettle C!terin Servi2es, In2$ o/ne" !n"

m!n!e" %9 res#on"entBs /ie !re not one !n" t.e s!me$

II

T.e Court o A##e!ls erre" in .ol"in t.!t res#on"ent /!s "enie" "ue

#ro2ess or !ilure o #etitioner to v!li"l9 serve res#on"ent /it. t.e #ost-

re#ortin !n" #re-!ssessment noti2es !s reuire" %9 l!/$

On t.e irst issue, t.e CTA .!s rule" t.!t C@CS, In2$ !n" C@CS !re one

!n" t.e s!me 2or#or!tion %e2!use J5t6.e 2ontr!2t %et/een Te+!s Instruments !n"Co##er @ettle /!s sine" %9 #etitioners 5res#on"ents6 /ie, ;e!nne Menuito !s

#ro#rietress$K5&06

Ho/ever, t.e CA reverse" t.e CTA on t.ese roun"s:

Res#on"ents 5.erein #etitioners6 !lle!tion t.!t Co##er

@ettle C!terin Servi2es, In2$ !n" Co##er @ettle C!eteri! S#e2i!lists !re

not "istin2t entities !n" t.!t t.e un"er-"e2l!re" s!les>revenues o Co##er

@ettle C!terin Servi2es, In2$ #ert!in to Co##er @ettle C!eteri!S#e2i!list !re %elie" %9 t.e evi"en2e on re2or"$ In t.e ;oint Sti#ul!tion

o

Jt.!t #etitioners 5.erein res#on"ents6 %usiness n!me is Co##er @ettle

C!eteri! S#e2i!list$K

Also, t.e Certii2!tion o Clu% ;o.n H!9 !n" etter "!te" ;ul9 ?,

&??' o Te+!s Instruments %ot. !""resse" to res#on"ent in"i2!te t.!t

t.ese 2om#!nies tr!ns!2te" /it. Co##er @ettle C!terin Servi2es, In2$,

o/ne" !n" m!n!e" %9 ;EANNE G$ MENGUITO, NOT #etitioner

4omin!"or Menuito$ T.e !llee" un"er-"e2l!re" s!les in2ome su%e2to t.e #resent !ssessments /ere s.o/n to .!ve %een e!rne" %9 Co##er

@ettle C!terin Servi2es, In2$ in its 2ommer2i!l tr!ns!2tion /it. Te+!s

Instruments !n" C!m# ;o.n H!9F NOT %9 #etitioners "e!lin /it.

t.ese 2om#!nies$ In !2t, t.ere is not.in on re2or" /.i2. s.o/s t.!t

Te+!s Instruments !n" C!m# ;o.n H!9 2on"u2te" %usiness rel!tions

/it. Co##er @ettle C!eteri! S#e2i!list, o/ne" %9 .erein #etitioner
http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn14


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4omin!"or Menuito$In t.e !%sen2e, t.ereore, o 2le!r !n" 2onvin2in

evi"en2e s.o/in t.!t Co##er @ettle C!eteri! S#e2i!list !n" Co##er

@ettle C!terin Servi2es, In2$ !re one !n" t.e s!me, res#on"ent 2!n NOT

v!li"l9 im#ute !llee" un"er"e2l!re" s!les in2ome e!rne" %9 Co##er

@ettle C!terin Servi2es, In2$ !s s!les in2ome o Co##er @ettle C!eteri!S#e2i!list$5&167Em#.!sis su##lie"8

Res#on"ent is !"!m!nt t.!t t.e CA is 2orre2t$ M!n9 times in t.e #!st, t.e

IR .!" tre!te" C@CS se#!r!tel9 rom C@CS, In2$: rom M!9 &??0 to ;une &??1,

t.e IR sent !u"it te!ms to e+!mine t.e %ooDs o !22ount !n" ot.er !22ountin

re2or"s o C@CS, !n" %!se" on s!i" !u"its, res#on"ent /!s .el" li!%le or

"ei2ien29 t!+es, !ll o /.i2. .e .!" #!i"$5&6 Moreover, t.e 2ertii2!tions5&'6issue"

%9 Clu% ;o.n H!9 !n" Te+!s Instruments i"enti9 t.e 2on2ession!ire o#er!tin

t.erein!s C@CS, In2$, o/ne" !n" m!n!e" %9 .is s#ouse ;e!nne Menuito, !n"

not

C@CS$5&*6

Petitioner im#uns t.e in"ins o t.e CA, 2l!imin t.!t t.ese !re

2ontr!"i2te" %9 evi"en2e on re2or" 2onsistin o ! re#l9 to t.e Se#tem%er (,

&??' !ssessment noti2e o IR !uio /.i2. ;e!nne Menuito /rote

on Se#tem%er (*, &??', to /it:

@e!re in re2ei#t o t.e !ssessment noti2e 9ou .!ve sent us,

"!te" Se#tem%er (, &??'$ H!vin t!Den .ol" o t.e s!me onl9 no/

ollo/in our travel overseas, .e .ere not able to respond

immediately and manifest our protest$ Also, /it. t.e im#en"in

termin!tion o our businesses at '(thee, "lub John #ay and at e!as

Instruments, 6oa>an, Baguio "ity, .e have already started the

transfer of our records and boo>s in Baguio "ity to +anila t.!t /e

/ill nee" more time to revie/ !n" sort t.e re2or"s t.!t m!9 .!ve to %e

#resente" rel!tive to t.e !ssessment + + +$5&?6 7Em#.!sis su##lie"8

Petitioner insists t.!t s!i" re#l9 2onirms t.!t t.e !ssessment noti2e is "ire2te"

!!inst t.e %usinesses /.i2. s.e !n" .er .us%!n", res#on"ent .erein, o/n !n"

o#er!te !t Clu% ;o.n H!9 !n" Te+!s Instruments, !n" est!%lis.es t.!t s.e is

#rotestin s!i" noti2e not ust or .ersel %ut !lso or res#on"ent$5()6

Moreover, #etitioner !rues t.!t i it /ere true t.!t C@CS, In2$ !n" C@CS

!re se#!r!te !n" "istin2t entities, res#on"ent 2oul" .!ve e!sil9 #ro"u2e" t.e !rti2les

o in2or#or!tion o C@CS, In2$F inste!", /.!t res#on"ent #resente" /!s merel9 !

#.oto2o#9 o t.e in2or#or!tion !rti2les$5(&6 orse, #etitioner !""s, s!i" "o2ument

/!s not oere" in evi"en2e %eore t.e CTA, %ut /!s #resente" onl9 %eore t.e CA$5((6

Petitioner urt.er insists t.!t C@CS, In2$ !n" C@CS !re merel9 em#lo9in

t.e i2tion o t.eir se#!r!te 2or#or!te e+isten2e to ev!"e #!9ment o #ro#er t!+esF

t.!t t.e CTA s!/ t.rou. t.eir #lo9 !n" ri.tl9 "isre!r"e" t.eir 2or#or!te
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7/12

in"ivi"u!lit9, tre!tin t.em inste!" !s one t!+!%le entit9 /it. t.e s!me t!+ %!se !n"

li!%ilit9F5(36!n" t.!t t.e CA s.oul" .!ve sust!ine" t.e CTA$5(06

In ee2t, #etitioner /oul" .!ve t.e Court resolve ! #urel9 !2tu!l issue5(16o

/.et.er or not t.ere is su%st!nti!l evi"en2e t.!t C@CS, In2$ !n" C@CS !re one !n"

t.e s!me t!+!%le entit9$

As ! ener!l rule, t.e Court "oes not venture into ! tri!l o !2ts in

#ro2ee"ins un"er Rule 01 o t.e Rules o Courts, or its onl9 un2tion is to revie/

errors o l!/$5(6 T.e Court "e2lines to inuire into errors in t.e !2tu!l !ssessment

o t.e CA, or t.e l!tters in"ins !re 2on2lusive, es#e2i!ll9 /.en t.ese !re

s9non9mous to t.ose o t.e CTA$ 5('6 ut /.en t.e CA 2ontr!"i2ts t.e !2tu!l

in"ins o t.e CTA, t.e Court "eems it ne2ess!r9 to "etermine /.et.er t.e CA /!s

ustiie" in "oin so, or one %!si2 rule in t!+!tion is t.!t t.e !2tu!l in"ins o t.eCTA, /.en su##orte" %9 su%st!nti!l evi"en2e, /ill not %e "istur%e" on !##e!l

unless it is s.o/n t.!t t.e CTA 2ommitte" ross error in its !##re2i!tion o !2ts$ 5(*6

T.e Court in"s t.!t t.e CA r!vel9 erre" /.en it inore" t.e su%st!nti!l

evi"en2e on re2or" !n" reverse" t.e CTA$

In ! num%er o 2!ses, t.e Court .!s s.re""e" t.e veil o 2or#or!te i"entit9

!n" rule" t.!t /.ere ! 2or#or!tion is merel9 !n !"un2t, %usiness 2on"uit or !lter

eo o !not.er 2or#or!tion or /.en t.e9 #r!2ti2e r!u" on our intern!l revenue l!/s,5(?6t.e i2tion o t.eir se#!r!te !n" "istin2t 2or#or!te i"entities s.!ll %e "isre!r"e",

!n" %ot. entities tre!te" !s one t!+!%le #erson, su%e2t to !ssessment or t.e s!me

t!+!%le tr!ns!2tion$

T.e Court 2onsi"ers t.e #resen2e o t.e ollo/in 2ir2umst!n2es, to /it:

/.en t.e o/ner o one "ire2ts !n" 2ontrols t.e o#er!tions o t.e ot.er, !n" t.e

#!9ments ee2te" or re2eive" %9 one !re or t.e !22ounts "ue rom or #!9!%le to

t.e ot.erF53)6or /.en t.e #ro#erties or #ro"u2ts o one !re !ll sol" to t.e ot.er, /.i2.

in turn imme"i!tel9 sells t.em to t.e #u%li2,53&6!s su%st!nti!l evi"en2e in su##ort o

t.e in"in t.!t t.e t/o !re !2tu!ll9 one uri"i2!l t!+!%le #erson!lit9$

In t.e #resent 2!se, over/.elmin evi"en2e su##orts t.e CTA in

"isre!r"in t.e se#!r!te i"entit9 o C@CS, In2$ rom C@CS !n" in tre!tin t.em !s

one t!+!%le entit9$


8/12

)3?(*?*, !n" )3?(?) "!te" M!9 &, &??0, investi!tin myin2ome, %usiness, !n"

/it..ol"in t!+es or t.e 9e!rs &??&, &??(, !n" &??3$K 53167Em#.!sis su##lie"8

;e!nne Menuito sine" t.e letter !s #ro#rietor o Co##er @ettle C!eteri!

S#e2i!list$536Rel!te" to E+.i%it J&K is #etitionerBs E+.i%it J&0,K /.i2. is !not.er letter

"!te" Se#tem%er (*, &??', in /.i2. ;e!nne Menuito #roteste" t.e Se#tem%er (,

&??' !ssessment noti2es "ire2te" !t Co##er @ettle C!eteri! S#e2i!list !n" reerre"

to t.e l!tter !s Jour %usiness !t &?t.Tee Clu% ;o.n H!9 !n" !t Te+!s

Instruments$K53'6 T!Den !lon /it. t.e ;oint Sti#ul!tion, E+.i%its JAK t.rou. JCK

!n" t.e Auust 3, &??3 Certii2!tion o C!m# ;o.n H!9, E+.i%its J&K !n" J&0,K

2onirm t.!t res#on"ent, toet.er /it. .is s#ouse ;e!nne Menuito, o/n, o#er!te

!n" m!n!e ! %r!n2. o Co##er @ettle C!eteri! S#e2i!list, !lso 2!lle" Co##er

@ettle C!terin Servi2es !t C!m# ;o.n H!9$

Moreover, in E+.i%its JAK to JA-&,K53*6E+.i%its JK to J-&K53?6!n"

E+.i%its JCK to JC-&K50)6/.i2. !re lists o 2on2ession!ires t.!t o#er!te" in Clu%

;o.n H!9 in &??(, &??3 !n" &??&, res#e2tivel9,50&6it !##e!rs t.!t t.ere is no outlet

/it. t.e n!me JCo##er @ettle C!eteri! S#e2i!listK !s 2l!ime" %9 res#on"ent$ T.e

n!me t.!t !##e!rs in t.e lists is J&?t.TEE CA


9/12

C@CS, In2$ /!s issue" in &?*?, %ut "o2ument!r9 evi"en2e in"i2!te t.!t !ter s!i"

"!te, C@CS, In2$ .!s !lso !ssume" t.e n!me C@CS, !n" vi2e-vers!$ T.e most

2on2rete in"i2!tion o t.is #r!2ti2e is t.e &??& u!rterl9 Per2ent!e T!+ Returns

2overin t.e %usiness n!me>tr!"e J&?t.Tee C!m# ;o.n H!9$K In s!i" returns, t.e

t!+#!9er is i"entiie" !s JCo##er @ettle C!eteri! S#e2i!listK50*6or C@CS, not

C@CS, In2$ Yet, in sever!l "o2uments !lre!"9 2ite", t.e #ur#orte" o/ner o

&?t.Tee !r !t Clu% ;o.n H!9 is C@CS, In2$

All t.ese #ie2es o evi"en2e %uttress t.e in"in o t.e CTA t.!t in &??&,

&??( !n" &??3, res#on"ent, toet.er /it. .is s#ouse ;e!nne Menuito, o/ne" !n"

o#er!te" outlets in Clu% ;o.n H!9 !n" Te+!s Instruments un"er t.e n!mes Co##er

@ettle C!eteri! S#e2i!list or C@CS !n" Co##er @ettle C!terin Servi2es or Co##er

@ettle C!terin Servi2es, In2$$

Turnin no/ to t.e se2on" issue$

In res#on"entBs Petition or Revie/ /it. t.e CTA, .e uestione" t.e

v!li"it9 o t.e Assessment Noti2es,50?6!ll "!te" Se#tem%er (, &??', issue" %9

IR, !uio Cit9 !!inst .im on t.e ollo/in roun"s:

&$ T.e !ssessment noti2es, %!se" on in2ome !n" #er2ent!e t!+

returns ile" or &??&, &??( !n" &??3, /ere issue" %e9on" t.e t.ree-

9e!r #res2ri#tive #erio" un"er Se2tion ()3 o t.e T!+ Co"eF51)6

($ T.e !ssessment noti2es /ere !""resse" to Co##er @ettle S#e2i!list,

Clu% ;o.n H!9, !uio Cit9, "es#ite noti2e to #etitioner t.!t

res#on"entBs #rin2i#!l #l!2e o %usiness /!s !t t.e CCP

Com#le+, P!s!9 Cit9$51&6

3$ T.e !ssessment noti2es /ere issue" in viol!tion o t.e reuirement

o Revenue Reul!tions No$ &(-*1, "!te" Novem%er (', &?*1, t.!t

t.e t!+#!9er %e issue" ! #ost-re#ortin noti2e !n" #re-!ssessment

noti2e %eore t.e #relimin!r9 in"ins o "ei2ien29 m!9 ri#en into !

orm!l !ssessmentF51(6 !n"

0$ T.e !ssessment noti2es "i" not ive res#on"ent ! &1-"!9 #erio" to

re#l9 to t.e in"ins o "ei2ien29$5136

T.e Court notes t.!t no/.ere in .is Petition or Revie/ "i" res#on"ent

"en9 t.!t .e re2eive" t.e Se#tem%er (, &??' !ssessment noti2es$ Inste!", "urin

t.e tri!l,res#on"entBs /itness, M!$ T.eres! N!l"! 7N!l"!8, testiie" t.!t s.e

inorme" t.e IR, !uio Cit9 Jt.!t t.ere /!s no Noti2e or letter, t.!t /e

"i" not re2eive,

#er.!#s, %e2!use t.e9 /ere not !""resse" to Mr$ MenuitoBs .e!" oi2e$K5106

T.e CTA 2orre2tl9 u#.el" t.e v!li"it9 o t.e !ssessment noti2es$ Citin

Se2tion ((3 o t.e T!+ Co"e /.i2. #rovi"es t.!t t.e #res2ri#tive #erio" or t.e

issu!n2e o !ssessment noti2es %!se" on r!u" is &) 9e!rs, t.e CTA rule" t.!t t.e

!ssessment noti2es issue" !!inst res#on"ent on Se#tem%er (, &??' /ere timel9
http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn54


10/12

%e2!use #etitioner "is2overe" t.e !lsit9 in res#on"entBs t!+ returns or &??&, &??(

!n" &??3 onl9 on


11/12

competent evidence that such notice .as indeed received by the

addressee$Here, res#on"ent 5#etitioner .erein6 merel9 !llee" t.!t it

Jor/!r"e"K t.e !ssessment noti2es to #etitioner 5res#on"ent .erein6$

T.e res#on"ent "i" not s.o/ !n9 #roo o m!ilin, reistr9 re2ei#t or

!2Dno/le"ment re2ei#t sine" %9 t.e #etitioner 5res#on"ent.erein6$Since respondent [petitioner herein] has not adduced

sufficient evidence that petitioner [respondent herein] had in fact

received the pre;assessment notice and post;reporting notice required

by la., it cannot be assumed that petitioner [respondent herein] had

been served said notices$5&6

No ot.er roun" /!s 2ite" %9 t.e CA or t.e revers!l o t.e in"in o t.e CTA on

t.e issue$

T.e CA is r!vel9 mist!Den$

In t.eir Petition or Revie/ /it. t.e CTA, res#on"ent e+#ressl9 st!te" t.!t

J5s6ometime in Se#tem%er &??', #etitioner 5res#on"ent .erein6 receivedv!rious

!ssessment noti2es, !ll "!te" )( Se#tem%er &??', issue" %9 IR-!uio or !llee"

"ei2ien29 in2ome !n" #er2ent!e t!+es or t!+!%le 9e!rs en"in 3& 4e2em%er

&??&, &??( !n" &??3 + + +$K5(6 In t.eir Se#tem%er (*, &??' #rotest to t.e

Se#tem%er (, &??' !ssessment noti2es, res#on"ent, t.rou. .is s#ouses

;e!nne Menuito, !2Dno/le"e" t.!t J5t.e96 !re in receipto t.e !ssessment noti2e

9ou .!ve sent us, "!te" Se#tem%er (, &??' + + +$K536

Res#on"ent is t.ereore esto##e" rom "en9in !2tu!l re2ei#t o

t.e Se#tem%er (, &??' !ssessment noti2es, not/it.st!n"in t.e "eni!l o .is

/itness N!l"!$

As to t.e !""ress in"i2!te" on t.e !ssessment noti2es, res#on"ent 2!nnot

uestion t.e s!me or it is t.e s!i" !""ress /.i2. !##e!rs in its #er2ent!e t!+

returns$506 .ile res#on"ent 2l!ims t.!t .e .!" e!rlier notiie" #etitioner o !

2.!ne in .is %usiness !""ress, no evi"en2e o su2. /ritten noti2e /!s #resente"$Un"er Se2tion && o Revenue Reul!tion No$ &(-*1, res#on"entBs !ilure to ive

/ritten noti2e o 2.!ne o !""ress %oun" .im to /.!tever 2ommuni2!tions /ere

sent to t.e !""ress !##e!rin in t.e t!+ returns or t.e #erio" involve" in t.e

investi!tion$516

T.us, /.!t rem!in in uestion no/ !re: /.et.er #etitioner issue" !n"

m!ile" ! #ost-re#ortin noti2e !n" ! #re-!ssessment noti2eF !n" /.et.er res#on"ent

!2tu!ll9 re2eive" t.em$

T.ere is no "ou%t t.!t #etitioner !ile" to #rove t.!t it serve" on res#on"ent

! #ost-re#ortin noti2e !n" ! #re-!ssessment noti2e$ E+.i%it J&&K56o #etitioner is !

mere #.oto2o#9 o ! ;ul9 (*, &??' letter it sent to res#on"ent, inormin .im o t.e

initi!l out2ome o t.e investi!tion into .is s!les, !n" t.e rele!se o ! #relimin!r9

!ssessment u#on 2om#letion o t.e investi!tion, /it. noti2e or t.e l!tter to ile !n9

o%e2tion /it.in ive "!9s rom re2ei#t o t.e letter$ JE+.i%it J&3K5'6o #etitioner is
http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn61http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn62http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn63http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn64http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn65http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn65http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn66http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn67http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn61http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn62http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn63http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn64http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn65http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn66http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn67


12/12

!lso ! mere #.oto2o#9 o !n Auust &&, &??' Prelimin!r9 Ten 7&)8 4!9 etter to

res#on"ent, inormin .im t.!t .e .!" %een oun" to %e li!%le or "ei2ien29 in2ome

!n" #er2ent!e t!+ !n" invitin .im to su%mit ! /ritten o%e2tion to t.e #ro#ose"

!ssessment /it.in &) "!9s rom re2ei#t o noti2e$ ut no/.ere on t.e !2e o s!i"

"o2uments 2!n %e oun" evi"en2e t.!t t.ese /ere sent to !n" re2eive" %9

res#on"ent$ Nor is t.ere se#!r!te evi"en2e, su2. !s ! reistr9 re2ei#t o t.e noti2es

or ! 2ertii2!tion rom t.e ure!u o Posts, t.!t #etitioner !2tu!ll9 m!ile" s!i"

noti2es$

Ho/ever, /.ile t.e l!2D o ! #ost-re#ortin noti2e !n" #re-

!ssessment noti2e is ! "evi!tion rom t.e reuirements un"er Se2tion

&5*6!n" Se2tion (5?6o Revenue Reul!tion No$ &(-*1, t.e s!me 2!nnot "etr!2t

rom t.e !2t t.!t orm!l !ssessments /ere issue" to !n" !2tu!ll9 re2eive" %9

res#on"ents in !22or"!n2e /it. Se2tion ((* o t.e N!tion!l Intern!l RevenueCo"e /.i2. /!s in ee2t !t t.e time o !ssessment$

It s.oul" %e em#.!si=e" t.!t t.e strinent reuirement t.!t !n !ssessment

noti2e %e s!tis!2toril9 #roven to .!ve %een issue" !n" rele!se" or, i re2ei#t t.ereo

is "enie", t.!t s!i" !ssessment noti2e .!ve %een serve" on t.e t!+#!9er, 5')6!##lies

onl9 to orm!l !ssessments #res2ri%e" un"er Se2tion ((* o t.e N!tion!l Intern!l

Revenue Co"e, %ut not to #ost-re#ortin noti2es or #re-!ssessment noti2es$ T.e

issu!n2e o ! v!li" orm!l !ssessment is ! su%st!ntive #rereuisite to t!+ 2olle2tion,5'&6

or it 2ont!ins not onl9 ! 2om#ut!tion o t!+ li!%ilities %ut !lso ! "em!n" or#!9ment /it.in ! #res2ri%e" #erio", t.ere%9 sin!lin t.e time /.en #en!lties !n"

interests %ein to !22rue !!inst t.e t!+#!9er !n" en!%lin t.e l!tter to "etermine .is

reme"ies t.ereor$ 4ue #ro2ess reuires t.!t it must %e serve" on !n" re2eive" %9

t.e t!+#!9er$5'(6

A #ost-re#ortin noti2e !n" #re-!ssessment noti2e "o not %e!r t.e r!vit9 o

! orm!l !ssessment noti2e$ T.e #ost-re#ortin noti2e !n" #re-!ssessment noti2e

merel9 .int !t t.e initi!l in"ins o t.e IR !!inst ! t!+#!9er !n" invites t.e l!tter

to !n Jinorm!lK 2oneren2e or 2l!rii2!tor9 meetin$ Neit.er noti2e 2ont!ins !

"e2l!r!tion o t.e t!+ li!%ilit9 o t.e t!+#!9er or ! "em!n" or #!9ment

t.ereo$ Hen2e, t.e l!2D o su2. noti2es inli2ts no #reu"i2e on t.e t!+#!9er or !s

lon !s t.e l!tter is #ro#erl9 serve" ! orm!l !ssessment noti2e$ In t.e 2!se o

res#on"ent, ! orm!l !ssessment noti2e /!s re2eive" %9 .im !s !2Dno/le"e" in .is

Petition or Revie/ !n" ;oint Sti#ul!tionF !n", on t.e %!sis t.ereo, .e ile" ! #rotest

/it. t.e IR, !uio Cit9 !n" eventu!ll9 ! #etition /it. t.e CTA$

!EREFORE, t.e #etition is GRANTED$ T.e M!r2. 3&, ())1

4e2isiono t.e Court o A##e!ls is REVERSED!n" SETASIDE!n" t.e A#ril

(, ())( 4e2ision !n" O2to%er &), ())( Resolution o t.e Court o T!+ A##e!ls!re REINSTATED$

SO ORDERED$
http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn68http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn68http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn69http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn70http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn71http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn72http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn72http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn68http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn69http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn70http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn71http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/167560.htm#_ftn72

commissioner of internal vs menguito

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