PHILIPPINE NATIONAL BANK v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION ************************ PHILIPPINE NATIONAL BANK, C.T .A. CASE NO. 6850 Petitioner, Members: - versus - A COSTA, Chairperson BAUTISTA, and CASANOVA, JJ. COMMISSIONER OF INTERNAL Promulgated : Jl ~ ,... o r· t ? ') o1o· REVENUE, ~-,!A. Respondent. !t-d\.1 6 · / j /Jl7J f\ / _ s;,. x ------------ ------ -- - ------ --- - - ~ - - -x AMENDED DECI N BAUTISTA, J .: This resolves petitioner's Motion for Partial Reconsideration (with Prayer to Admit Attached Tax Abatement Documents) filed on March 20, 2009; seeking the partial reconsideration of this Court's Decision promulgated on March 3, 2009 and the permission to submit the attached Ta x Abatement documents as evidence. The dispositive portion of the assailed Decision states as follows: " WHEREFORE, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, the assessment for deficiency documentary stamp taxes on petitioner's Interbank Ca ll Loans for taxable year 1997 is hereby CANCELLED. However, the assessment for deficiency documentary stamp tax on petitioner's Special Savings Account for taxable year 1997 is hereby AFFIRMED . Petitioner is hereby ORDERED to PAY respondent the amount of FOURTEEN MILLION SIX HUNDRED EIGHTY EIGHT THOUSAND FOUR HUNDRED SIXTY THREE PESOS AND FIFTEEN CENTAVOS (P14,688, 463.15), represe nting deficiency documentary stamp tax for ,taxabl e year 1997, computed as follows: 34 0

C.T.A. Case No. 6850 Special Savings Account 7,833,847,016.00 Documentary Stamp Tax (O.::W/200) 11,750,770.52 Surcharge - 25% 2,937,692.63 Total Amount Due 14,688,463.15 In addition, petitioner is hereby ORDERED to PAY a penalty equivalent to twenty five percent (25%) and a delinquency interest equivalent to twenty percent (20%) per annum on the amount of P14,688,463.15 from February 15, 2004 until such amount is paid in full, pursuant to Sections 248 and 249 of the Tax Code. SO ORDERED." This Court in Resolution dated July 7, 2009, ruled, among others, to grant petitioner's prayer for the allowance of formal presentation, comparison with the originals, and id~ntification of the attached One-Time Administrative Abatement documents. The Court likewise ordered the holding in abeyance of the resolution of petitioner's Motion for Partial Reconsideration until the said documents are formally offered in evidence. On October 20, 2009, petitioner filed its Petitioner's Supplemental Formal Offer of Evidence, submitting the following exhibits: 1. Exhibit "VW" - Philippine National Bank's (PNB) Application for Abatem ent Program dated January 30, 2007, with Bureau of Internal Revenue (BIR) stamp receipt dated January 31, 2007; 2. Exhibit "WWW" - Payment Form (BIR Form No. 0605) showing the amount of P11,750,771.00; 3. Exhibit "XXX" - Proof of PNB's payment through the Fund Transfer System of Bangko Sentral ng PJ!iipinas, and 4. Exhibit "YYY" - Termination Letter (Abatement Program Under RR 15-2006) dated April 28, 2009. In Resolution dated November 26, 2009, the foregoing documents were duly admitted and petitioner's Motion for Partial Reconsideration was submitted for resolution .

C. I .A . Case No. b!:l~U Based on the documents presented, petitioner filed its Application for Abatement Program on January 30, 2007. After compliance with the requirements of the Abatement Program under Revenue Regulations (R.R.) No. 15-2006, a Termination Letter dated April 28, 2009 was issued covering Assessment No. DST- 97-000064, stating in part as follows: "This refers to your availment of the ON E-TIME ADMINISTRATIVE ABATEMENT of all penalties, surcharge and interest, pursuant the provisions of Section 204 of the Tax Code, as amended, and implemented by Revenue Regulations No. 15- 2006, bearing on your internal revenue ta x liabilities, to wit: XXX XXX XXX In this connection, we are pleased to inform you that in view of your availment of the aforesaid benefits granted under the special provisions of Section 204 of National Internal Revenue Code (NIRC), as amended, and its implementing ru les and regulations, and the payment of the total amount of Eleven Million Seven Hundred Fiftv Thousand Seven Hundred Seventv One (P11,750,7 7 1.00t pesos only representing ONE HUNDRED PERCENT ( 1 00°/o) of the basic tax assessed under this ABATEMENT PROGRAM, the tax liability sta.ted above is hereby CLOSED and TERMINATED ." 1 (Emphasis supplied) After a close scrutiny of the documents formally offered by petitioner in connection with its availment of the One-Time Administrative Abatement, this Court finds petitioner's Motion for Partial Reconsideration meritorious. Petitioner was able to comply with the requirem ents of the Abatement Program under R.R. No. 15-2006, the pertinent portions of which read: "SECTION 1. Purpose. - These regulations prescribe the guidelines for the availment by taxpayers of the opportunity to settle their delinquent accounts or assessments, preliminary and final, disputed or not, by way of application for abatement of all penalties, including surcharge and interest, under Section 204 of the National Internal Revenue Code (NIRC) of 1997 as another 1 Exhibit "YYY" I 34 2

L. 1.A. case No. 6850 step towards the collection and reduction of the Bureau's Accounts Receivables and pending assessments. SECTION 2. Coverage - The following cases shall be covered hereof: XXX XXX XXX f.) Civil tax cases being disputed before the Department of Justice and the courts/ e.g. 1 MTC1 RTC1 CTA, CA and SC including decided cases which are not yet final and executory except those cases where the Presidential Commission on Good Government (PCGG) has an interest and/or there is a need to coordinate with the PCGG; XXX XXX XXX SECTION 4. Who May Avail. - Any person/taxpayer, natural or juridical, may settle thru this abatement program any delinquent account or assessment which has been released as of June 30, 2006, by paying an amount equal to One Hundred Percent (100°/o) of the Basic Tax assessed with the Accredited Agent Bank (AAB) of the Revenue District Office (RDO)/Large Taxpayers Service (LTS)/Large Taxpayers District Office (LTDO) that has jurisdiction over the taxpayer. In the absence of an AAB, payment may be made with the Revenue Collection Officer/Deputized Treasurer of the ROO that has jurisdiction over the taxpayer. After payment of the basic tax, the assessment for penalties/surcharge and interest shall be cancelled by the concerned BIR Office following existing rules and procedures. Thereafter, the docket of the case shall be forwarded to the Office of the Commissioner/ thru the Deputy Commissioner for Operations Group 1 for issuance of Termination Letter. " (Emphasis supplied) The effect of compliance with the requiremepts of the Abatement Program is stated under Section 4 of the same Revenue Regulations/ to wit: "(A)fter payment of the basic tax, the assessment for penalties/surcharge and interest shall be cancelled by the concerned BIR Office following existing rules and procedures. Thereafter, the docket of the case shall be forwarded to the Office of the Commissioner, thru the Deputy Commissioner for Operations Group 1 for issuance of Termination Letter." (Emphasis supplied)

.._. , o . r-.., .._...._. ..:.. .._ I 'IIU . UU ..J V WHEREFORE, premises considered, petitioner's Motion for Partial Reconsideration is hereby GRANTED . Accordingly, Assessment Notice No. DST- 97-000064 assessing petitioner of deficiency Documentary Stamp Ta x on Special Savings Account in the total amount of P14,688,463.15, inclusive of surcharge, interest, and compromise penalty, for taxable year 1997 is hereby CANCELLED and SET ASIDE in view of petitioner's availment of the Abatement Program under Revenue Regulations No. 15-2006. SO ORDERED . WE CONCUR: o__-v. ~ ERNESTO D. ACOSTA Presiding Justice CAES~OVA Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified ,t hat the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. L~~\~ ERNESTO D. ACOSTA Presiding Justice Chairperson, First Division 34 4