Without date, gov’t loses P2-B tax case

Here’s one for the books.

The Court of Tax Appeals has saved a publicly listed shipping company from having to pay a whopping P2.01 billion in taxes for 2008 due to a simple technicality: revenue officers forgot to state the date of their assessment.

In a June 28 decision, the court’s Third Division canceled the undated final assessment notice (FAN) issued by the Bureau of Internal Revenue (BIR) against Lorenzo Shipping Corp. (LSC) for being void.

It ruled that the lack of a date in the FAN — received by LSC on April 18, 2013 — meant that the interest and penalties on the company’s tax liabilities could not be computed properly.

Left blank

The due dates in the tax audit and assessment notices were left blank, which meant that the BIR did not inform the company of any payment period.

“It must be emphasized that the date certain for the payment of tax liabilities is indispensable in an assessment as it dictates the time when the penalties, surcharges and interest begin to accrue against,” the decision read.

The decision was penned by Associate Justice Ma. Belen M. Ringpis-Liban and concurred in by Associate Justices Lovell R. Bautista and Esperanza R. Fabon-Victorino.

The BIR could appeal the decision.

LSC’s liabilities arose from alleged shortfalls in the payment of income tax, value-added tax, withholding tax on compensation, expanded withholding tax, fringe benefits tax and documentary stamp tax, as well as interest and compromise penalties. The back taxes were uncovered after BIR officers looked into the company’s books.

The company, which was incorporated in 1972 and went public in 1996, is headed by shipping magnate Doris Magsaysay-Ho as president and chair.