Personal delivery of the Notice of Informal Conference and the Preliminary Assessment Notice must be served only upon taxpayers or their duly authorized representatives, according to the Supreme Court.
Only authorized representatives of taxpayers can receive preliminary assessment notices from the Bureau of Internal Revenue.
The personal delivery of the Notice of Informal Conference or NIC and the Preliminary Assessment Notice or PAN must be served only upon the taxpayer or his/her duly authorized representatives.
This was the ruling of the Supreme Court's Third Division, penned by Associate Justice Japar B. Dimaampao, in granting the petition for review on certiorari filed by Mannasoft Technology Corporation.
The petition challenged the rulings of the Court of Tax Appeals or CTA en banc, which had upheld the deficiency tax assessments issued against Mannasoft.
Tax investigation
The Commissioner of Internal Revenue or CIR conducted a tax investigation on Mannasoft for calendar year 2008, resulting in the issuance of a NIC and a PAN which were personally served upon Mannasoft through Gladys Badocdoc, referred to as "Client Service Assistant."
A Final Assessment Notice or FAN was subsequently issued by the CIR, finding Mannasoft liable for deficiency income tax in the amount of P13,475,472.84; deficiency value-added tax of P57,102,109.92; and expanded withholding tax of P8,212,654.77.
The FAN was personally served on Angelo Pineda, Mannasoft's reliever security guard. The CIR later issued a Warrant of Distraint and/or Levy or WDL against Mannasoft which was protested by the latter for being premature pending the CIR's evaluation of Mannasoft's submitted documents.
Mannasoft requested anew for the reinvestigation of the case, but its request was rejected by the Bureau of Internal Revenue, which also gave Mannasoft 30 days to pay the deficiency taxes, otherwise the BIR would enforce collection through summary remedies.
Petition for review
This prompted Mannasoft to file a petition for review before the CTA. The CTA Third Division granted Mannasoft's petition and ordered that the NIC, PAN, FAN, and WDL be canceled. This, however, was reversed by the CTA En Banc, prompting the present petition before the Court.
In granting Mannasoft's petition, the SC stressed that when the CIR finds that proper taxes should be assessed, the taxpayer must be properly notified of its findings, in accordance with Section 228 of the Tax Code.
Further, Section 3.1.4 of Revenue Regulations No. (RR) 12-99 states that personal delivery of the formal letter of demand and assessment notice must be acknowledged by the taxpayer or his/her duly authorized representative.
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