Businessman’s Tax Case Remanded for Correct Tax Assessment
The Court of Tax Appeals (CTA) has sent back the case of a businessman to the La Union Regional Trial Court (RTC) to clarify the correct taxes he owes the Bureau of Internal Revenue (BIR) for 2018. This move highlights the importance of accurately determining tax liabilities and penalties.
Datu Amerhassan Lucman, president of Royal AGL Quality Foods, Inc., was previously found guilty by the RTC in San Fernando City for failing to provide accurate information on his company’s 2018 income tax and value-added tax returns. The court had fined him P10,000 for this violation.
BIR Challenges Court’s Decision on Civil Liabilities
However, the BIR filed a motion for partial reconsideration, contesting the RTC’s decision not to impose civil liabilities on Lucman. The tax agency insisted that Lucman should pay his overdue accounts and penalties, including an income tax of P868,639.07, VAT of P440,250.95, and an additional penalty of P100,000.
When the RTC rejected the BIR’s motion, the agency elevated the case to the CTA. They argued that the RTC committed grave abuse of discretion by failing to explain why it did not impose civil liability despite Lucman’s admission of guilt.
CTA Orders RTC to Impose Correct Tax Penalties
The CTA sided with the BIR, declaring the RTC’s July 5, 2023 order invalid for not imposing the required penal and civil liabilities. The court emphasized that it is crucial for courts to assign proper penalties and civil liabilities when convicting accused taxpayers.
The CTA instructed the RTC to promptly conduct proceedings to determine Lucman’s civil and penal liabilities based on this ruling. The 19-page decision was penned by Associate Justice Catherine T. Manahan, with the agreement of Associate Justices Marian Ivy F. Reyes Fajardo and Henry S. Angeles.
This case underscores the judiciary’s role in ensuring that tax laws are properly enforced and that taxpayers settle their obligations accordingly.
For more news and updates on tax appeals, visit Filipinokami.com.