The Court of Tax Appeals (CTA) has dismissed the P341 million deficiency tax assessment imposed by the Bureau of Internal Revenue (BIR) against the importer and distributor of high-end sports cars.

This recent setback was just one of the cases that the BIR lost in legal battles, some due to technicality.

In affirming the decision of one of its divisions, the court en banc stated that BIR large taxpayers service (LTS) did not issue letter of authority (LA) to investigate Autostrada Motore, Inc. of Fort Bonifacio, Taguig City when it assessed it’s alleged multi-million tax debts as required by the Tax Code.

It noted the LTS issued only a mission order (MO) to audit the motor company.

In a 15-page resolution, Associate Justice Maria Rowena Modesto-San Pedro said the MO is different from LA as the former is used only to conduct surveillance operations on the business activities of taxpayers like verification of their compliance concerning revenue rules and regulations.

She said the MO must be changed and replaced by an LA when a full-blown audit is conducted as ruled by the Supreme Court in landmark decisions that implemented appropriate provisions of the Tax Code.

In scrapping the deficiency assessments, the resolution also noted that the BIR motion for reconsideration was submitted late in violation of the Rules of Court.

The assessments covered excise and value -added taxes for three-year period starting in 2011.

Source: Manila Bulletin (