SMI-Ed Philippines Technology, Inc. v CIR; G.R. No. 175410; 12 Nov 2014

in Legal Chyme by

On 02 February 2001, petitioner filed an administrative claim for refund with BIR, alleging that the amount representing the 5% final tax on the gross sales of its properties and some of its installed machineries and equipment was erroneously paid.

Respondent did not act on said claim, prompting petitioner to file a petition for review before the CTA on 09 September 2002. The CTA Second Division denied petitioner’s claim for refund, instead assessing 6% capital gains tax on the sale of equipment, machineries, and buildings.

Whether or not CTA has the power to make an assessment at the first instance.

NO. The term “assessment” refers to the determination of amounts due from a person obligated to make payments. In the context of national internal revenue collection, it refers to the determination of the taxes due from a taxpayer under the NIRC of 1997.

The power and duty to assess national internal revenue taxes are lodged with the BIR.  The CTA has no power to make an assessment at the first instance. On matters such as tax collection, tax refund, and others related to the national internal revenue taxes, the CTA’s jurisdiction is appellate in nature.

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