Myline Cordial

University of Santo Tomas Hospital, Inc. vs. Commissioner of Internal Revenue
CTA EB No. 1328 (CTA Case No. 8292), November 28, 2016

FACTS:
Petitioner University of Santo Tomas Hospital Inc. was transferred from the jurisdiction of RDO No. 32, Revenue Region (RR) No. 6 BIR Manila to the Large Taxpayers Service (LTS) on January 12, 2007. Petitioner was later informed that since it falls under the jurisdiction of the LTS, all Letters of Authority (LAs)/ Tax
Verification Notices (TVNs) I Letter Notices (LNs) issued/to be issued after December 30, 2006 shall be issued by the LTS. However, RDO No. 32 still issued Notices on its assessment on UST Hospital’s deficiency tax liabilities.

ISSUE:
Does BIR RR No. 6, RDO No. 32 of Manila have jurisdiction to issue Notices and audit UST Hospital?

RULING:
NO. Revenue Regional Directors have the power to issue Letters of Authority for the examination of taxpayers within the region and district offices but only those “under his jurisdiction”.

Once a taxpayer has been identified and notified of his/its status as a Large Taxpayer by the Commissioner of Internal Revenue, he/it shall continue to be classified as such, until otherwise notified. Thus, it is the notification by the Commissioner of Internal Revenue which determines when a taxpayer becomes a Large Taxpayer and as to which BIR Office has jurisdiction over the same.

NOTES:
A tax assessment must proceed from a valid authority. Otherwise, it is a nullity.
In Commissioner of Internal Revenue vs. Sony Philippines, lnc., the Supreme Court held that in the absence of an authority, the assessment or examination conducted by the BIR is a nullity. It ruled as follows: “Clearly, there must be a grant of authority before any revenue officer can conduct an examination or assessment. Equally important is that the revenue officer so authorized must not go beyond the authority given. In the absence of such an authority, the assessment or examination is a nullity.”

CTA DECISIONS: CTA_EB_CV_01328_D_2016NOV28_ASS (1)CTA_EB_CV_01328_M_2017JUN02_ASS