Oceanic Wireless Network Inc. vs.

CIR OWN questioned the validity of such Waiver on the ground that it failed to
state the kind and amount of tax due a required by RMO No. 20-90. There
CTA Case No. 6111 / November 3, 2004
being no valid waiver, the subject assessment notices are void for having
Facts: been issued beyond the 3-year prescriptive period.
OWN further questioned the validity of the issuance of notices, demand
Oceanic Wireless Network (OWN) is a corporation organized and existing
letters and details of discrepancies. It alleged that CIR did not comply with
under our laws. Sec. 228 of the Tax Code.
On April 15, 1996, it filed its 1995 Annual ITR.
On Dec.12, 1996, it received Letter of Authority authorizing 2 Revenue Issues:
Officers to examine OWNs books of accounts and other accounting
W/N there is a valid waiver.
records for all internal revenue taxes for the year 1995.
W/N the tax assessments issued in 1999 is time-barred.
On Mar. 17, 1997, OWN executed a waiver of the defense of prescription.
W/N there is a valid issuance of notices, demand letters and details of
On May 18, 1997, a preliminary tax assessment was issued. In this
discrepancies.
assessment, OWN was informed of all its internal revenue tax liabilities for
the year 1995. OWN was requested to attend an informal conference to Ruling:
discuss the result of the investigation.
YES, there is a valid waiver. Petitioner cannot question the validity of the
On July 19, 1999, petitioner received pre-assessment notice with details of
waiver. When it executed its waiver, no preliminary assessment was issued
discrepancies. OWN was advised to file its written protest OR to request
yet. Hence, such details, i.e. kind and amount of tax, cannot be specified in
for an office conference to discuss the proposed assessments for deficiency
the waiver yet because these details were still unascertainable.
income.
NO. The assessment notices issued by CIR in 1999 for 1995 internal revenue
On July 28, 1999, OWN filed its request for an office conference.
taxes liabilities of OWN were not time-barred there being a valid waiver of
On July 31, 1999, CIR issued its final assessment notices, demand letters
statute of limitations.
and detail discrepancies. These were received by OWN on the same day
YES, there is a valid issuance of notices, demand letters and details of
(July 31).
discrepancies. CIR has substantially complied with the requirements under
OWN, as assessed, has P1,834,399.78 tax deficiency (inclusive of
Sec. 228 because OWN was able to protest the assessments intelligently.
surcharge, interest and compromise fee).
OWN had actual knowledge of the factual and legal bases of the
On Aug. 16, 1999, OWN filed its protest requesting for reconsideration of
assessments. The fact that petitioner was furnished the computation and
the final assessments. It filed its supplemental protest on April 7, 2000.
brief explanation of the how the assessment for deficiency quarterly
On May 12, 2000, OWN filed its PetRev with CTA.
income tax was arrived at, the requirement under Section 228 of the 1997
OWN averred that the assessment notices covering its deficiency taxes for
Tax Code is deemed complied with. Petitioner was notified of the specific
the year 1995 are void for having been issued beyond the 3-year
provision of law on which the assessment was based. Assuming arguendo
prescriptive period pursuant to Sec. 203 of the 1997 Tax Code. It being
that OWN was not furnished of the detailed computation of the deficiency
issued only in 1999.
quarterly income tax, the same was discussed with petitioner during the
CIR, on the other hand, argued that the assessment notices were timely informal conference. (Briefed by: Mhel Joseph P. Areglado)
issued considering that OWN executed a Waiver of Statute of Limitations
pursuant to Sec. 222(b) of the Tax Code.