+

Jurisdiction of the
Court of Tax Appeals

+
Laws Governing the CTA

RA 1125 , enacted June 16, 1954, created the CTA

RA 3457, enacted June 16, 1962

RA 9282, March 30,2004 amended RA 1125

Expanded the jurisdiction of the CTA and elevated it to the level of

Court of Appeals

Provided also that appeals from the decision the CTA en banc shall
be made before the SC

Provide for jurisdiction to hear criminal offenses under the NIRC

and TCC

RA 9503, June 12, 2008, further amended RA 1125

Provided for the increase of the Justices from 6 to 9 , increased the

number of divisions from 2 to 3

+
Composition and Structure of
The CTA

Sitting En Banc or Division; Quorum; Proceedings. - The CTA

may sit en banc or in three (3) Divisions, each Division
consisting of three (3) Justices.

Five (5) Justices shall constitute a quorum for sessions en banc

and two (2) Justices for sessions of a Division. Provided, That
when the required quorum cannot be constituted due to any
vacancy, disqualification, inhibition, disability, or any other
lawful cause, the Presiding Justice shall designate any Justice of
other Divisions of the Court to sit temporarily therein.

The affirmative votes of five (5) members of the Court en banc

shall be necessary to reverse a decision of a Division but a
simple majority of the Justices present necessary to promulgate
a resolution or decision in all other cases or two (2) members of
a Division, as the case may be, shall be necessary for the
rendition of a decision or resolution in the Division Level.

+
Court of Tax Appeals

The CTA is a highly specialized body specifically

created for the purpose of reviewing tax cases . As a
matter of principle the SC will not set aside the
conclusion reached by the CTA which is by its the very
nature of its function, dedicated exclusively to the
study and consideration of tax problems and has
necessarily developed an expertise on the subject
unless there has been an abuse or improvident
exercise of authority.

In Ursal v. Court of Tax Appeals, Ursal as City Assessor of Cebu

assessed for taxation two real properties owned by certain individuals.
Upon protest of the taxpayers, the Cebu Board of Assessment Appeals
reduced the assessments. Ursal took the matter to the CTA insisting
on his valuation. The Supreme Court ruled that: (1) Ursal had no
personality to resort to the CTA because the rulings of the Cebu Board
of Assessment Appeals did not adversely affect him; and (2) RA No.
1125 creating the CTA did not grant itqaq blanket authority to decide
any and all tax disputes, and that in defining such special courts
jurisdiction, the law necessarily limited its authority to those matters
enumerated therein. Hence, the CTA correctly rejected Ursals appeal
to it.

[Ursal v. Court of Tax Appeals, GR Nos. L-10123 and L-10355, 26 April

1957.]

+
Meaning of CTA being a
Specialized Court

CIR v. Villa, GR No. L-23988, 2 January 1968.] , it can take

cognizance only of such matters as are clearly within its
jurisdiction. Thus, in the case at bar, the appeal was
premature and the CTA had no jurisdiction to entertain said
appeal.

Philippine Refining Company v. Court of Appeals, GR No.

118794, 8 May 1996- The Supreme Court upheld the CTAs
decision in disallowing the bad debts. The CTA is a highly
specialized body specifically created for the purpose of
reviewing tax cases. Through its expertise, it is undeniably
competent to determine the issue of whether a debt is
deductible through the evidence presented before it. The
findings of the CTA will not ordinarily be reviewed absent a
showing of gross error or abuse on its part.

In Philippine Long Distance Telephone Company, Inc. v. City of Davao, PLDT

was assessed to pay local franchise tax for several taxable years. The case
reached the Supreme Court and PLDT contended that: (1) it was exempt from
payment of local franchise tax based on an opinion of the Bureau of Local
Government Finance (BLGF) dated 2 June 1998; and (2) courts should not set
aside conclusions reached by the BLGF because its function is precisely the
study of local tax problems and it has necessarily developed an expertise on
the subject. The Supreme Court differentiated between the BLGF and the CTA,
thus: To be sure, the BLGF is not an administrative agency whose findings on
questions on fact are given weight and deference in the courts. The authorities
cited by petitioner pertain to the Court of Tax Appeals, a highly specialized
court which performs judicial functions as it was created for the review of tax
cases. In contrast, the BLGF was created merely to provide consultancy
services and technical assistance to local governments and the general public
on local taxation, real property assessment, and other related matters, among
others. The question raised by petitioner is a legal question, to wit, the
interpretation of 23 of R.A. No. 7925. There is, therefore, no basis for claiming
expertise for the BLGF that administrative agencies are said to possess in their
respective fields.

[Philippine Long Distance Telephone Company, Inc. v. City of Davao, GR No.

143867, 22 August 2001.]

+
CTA

The well settled doctrine is that the findings of the CTA

are binding on the SC and absent strong reasons for
the SC to delve unto facts, only questions of law are
open for determination.

+
CTA

However, CTA decisions do not constitute precedents

and do not bind the SC or the public. CTA decisions are
appealable to the SC which may affirm reverse or
modify the CTA decisions as the facts and the law may
warrant. Only decisions of the SC constitute binding
precedents, forming part of the Philippine legal
system.

+
Jurisdiction of the CTA

Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court en banc

Cases within the jurisdiction of the Court in divisions

Criminal Cases

Excusive Original Jurisdiction

Exclusive appellate jurisdiction in criminal cases

Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court in divisions

Decisions of the CIR

In cases involving disputed assessments, refunds of

internal revenue taxes, fees or other charges, penalties in
relation thereto;

Other matter arising under the NIRC or other laws

administered by the BIR

Allied Banking Corporation v. CIR, GR No. 175097, 5

February 2010. - the Supreme Court found that the
language used and the tenor of the Formal Letter of
Demand indicated that it was the final decision of the
CIR on the matter. Thus, the Formal Letter of Demand
was tantamount to a decision of the CIR involving a
disputed assessment which could already be appealed
to the CTA.

*CIR v. Leal, GR No. 113459, 18 November 2002 Where does jurisdiction to review revenue issuances,
e.g., BIR Rulings, RRs, RMOs and RMCs, lie? CIR v. Leal
says jurisdiction over this matter pertains to the CTA,
and not to the RTC. In this case, in dispute were RMO
No. 15-91 and RMC No. 43-91 issued by the CIR
implementing the 1977 Tax Code on the taxability of
pawnshops. The Supreme Court ruled that the CTA had
jurisdiction to review by appeal decisions of the CIR on
other matters arising under the National Internal
Revenue or other laws administered by the Bureau of
Internal Revenue, and revenue issuances belong to
such category of other matters.

Philippine Journalists, Inc. v. CIR, GR No. 162852, 16 December

2004. - Section 7 of RA No. 1125, as amended, provides that the CTA
has jurisdiction to review by appeal decisions of the CIR involving
certain matters. At issue in Philippine Journalists, Inc. v. CIR was
whether the CTA had jurisdiction to entertain PJIs petition for review
considering that the CIR decision brought to the CTAs attention for
appeal was not a decision denying a request for reconsideration or
reinvestigation. PJI argued that the appellate jurisdiction of the CTA
is not limited to cases which involve CIR decisions on matters
relating to assessments or refunds. The phrase or other matters
arising under the National Internal Revenue or other laws
administered by the Bureau of Internal Revenue gives the CTA the
jurisdiction to determine if the warrant of distraint and levy issued
by the CIR is valid and to rule if the waiver of statute of limitations
was validly effected. The Supreme Court categorically upheld PJIs
argument.

Philippine National Oil Company v. Court of Appeals, GR Nos.

109976 and 112800, 26 April 2005. -Savellano filed a petition
for review with the CTA requesting for review of the decisions of
the CIR to enter into a compromise agreement with PNOC and
to reject Savellanos claim for additional informers reward. He
submitted before the CTA questions of law involving the
interpretation and application of the law authorizing the CIR to
compromise delinquent accounts and disputed assessments, as
well as the provision of law granting to an informer a reward
equivalent to 15% of the actual amount recovered or collected
by the CIR. The issue was whether the CTA had jurisdiction over
Savellanos petition for review. The Supreme Court ruled in the
affirmative finding basis on the phrase or other matters arising
under the National Internal Revenue or other laws administered
by the Bureau of Internal Revenue.

[CIR v. Hambrecht & Quist Philippines, Inc., GR No. 169225,

17 November 2010.] The issue in CIR v. Hambrecht & Quist
Philippines, Inc. was whether the CTA could pass upon the
subject matter on prescription of the CIRs right to collect
taxes. The Supreme Court ruled that the appellate jurisdiction
of the CTA is not limited to cases which involve decisions of
the CIR on matters relating to assessments or refunds. The
issue of prescription of the CIRs right to collect taxes may be
considered as covered by the phrase or other matters
arising under the National Internal Revenue or other laws
administered by the Bureau of Internal Revenue.

+Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court in divisions

Inaction by the CIR where the NIRC provides a specific

period of action

In cases involving disputed assessments, refunds of

internal revenue taxes, fees or other charges, penalties in
relation thereto, or

Other matters arising under the NIRC or other laws

administered by the BIR

In case the CIR fails to act on a disputed assessment within 180 days from
date of submission of documents, a taxpayer can either: (1) file a petition
for review with the CTA within 30 days after the expiration of 180 days; or
(2) await the final decision of the CIR on the disputed assessment and
appeal such final decision to the CTA within 30 days after receipt of a copy
of such decision. These options are mutually exclusive, and resort to one
bars the application of the other.

Rizal Commercial Banking Corporation v. CIR, GR No. 168498, 24 April

2007.- In Rizal Commercial Banking Corporation v. CIR, the CIR failed to act
on the disputed assessment within 180 days from date of submission of
documents. RCBC opted to file a petition for review before the CTA. This
course of action is sanctioned by Section 7(a)(2) of RA No. 1125, as
amended. Unfortunately, here, the Supreme Court found that the petition
for review was filed out of time, i.e., it was filed more than 30 days after the
lapse of 180 days.

+Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court in divisions

Decisions orders or resolutions of the RTCs in local tax

cases decided or resolved by them in the exercise of their
original jurisdiction

[Philippine British Assurance Company, Inc. v. Republic of the Philippines, GR No.

185588, 2 February 2010. The, petitioner issued customs bonds to its clients in
favor of the COC. These bonds secured the release of imported goods in order that
the goods could be released by the COC without prior payment of the
corresponding customs duties and taxes. Under these bonds, petitioner and its
clients solidarily bound themselves to pay the COC the face value of the bonds in
the event that the bonds expire without either the imported goods being reexported or the proper duties and taxes being paid. The COC filed a complaint
before the RTC for collection of money with damages representing outstanding
unliquidated customs bonds. The RTC ruled in favor of the COC. Upon appeal by
petitioner to the Court of Appeals, the CA deferred judgment as the issue was
within the CTAs jurisdiction, and not the CAs.Petitioners contention was that CA
had jurisdiction over the case because inasmuch as the COCs right was initially
based on its right to collect duties and taxes, the same was converted to a right
arising out of a contract, the bond being a contract between petitioner and the
COC. The Supreme Court adhered to petitioners view and held that: an action to
collect on a bond used to secure the payment of taxes is not a tax collection case,
but rather a simple case for enforcement of a contractual liability. Hence,
appellate jurisdiction belonged to the CA, and not the CTA.

+Exclusive Appellate Jurisdiction over

Civil Tax Cases

Cases within the jurisdiction of the Court in divisions

Decisions of the Com of Customs

In cases involving liability for customs duties, fees, or

other money charges, seizure, detention or release of
property affected, fines forfeitures of other penalties in
relation thereto; or

Other matters arising under the Customs Law or other

laws administered by the BOC

Commissioner of Customs v. Court of Appeals, GR Nos. 111202-05, 31

January 2006.] * In Commissioner of Customs v. Court of Appeals, M/V Star
Ace, coming from Singapore laden with cargo, entered the Port of San
Fernando, La Union for needed repairs. When the COC later became
suspicious that the vessels real purpose in docking was to smuggle its
cargo into the country, seizure proceedings were instituted and
subsequently, two warrants of seizure and detention were issued for the
vessel and its cargo. One of the issues raised was whether allegations of
ownership over the vessel and/or cargo divest the Collector of Customs of
jurisdiction over the seizure proceedings. The Supreme Court held that:
allegations of ownership neither divest the Collector of Customs of such
jurisdiction nor confer upon the trial court jurisdiction over the case.
Ownership of goods or the legality of its acquisition can be raised as
defenses in a seizure proceeding. The actions of the Collectors of Customs
are appealable to the Commissioner of Customs, whose decision, in turn, is
subject to the exclusive appellate jurisdiction of the CTA. Clearly, issues of
ownership over goods in the custody of custom officials are within the
power of the CTA to determine.

+Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court in divisions

Decisions of the Sec Fin on customs cases elevated to him

automatically for review from decisions of the COC which
are adverse to the govt under section 2315 of the TCC

+Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court in divisions

Decisions of the DTI Secretary in the case of nonagricultural product, commodity or article and the DA
Secretary in case of agricultural product, commodity or
article, involving dumping and countervailing duties and
safeguard measures

+Exclusive Appellate Jurisdiction over

Civil Tax Cases

Cases within the jurisdiction of the Court en banc

Decisions or resolutions on MRs or MNTs of the Court in

Division in the exercise of its exclusive appellate
jurisdiction over:

Cases arising from administrative agencies

Local tax cases decided by the RTCs in he exercise of

their original jurisdiction involving final and executory
assessments for taxes, fees, charges and penalties,
where the principal amount claimed is less than P1 m

Criminal offenses arising from violations of the NIRC or

TCC and other laws administered by the BIR and BOC

+Exclusive Appellate Jurisdiction over Civil Tax Cases

Cases within the jurisdiction of the Court en banc

Decision , resolutions or orders on MRs or MNTs of the Court

in division in the exercise of its exclusive original
jurisdiction over:

Tax collection cases

Cases involving criminal offenses arising from violations

of the NIRC or TCC and other laws administered by the
BIR and BOC.

+Exclusive Appellate Jurisdiction over

Civil Tax Cases

Cases within the jurisdiction of the Court en banc

Decisions, resolutions or orders of the RTCs in the exercise

of its appellate jurisdiction over:

Local tax case

Tax collection cases

Criminal offenses arising from violations of the NIRC or

TCC and other laws administered by the BIR and BOC

+Exclusive Appellate Jurisdiction over

Civil Tax Cases

Cases within the jurisdiction of the Court en banc

Decisions of the CBAA in the exercise of its appellate

jurisdiction over cases involving assessment and taxation of
real property originally decided by the provincial or city
board of assessment appeals

Criminal cases Exclusive

Original Jurisdiction

The CTA shall exercise exclusive original jurisdiction

over all criminal cases where the principal amount
involved of taxes and fees is P 1 million or more,
exclusive of charges and penalties, arising from
violations of the NIRC, TCC and other laws administered
by the BIR or BOC

Criminal Cases Exclusive appellate

jurisdiction in criminal cases

Appeals from judgments, resolutions or orders of the

RTCs in tax cases originally decided by them in their
respective territorial jurisdiction; and

Petitions for review of the judgments, resolutions or

orders of the RTCs in the exercise of their appellate
jurisdiction over tax cases originally decided by the
MeTCs, MTCs or MCTCs.

+
Judicial Procedures

Judicial action for collection of

taxes

CTA has exclusive jurisdiction over the ff cases

involving tax collections:

Original jurisdiction in tax collection cases involving final

and executory assessments for taxes, fees, charges and
penalties where the principal amount of taxes and fees,
charges , exclusive of charges and penalties, claimed is
P1M or more

Appellate Jurisdiction over appeals from the judgment,

resolutions or orders of the RTC in tax collection cases
originally decided by them within their respective
jurisdiction. Or decisions of the RTC in exercise of their
appellate jurisdiction over tax collection cases originally
decided by the MTC.

+
Who may appeal

Any party adversely affected by a decision, ruling, or inaction of :

CIR

COC

DOF Sec

DTI SEC

DA Sec

RTC ( in the exercise of its original jurisdiction)

A party adversely affected by the decision or resolution of a

Division on a MR or MNT

A party adversely affected by the decision or ruling of the

CBAA and the RTC in the exercise of their appellate
jurisdiction

+
Mode and Effect of Appeal

Petition for Review under Rule 42 to be acted upon by

the CTA in division with respect to a decision, ruling or
inaction of:

CIR (on disputed assessments or claim for refund of internal

revenue taxes erroneously or illegally collected)

COC

DOF Sec

DTI Sec

DA Sec

RTC ( in the exercise of their original jurisdiction)

+
Mode and Effect of Appeal

Petition for Review under Rule 43 to be acted upon the

CTA en banc with respect to a decision or resolution on
the Court in Division on a MR or MNT

Period to file : 15 days. Extendable by 15 days

+
Mode and effect of Appeal

Petition for review under Rule 43 to be acted upon by

the CTA en banc with respect to the decisions or
rulings of :

CBAA

RTCs ( in the exercise of their appellate jurisdiction

Period to file: 30 days

+
Mode and Effect of Appeal

Appeal within 30 days from receipt of decision or period

of inaction of CIR, COC, SECFIN, SECDTI,SECDA, or
CBAA or RTC:

Generally appeal is to the Division

Except : appeal by filing a Petition for Review to En banc in

case of decisions of CBAA and RTC in the exercise of their
appellate jurisdiction

+
Mode and Effect of Appeal

In case the decision of the Division is adverse

File an MR with the same Division within 15 days from

Notice thereof

+
Mode and Effect of Appeal

In case resolution of Division on the MR or New Trial is

still adverse

File Petition for Review with the en banc

+
Mode and Effect of Appeal

In case the decision of the CTA en banc is adverse, file

a review on certiorari with the SC to Rule 45 of the
Rules of Court

Rule on Suspension of
Collection

General Rule No injunction to restrain collection of

taxes

Rule on Suspension of Collection

of Taxes

Exception: Under Section 9 of RA 9282, suspension is

allowed when the following conditions concur:

It is an appeal to the CTA from a decision of the CIR, COC or

the RTC, provincial, municipal treasurer, SECFIN, SECDTI,
SECDA, as the case maybe and

In the opinion of the Court, the collection by the concerned

government agencies may jeopardize the interest of the
govt/taxpayer

In case of suspension, what is

required of the taxpayer

Taxpayer will be required to either deposit the amount

claimed or file a surety bond for not more than double
the amount with the court.

Rule on the amount of the Surety

bond

EB Resolution No. 02-2015

The CTA en banc resolved to limit the meaning of the

amount claimed found in Section 11 to mean the
principal amount of the deficiency taxes only, excluding
penalties, interest and surcharges

+
Taking of Evidence

Court may receive evidence in the ff cases:

In all cases falling within the original jurisdiction of the CTA

in division

In appeals in both civil and criminal cases where the Courts

grants a new trial

+
Taking of Evidence

Who are authorized to take evidence:

Any justice of the court when:

The determination of a question of fact arises at any stage of

the proceedings

The taking of an account is necessary

The determination of an issue of a fact requires the

examination of a long account

Any court official for the sole purpose of marking comparison with
the original and identification by witnesses of the received
documentary evidence

Motion for Reconsideration/Motion

for New Trial

Any aggrieved party

15 days

No second MR or MNT

Filing of MR or MNT shall suspend the running of the

period within which an appeal my be perfected

+
Grounds for Filing an MR/ MNT

Fraud, accident, Mistake or excusable negligence

Newly discovered evidence

+
Appeal to the CTA en banc

Who may file

A party adversely affected

Who may appeal to the CTA en

banc

Note: A decision or order of a Division can not be

directly appealed to the CTA en banc. There must be a
timely filing of MR or MNT ( Rule 8, Section 1 of the
Revised Rules of the CTA ; COC v Marina Sales 635
SCRA 606, 2010)

Petition for Review on Certiorari to

the Supreme Court

Any party adversely affected by a decision or ruling of

the CTA en banc may appeal to the Supreme Court

The mode of Appeal is a petition for review on certiorari

under Rule 45

+
Criminal cases

Institutions and prosecution of criminal actions

Filing of an Information with the CTA in Division in the

exercise of its original jurisdiction

Filing will not interrupt the running of the period of

prescription

For violations of the NIRC and other laws, CIR must

approved filing

Violations of the TCC, COC must approved the filing

Public prosecutor controls the prosecution

The corresponding civil action for the recovery of civil

liability for taxes and penalties shall be deemed jointly
instituted in the same proceeding.

+
Criminal cases

Appeal and period to appeal

Modes of appeal

Period to appeal 15 days

Notice of appeal pursuant to Sections 3(a) and 6 Rule 122

of the Rules of Court to the CTA in Division with respect to
criminal cases decided by the RTC in its original
jurisdiction

Petition for review under Rule 43 to the CTA en banc with

respect to criminal cases decided the

CTA in division in the exercise of its appellate

jurisdiction

RTC in the exercise of its appellate jurisdiction

+
Criminal cases

Petition for review on certiorari to the SC

Any party adversely affected by a decision or ruling of the

CTA en banc to the SC
Mode of appeal is Rule 45

Taxpayers Suit Impugning the

Validity of Tax Measures

Taxpayers Suit

Will prosper only if the governmental acts being questioned

involve disbursement of public funds upon the theory that
the expenditure of public funds by an officer of the state for
the purpose of administering an unconstitutional act
constitute a misapplication of such funds, which may be
enjoined at the request of a taxpayer.

A taxpayer suit is proper only when there is an exercise of

the spending power of Congress.

+
Distinguised from Citizens suit

TS, the plaintiff is affected by the expenditure of public

funds, in CS, he is just but a mere instrument of the
public concern

TS:the right of the citizen and a taxpayer to maintain

an action in courts to restrain the unlawful use of
public funds,. In CT every citizen has the duty to
interfere and see that a public offense be properly
pursued and punished and public grievance be
remedied.

+
Requisites

Public funds are disbursed by a political subdivision or

instrumentality and in doing so a law is violated or
some irregularity is committed

Petitioner is directly affected by the alleged ultra vires

act

Concept of loco standi (Standing

to sue)

Has personally suffered some actual or threatened

injury because of the allegedly illegal conduct of the
government

Injury is fairly traceable to the challenged action

Injury is likely to be redressed by the remedy being

sought

Doctrine of Transcendental
Importance

The character of the funds or other assets involved in

the case

Presence of a clear case of disregard of a constitutional

or statutory prohibition by the public respondent
agency or instrumentality of the government

Lack of any other party with a more direct and specific

interest in the questions being raised

+
Ripeness

The issue of ripeness is generally treated in terms of

actual injury to the plaintiff, Hence a question is ripe for
adjudication when the act being challenged has had a
direct adverse effect on the individual challenging it.