Commissioner of Internal Revenue v. Script2010
REITERATIONFacts
The Antecedents: Respondent Script2010, Inc. (Script) was investigated by the Bureau of Internal Revenue (BIR) for its taxable liabilities for the calendar year 2011. Following this investigation, the Commissioner of Internal Revenue (CIR) issued assessments for deficiency income tax, value-added tax (VAT), and expanded withholding tax (EWT). Script contested these assessments, leading to a series of exchanges and decisions from the BIR and the Court of Tax Appeals (CTA). Procedural History: After receiving a Letter of Authority and subsequent assessment notices, Script protested the deficiency tax assessments. The CTA Second Division initially partially granted Script's petition, affirming some assessments but cancelling others due to prescription and lack of factual basis. However, upon Script's motion for reconsideration, the CTA Second Division amended its decision, cancelling and setting aside all assessments against Script. The CIR's subsequent motion for extension to file a petition for review was denied, and its motion for reconsideration of that denial was also denied. The CIR then appealed to the CTA En Banc, which affirmed the Second Division's amended decision. The CIR subsequently filed a Petition for Review on Certiorari with the Supreme Court. The Petition: The Commissioner of Internal Revenue (CIR) filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the decision and resolution of the CTA En Banc. The CIR raises two main issues: (1) whether its appeal to the CTA En Banc was invalid, and (2) whether its actions violated Script's right to due process. The Supreme Court, however, denied the petition, primarily on the ground that the CTA Second Division's amended decision had attained finality due to the CIR's failure to file a timely motion for reconsideration, rendering the subsequent appeals procedurally infirm.
Issue(s)
Whether the CIR's appeal to the CTA En Banc was valid. Whether the CIR violated Script's right to due process.
Ruling
The Supreme Court denied the Petition for Review on Certiorari, affirming the Decision and Resolution of the CTA En Banc. The Court held that the Amended Decision of the CTA Second Division had attained finality and could no longer be disturbed.
Ratio Decidendi
On the validity of the CIR's appeal: The Court ruled that the CIR's appeal to the CTA En Banc was invalid because it failed to file a timely motion for reconsideration of the CTA Second Division's Amended Decision dated February 17, 2020. The CIR received this Amended Decision on February 20, 2020, and the reglementary period to file a motion for reconsideration expired on March 6, 2020. The filing of a Motion for Extension of Time to File Petition for Review did not toll the running of the period to appeal. Consequently, the Amended Decision attained finality, and the CTA En Banc correctly denied the CIR's petition for review on procedural grounds. The Court reiterated that the filing of a prior motion for reconsideration is mandatory for an appeal to the CTA En Banc. The Court emphasized that the negligence of counsel binds the client. The CIR's argument that its counsel inadvertently filed a Motion for Extension instead of a motion for reconsideration was unavailing. The Court held that clients are bound by the actions of their counsel, and there would be no end to litigation if a lawyer's mistake or negligence were always admitted as a reason for reopening a case, unless the actuations were gross or palpable, resulting in serious injustice, which was not the case here. The CIR was duly given its day in court. The Court stressed that once a judgment becomes final and executory, no court, not even the Supreme Court, can modify or revise it. The doctrine of finality and immutability of judgments is grounded on public policy and sound practice to put an end to litigation. The exceptions to this doctrine, such as clerical errors, void judgments, or supervening circumstances rendering execution unjust, were not present in this case. The CIR's attempt to salvage the case by filing additional pleadings after the Amended Decision had attained finality was an undue delay that caused injustice to Script and should not be countenanced. On the violation of Script's right to due process: The Court did not delve into the merits of the due process claim because the Amended Decision had already attained finality. However, the Court noted that the CTA En Banc found that Script's right to due process was violated because the CIR issued the Formal Letter of Demand (FLD-FAN) on January 8, 2015, before Script's mandatory 15-day period to respond to the Preliminary Assessment Notice (PAN), which Script received on December 29, 2014, had expired. The CTA En Banc confirmed that the CIR preempted Script's right to reply to the PAN.
Main Doctrine
A judgment that has attained finality can no longer be modified or revised by any court, including the Supreme Court, except for specific exceptions not present in this case. Failure to file a timely motion for reconsideration of an amended decision renders it final and executory.