Tax notes: Appellate jurisdiction over validity of BIR rulings-A A +A
Monday, November 4, 2013
THE validity of rulings issued by the Bureau of Internal Revenue (BIR) should be elevated to the Secretary of Finance and eventually to the regular courts, not the Court of Tax Appeals (CTA).
In general, the CTA has exclusive appellate jurisdiction to review, among others, the decisions of the Commissioner of Internal Revenue involving disputed assessment, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other laws or part of law administered by the BIR (Section 7 of RA 1125, as amended by RA 9282).
Where the issue involved is the validity of a BIR Ruling, the CTA held that this is beyond the jurisdiction of the CTA. In its decision, the CTA cited the case of British American Tobacco v. Jose Isidro N. Camacho (GR 163583, Aug. 20, 2008) where the SC held that while the law confers on the CTA jurisdiction to resolve tax disputes in general; this does not include cases where the constitutionality of a law or rule is challenged. Where what is assailed is the validity or constitutionality of a law, or a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same (Delta Airlines, Inc. v. Hon. Secretary Cesar V. Purisima and Commissioner of Internal Revenue, CTA Case No. 8360, Aug. 15, 2013).
Hence, in the instance of immediate filing of a case questioning the validity of a BIR ruling with the CTA, this will result in the dismissal of the case on grounds of failure to exhaust administrative remedies and the absence of CTA jurisdiction.
Published in the Sun.Star Cebu newspaper on November 05, 2013.