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    10 CIR Vs Lancaster Case Digest

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    Allan
    The Bureau of Internal Revenue issued a Letter of Authority to examine Lancaster Philippines' books from 1998. However, the assessment issued against Lancaster disallowed expenses from 1999, outside the period authorized. The Court of Tax Appeals cancelled the assessment, finding the revenue officers exceeded their authority. The Supreme Court affirmed, as the assessment covered a period not specified in the Letter of Authority and was therefore void.

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    10 CIR Vs Lancaster Case Digest

    Uploaded by

    Allan
    477 views1 page
    The Bureau of Internal Revenue issued a Letter of Authority to examine Lancaster Philippines' books from 1998. However, the assessment issued against Lancaster disallowed expenses from 1999, outside the period authorized. The Court of Tax Appeals cancelled the assessment, finding the revenue officers exceeded their authority. The Supreme Court affirmed, as the assessment covered a period not specified in the Letter of Authority and was therefore void.

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    10 CIR vs Lancaster Case Digest

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    10 CIR vs Lancaster Case Digest

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    The Bureau of Internal Revenue issued a Letter of Authority to examine Lancaster Philippines' books from 1998. However, the assessment issued against Lancaster disallowed expenses from 1999, outside the period authorized. The Court of Tax Appeals cancelled the assessment, finding the revenue officers exceeded their authority. The Supreme Court affirmed, as the assessment covered a period not specified in the Letter of Authority and was therefore void.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    477 views1 page

    10 CIR Vs Lancaster Case Digest

    Uploaded by

    Allan
    The Bureau of Internal Revenue issued a Letter of Authority to examine Lancaster Philippines' books from 1998. However, the assessment issued against Lancaster disallowed expenses from 1999, outside the period authorized. The Court of Tax Appeals cancelled the assessment, finding the revenue officers exceeded their authority. The Supreme Court affirmed, as the assessment covered a period not specified in the Letter of Authority and was therefore void.

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    COMMISSIONER OF INTERNAL REVENUE, Petitioner

    vs.
    LANCASTER PHILIPPINES, INC., Respondent

    G.R. No. 183408 July 12, 2017

    Facts:
    Lancaster Philippines, Inc. (Lancaster) is a domestic corporation established in 1963 and is engaged
    in the production, processing, and marketing of tobacco. In 1999, the Bureau of Internal
    Revenue (BIR) issued Letter of Authority (LOA) 00012289 authorizing its revenue officers to examine
    Lancaster's books of accounts and other accounting records for all internal revenue taxes due
    from taxable year 1998 to an unspecified date. After the conduct of examination, the BIR issued a
    Preliminary Assessment Notice (PAN) and subsequently a Final Notice of Assessment (FAN) which
    cited Lancaster for deficiency income tax. The deficiency income tax assessment which the BIR issued
    against Lancaster was based on the disallowance of expenses reported in FY 1999, or for the period 1
    April 1998 to 31March1999.On appeal with the Court of Tax Appeals (CTA), the CTA ordered for the
    cancellation and withdrawal of the deficiency income tax assessment issued against Lancaster.
    Petitioner appealed the decision citing that the Court of Tax Appeals erred in holding the Revenue
    Officers exceeded their authority to investigate the period not covered by the letter of authority.
    Issue:
    Whether or not the Revenue Officers exceeded the scope of their authority when they issued the
    assessment against respondent.
    Ruling:
    Yes. The revenue examiners had exceeded their authority when they issued the assessment against
    Lancaster. The Letter Of Authority (LOA) No. 00012289 authorized the BIR officers to examine the
    books of account of Lancaster for the taxable year 1998 only or, since Lancaster adopted a fiscal
    year (FY), for the period 1 April 1997 to 31March1998 only. The Subject LOA specified that the
    examination should be for the taxable year 1998 only but the subsequent assessment issued against
    Lancaster involved disallowed expenses covering the next fiscal year, or the period ending 31 March
    1999. The taxable year covered by the assessment being outside of the period specified in the LOA
    in this case, the assessment issued against Lancaster is, therefore, void.

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