Violation? Simultaneous issuance of PAN and FAN... EmelinoTMaestro.com

On December 17, 2010, the BIR issued to taxpayer a Preliminary Assessment Notice (PAN), which the latter received on December 29, 2010. Thereafter, on January 7, 2011, the BIR issued the Formal Letter of Demand (FLD) and Assessment Notices. On January 13, 2011, taxpayer filed a letter of protest against the PAN. Subsequently, on February 14, 2011, taxpayer filed a letter of protest against the FLD. In view of the BIR’s failure to act o
n the protest within 180 days from the submission of documents, taxpayer filed a petition for review with the CTA. The taxpayer argued, among others, that the assessment is null and void, the FLD having been issued before the lapse of taxpayer’s 15-day period to file protest to the PAN. According to the Court, the issuance of the FLD and Assessment Notices before the lapse of the 15-day period does not violate the due process requirement under the law. This must be so because the essence of due process in administrative proceedings is the opportunity to explain one’s side or seek a reconsideration of the action or ruling complained of. In this case, the taxpayer was given ample opportunity to explain its side or to contest the PAN and the FLD. (Merial Philippines, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 8370, May 13, 2015)