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REPUBLIC ACT NO.

1125

REPUBLIC ACT NO. 1125 - AN ACT CREATING THE
COURT OF TAX APPEALS
Section 1. Court; Judges; qualifications; salary; tenure. There is hereby created a Court of Tax Appeals which shall
consist of a residing Judge and two Associate Judges! each of who" shall be appointed by the resident! with the consent of
the Co""ission on Appoint"ents. The residing Judge shall be so designated in the co""ission issued to hi" by the
resident! and the Associate Judges shall ha#e precedence according to the date of their co""issions. The residing Judge
shall recei#e a co"pensation of thirteen thousand pesos per annu" and shall ha#e the sa"e qualifications! ran$! category and
pri#ileges as the residing Judge of the Court of %ndustrial &elations. The Associate Judges shall each recei#e a co"pensation
of twel#e thousand pesos per annu" and shall ha#e the sa"e qualifications! ran$! category and pri#ileges as a "e"ber of the
Court of %ndustrial &elations. The residing Judge and the Associate Judges shall be appointed to hold office during good
beha#ior! until they reach the age of se#enty! or beco"e incapacitated to discharge the duties of their office! unless sooner
re"o#ed for the sa"e causes and in the sa"e "anner pro#ided by law for "e"bers of the 'udiciary of appellate ran$.
Section (. )uoru"; te"porary #acancy. Any two Judges of the Court of Tax Appeals shall constitute a quoru"! and the
concurrence of two 'udges shall be necessary to pro"ulgate any decision thereof. %n case of te"porary #acancy! disability or
disqualification! for any reason! of any of the 'udges of the said Court! the resident "ay! upon the request of the residing
Judge! designate any Judge of *irst %nstance to act in his place; and such Judge of *irst %nstance shall be duly qualified to act
as such.
Section +. Cler$ of court; appoint"ent; qualification; co"pensation. The Court of Tax Appeals shall ha#e the Cler$ of
Court who shall be appointed by the resident with the consent of the Co""ission on Appoint"ents. ,o person shall be
appointed Cler$ of Court unless he is duly authori-ed to practice law in the hilippines. The Cler$ of Court shall exercise the
sa"e powers and perfor" the sa"e duties in regard to all "atters within the court.s 'urisdiction! as are exercise and
perfor"ed by cler$s of Court of *irst %nstance! in so far of those powers and the perfor"ance of those duties the cler$ shall be
under the direction of the said court. The Cler$ of Court shall recei#e a co"pensation of six thousand pesos per annu".
Section /. 0ther subordinate e"ployees. The Court of Tax Appeals shall appoint! in accordance with the Ci#il Ser#ice
1aw! rules and regulations! the necessary personnel to assist it in the perfor"ance of its duties. The said Court shall fix their
salaries and prescribe their duties.
Section 2. 3isqualifications. ,o 'udge or other officer or e"ployee of the Court of Tax Appeals shall inter#ene! directly or
indirectly! in the "anage"ent or control of any pri#ate enterprise which in any way "ay be affected by the functions of the
Court. Judges of the said Court shall be disqualified fro" sitting in any case on the sa"e grounds pro#ided under &ule one
hundred twenty4six of the &ules of Court for the disqualification of 'udicial officers. ,o person who has once ser#iced in the
Court in a per"anent capacity! either as residing Judge or as Associated Judge thereof! shall be qualified to practice as
counsel before the Court for a period of one year fro" his separation therefro" for any cause.
Section 5. lace of office. The Court of Tax Appeals shall ha#e its office in the City of 6anila! and shall hold hearings at
such ti"e and place as it "ay! by order in writing! designate with a #iew to assuring a reasonable opportunity for taxpayers to
appear with a little incon#enience and expense as practicable.
Section 7. Jurisdiction. The Court of Tax Appeals shall exercise exclusi#e appellate 'urisdiction to re#iew by appeal! as
herein pro#ided.
819 3ecisions of the Collector of %nternal &e#enue in cases in#ol#ing disputed assess"ents! refunds of internal re#enue taxes!
fees or other charges! penalties i"posed in relation thereto! or other "atters arising under the ,ational %nternal &e#enue
Code or other law or part of law ad"inistered by the :ureau of %nternal &e#enue;
8(9 3ecisions of the Co""issioner of Custo"s in cases in#ol#ing liability for custo"s duties! fees or other "oney charges;
sei-ure! detention or release of property affected fines! forfeitures or other penalties i"posed in relation thereto; or other
"atters arising under the Custo"s 1aw or other law or part of law ad"inistered by the :ureau of Custo"s; and
8+9 3ecisions of pro#incial or city :oards of Assess"ent Appeals in cases in#ol#ing the assess"ent and taxation of real
property or other "atters arising under the Assess"ent 1aw! including rules and regulations relati#e thereto.
Section ;. Court of record; seal; proceedings. The Court of Tax Appeals shall be a court of record and shall ha#e a seal
which shall be 'udicially noticed. %t shall prescribe the for" of its writs and other processes. %t shall ha#e the power to
pro"ulgate rules and regulations for the conduct of the business of the Court! and as "ay be needful for the unifor"ity of
decisions within its 'urisdiction as conferred by law! but such proceedings shall not be go#erned strictly by technical rules of
e#idence.
Section <. *ees. The Court shall fix reasonable fees for the filing of an appeal! for certified copies of any transcript of
record! entry or other docu"ent! and for other authori-ed ser#ices rendered by the Court or its personnel.
Section 1=. ower to ad"inister oaths; issue subpoena; punish for conte"pt. The Court shall ha#e the power to
ad"inister oaths! recei#e e#idence! su""on witnesses by subpoena and require the production of papers or docu"ents by
subpoena duce tecu"! sub'ect in all respects to the sa"e restrictions and qualifications as apply in 'udicial proceedings of a
si"ilar nature. The Court shall! in accordance with &ule sixty4four for the &ules of Court! ha#e the power to punish for
conte"pt for the sa"e causes! under the sa"e procedure and with the sa"e penalties pro#ided therein.
Section 11. >ho "ay appeal; effect of appeal. Any person association or corporation ad#ersely affected by a decision or
ruling of the Collector of %nternal &e#enue! the Collector of Custo"s or any pro#incial or city :oard of Assess"ent Appeals
"ay file an appeal in the Court of Tax Appeals within thirty days after the receipt of such decision or ruling.
,o appeal ta$en by the Court of Appeals fro" the decision of the Collector of %nternal &e#enue or the Collector of Custo"s
shall suspend the pay"ent! le#y! distraint! and or sale of any property of the taxpayer for the satisfaction of his tax liability as
pro#ided by existing law; ro#ided! howe#er! That when in the opinion of the Court the collection by the :ureau of %nternal
&e#enue or the Co""issioner of Custo"s "ay 'eopardi-e the interest of the ?o#ern"ent and@or the taxpayer the Court at
any stage of the proceeding "ay suspend the said collection and require the taxpayer either to deposit the a"ount clai"ed or
to file a surety bond for not "ore than double the a"ount with the Court;
Section 1(. Ta$ing of e#idence. The Court "ay! upon proper "otion on or its initiati#e! direct that a case! or any issue
thereof! be assigned to one of its "e"bers for the ta$ing of e#idence! when the deter"ination of a question of fact arises upon
"otion or otherwise in any stage of the proceedings! or when the ta$ing of an account is necessary! or when the deter"ination
of an issue of fact requires the exa"ination of a long account. The hearing before such "e"ber shall proceed in all respects as
though the sa"e had been "ade before the Court.
Apon the reco""endation of such hearing such "e"ber! he shall pro"ptly sub"it to the Court his report in writing! stating
his findings and conclusions; and thereafter! the Court shall render its decisions on the case! adopting! "odifying! or re'ecting
the report in whole or in part! as the case "ay be! or the Court "ay! in its discretion reco""it it with instructions! or recei#e
further e#idence.
Section 1+. 3ecision. Cases brought before the Court shall be decided within thirty days after the sub"ission thereof for
decision. 3ecisions of the Court shall be in writing! stating clearly and distinctly the facts and the law on which they are based!
and signed by the 'udges concurring therein. The Court shall pro#ide for the publication of its decisions in the 0fficial ?a-ette
in such for" and "anner as "ay best be adopted for public infor"ation and use.
As in the case of 'udicial officers under section one hundred twenty4nine of the Ad"inistrati#e Code! the 'udges of the Court
shall each certify on their applications for lea#e! and upon salary #ouchers presented by the" for pay"ent! or upon the
payrolls under which their salaries are paid! that all proceedings! petitions and "otions which ha#e been sub"itted to the
Court for deter"ination or decision for a period of thirty days or "ore ha#e been deter"ined or decided by the Court on or
before the date of "a$ing the certificate! and no lea#e shall be granted and no salary shall be paid without such certificate.
Section 1/. Bffect of decision that tax is barred by statute of li"itations. %f the assess"ent or collection of any tax is
barred by any statute of li"itations! the decisions of the Court that effect shall be considered as its decision that there is no
deficiency in respect of such tax.
Section 12. ublicity of proceedings and publication of decisions. All decisions of! and all e#idence recei#ed by the Court
and its di#isions! including transcript of stenographic reports of the hearings! shall be public records open to the inspection of
the public! except that after the decision of the Court in any proceedings has beco"e final the Court "ay! upon "otion of the
taxpayer or the ?o#ern"ent per"it the withdrawal! by the part entitled thereto of originals of boo$s! docu"ents and records!
and or "odels! diagra"s! and other exhibits! introduced in e#idence before the Court or any di#ision; or the Court "ay! on its
own "otion! "a$e such other disposition thereof as it dee"s ad#isable. The Court shall pro#ide for the publication of its
decisions in the 0fficial ?a-ette in such for" and "anner as "ay be best adopted for public infor"ation and use.
Section 15. 3a"ages. >here an appeal is found to be fri#olous! or that proceedings ha#e been instituted "erely for delay!
the Court "ay assess da"age against the appellants in an a"ount not exceeding fi#e hundred pesos! which shall be collected
in the sa"e "anner as fines or other penalties authori-ed by law.
Section 17. Ciolation of penal law. >hen! in the perfor"ance of its functions! it should appear to the Court that a cri"e
or other #iolation of law has been co""itted! or! that there are reasonable grounds to belie#e that any official! e"ployee or
pri#ate person is guilty of any cri"e! offense or other #iolation! the Court shall refer the "atter to the proper depart"ent!
bureau or office for in#estigation or the institution of such cri"inal or ad"inistrati#e action as the facts and circu"stances of
the case "ay warrant.
Section 1;. Appeal to the Supre"e Court. ,o 'udicial proceeding against the ?o#ern"ent in#ol#ing "atters arising
under the ,ational %nternal &e#enue Code! the Custo"s 1aw or the Assess"ent 1aw shall be "aintained! except as herein
pro#ided! until and unless an appeal has been pre#iously filed with the Court of Tax Appeals and disposed of in accordance
with the pro#isions of this Act.
Any party ad#ersely affected by any ruling! order or decision of the Court of tax Appeals "ay appeal therefro" to the
Supre"e Court by filing with the said Court a notice of appeal and with the Supre"e Court a petition for re#iew! within thirty
days fro" the date he recei#es notice of said ruling! order or decision. %f! within the aforesaid period! he fails to perfect his
appeal! the said ruling! order or decision shall beco"e final and conclusi#e against hi"
%f no decision is rendered by the Court within thirty days fro" the date a case is sub"itted for decision! the party ad#ersely
affected by said ruling! order or decision "ay file with said Court a notice of his intention to appeal to the Supre"e Court! and
if! within thirty days fro" the filing of said notice of intention to appeal! no decision has as yet been rendered by the Court! the
aggrie#ed party "ay file directly with the Supre"e Court an appeal fro" said ruling! order or decision! notwithstanding the
foregoing pro#isions of this section.
%f any ruling! order or decision of the Court of Tax Appeals be ad#erse to the ?o#ern"ent! the Collector of %nternal &e#enue!
the Co""issioner of Custo"s! or the pro#incial or city :oard of Assess"ent Appeals concerned "ay li$ewise file an appeal
therefro" to the Supre"e Court in the "anner and within the sa"e period as abo#e prescribed for pri#ate parties.
Any proceeding directly affecting any ruling! order or decision of the Court of Tax Appeals shall ha#e preference o#er all other
ci#il proceedings except habeas corpus! wor$"en.s co"pensation and election cases.
Section 1<. &e#iew by certiorari. Any ruling! order or decision of the Court of Tax Appeals "ay li$ewise be re#iewed by
the Supre"e Court upon a writ of certiorari in proper cases. roceedings in the Supre"e Court upon a writ of certiorari or a
petition for re#iew! as the case "ay be! shall be in accordance with the pro#isions of the &ules of Court or such rules as the
Supre"e Court "ay prescribe.
Section (=. Appropriation. The su" of se#enty4thousand pesos is hereby appropriated out of any funds in the ,ational
Treasury not otherwise appropriated for the salaries and the purchase of supplies and equip"ent necessary for the operation
of the Court of Tax Appeals herein established during the current fiscal year. Thereafter the funds necessary for the operation
of the Court shall be included in the regular Appropriation Act.
Section (1. ?eneral pro#isions. >hene#er the words D:oard of Tax AppealsD are used in Co""onwealth Act ,u"bered
*our hundred and se#enty! otherwise $nown as the Assess"ent 1aw! or in other laws! rules and regulations relati#e thereto!
the sa"e shall read D:oard of Assess"ent Appeals.D
The Central :oard of Tax Appeals created under section two of Co""onwealth Act ,u"bered *i#e hundred and thirty is
hereby abolished.
Bxecuti#e 0rder ,u"bered *our hundred and one4A! dated the fifth of January! nineteen hundred and fifty4 one! is repealed
and the :oard of Tax Appeals created therein! abolishedE ro#ided! howe#er! That all cases heretofore decided by the said
:oard of Tax Appeals and thence appealed to the Supre"e Court pursuant to Bxecuti#e 0rder ,u"bered *our hundred one4
A shall be decided by the Supre"e Court on the "erits to all intents and purposes as if said Bxecuti#e 0rder has been duly
enacted by the CongressE And! ro#ided! further! That all cases now pending in the said :oard of Tax Appeals shall be
transferred to the Court of Tax Appeals and shall be heard and decided by the latter to all intents and purposes as if they had
been originally filed therein.
Any law or part of law! or any executi#e order! rule or regulation or part thereon! inconsistent with the pro#isions of this Act is
hereby repealed.
Section ((. ending cases to be re"anded to Court. All cases in#ol#ing disputed assess"ent of %nternal &e#enue taxes or
custo"s duties pending deter"ination before the Court of *irst %nstance shall be certified and re"anded by the respecti#e
cler$ of court to the Court of Tax Appeals for final disposition thereof.
Section (+. Separability Clause. %f any clause! sentence! paragraph or part of this act shall be ad'udged by any court of
co"petent 'urisdiction to be in#alid! such 'udg"ent shall not affect! i"pair or in#alidate the re"ainder of this Act! but shall
confined in its operations to the clause! sentence! paragraph or part thereof directly in#ol#ed in the contro#ersy.
Section (/. This Act shall ta$e effect upon its appro#al.
Approved: June 16, 1954