LANZ AIDAN L OLIVESTAXATION 2 TAX REMEDIES DIGEST COMPILATION
1) Commissioner Of Internal Revenue vs. Lascona Land Co., Inc. CA-G.R. SP No. 58061. October 25, 2005
Facts: This is a petition for review that seeks to annul the CTA decision withdrawing the deficiency in income tax liability of Lascona Land Co.
Sometime in March 1998, the Commissioner of Internal Revenue (herein petitioner) issued Assessment Notice No. 0000047-93-407 against Lascona Land Co., Inc. (herein respondent) informing the latter of its alleged deficiency income tax for the year 1993 in the amount of P753,266.56.3 As a consequence, respondent filed a letter protest on April 20, 1998 which was denied by the OIC, Regional Director, Bureau of Internal Revenue (BIR), Revenue Region No. 8, Makati City.
The case was filed in the Court of Tax Appeals (CTA). After due proceedings, the CTA rendered the assailed Decision dated January 4, 2000 nullifying the subject assessment. In seeking reconsideration thereof, petitioner further justified its action declaring the said assessment final, executory and demandable.
The CTA based its decision on Section 3 (3.1.5) of Revenue Regulations No. 12-99:If the Commissioner or his duly authorized representative fails to act on the taxpayers protest within one hundred eighty (180) days from date of submission, by the taxpayer, of the required documents in support of his protest, the taxpayer may appeal to the Court of Tax Appeals within thirty (30) days from the lapse of the said 180-day period, otherwise, the assessment shall become final, executory and demandable.Hence this petition.
Issue: Whether or not the contention of the CIR is correct.
Held: YES. In the case at bar, it is undisputed that respondent filed its protest on April 20, 1998 and must have submitted its supporting documents within 60 days therefrom or until June 19, 1998. Thereafter, the petitioner has 180 days or until December 16, 1998 within which to act on the subject protest. In turn, respondent has another 30 days reckoned from its actual receipt of the latters decision, if any, or the lapse of the 180-day period counted from December 17, 1998 or until January 16, 1999, whichever comes first, to elevate its appeal to the CTA. However, records show that respondent appealed to the said court only on April 12, 1999, after almost three (3) months from the lapse of the 180-day period. As such, its appeal was clearly filed out of time rendering the disputed assessment final and demandable.The prescribed period has lapsed. CIR won.
2) Lascona Land Co., Inc.,petitioner, vs. Commissioner of Internal Revenue, respondent. G.R. No. 171251. March 5, 2012
Facts: This is a petition for review on certiorari under Rule 45 to reverse the decision of the CA in the previous case discussed.
On March 27, 1998, the Commissioner of Internal Revenue (herein petitioner) issued Assessment Notice No. 0000047-93-407 against Lascona Land Co., Inc. (herein respondent) informing the latter of its alleged deficiency income tax for the year 1993 in the amount of P753,266.56.3 As a consequence, respondent filed a letter protest on April 20, 1998 which was denied by the OIC, Regional Director, Bureau of Internal Revenue (BIR), Revenue Region No. 8, Makati City.
The CA ruled in favor of the CIR. Hence, this petition by Lascona Land.
Issue: Whether or not the contention of the CIR is correct.
Held: NO. The SC ruled that the revenue regulation to which the CIR anchored its contention is invalid. Section 228 of the National Internal Revenue Code provides that a taxpayer has two remedies if the CIR failed to act on his protest within the 180-day period, to wit;1) the taxpayer adversely affected by the decision may appeal to the CTA within 30 days from receipt of the decision, or2) may appeal to the CTA within 30 days from the lapse of the one hundred eighty (180)-day period.
From the above provision, the taxpayer was given two options in case CIR failed to act on their claim. First is to appeal to the CTA within 30 days from the lapse of the 180 day period; or second, wait for the CIR to issue the decision and then appeal, if adverse, to the CTA within 30 days from the receipt of the decision by the taxpayer
In the case at bar, Lascona waited for the CIR to decide on the case and it did not appeal within 30 days from the lapse of the 180-day period. Lascona received the adverse decision of the CIR on March 12, 1999. It appealed on April 12, 1999 which is still within the 30-day period to appeal to the CTA.
The revenue regulation in question is invalid because in effect, it limited the remedy provided for by the law. Section 228 of the NIRC prevails over the said revenue regulation. The said revenue regulation cannot validly take away the option of the taxpayer to continue waiting, even after the lapse of the 180 day period, for the CIR to decide on the case and just appeal, within 30 days from receipt, if the CIRs ruling is adverse.It must however be noted that these two remedies are mutually exclusive3) Oceanic Wireless Network, Inc., petitioner, vs. Commissioner of Internal Revenue, The Court of Tax Appeals, and The Court of Appeals, respondents. G.R. No. 148380. December 9, 2005.
Facts: This is a Petition for Review on Certiorari seeking to reverse and set aside the Decision of the Court of Appeals for lack of jurisdiction.
On March 17, 1988, Oceanic Wireless Network (petitioner) received from the Bureau of Internal Revenue (BIR) deficiency tax assessments for the taxable year 1984 in the total amount of P8,644,998.71. Petitioner filed its protest against the tax assessments and requested a reconsideration or cancellation of the same in a letter to the BIR Commissioner.
Acting in behalf of the BIR Commissioner, then Chief of the BIR Accounts Receivable and Billing Division, Mr. Severino B. Buot, reiterated the tax assessments while denying petitioners request for reinvestigation. Said letter likewise requested petitioner to pay within 10 days from receipt thereof, otherwise the case shall be referred to the Collection Enforcement Division of the BIR National Office for the issuance of a warrant of distraint and levy without further notice.
Upon petitioners failure to pay the subject tax assessments within the prescribed period, the Assistant Commissioner for Collection, acting for the Commissioner of Internal Revenue, issued the corresponding warrants of distraint and/or levy and garnishment.
Petitioner filed a Petition for Review with the Court of Tax Appeals (CTA) to contest the issuance of the warrants to enforce the collection of the tax assessments. The CTA dismissed the petition for lack of jurisdiction.Petitioner filed a Motion for Reconsideration arguing that the demand letter cannot be considered as the final decision of the Commissioner of Internal Revenue on its protest because the same was signed by a mere subordinate and not by the Commissioner himself.
With the denial of its motion for reconsideration, petitioner consequently filed a Petition for Review with the Court of Appeals contending that there was no final decision to speak of because the Commissioner had yet to make a personal determination as regards the merits of petitioners case.
The Court of Appeals denied the petition. Hence, this petition for review.
Issues:1. Whether or not the BIRs right to assess has already prescribed. NO2. Whether or not the deficiency assessments are void for failure to state the law and facts to which the assessments are made. NO3. Whether or not petitioner is liable for deficiency income tax. YES
Held:1. NO. BIRs right has not yet prescribed and the assessment notices are valid. At the time of the execution of the waiver, there was no preliminary assessment issued yet against petitioner where the kind and amount of tax could be referred to. Such details cannot be specified in the waiver since it was still unascertainable at the time. Since the period of respondent to assess was extended up to July 31, 1999 in view of the waiver, the deficiency assessments issued against petitioner on July 30, 1999 are within the period allowed by law.
2. NO. The purpose of Section 228 of the National Internal Revenue Code of 1997 in requiring that "the taxpayer be informed of the law and facts on which assessment is made" is to give the taxpayer the opportunity to refute the findings of the examiner and give a more accurate and detailed explanation regarding the proposed assessment. In the case, there was substantial compliance with Sec. 228 of the NIRC because petitioner was able to protest the assessments intelligently, thereby implying that it had actual knowledge of the factual and legal bases of the assessments. The fact that petitioner was furnished the computation and brief explanation of how the assessment for deficiency quarterly income tax was arrived at, the requirement under Section 228 of the 1997 Tax Code is deemed complied with. And even if petitioner was not furnished of the detailed computation of the deficiency quarterly income tax, the same was discussed with petitioner during the informal conference.
3. YES. Petitioner having failed to comply with the requirement of the law in disputing an assessment, the same became final, executory and demandable. Sec. 228 states that:
x x x If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) daysfrom submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable. Undoubtedly, a taxpayer has sixty (60) days from the