Case Digest - Taxation
CIR vs. BPI
G.R. No. 134062 April 17, 2007
In October 28, 1988, petitioner assessed BPI of deficiency percentage and documentary stamp tax for the year 1986, in the total amount of P129,488,056.63. A letter reply by respondent was sent on December 10, 1988 stating among other:
... we shall inform you the taxpayer’s decision on whether to pay of protest the assessment, CTA ruled that BPI failed to protest on time under Sec 270 of NIRC of 1986.
Whether or not the assessments issued to BPI for deficiency percentage and documentary stamp taxes for 1986 had already become final and un-appealable.
In merely notifying BPI of his findings. CIR relied on the provisions of the former Section 270 prior to its amendment by RA 8424. The sentence
“the taxpayers shall be informed in writing of the law and the facts on which the assessment is made…”
Was not in the old Section 270 but was only later on inserted in the renumbered Section 228 in 1997.
Tax assessments by tax examiners are presumed correct and are made in good faith. The taxpayer has the duty to prove otherwise. In the absence of proof of any irregularities in the performance of duties, an assessment duly made by BIR examiner and approved by his superior officers will not be distributed. All presumptions are in favor of the correctness of tax assessments.
BPI vs. CIR
G.R. 139736 October 17, 2005
On June 6 and 14, 1985, petitioner bank sold $500,000.00 to the Central Bank, for the total sale amount of $1M. BIR issued deficiency assessment for DST in the amount of 28,020.00 for the said sales. On October 20,1989, petitioner received the notice and consequently filed a protest in November 16,1989. Petitioner did not receive a reply but soon after, October 15, 1992, BIR issued a Warrant of distraint, and finally in August 13, 1997, BPI received a letter denying its request for reconsideration. Petitioner alleged prescription to CTA but the latter denied the same. CTA likewise ruled in the negative that the sales of currency by petitioner was not subject to DST. CA sustained first issue but reinstated the second.
Whether or not the right to collect has prescribed;
Request for reconsideration
It will not suspend the running of the statute of limitations because reconsideration of tax assessment is limited to the evidence.
Request for reinvestigation
will suspend the running of statute of limitations because it entails the reception and re-evaluation of additional evidence. It will take more time.
The period for the BIR to assess and collect an internal revenue tax is limited to three years by Section 203 of the Tax Code. This period is limited by Section 223
Exemptions… a) in the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within 10 years after the discovery of the falsity, fraud or omission…
BPI executed no waiver of the Statute of Limitations, thus it did not suspend running of the prescription. Likewise, BPI requested for a reconsideration and suspension of the running of the statute of limitations shouldn’t apply. The statute of limitations for collection “against BPI had expired; none of the conditions from the statute of limitations on collection exists herein.”
BPI (Far East Bank and Trust Co) vs. CIR
G.R. 174492 March 7, 2008
Following a pre-assessment notice on deficiency tax filed by respondent in 1986, the latter sent final demand to petitioner on April 7, 1989. Petitioner filed a protest and a waiver of the Statutes of Limitations was effected until December 31, 1994. On August 9, 2002, respondent issued a final decision on petitioner’s protest ordering the withdrawal and cancellation of the deficiency withholding tax assessment in the amount of P190,752,860.82 and considered the sane as close and terminated but the documentary stamp tax of P24,587,174.63 was reiterated. Thereafter petition for review was filed with CTA. The court denied the petition.
Whether or not the collection of the deficiency DST is barred by prescription:
In order to determine whether the prescriptive period for collecting the tax deficiency tolled by BPI’s filing of the protest letters dated April 7, 1989. Section 20 of the Tax Code must be examined:
The running of the Statute of Limitations… on the making of assessment and the beginning of distraint or levy or a proceeding in court of collection… shall be suspended for the period… when the taxpayer requests for re-investigation which is granted by the Commissioner.
In order to suspend the running of the prescriptive periods for assessment and collection, the request for re-investigation must be granted by CIR. There is nothing in this case which indicates, expressly or impliedly, that the CIR had granted the request for re-investigation filed by BPI. What is reflected is the silence and inaction of the CIR.
Given the prescription of the Government’s claim, we no longer deem it necessary to pass upon the validity of the assessment.
CIR vs. Phil. Global Communitions
G.R. No. 167146 October 31, 2006
Chico – Nazario, J.:
Responded was pre-assessed for a deficiency tax for the year 1990. In 1994, final assessment was sent to respondent and through counsel, Philcon sent protest letter to CIR. In 2002, after 8 long years, respondent received from CIR a final decision denying the respondent’s protest and affirming said assessment. CTA ruled on prescription and ordered CIR to withdraw and cancel assessment previously issued against petitioner.
Whether or not CIR’s right to collect alleged deficiency tax is barred by prescription
There was nothing from the respondent’s protest letter that could tell the running of prescriptive period upon which CIR could have caused the collection from respondent. The motion for reconsideration was in effect denied by CIR and prescription runs from 1994 until 1997, collection effected in 2002 was barred now, by prescription.