G.R. No.

L-14519 July 26, 1960

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. LUIS G.
ABLAZA, defendant.
Facts:
The Collector of Internal Revenue assessed income taxes for the years 1945, 1946, 1947 and
1948 on the income tax returns of defendant-appellee Luis G. Ablaza. The assessments total
P5,254.70. The accountants for Ablaza requested a reinvestigation of Ablaza's tax liability, on
the ground that (1) the assessment is based on third-party information and (3) neither the
taxpayer nor his accountants were permitted to appear in person. The petition for reinvestigation
was granted in a letter of the Collector of Internal Revenue, the accountants for Ablaza again
sent another letter to the Collector of Internal Revenue submitting a copy of their own
computation, said accountants again submitted a supplemental memorandum. The accountants
for Ablaza sent a letter to the examiner of accounts and collections of the Bureau of Internal
Revenue.
After the reinvestigation, the Collector of Internal Revenue made a final assessment of the
income taxes of Ablaza, fixing said income taxes for the years already mentioned at P2,066.56
and upon receipt thereof the accountants of Ablaza sent a letter to the Collector of Internal
Revenue, protesting the assessments, on the ground that the income taxes are no longer
collectible for the reason that they have already prescribed. The Court of First Instance upheld
the contention of Ablaza that the action to collect the said income taxes had prescribed. Against
this decision the case was brought here on appeal.
Issue:
Whether or not the claims of prescription by the respondent valid.
Held:
YES. The law prescribing a limitation of actions for the collection of the income tax is beneficial
both to the Government and to its citizens; to the Government because tax officers would be
obliged to act promptly in the making of assessment, and to citizens because after the lapse of the
period of prescription citizens would have a feeling of security against unscrupulous tax agents
who will always find an excuse to inspect the books of taxpayers, not to determine the latter's
real liability, but to take advantage of every opportunity to molest peaceful, law-abiding citizens.
Without such legal defense taxpayers would furthermore be under obligation to always keep
their books and keep them open for inspection subject to harassment by unscrupulous tax agents.
The law on prescription being a remedial measure should be interpreted in a way conducive to
bringing about the beneficient purpose of affording protection to the taxpayer.

G.R. No. 163583 August 20, 2008
BRITISH AMERICAN TOBACCO, vs. JOSE ISIDRO N. CAMACHO.