Professional Documents
Culture Documents
The CIR assessed Yee Fong Hong, Ltd the total sum of 500K, as deficiency
income taxes due for the years 1971 and 1972. Respondent Yee protested the
assessment.
November 25, 1976 the CIR, without ruling on the protest by Yee, issued a
Warrant of Distraint and Levy, which was served on private respondent's
counsel.
November 27, 1976 Yee reiterated its request for the reinvestigation of the
assessment. However the CIR, again, without acting on the request for
reinvestigation and reconsideration of the Warrant of Distraint and Levy, filed a
collection suit before the CFI.
January 10, 1976 Respondent filed its Petition for Review of the petitioner's
assessment of its deficiency income taxes in the Court of Tax Appeals.
According to the petitioner, the Court of Tax Appeals has no jurisdiction over
this case. It claims that the warrant of distraint and levy is proof of the finality
of an assessment and is tantamount to an outright denial of a motion for
reconsideration of an assessment. Among others, petitioner contends that the
warrant was issued after the respondent filed a request for reconsideration of
subject assessment, thus constituting petitioner's final decision in the disputed
assessments. Therefore, the period to appeal to the CTA commenced from the
receipt of the warrant on November 25, 1976 so that on January 10, 1976 when
respondent corporation sought redress, it has long become final and executory.
Issue: Whether or not the issuance of a warrant of distraint and levy is proof of
the finality of an assessment and is tantamount to an outright denial of a
motion for reconsideration of an assessment.
HELD:
The Supreme Court had already laid down the dictum that the Commissioner
should always indicate to the taxpayer in clear and unequivocal language what
constitutes his final determination of the disputed assessment.
There is no dispute that petitioner did not rule on private respondent's motion
for reconsideration but left private respondent in the dark as to which action of
the Commissioner is the decision appealable to the CTA. Had he categorically
stated that he denies private respondent's motion for reconsideration and that
his action constitutes his final determination on the disputed assessment,
private respondent without needless difficulty would have been able to
determine when his right to appeal accrues and the resulting confusion would
have been avoided. Under the circumstances, the CIR, not having clearly
signified his final action on the disputed assessment, legally the period to
appeal has not commenced to run.
Surigao electric v CA
The foregoing-view accords with settled jurisprudence and this despite the
fact that nothing in Republic Act 1125, 1 as amended, even remotely
suggests the element truly determinative of the appealability to the
Court of Appeals of a ruling of the Commissioner of Internal Revenue.
To sustain the petitioner's contention that the Commissioner's letter of June 28,
1963 denying its request for further amendment of the revised assessment
constitutes the ruling appealable to the tax court and that the thirty-day period
should, therefore, be counted from July 16, 1963, the day it received the June
28, 1963 letter, would, in effect, leave solely to the petitioner's will the
determination of the commencement of the statutory thirty-day
period, and place the petitioner and for that matter, any taxpayer
in a position, to delay at will and on convenience the finality of a tax
assessment. This absurd interpretation espoused by the petitioner would
result in grave detriment to the interests of the Government, considering that
taxes constitute its life-blood and their prompt and certain availability is an
imperative need. 6
The revised assessment embodied in the Commissioner's letter dated April 29,
1963 being, in legal contemplation, the final ruling reviewable by the tax
court, the thirty-day appeal period should be counted from May 8,
1963 (the day the petitioner received a copy of the said letter).
From May 8, 1963 to June 7, 1963 (the day the petitioner, by registered mail,
sent to the Commissioner its letter of June 6, 1963 requesting for further
recomputation of the amount demanded from it) saw the lapse of thirty days.
The June 6, 1963 request for further recomputation, partaking of a
motion for reconsideration, tolled the running of the thirty-day period
from June 7, 1963 (the day the petitioner sent its letter by registered mail) to
July 16, 1963 (the day the petitioner received the letter of the Commissioner
dated June 28, 1963 turning down its request).
The prescriptive period commenced to run again on July 16, 1963. The
petitioner filed its petition for review with the tax court on August 1, 1963
after the lapse of an additional sixteen days.
The petition for review having been filed beyond the thirty-day period,
we rule that the Court of Tax Appeals correctly dismissed the same.
The thirty-day period prescribed by section 11 of Republic Act 1125, as
amended, within which a taxpayer adversely affected by a decision of the
Commissioner of Internal Revenue should file his appeal with the tax
court, is a jurisdictional requirement, 7 and the failure of a taxpayer to
lodge his appeal within the prescribed period bars his appeal and
renders the questioned decision final and executory. 8
Prescinding from all the foregoing, we deem it appropriate to state that the
Commissioner of Internal Revenue should always indicate to the
taxpayer in clear and unequivocal language whenever his action on an
assessment questioned by a taxpayer constitutes his final
vs.
ISABELA
The appellate court reasoned that the final Notice before seizure
had effectively denied petitioners request for a reconsideration of the
commissioners assessment.
Issues
Whether or not the Final Notice Before Seizure dated February 9, 1995 signed
constitutes the final decision of the CIR appealable to the CTA.- yes
Respondent, points out that the Final Notice Before Seizure should be
considered as a denial of its request for reconsideration of the disputed
assessment. The Notice should be deemed as petitioners last act, since failure
to comply with it would lead to the distraint and levy of respondents
properties, as indicated therein.
We agree with respondent. In the normal course, the revenue district
officer sends the taxpayer a notice of delinquent taxes, indicating the period
covered, the amount due including interest, and the reason for the
delinquency. If the taxpayer disagrees with or wishes to protest the
assessment, it sends a letter to the BIR indicating its protest, stating the
reasons therefor, and submitting such proof as may be necessary. That letter is
considered as the taxpayers request for reconsideration of the delinquent
assessment. After the request is filed and received by the BIR, the assessment
becomes a disputed assessment on which it must render a decision. That
decision is appealable to the Court of Tax Appeals for review.
Prior to the decision on a disputed assessment, there may still be
exchanges between the commissioner of internal revenue (CIR) and the
taxpayer. The former may ask clarificatory questions or require the latter to
submit additional evidence. However, the CIRs position regarding the disputed
assessment must be indicated in the final decision. It is this decision that is
properly appealable to the CTA for review.
Indisputably, respondent received an assessment letter dated February 9,
1990, stating that it had delinquent taxes due; and it subsequently filed its
motion for reconsideration on March 23, 1990. In support of its request for
reconsideration, it sent to the CIR additional documents on April 18, 1990. The
next communication respondent received was already the Final Notice
Before Seizure dated November 10, 1994.
In the light of the above facts, the Final Notice Before Seizure cannot
but be considered as the commissioners decision disposing of the
request for reconsideration filed by respondent, who received no
other response to its request. Not only was the Notice the only response
received; its content and tenor supported the theory that it was the CIRs
final act regarding the request for reconsideration.
The very title expressly indicated that it was a final notice prior to
seizure of property. The letter itself clearly stated that respondent
was being given this LAST OPPORTUNITY to pay; otherwise, its
properties would be subjected to distraint and levy. How then could it
have been made to believe that its request for reconsideration was still
pending determination, despite the actual threat of seizure of its properties?
Furthermore, Section 228 of the National Internal Revenue Code states
that a delinquent taxpayer may nevertheless directly appeal a disputed
assessment, if its request for reconsideration remains unacted upon 180 days
after submission thereof. In this case, the said period of 180 days had already
lapsed when respondent filed its request for reconsideration on March 23,
1990, without any action on the part of the CIR.
Issue: Whether the demand letter for tax deficiency issued and signed by a
subordinate officer who was acting in behalf of the CIR is deemed final and
executor and subject to an appeal to the CTA.
Held: YES. A demand letter for payment of delinquent taxes may be considered
a decision on a disputed or protested assessment. The determination on
whether or not a demand letter is final is conditioned upon the language used
or the tenor of the letter being sent to the taxpayer. In this case, the letter of
demand, unquestionably constitutes the final action taken by the Bureau of
Internal Revenue on petitioners request for reconsideration when it reiterated
the tax deficiency assessments due from petitioner, and requested its
payment. Failure to do so would result in the issuance of a warrant of distraint
and levy to enforce its collection without further notice. In addition, the letter
contained a notation indicating that petitioners request for reconsideration had
been denied for lack of supporting documents. The demand letter received by
petitioner verily signified a character of finality. Therefore, it was tantamount to
a rejection of the request for reconsideration.
This now brings us to the crux of the matter as to whether said demand letter
indeed attained finality despite the fact that it was issued and signed by the
Chief of the Accounts Receivable and Billing Division instead of the BIR
Commissioner.
The general rule is that the Commissioner of Internal Revenue may delegate
any power vested upon him by law to Division Chiefs or to officials of higher
rank. He cannot, however, delegate the four powers granted to him under the
National Internal Revenue Code (NIRC) enumerated in Section .
As amended by Republic Act No. 8424, Section 7 of the Code authorizes the BIR
Commissioner to delegate the powers vested in him under the pertinent
provisions of the Code to any subordinate official with the rank equivalent to a
division chief or higher, except the following:
(a) The power to recommend the promulgation of rules and regulations by the
Secretary of Finance;
(b) The power to issue rulings of first impression or to reverse, revoke or modify
any existing ruling of the Bureau;
(c) The power to compromise or abate under Section 204(A) and (B) of this
Code, any tax deficiency: Provided, however, that assessments issued by the
Regional Offices involving basic deficiency taxes of five hundred thousand
pesos (P500,000) or less, and minor criminal violations as may be determined
by rules and regulations to be promulgated by the Secretary of Finance, upon
the recommendation of the Commissioner, discovered by regional and district
officials, may be compromised by a regional evaluation board which shall be
composed of the Regional Director as Chairman, the Assistant Regional
Director, heads of the Legal, Assessment and Collection Divisions and the
Revenue District Officer having jurisdiction over the taxpayer, as members; and
(d) The power to assign or reassign internal revenue officers to establishments
where articles subject to excise tax are produced or kept.
It is clear from the above provision that the act of issuance of the demand
letter by the Chief of the Accounts Receivable and Billing Division does not fall
under any of the exceptions that have been mentioned as non-delegable.
Thus, the authority to make tax assessments may be delegated to subordinate
officers. Said assessment has the same force and effect.