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Phil Journalist v. CIR the BIR; petition at all.

o that the warrant of distraint and/or levy was o Irregularity in the execution of the waiver were
 This case arose from the Annual Income Tax Return filed by without factual and legal bases as its issuance merely formal in nature.
petitioner for the calendar year ended December 31, 1994 was premature;  date of acceptance by the BIR does
which presented a net income of P30,877,387.00 and the tax o that the assessment, having been made beyond not categorically appear in the
due of P10,807,086.00. After deducting tax credits for the year, the 3-year prescriptive period, is null and void; document but it states at the bottom
petitioner paid the amount of P10,247,384.00. o that the issuance of the warrant without being page that the BIR "accepted and
given the opportunity to dispute the same violates agreed to:"..., followed by the
 August 10, 1995 - Revenue District Office No. 33 of BIR issued
Letter of Authority for Revenue Officer Federico de Vera, Jr. its right to due process; and signature of the BIR’s authorized
and Group Supervisor Vivencio Gapasin to examine o that the grave prejudice that will be sustained if the representative.
petitioner’s books of account and other accounting records for warrant is enforced is enough basis for the  Although the date of acceptance was
internal revenue taxes for the period January 1, 1994 to issuance of the writ of preliminary injunction. not stated, the document was dated
December 31, 1994.  CTA – ruled in favor of petitioners. 22 September 1997. This date could
 whether or not the assessment notices were received by the reasonably be understood as the
 From the examination, the petitioner was told that there were
petitioner, CTA ruled in the affirmative. same date of acceptance by the BIR
deficiency taxes, inclusive of surcharges, interest and
o Certification of receipt issued by post master of since a different date was not
compromise penalty amounting to 127.980,433.20
Central Post Office of Manila indicated.
 September 22, 1997, petitioner’s Comptroller, Lorenza
 whether or not the Waiver of the Statute of Limitations is valid o Phil. Journalists, through its comptroller, Lorenza
Tolentino, executed a "Waiver of the Statute of Limitation
and binding on the petitioner . Tolentino, signed the waiver. Why would it need a
Under the National Internal Revenue Code (NIRC)".
o subject assessments were issued beyond the copy of the document it knowingly executed when
o document "waived the running of the prescriptive
three-year prescriptive period. the reason why copies are furnished to a party is
period provided by Sections 223 and 224 and
 Waiver without binding effect. to notify it of the existence of a document, event or
other relevant provisions of the NIRC and
o waiver is an unlimited waiver. It does not contain proceeding?
consent[ed] to the assessment and collection of
a definite expiration date o As to expiration date - requirement does not apply
taxes which may be found due after the
 RMO 20-90 requires agreed in the instant case because what we have here is
examination at any time after the lapse of the
expiration date of assessment shall not an extension of the prescriptive period but a
period of limitations fixed, until completion of the
be filled up waiver thereof. These are two (2) very different
investigation
o waiver failed to state the date of acceptance by the things. What Phil. Journalists executed was a
 July 2, 1998 - Revenue Officer De Vera submitted his audit renunciation of its right to invoke the defense of
report recommending the issuance of an assessment and Bureau which under the RMO should be indicated
o petitioner was not furnished a copy of the waiver. prescription.
finding that petitioner had deficiency taxes in the total amount
of P136,952,408.97.  Under RMO, waiver must be
 October 5, 1998 - Assessment Division of the BIR issued Pre- executed in 3 copies, second copy for ISSUE/S and RULING:
Assessment Notices which informed petitioner of the results of the taxpayer
the investigation  It is also required that fact of receipt 1. WON CTA has Jurisdiction over the petition. YES.
by the taxpayer of his/her file copy be a. petitioner argues that the case was brought to the
 Dec. 9, 1998 – Assessment/Demand was issued
indicated in the original copy. Failed CTA because the warrant of distraint or levy was
 March 16, 1999 - Preliminary Collection Letter was sent by
to comply. illegally issued and that no assessment was
Deputy Commissioner Romeo S. Panganiban to the petitioner
 RMO No. 20-90 is directed to all concerned internal revenue issued because it was based on an invalid waiver
to pay the assessment within ten (10) days from receipt of the
officers. of the statutes of limitations.
letter.
o Procedures to be strictly followed. Prescription of b. Section 7(1) of Republic Act No. 1125, the Act
 November 10, 1999 - Final Notice Before Seizure8 was issued
right to assess due to its failure to comply with the Creating the Court of Tax Appeals, provides for
by the same deputy commissioner giving the petitioner ten (10)
procedures will be administratively dealt with. the jurisdiction of that special court:
days from receipt to pay. Was received by petitioner on Nov.
o Waiver with legal infirmities, hence it is null i. SEC. 7. Jurisdiction. – The Court of
24, 1999.
and void, and the assessment and notice of Tax Appeals shall exercise exclusive
 By letters dated November 26, 1999, petitioner asked to be distraint and/or levy invalid.
clarified how the tax liability of P111,291,214.46 was reached appellate jurisdiction to review by
 CA – reversed CTA. appeal, as herein provided – (1)
and requested an extension of thirty (30) days from receipt of
o CTA has no jurisdiction over the petition. Decisions of the Commissioner of
the clarification within which to reply.
 Petition was not timely filed nor the Internal Revenue in cases involving
 BIR received a follow-up letter from the petitioner asserting that proper remedy.
its (PJI) records do not show receipt of Tax disputed assessments, refunds of
 Only decisions of the BIR, denying internal revenue taxes, fees or other
Assessment/Demand No. 33-1-000757-94.10 Petitioner also the request for reconsideration or
contested that the assessment had no factual and legal basis. charges, penalties imposed in
reinvestigation may be appealed to relation thereto, or other matters
 March 28, 2000 - Warrant of Distraint and/or Levy signed by the CTA. Mere assessment notices
Deputy Commissioner Romeo Panganiban for the BIR was arising under the National Internal
which have become final after the Revenue Code or other laws or
received by the petitioner. lapse of the thirty (30)-day part of law administered by the
 Petitioner filed a Petition for Review with the Court of Tax reglementary period are not Bureau of Internal Revenue;
Appeals (CTA), Complaining: appealable. c. appellate jurisdiction of the CTA is not limited to
o that no assessment or demand was received from  CTA should not have entertained the cases which involve decisions of the
Commissioner of Internal Revenue on matters or more. and the taxpayer which give birth to such a valid
relating to assessments or refunds. e. The foregoing procedures shall be strictly agreement.
d. second part of the provision covers other cases followed. Any revenue official found not to  The other defect in the waiver was the date of acceptance
that arise out of the NIRC or related laws have complied with this Order resulting in which makes it difficult to fix with certainty if the waiver was
administered by the Bureau of Internal Revenue. prescription of the right to assess/collect shall actually agreed before the expiration of the 3-year prescriptive
The wording of the provision is clear and simple. It be administratively dealt with. period:
gives the CTA the jurisdiction to determine if the 4. A waiver of the statute of limitations under the NIRC, to a a. CA - The date of the execution of the waiver on Sept. 22,
warrant of distraint and levy issued by the BIR is certain extent, is a derogation of the taxpayers’ right to 1997 could reasonably be understood as the same date
valid and to rule if the Waiver of Statute of security against prolonged and unscrupulous of acceptance by the BIR;
Limitations was validly effected. investigations and must therefore be carefully and strictly
b. Petitioner – RDO Sarmiento could not have accepted the
e. Pantoja v. David - SC upheld the jurisdiction of the construed.
waiver yet because she was not the RDO on such date.
CTA to act on a petition to invalidate and annul the 5. Such waiver is not a waiver of the right to invoke the
Ms. Sarmiento’s transfer and assignment to RDO Makati
distraint orders of the Commissioner of Internal defense of prescription as erroneously held by the CA. It’s
was only signed by the CIR on Jan. 16, 1998 as shown
Revenue. an agreement between the taxpayer and the BIR that the
by the Revenue Travel Assignment Order No. 14-98;
2. WON the waiver of the Statute of Limitations Valid. NO. period to issue an assessment and collect the taxes due
a. Commissioner of Internal Revenue v. Court of is extended to a date certain. The waiver does not mean c. CTA – It’s unlikely that Ms. Sarmiento made such
Appeals - the decision of the CTA declaring that the taxpayer relinquishes the right to invoke acceptance on Jan. 16, 1998 because Revenue Officials
several waivers executed by the taxpayer as null prescription unequivocally particularly where the normally have to conduct first an inventory of their
and void, thus invalidating the assessments language of the document is equivocal. pending papers and property responsibilities.
issued by the BIR, was upheld by this Court. 6. For the purpose of safeguarding taxpayers from any  Lastly, there’s no record that would show that petitioner was
b. NIRC, under Sections 203 and 222, provides for a unreasonable examination, investigation or assessment, the furnished a copy of the waiver. Under RMO No. 20-90, the
statute of limitations on the assessment and NIRC provides a statute of limitations in the collection of taxes. waiver must be executed in three copies with the second copy
collection of internal revenue taxes in order to Thus, the law on prescription, being a remedial measure, for the taxpayer. The Court of Appeals did not think this was
safeguard the interest of the taxpayer against should be liberally construed in order to afford such protection. important because the petitioner need not have a copy of the
unreasonable investigation. 7. As a corollary, the exceptions to the law on prescription should document it knowingly executed. It stated that the reason
c. Unreasonable investigation - contemplates cases perforce be strictly construed. That is why RMO No. 20-90 copies are furnished is for a party to be notified of the existence
where the period for assessment extends explains that rationale of a waiver that the phrase "but not after of a document, event or proceeding.
indefinitely because this deprives the taxpayer of _________ 19___" should be filled up. This indicates the expiry  The waiver is incomplete and defective. Thus, the 3-year
the assurance that it will no longer be subjected to date of the period agreed upon to assess/collect the tax after prescriptive period was not tolled or extended and continued to
further investigation for taxes after the expiration the regular three-year period of prescription. The period run until April 17, 1998. Consequently, the
of a reasonable period of time. agreed upon shall constitute the time within which to Assessment/Demand issued on Dec. 9, 1998 was invalid. The
d. RP v. Ablaza - The law on prescription being a effect the assessment/collection of the tax in addition to Warrant of Distraint/Levy is also void pursuant to a void
remedial measure should be interpreted in a the ordinary prescriptive period. assessment.
way conducive to bringing about the 8. As the CTA found, the waiver was not valid because it didn’t
beneficent purpose of affording protection to conform to RMO No. 20-90. It didn’t specify a definite agreed
the taxpayer within the contemplation of the date between the BIR and petitioner, within which the former
Commission which recommend the approval may assess and collect revenue taxes. Thus, petitioner’s
of the law. waiver became unlimited in time, violating Sec. 222(b) of the
3. RMO No. 20-90 implements these provisions of the NIRC NIRC.
relating to the period of prescription for the assessment and 9. The waiver is also defective from the gov’t’s side because it
collection of taxes. A cursory reading of the Order supports was signed only by a RDO, not the CIR, as mandated by the
petitioner’s argument that the RMO must be strictly followed NIRC and RMO No. 20-90. The waiver is not a unilateral act by
a. In the execution of said waiver, the following the taxpayer or the BIR, but is a bilateral agreement between
procedures should be followed: 2 parties to extend the period to a certain date. The law
b. 1. The waiver must be in the form identified provides that the conformity of the BIR must be made by either
hereof. This form may be reproduced by the Office the CIR or the RDO depending on the amount involved. In this
concerned but there should be no deviation case, it involves taxes amounting to more than P1M and
from such form. The phrase "but not after executed almost 7 months before the expiration of the 3-year
__________ 19___" should be filled up... prescription period. For this, RMO No. 20-90 requires the CIR
c. Soon after the waiver is signed by the taxpayer, to sign for the BIR.
the Commissioner of Internal Revenue or the  CIR vs. CA was cited which deals with waivers not signed but
revenue official authorized by him, as were argued to have been given implied consent by the CIR.
hereinafter provided, shall sign the waiver The Court invalidated such waivers because neither implied
indicating that the Bureau has accepted and consent can be presumed nor can it be contended that the
agreed to the waiver. The date of such waiver required under Sec. 319 of the NIRC is one which
acceptance by the Bureau should be indicated... is unilateral nor can it be said that concurrence to such an
d. The following revenue officials are authorized to agreement is a mere formality because it is the very
sign the waiver. – CIR for tax cases involving 1M signatures of both the Commissioner of Internal Revenue