Today is Monday, August 27, 2018

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

URT OF TAX APPEALS, respondents.

, Executive Order No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes, later amended to include estat

and November 1986, its Tax Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty Return No. 34-F-00146-64-B, respe

vate respondent on 13 August 1986, assessed the latter deficiency income and business taxes for its fiscal years ended 30 Septembe
th be cancelled and withdrawn. The request was denied by the Commissioner, in his letter of 22 November 1988, on the ground that
nue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made. The invoked provisio

nder Executive Order No. 41, as expanded by Executive Order No. 64, the following instructions are hereby issued:

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lment of the said tax amnesty shall be a sufficient basis for:

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nd letters of demand issued after August 21, 1986 for the collection of income, business, estate or donor's taxes due during the same

ayer, the tax court said:

hich proves that an assessment can withstand or negate the force and effects of a tax amnesty. This burden of proof on the petitione
aid unpaid taxes which are forgiven (Section 2, Section 5, Executive Order No. 41, as amended). More specifically, the plain provision
 ssessment before the date of the promulgation of the executive order could have a reasonable relation with the objective periods of t

as amended, do not indicate any reference to an assessment or pending investigation aside from one arising from information furnish
d by the amnesty is beyond the contemplation of Executive Order No. 41, as amended.2

appellate court further observed:

, as amended, we find nothing which justifies petitioner Commissioner's ground for denying respondent taxpayer's claim to the benef

e added exception urged by petitioner Commissioner based on Revenue Memorandum Order No. 4-87, further restricting the scope

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erlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law, p
ers, who wish to relent and are willing to reform a chance to do so and thereby become a part of the new society with a clean slate. (
lication of Revenue Memorandum Order No. 4-87 pressed by petitioner Commissioner would be to work against the raison d'etre of E

D TO IMPLEMENT E.O. NO. 41, IS VALID;

INGUISHED BY REASON OR PRIVATE RESPONDENT'S AVAILMENT OF EXECUTIVE ORDER NO. 41 AS AMENDED BY EXEC

ON OF VALIDITY OF ASSESSMENTS.4

ioner of Internal Revenue, to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cann
al than either of the above, however, is that all such issuances must not override, but must remain consistent and in harmony with, the

ning and intent of executive Order No. 41.

xplicit and requires hardly anything beyond a simple application of its provisions. It reads:

xes for the years 1981 to 1985 is hereby declared.

he tax amnesty shall, on or before October 31, 1986;

31, 1985;

as of December 31, 1980 on record with the Bureau of Internal Revenue, or if no such record exists, file a statement of said net wort

e increase in net worth from December 31, 1980 to December 31, 1985: Provided, That in no case shall the tax be less than P5,000.

ection 2 hereof, the following rules shall govern:

evailing as of the date of the net worth statement.

mnesty herein granted:

and 14;

ectivity hereof;

already filed in court as of the effectivity filed in court as of the effectivity hereof;

ernal Revenue Code, as amended, insofar as the said liabilities are concerned;

ternal Revenue as of the effectivity hereof as a result of information furnished under Section 316 of the National Internal Revenue Co

cquired wealth before the Sandiganbayan;

Exactions and Transactions) and Chapter Four (Malversation of Public Funds and Property) of the Revised Penal Code, as amended

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f Internal Revenue, shall promulgate the necessary rules and regulations to implement this Executive Order.

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een hundred and eighty-six.

Order No. 54, dated 04 November 1986, and, its coverage expanded, under Executive Order No. 64, dated 17 November 1986, to in

liabilities already assessed (administratively) prior to 22 August 1986, the law could have simply so provided in its exclusionary clau

ately preceding the 1986 revolution during which time there had been persistent calls, all too vivid to be easily forgotten, for civil disob
ul revolution would promptly provide for abroad, and not a confined, tax amnesty.

No. 41 itself; thus:

the tax amnesty and the rules and regulations issued pursuant to this Executive order, the taxpayer shall enjoy the following immuniti

y untaxed income from January 1, 1981 to December 31, 1985, including increments thereto and penalties on account of the non-pay
as amended, are likewise deemed extinguished.

in evidence in all proceedings before judicial, quasi-judicial or administrative bodies, in which he is a defendant or respondent, and th
 period from January 1, 1981 to December 31, 1985 shall not be examined for income tax purposes: Provided, That the Commission
any tax refund, tax credit (other than refund on credit of withheld taxes on wages), tax incentives, and/or exemptions under existing la

form with the conditions expressed in the amnesty order.

y AFFIRMED in toto. No costs.