TITLE: Meralco Securities Corporation vs Hon. Victorino Savellano (G.R. No.

L-36181)

FACTS:

The late Juan Maniago submitted to the CIR confidential denunciation against
the Meralco Securities Corporation for tax evasion for having paid income tax only on
25% of the dividends it received from the Manila Electric Co. for 1962-1966, thereby
allegedly shortchanging the government of income tax due from 75% of the said
dividends it received.

CIR held that no deficiency corporate income tax was due on the dividends
received since under the law then prevailing “in the case of dividends received by a
domestic or foreign resident corporation liable to tax…. only 25% thereof shall be
returnable for the purposes of the tax imposed under this section”. Hence, CIR denied
Maniago’s claim for informer’s reward. Secretary of Finance sustained CIR’s action.
Maniago filed a petition for mandamus in CFI Manila. CFI orderedCIR to assess and
collect from petitioner deficiency corporate income tax amounting to P51,840,612.
Hence, this petition.

ISSUE: WON CFI have jurisdiction over the subject matter

RULING:

No. Under Sec 7 of RA 1125, CTA have the exclusive appellate jurisdiction to
review by appeal, among others, decisions of the CIR in cases involving disputed
assessments, refunds of internal revenue taxes, fees, or other charges, penalties
imposed in relation thereto, or other matters arising from NIRC or other law
administered by the BIR. In the case at bar, a question of whether or not to impose a
deficiency tax assessment undoubtedly comes within the purview of the words “disputed
assessments” or of “other matters arising under the NIRC”.

Moreover, mandamus only lies to enforce the performance of ministerial act and
not to control the discretionary power. CIR is charged with administration of revenue
laws, hence, mandamus will not lie to compel him to impose a tax assessment not
found by him to be due as it would be tantamount to a usurpation of executive functions.