Philippines, Plaintiff, Versus Quirico Ungab, Accused " and To Restrain The Respondent Judge

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-41919-24 May 30, 1980
QUIRICO P. UNGAB, petitioner,

vs.
HON. VICENTE N. CUSI, JR., in his capacity as Judge of the Court of First
Instance, Branch 1, 16TH Judicial District, Davao City, THE COMMISSIONER OF
INTERNAL REVENUE, and JESUS N. ACEBES, in his capacity as State
Prosecutor, respondents.
CONCEPCION JR., J:
Petition for certiorari and prohibition with preliminary injunction and restraining order to
annul and set aside the informations filed in Criminal Case Nos. 1960, 1961, 1962, 1963,
1964, and 1965 of the Court of First Instance of Davao, all entitled: "People of the
Philippines, plaintiff, versus Quirico Ungab, accused;" and to restrain the respondent Judge
from further proceeding with the hearing and trial of the said cases.
It is not disputed that sometime in July, 1974, BIR Examiner Ben Garcia examined the
income tax returns filed by the herein petitioner, Quirico P. Ungab, for the calendar year
ending December 31, 1973. In the course of his examination, he discovered that the
petitioner failed to report his income derived from sales of banana saplings. As a result, the
BIR District Revenue Officer at Davao City sent a "Notice of Taxpayer" to the petitioner
informing him that there is due from him (petitioner) the amount of P104,980.81,
representing income, business tax and forest charges for the year 1973 and inviting
petitioner to an informal conference where the petitioner, duly assisted by counsel, may
present his objections to the findings of the BIR Examiner. 1 Upon receipt of the notice, the
petitioner wrote the BIR District Revenue Officer protesting the assessment, claiming that
he was only a dealer or agent on commission basis in the banana sapling business and that
his income, as reported in his income tax returns for the said year, was accurately stated.
BIR Examiner Ben Garcia, however, was fully convinced that the petitioner had filed a
fraudulent income tax return so that he submitted a "Fraud Referral Report," to the Tax
Fraud Unit of the Bureau of Internal Revenue. After examining the records of the case, the
Special Investigation Division of the Bureau of Internal Revenue found sufficient proof that
the herein petitioner is guilty of tax evasion for the taxable year 1973 and recommended his
prosecution: têñ.£îhqwâ£
(1) For having filed a false or fraudulent income tax return for 1973 with
intent to evade his just taxes due the government under Section 45 in
relation to Section 72 of the National Internal Revenue Code;
(2) For failure to pay a fixed annual tax of P50.00 a year in 1973 and 1974, or
a total of unpaid fixed taxes of P100.00 plus penalties of 175.00 or a total of
P175.00, in accordance with Section 183 of the National Internal Revenue
Code;
(3) For failure to pay the 7% percentage tax, as a producer of banana poles or
saplings, on the total sales of P129,580.35 to the Davao Fruit Corporation,
depriving thereby the government of its due revenue in the amount of
P15,872.59, inclusive of surcharge. 2
In a second indorsement to the Chief of the Prosecution Division, dated December 12, 1974,
the Commissioner of Internal Revenue approved the prosecution of the petitioner. 3
Thereafter, State Prosecutor Jesus Acebes who had been designated to assist all Provincial
and City Fiscals throughout the Philippines in the investigation and prosecution, if the
evidence warrants, of all violations of the National Internal Revenue Code, as amended,
and other related laws, in Administrative Order No. 116 dated December 5, 1974, and to
whom the case was assigned, conducted a preliminary investigation of the case, and finding
probable cause, filed six (6) informations against the petitioner with the Court of First
Instance of Davao City, to wit: têñ.£îhqwâ£
(1) Criminal Case No. 1960 — Violation of Sec. 45, in relation to Sec. 72 of the
National Internal-Revenue Code, for filing a fraudulent income tax return for
the calendar year ending December 31, 1973; 4
(2) Criminal Case No. 1961 — Violation of Sec. 182 (a), in relation to Secs.
178, 186, and 208 of the National Internal Revenue Code, for engaging in
business as producer of saplings, from January, 1973 to December, 1973,
without first paying the annual fixed or privilege tax thereof; 5
186 and 209 of the National Internal Revenue Code, for failure to render a
true and complete return on the gross quarterly sales, receipts and earnings
in his business as producer of banana saplings and to pay the percentage tax
due thereon, for the quarter ending December 31, 1973; 6
true and complete return on the gross quarterly sales receipts and earnings
in his business as producer of saplings, and to pay the percentage tax due
thereon, for the quarter ending on March 31, 1973; 7
in his business as producer of banana saplings for the quarter ending on June
30, 1973, and to pay the percentage tax due thereon; 8
as producer of banana saplings, for the quarter ending on September 30,
1973, and to pay the percentage tax due thereon. 9
On September 16, 1975, the petitioner filed a motion to quash the informations upon the
grounds that: (1) the informations are null and void for want of authority on the part of the
State Prosecutor to initiate and prosecute the said cases; and (2) the trial court has no
jurisdiction to take cognizance of the above-entitled cases in view of his pending protest
against the assessment made by the BIR Examiner. 10 However, the trial court denied the
motion on October 22, 1975. 11 Whereupon, the petitioner filed the instant recourse. As
prayed for, a temporary restraining order was issued by the Court, ordering the respondent
Judge from further proceeding with the trial and hearing of Criminal Case Nos. 1960, 1961,
1962, 1963, 1964, and 1965 of the Court of First Instance of Davao, all entitled: "People of
the Philippines, plaintiff, versus Quirico Ungab, accused."
The petitioner seeks the annulment of the informations filed against him on the ground
that the respondent State Prosecutor is allegedly without authority to do so. The petitioner
argues that while the respondent State Prosecutor may initiate the investigation of and
prosecute crimes and violations of penal laws when duly authorized, certain requisites,
enumerated by this Court in its decision in the case of Estrella vs. Orendain, 12 should be
observed before such authority may be exercised; otherwise, the provisions of the Charter of
Davao City on the functions and powers of the City Fiscal will be meaningless because
according to said charter he has charge of the prosecution of all crimes committed within
his jurisdiction; and since "appropriate circumstances are not extant to warrant the
intervention of the State Prosecution to initiate the investigation, sign the informations and
prosecute these cases, said informations are null and void." The ruling adverted to by the
petitioner reads, as follows: têñ.£îhqwâ£
In view of all the foregoing considerations, it is the ruling of this Court that
under Sections 1679 and 1686 of the Revised Administrative Code, in any
instance where a provincial or city fiscal fails, refuses or is unable, for any
reason, to investigate or prosecute a case and, in the opinion of the Secretary
of Justice it is advisable in the public interest to take a different course of
action, the Secretary of Justice may either appoint as acting provincial or city
fiscal to handle the investigation or prosecution exclusively and only of such
case, any practicing attorney or some competent officer of the Department of
Justice or office of any city or provincial fiscal, with complete authority to act
therein in all respects as if he were the provincial or city fiscal himself, or
appoint any lawyer in the government service, temporarily to assist such city
of provincial fiscal in the discharge of his duties, with the same complete
authority to act independently of and for such city or provincial fiscal
provided that no such appointment may be made without first hearing the
fiscal concerned and never after the corresponding information has already
been filed with the court by the corresponding city or provincial fiscal without
the conformity of the latter, except when it can be patently shown to the court
having cognizance of the case that said fiscal is intent on prejudicing the
interests of justice. The same sphere of authority is true with the prosecutor
directed and authorized under Section 3 of Republic Act 3783, as amended
and/or inserted by Republic Act 5184. The observation in Salcedo vs. Liwag,
supra, regarding the nature of the power of the Secretary of Justice over
fiscals as being purely over administrative matters only was not really
necessary, as indicated in the above relation of the facts and discussion of the
legal issues of said case, for the resolution thereof. In any event, to any extent
that the opinion therein may be inconsistent herewith the same is hereby
modified.
The contention is without merit. Contrary to the petitioner's claim, the rule therein
established had not been violated. The respondent State Prosecutor, although believing
that he can proceed independently of the City Fiscal in the investigation and prosecution of
these cases, first sought permission from the City Fiscal of Davao City before he started the
preliminary investigation of these cases, and the City Fiscal, after being shown
Administrative Order No. 116, dated December 5, 1974, designating the said State
Prosecutor to assist all Provincial and City fiscals throughout the Philippines in the
investigation and prosecution of all violations of the National Internal Revenue Code, as
amended, and other related laws, graciously allowed the respondent State Prosecutor to
conduct the investigation of said cases, and in fact, said investigation was conducted in the
office of the City Fiscal. 13
The petitioner also claims that the filing of the informations was precipitate and premature
since the Commissioner of Internal Revenue has not yet resolved his protests against the
assessment of the Revenue District Officer; and that he was denied recourse to the Court of
Tax Appeals.
The contention is without merit. What is involved here is not the collection of taxes where
the assessment of the Commissioner of Internal Revenue may be reviewed by the Court of
Tax Appeals, but a criminal prosecution for violations of the National Internal Revenue
Code which is within the cognizance of courts of first instance. While there can be no civil
action to enforce collection before the assessment procedures provided in the Code have
been followed, there is no requirement for the precise computation and assessment of the
tax before there can be a criminal prosecution under the Code. têñ.£îhqwâ£
The contention is made, and is here rejected, that an assessment of the

deficiency tax due is necessary before the taxpayer can be prosecuted
criminally for the charges preferred. The crime is complete when the violator
has, as in this case, knowingly and willfully filed fraudulent returns with
intent to evade and defeat a part or all of the tax. 14
An assessment of a deficiency is not necessary to a criminal prosecution for

willful attempt to defeat and evade the income tax. A crime is complete when
the violator has knowingly and willfuly filed a fraudulent return with intent
to evade and defeat the tax. The perpetration of the crime is grounded upon
knowledge on the part of the taxpayer that he has made an inaccurate
return, and the government's failure to discover the error and promptly to
assess has no connections with the commission of the crime. 15
Besides, it has been ruled that a petition for reconsideration of an assessment may affect
the suspension of the prescriptive period for the collection of taxes, but not the prescriptive
period of a criminal action for violation of law. 16Obviously, the protest of the petitioner
against the assessment of the District Revenue Officer cannot stop his prosecution for
violation of the National Internal Revenue Code. Accordingly, the respondent Judge did not
abuse his discretion in denying the motion to quash filed by the petitioner.
WHEREFORE, the petition should be, as it is hereby dismissed. The temporary restraining
order heretofore issued is hereby set aside. With costs against the petitioner.
SO ORDERED.
[G.R. No. 128315. June 29, 1999]
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. PASCOR REALTY

AND DEVELOPMENT CORPORATION, ROGELIO A. DIO and VIRGINIA S.
DIO, respondents.
DECISION
PANGANIBAN, J.:
An assessment contains not only a computation of tax liabilities, but also a demand for
payment within a prescribed period. It also signals the time when penalties and interests
begin to accrue against the taxpayer. To enable the taxpayer to determine his remedies
thereon, due process requires that it must be served on and received by the
taxpayer. Accordingly, an affidavit, which was executed by revenue officers stating the tax
liabilities of a taxpayer and attached to a criminal complaint for tax evasion, cannot be
deemed an assessment that can be questioned before the Court of Tax Appeals.
Statement of the Case
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court praying for the nullification of the October 30, 1996 Decision[1] of the Court of
Appeals[2] in CA-GR SP No. 40853, which effectively affirmed the January 25, 1996
Resolution[3] of the Court of Tax Appeals[4] in CTA Case No. 5271. The CTA disposed as
follows:
WHEREFORE, finding [the herein petitioners] Motion to Dismiss as UNMERITORIOUS,

the same is hereby DENIED. [The CIR] is hereby given a period of thirty (30) days from
receipt hereof to file her answer.
Petitioner also seeks to nullify the February 13, 1997 Resolution[5] of the Court of
Appeals denying reconsideration.
The Facts
As found by the Court of Appeals, the undisputed facts of the case are as follows:
It appears that by virtue of Letter of Authority No. 001198, then BIR Commissioner Jose U.
Ong authorized Revenue Officers Thomas T. Que, Sonia T. Estorco and Emmanuel M.
Savellano to examine the books of accounts and other accounting records of Pascor Realty
and Development Corporation. (PRDC) for the years ending 1986, 1987 and 1988. The said
examination resulted in a recommendation for the issuance of an assessment in the
amounts of P7,498,434.65 and P3,015,236.35 for the years 1986 and 1987, respectively.
On March 1, 1995, the Commissioner of Internal Revenue filed a criminal complaint before
the Department of Justice against the PRDC, its President Rogelio A. Dio, and its
Treasurer Virginia S. Dio, alleging evasion of taxes in the total amount of
P10,513,671.00. Private respondents PRDC, et. al. filed an Urgent Request for
Reconsideration/Reinvestigation disputing the tax assessment and tax liability.
On March 23, 1995, private respondents received a subpoena from the DOJ in connection
with the criminal complaint filed by the Commissioner of Internal Revenue (BIR) against
them.
In a letter dated May 17, 1995, the CIR denied the urgent request for
reconsideration/reinvestigation of the private respondents on the ground that no formal
assessment has as yet been issued by the Commissioner.
Private respondents then elevated the Decision of the CIR dated May 17, 1995 to the Court
of Tax Appeals on a petition for review docketed as CTA Case No. 5271 on July 21,
1995. On September 6, 1995, the CIR filed a Motion to Dismiss the petition on the ground
that the CTA has no jurisdiction over the subject matter of the petition, as there was no
formal assessment issued against the petitioners. The CTA denied the said motion to
dismiss in a Resolution dated January 25, 1996 and ordered the CIR to file an answer
within thirty (30) days from receipt of said resolution. The CIR received the resolution on
January 31, 1996 but did not file an answer nor did she move to reconsider the resolution.
Instead, the CIR filed this petition on June 7, 1996, alleging as grounds that:
Respondent Court of Tax Appeals acted with grave abuse of discretion and without
jurisdiction in considering the affidavit/report of the revenue officer and the indorsement of
said report to the secretary of justice as assessment which may be appealed to the Court of
Tax Appeals;
Respondent Court of Tax Appeals acted with grave abuse of discretion in considering the
denial by petitioner of private respondents Motion for Reconsideration as [a] final decision
which may be appealed to the Court of Tax Appeals.
In denying the motion to dismiss filed by the CIR, the Court of Tax Appeals stated:
We agree with petitioners contentions, that the criminal complaint for tax evasion is the
assessment issued, and that the letter denial of May 17, 1995 is the decision properly
appealable to [u]s. Respondents ground of denial, therefore, that there was no formal
assessment issued, is untenable.
It is the Courts honest belief, that the criminal case for tax evasion is already an
assessment. The complaint, more particularly, the Joint Affidavit of Revenue Examiners
Lagmay and Savellano attached thereto, contains the details of the assessment like the
kind and amount of tax due, and the period covered.
Petitioners are right, in claiming that the provisions of Republic Act No. 1125, relating to
exclusive appellate jurisdiction of this Court, do not, make any mention of formal
assessment. The law merely states, that this Court has exclusive appellate jurisdiction over
decisions of the Commissioner of Internal Revenue on disputed assessments, and other
matters arising under the National Internal Revenue Code, other law or part administered
by the Bureau of Internal Revenue Code.
As far as this Court is concerned, the amount and kind of tax due, and the period covered,
are sufficient details needed for an assessment. These details are more than complete,
compared to the following definitions of the term as quoted hereunder. Thus:
Assessment is laying a tax. Johnson City v. Clinchfield R. Co., 43 S.W. (2d) 386, 387, 163
Tenn. 332. (Words and Phrases, Permanent Edition, Vol. 4, p. 446)
The word assessment when used in connection with taxation, may have more than one
meaning. The ultimate purpose of an assessment to such a connection is to ascertain the
amount that each taxpayer is to pay. More commonly, the word assessment means the
official valuation of a taxpayers property for purpose of taxation.State v. New York, N.H.
and H.R. Co. 22 A. 765, 768, 60 Conn. 326, 325. (Ibid. p. 445)
From the above, it can be gleaned that an assessment simply states how much tax is due
from a taxpayer. Thus, based on these definitions, the details of the tax as given in the
Joint Affidavit of respondents examiners, which was attached to the tax evasion complaint,
more than suffice to qualify as an assessment. Therefore, this assessment having been
disputed by petitioners, and there being a denial of their letter disputing such assessment,
this Court unquestionably acquired jurisdiction over the instant petition for review.[6]
As earlier observed, the Court of Appeals sustained the CTA and dismissed the
petition.
Hence, this recourse to this Court.[7]
Ruling of the Court of Appeals
The Court of Appeals held that the tax court committed no grave abuse of discretion in
ruling that the Criminal Complaint for tax evasion filed by the Commissioner of Internal
Revenue with the Department of Justice constituted an assessment of the tax due, and that
the said assessment could be the subject of a protest. By definition, an assessment is simply
the statement of the details and the amount of tax due from a taxpayer. Based on this
definition, the details of the tax contained in the BIR examiners Joint Affidavit,[8] which
was attached to the criminal Complaint, constituted an assessment. Since the assailed
Order of the CTA was merely interlocutory and devoid of grave abuse of discretion, a
petition for certiorari did not lie.
Issues
Petitioners submit for the consideration of this Court the following issues:
(1) Whether or not the criminal complaint for tax evasion can be construed as an
assessment.
(2) Whether or not an assessment is necessary before criminal charges for tax evasion may
be instituted.
(3) Whether or not the CTA can take cognizance of the case in the absence of an
assessment.[9]
In the main, the Court will resolve whether the revenue officers Affidavit-Report,
which was attached to the criminal Complaint filed with the Department of Justice,
constituted an assessment that could be questioned before the Court of Tax Appeals.
The Courts Ruling
The petition is meritorious.
Main Issue: Assessment
Petitioner argues that the filing of the criminal complaint with the Department of
Justice cannot in any way be construed as a formal assessment of private respondents tax
liabilities. This position is based on Section 205 of the National Internal Revenue
Code[10] (NIRC), which provides that remedies for the collection of deficient taxes may be by
either civil or criminal action. Likewise, petitioner cites Section 223(a) of the same Code,
which states that in case of failure to file a return, the tax may be assessed or a proceeding
in court may be begun without assessment.
Respondents, on the other hand, maintain that an assessment is not an action or
proceeding for the collection of taxes, but merely a notice that the amount stated therein is
due as tax and that the taxpayer is required to pay the same. Thus, qualifying as an
assessment was the BIR examiners Joint Affidavit, which contained the details of the
supposed taxes due from respondent for taxable years ending 1987 and 1988, and which
was attached to the tax evasion Complaint filed with the DOJ.Consequently, the denial by
the BIR of private respondents request for reinvestigation of the disputed assessment is
properly appealable to the CTA.
We agree with petitioner. Neither the NIRC nor the revenue regulations governing the
protest of assessments[11] provide a specific definition or form of an assessment. However,
the NIRC defines the specific functions and effects of an assessment. To consider the
affidavit attached to the Complaint as a proper assessment is to subvert the nature of an
assessment and to set a bad precedent that will prejudice innocent taxpayers.
True, as pointed out by the private respondents, an assessment informs the taxpayer
that he or she has tax liabilities. But not all documents coming from the BIR containing a
computation of the tax liability can be deemed assessments.
To start with, an assessment must be sent to and received by a taxpayer, and must
demand payment of the taxes described therein within a specific period. Thus, the NIRC
imposes a 25 percent penalty, in addition to the tax due, in case the taxpayer fails to pay
the deficiency tax within the time prescribed for its payment in the notice of
assessment. Likewise, an interest of 20 percent per annum, or such higher rate as may be
prescribed by rules and regulations, is to be collected from the date prescribed for its
payment until the full payment.[12]
The issuance of an assessment is vital in determining the period of limitation regarding
its proper issuance and the period within which to protest it. Section 203[13]of the NIRC
provides that internal revenue taxes must be assessed within three years from the last day
within which to file the return. Section 222,[14] on the other hand, specifies a period of ten
years in case a fraudulent return with intent to evade was submitted or in case of failure to
file a return. Also, Section 228[15] of the same law states that said assessment may be
protested only within thirty days from receipt thereof. Necessarily, the taxpayer must be
certain that a specific document constitutes an assessment. Otherwise, confusion would
arise regarding the period within which to make an assessment or to protest the same, or
whether interest and penalty may accrue thereon.
It should also be stressed that the said document is a notice duly sent to the
taxpayer. Indeed, an assessment is deemed made only when the collector of internal
revenue releases, mails or sends such notice to the taxpayer.[16]
In the present case, the revenue officers Affidavit merely contained a computation of
respondents tax liability. It did not state a demand or a period for payment.Worse, it was
addressed to the justice secretary, not to the taxpayers.
Respondents maintain that an assessment, in relation to taxation, is simply understood
to mean:
A notice to the effect that the amount therein stated is due as tax and a demand for
payment thereof.[17]
Fixes the liability of the taxpayer and ascertains the facts and furnishes the data for the
proper presentation of tax rolls.[18]
Even these definitions fail to advance private respondents case. That the BIR
examiners Joint Affidavit attached to the Criminal Complaint contained some details of the
tax liabilities of private respondents does not ipso facto make it an assessment. The purpose
of the Joint Affidavit was merely to support and substantiate the Criminal Complaint for
tax evasion. Clearly, it was not meant to be a notice of the tax due and a demand to the
private respondents for payment thereof.
The fact that the Complaint itself was specifically directed and sent to the Department
of Justice and not to private respondents shows that the intent of the commissioner was to
file a criminal complaint for tax evasion, not to issue an assessment. Although the revenue
officers recommended the issuance of an assessment, the commissioner opted instead to file
a criminal case for tax evasion. What private respondents received was a notice from the
DOJ that a criminal case for tax evasion had been filed against them, not a notice that the
Bureau of Internal Revenue had made an assessment.
In addition, what private respondents sent to the commissioner was a motion for a
reconsideration of the tax evasion charges filed, not of an assessment, as shown thus:
This is to request for reconsideration of the tax evasion charges against my client, PASCOR
Realty and Development Corporation and for the same to be referred to the Appellate
Division in order to give my client the opportunity of a fair and objective hearing[19]
Additional Issues: Assessment Not Necessary Before Filing of Criminal Complaint
Private respondents maintain that the filing of a criminal complaint must be preceded
by an assessment. This is incorrect, because Section 222 of the NIRC specifically states that
in cases where a false or fraudulent return is submitted or in cases of failure to file a return
such as this case, proceedings in court may be commenced without an
assessment. Furthermore, Section 205 of the same Code clearly mandates that the civil and
criminal aspects of the case may be pursued simultaneously. In Ungab v. Cusi,[20] petitioner
therein sought the dismissal of the criminal Complaints for being premature, since his
protest to the CTA had not yet been resolved. The Court held that such protests could not
stop or suspend the criminal action which was independent of the resolution of the protest
in the CTA. This was because the commissioner of internal revenue had, in such tax
evasion cases, discretion on whether to issue an assessment or to file a criminal case
against the taxpayer or to do both.
Private respondents insist that Section 222 should be read in relation to Section 255 of
the NIRC,[21] which penalizes failure to file a return. They add that a tax assessment should
precede a criminal indictment. We disagree. To reiterate, said Section 222 states that an
assessment is not necessary before a criminal charge can be filed. This is the general
rule. Private respondents failed to show that they are entitled to an exception. Moreover,
the criminal charge need only be supported by a prima facie showing of failure to file a
required return. This fact need not be proven by an assessment.
The issuance of an assessment must be distinguished from the filing of a
complaint. Before an assessment is issued, there is, by practice, a pre-assessment notice
sent to the taxpayer. The taxpayer is then given a chance to submit position papers and
documents to prove that the assessment is unwarranted. If the commissioner is unsatisfied,
an assessment signed by him or her is then sent to the taxpayer informing the latter
specifically and clearly that an assessment has been made against him or her. In contrast,
the criminal charge need not go through all these. The criminal charge is filed directly with
the DOJ. Thereafter, the taxpayer is notified that a criminal case had been filed against
him, not that the commissioner has issued an assessment. It must be stressed that a
criminal complaint is instituted not to demand payment, but to penalize the taxpayer for
violation of the Tax Code.
WHEREFORE, the petition is hereby GRANTED. The assailed Decision
is REVERSED and SET ASIDE. CTA Case No. 5271 is likewise DISMISSED. No costs.
SO ORDERED.
COMMISSIONER OF INTERNAL G.R. No. 162155
REVENUE and ARTURO V.
PARCERO in his official
capacity as Revenue District
Officer of Revenue District
No. 049 (Makati),
Petitioners, Present:
PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.
PRIMETOWN PROPERTY
GROUP, INC.,
Respondent. Promulgated:
August 28, 2007
x-----------------------------------------x
DECISION
CORONA, J.:
This petition for review on certiorari[1] seeks to set aside the August 1, 2003 decision[2] of
the Court of Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution
denying reconsideration.[3]
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc.,
applied for the refund or credit of income tax respondent paid in 1997. In Yap's letter to
petitioner revenue district officer Arturo V. Parcero of Revenue District No. 049 (Makati) of
the Bureau of Internal Revenue (BIR),[4] he explained that the increase in the cost of labor
and materials and difficulty in obtaining financing for projects and collecting receivables
caused the real estate industry to slowdown.[5] As a consequence, while business was good
during the first quarter of 1997, respondent suffered losses amounting to P71,879,228 that
year.[6]
According to Yap, because respondent suffered losses, it was not liable for income
taxes.[7] Nevertheless, respondent paid its quarterly corporate income tax and remitted
creditable withholding tax from real estate sales to the BIR in the total amount
of P26,318,398.32.[8] Therefore, respondent was entitled to tax refund or tax credit.[9]
On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit
additional documents to support its claim.[10] Respondent complied but its claim was not
acted upon. Thus, on April 14, 2000, it filed a petition for review[11] in the Court of Tax
Appeals (CTA).
On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year
prescriptive period for filing a judicial claim for tax refund or tax credit.[12] It invoked
Section 229 of the National Internal Revenue Code (NIRC):
Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or

proceeding shall be maintained in any court for the recovery of any national
internal revenue tax hereafter alleged to have been erroneously or illegally
assessed or collected, or of any penalty claimed to have been collected
without authority, or of any sum alleged to have been excessively or in any
manner wrongfully collected, until a claim for refund or credit has been duly
filed with the Commissioner; but such suit or proceeding may be
maintained, whether or not such tax, penalty, or sum has been paid under
protest or duress.
In any case, no such suit or proceeding shall be filed after the

expiration of two (2) years from the date of payment of the tax or
penalty regardless of any supervening cause that may arise after
payment: Provided, however, That the Commissioner may, even without a
claim therefor, refund or credit any tax, where on the face of the return
upon which payment was made, such payment appears clearly to have been
erroneously paid. (emphasis supplied)
The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its
right to claim a refund or credit commenced on that date.[13]
The tax court applied Article 13 of the Civil Code which states:
Art. 13. When the law speaks of years, months, days or nights, it shall be
understood that years are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four hours, and nights from sunset to
sunrise.
If the months are designated by their name, they shall be computed by the
number of days which they respectively have.
In computing a period, the first day shall be excluded, and the last included.
(emphasis supplied)
Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC
for the filing of judicial claims was equivalent to 730 days. Because the year 2000 was a
leap year, respondent's petition, which was filed 731 days[14] after respondent filed its final
adjusted return, was filed beyond the reglementary period.[15]
Respondent moved for reconsideration but it was denied.[16] Hence, it filed an appeal in the
CA.[17]
On August 1, 2003, the CA reversed and set aside the decision of the CTA. [18] It ruled that
Article 13 of the Civil Code did not distinguish between a regular year and a leap year.
According to the CA:
The rule that a year has 365 days applies, notwithstanding the fact that a
particular year is a leap year.[19]
In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998
to April 14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days
each or a total of 730 days. A statute which is clear and explicit shall be neither interpreted
nor construed.[20]
Petitioners moved for reconsideration but it was denied.[21] Thus, this appeal.
Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly
construed against claimants.[22] Section 229 of the NIRC should be strictly applied against
respondent inasmuch as it has been consistently held that the prescriptive period (for the
filing of tax refunds and tax credits) begins to run on the day claimants file their final
adjusted returns.[23] Hence, the claim should have been filed on or before April 13, 2000 or
within 730 days, reckoned from the time respondent filed its final adjusted return.
The conclusion of the CA that respondent filed its petition for review in the CTA within the
two-year prescriptive period provided in Section 229 of the NIRC is correct. Its basis,
however, is not.
The rule is that the two-year prescriptive period is reckoned from the filing of the final
adjusted return.[24] But how should the two-year prescriptive period be computed?
As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year,
it is understood to be equivalent to 365 days. In National Marketing Corporation v.
Tecson,[25] we ruled that a year is equivalent to 365 days regardless of whether it is a
regular year or a leap year.[26]
However, in 1987, EO[27] 292 or the Administrative Code of 1987 was enacted. Section 31,
Chapter VIII, Book I thereof provides:
Sec. 31. Legal Periods. Year shall be understood to be twelve calendar

months; month of thirty days, unless it refers to a specific calendar month in
which case it shall be computed according to the number of days the specific
month contains; day, to a day of twenty-four hours and; night from sunrise to
sunset. (emphasis supplied)
A calendar month is a month designated in the calendar without regard to the number of
days it may contain.[28] It is the period of time running from the beginning of a certain
numbered day up to, but not including, the corresponding numbered day of the next month,
and if there is not a sufficient number of days in the next month, then up to and including
the last day of that month.[29] To illustrate, one calendar month from December 31, 2007
will be from January 1, 2008 to January 31, 2008; one calendar month from January 31,
2008 will be from February 1, 2008 until February 29, 2008.[30]
A law may be repealed expressly (by a categorical declaration that the law is revoked and
abrogated by another) or impliedly (when the provisions of a more recent law cannot be
reasonably reconciled with the previous one).[31] Section 27, Book VII (Final Provisions) of
the Administrative Code of 1987 states:
Sec. 27. Repealing clause. All laws, decrees, orders, rules and regulation, or
portions thereof, inconsistent with this Code are hereby repealed or modified
accordingly.
A repealing clause like Sec. 27 above is not an express repealing clause because it fails to
identify or designate the laws to be abolished.[32]Thus, the provision above
only impliedly repealed all laws inconsistent with the Administrative Code of 1987.
Implied repeals, however, are not favored. An implied repeal must have been clearly and
unmistakably intended by the legislature. The test is whether the subsequent law
encompasses entirely the subject matter of the former law and they cannot be logically or
reasonably reconciled.[33]
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative
Code of 1987 deal with the same subject matter the computation of legal periods. Under the
Civil Code, a year is equivalent to 365 days whether it be a regular year or a leap year.
Under the Administrative Code of 1987, however, a year is composed of 12 calendar
months. Needless to state, under the Administrative Code of 1987, the number of days is
irrelevant.
There obviously exists a manifest incompatibility in the manner of computing legal periods
under the Civil Code and the Administrative Code of 1987. For this reason, we hold that
Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being the more recent
law, governs the computation of legal periods. Lex posteriori derogat priori.
Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case,
the two-year prescriptive period (reckoned from the time respondent filed its final adjusted
return[34] on April 14, 1998) consisted of 24 calendar months, computed as follows:
Year 1st calendar April 15, 1998 to May 14, 1998

1 month
2nd calendar May 15, 1998 to June 14, 1998
month
3rd calendar June 15, 1998 to July 14, 1998
month
4th calendar July 15, 1998 to August 14, 1998
month
5th calendar August 15, 1998 to September 14,
month 1998
6th calendar September 15, to October 14, 1998
month 1998
7th calendar October 15, to November 14,
month 1998 1998
8th calendar November 15, to December 14,
month 1998 1998
9th calendar December 15, to January 14,
month 1998 1999
10th calendar January 15, to February 14,
month 1999 1999
11th calendar February 15, to March 14, 1999
month 1999
12th calendar March 15, 1999 to April 14, 1999
month
Year 13th calendar April 15, 1999 to May 14, 1999
2 month
14th calendar May 15, 1999 to June 14, 1999
month
15th calendar June 15, 1999 to July 14, 1999
month
16th calendar July 15, 1999 to August 14, 1999
month
17th calendar August 15, 1999 to September 14,
month 1999
18th calendar September 15, to October 14, 1999
month 1999
19th calendar October 15, to November 14,
month 1999 1999
20th calendar November 15, to December 14,
month 1999 1999
21st calendar December 15, to January 14,
month 1999 2000
22nd calendar January 15, to February 14,
month 2000 2000
23rd calendar February 15, to March 14, 2000
month 2000
24th calendar March 15, 2000 to April 14, 2000
month
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last
day of the 24th calendar month from the day respondent filed its final adjusted return.
Hence, it was filed within the reglementary period.
Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax
Appeals which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113
entitled Primetown Property Group, Inc. v. Commissioner of Internal Revenue and Arturo V.
Parcero.
No costs.
SO ORDERED.
PHILIPPINE JOURNALISTS, INC., G.R. No. 162852
Petitioner,
Present:
Davide, Jr., C.J. (Chairman),

- versus - Quisumbing,
Ynares-Santiago,
Carpio, and
Azcuna, JJ.
COMMISSIONER OF INTERNAL
REVENUE, Promulgated:
Respondent.
December 16, 2004
x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review filed by Philippine Journalists, Incorporated (PJI)

assailing the Decision[1] of the Court of Appeals dated August 5, 2003,[2] which ordered
petitioner to pay the assessed tax liability of P111,291,214.46 and the Resolution[3] dated
March 31, 2004 which denied the Motion for Reconsideration.
The case arose from the Annual Income Tax Return filed by petitioner for the
calendar year ended December 31, 1994 which presented a net income of P30,877,387.00
and the tax due of P10,807,086.00. After deducting tax credits for the year, petitioner paid
the amount of P10,247,384.00.
On August 10, 1995, Revenue District Office No. 33 of the Bureau of Internal
Revenue (BIR) issued Letter of Authority No. 87120[4] for Revenue Officer Federico de Vera,
Jr. and Group Supervisor Vivencio Gapasin to examine petitioners books of account and
other accounting records for internal revenue taxes for the period January 1, 1994 to
December 31, 1994.
From the examination, the petitioner was told that there were deficiency taxes,
inclusive of surcharges, interest and compromise penalty in the following amounts:
Value Added Tax P 229,527.90

Income Tax 125,002,892.95
Withholding Tax 2,748,012.35
_______________
Total P 127,980,433.20
In a letter dated August 29, 1997, Revenue District Officer Jaime Concepcion invited
petitioner to send a representative to an informal conference on September 15, 1997 for an
opportunity to object and present documentary evidence relative to the proposed
assessment. On September 22, 1997, petitioners Comptroller, Lorenza Tolentino, executed
a Waiver of the Statute of Limitation Under the National Internal Revenue Code
(NIRC).[5] The document waive[d] the running of the prescriptive period provided by
Sections 223 and 224 and other relevant provisions of the NIRC and consent[ed] to the
assessment and collection of taxes which may be found due after the examination at any
time after the lapse of the period of limitations fixed by said Sections 223 and 224 and other
relevant provisions of the NIRC, until the completion of the investigation.[6]
On July 2, 1998, Revenue Officer De Vera submitted his audit report recommending
the issuance of an assessment and finding that petitioner had deficiency taxes in the total
amount of P136,952,408.97. On October 5, 1998, the Assessment Division of the BIR issued
Pre-Assessment Notices which informed petitioner of the results of the investigation. Thus,
BIR Revenue Region No. 6, Assessment Division/Billing Section, issued
Assessment/Demand No. 33-1-000757-94[7] on December 9, 1998 stating the following
deficiency taxes, inclusive of interest and compromise penalty:
Income Tax P108,743,694.88

Value Added Tax 184,299.20
Expanded Withholding Tax 2,363,220.38
______________
Total P111,291,214.46
On March 16, 1999, a Preliminary Collection Letter was sent by Deputy

Commissioner Romeo S. Panganiban to the petitioner to pay the assessment within ten (10)
days from receipt of the letter. On November 10, 1999, a Final Notice Before Seizure[8] was
issued by the same deputy commissioner giving the petitioner ten (10) days from receipt to
pay. Petitioner received a copy of the final notice on November 24, 1999. By letters dated
November 26, 1999, petitioner asked to be clarified how the tax liability of P111,291,214.46
was reached and requested an extension of thirty (30) days from receipt of the clarification
within which to reply.[9]
The BIR received a follow-up letter from the petitioner asserting that its (PJI) records
do not show receipt of Tax Assessment/Demand No. 33-1-000757-94.[10] Petitioner also
contested that the assessment had no factual and legal basis. On March 28, 2000, a
Warrant of Distraint and/or Levy No. 33-06-046[11] signed by Deputy Commissioner Romeo
Panganiban for the BIR was received by the petitioner.
Petitioner filed a Petition for Review[12] with the Court of Tax Appeals (CTA) which
was amended on May 12, 2000. Petitioner complains: (a) that no assessment or demand
was received from the BIR; (b) that the warrant of distraint and/or levy was without factual
and legal bases as its issuance was premature; (c) that the assessment, having been made
beyond the 3-year prescriptive period, is null and void; (d) that the issuance of the warrant
without being given the opportunity to dispute the same violates its right to due process;
and (e) that the grave prejudice that will be sustained if the warrant is enforced is enough
basis for the issuance of the writ of preliminary injunction.
On May 14, 2002, the CTA rendered its decision,[13] to wit:
As to whether or not the assessment notices were received by the

petitioner, this Court rules in the affirmative.
To disprove petitioners allegation of non-receipt of the aforesaid

assessment notices, respondent presented a certification issued by the Post
Master of the Central Post Office, Manila to the effect that Registered Letter
No. 76134 sent by the BIR, Region No. 6, Manila on December 15, 1998
addressed to Phil. Journalists, Inc. at Journal Bldg., Railroad St., Manila was
duly delivered to and received by a certain Alfonso Sanchez, Jr. (Authorized
Representative) on January 8, 1999. Respondent also showed proof that in
claiming Registered Letter No. 76134, Mr. Sanchez presented three
identification cards, one of which is his company ID with herein petitioner.
However, as to whether or not the Waiver of the Statute of

Limitations is valid and binding on the petitioner is another question. Since
the subject assessments were issued beyond the three-year prescriptive
period, it becomes imperative on our part to rule first on the validity of the
waiver allegedly executed on September 22, 1997, for if this court finds the
same to be ineffective, then the assessments must necessarily fail.
After carefully examining the questioned Waiver of the Statute of

Limitations, this Court considers the same to be without any binding effect
on the petitioner for the following reasons:
The waiver is an unlimited waiver. It does not contain a definite

expiration date. Under RMO No. 20-90, the phrase indicating the expiry date
of the period agreed upon to assess/collect the tax after the regular three-year
period of prescription should be filled up
Secondly, the waiver failed to state the date of acceptance by the

Bureau which under the aforequoted RMO should likewise be indicated
Finally, petitioner was not furnished a copy of the waiver. It is to be

noted that under RMO No. 20-90, the waiver must be executed in three (3)
copies, the second copy of which is for the taxpayer. It is likewise required
that the fact of receipt by the taxpayer of his/her file copy be indicated in the
original copy. Again, respondent failed to comply.
It bears stressing that RMO No. 20-90 is directed to all concerned

internal revenue officers. The said RMO even provides that the procedures
found therein should be strictly followed, under pain of being
administratively dealt with should non-compliance result to prescription of
the right to assess/collect
Thus, finding the waiver executed by the petitioner on September 22,

1997 to be suffering from legal infirmities, rendering the same invalid and
ineffective, the Court finds Assessment/Demand No. 33-1-000757-94 issued
on December 5, 1998 to be time-barred. Consequently, the Warrant of
Distraint and/or Levy issued pursuant thereto is considered null and void.
WHEREFORE, in view of all the foregoing, the instant Petition for

Review is hereby GRANTED. Accordingly, the deficiency income, value-
added and expanded withholding tax assessments issued by the respondent
against the petitioner on December 9, 1998, in the total amount of
P111,291,214.46 for the year 1994 are hereby declared CANCELLED,
WITHDRAWN and WITH NO FORCE AND EFFECT. Likewise, Warrant
of Distraint and/or Levy No. 33-06-046 is hereby declared NULL and VOID.
SO ORDERED.[14]
After the motion for reconsideration of the Commissioner of Internal Revenue was
denied by the CTA in a Resolution dated August 2, 2002, an appeal was filed with the Court
of Appeals on August 12, 2002.
In its decision dated August 5, 2003, the Court of Appeals disagreed with the ruling
of the CTA, to wit:
The petition for review filed on 26 April 2000 with CTA was neither timely
filed nor the proper remedy. Only decisions of the BIR, denying the request
for reconsideration or reinvestigation may be appealed to the CTA. Mere
assessment notices which have become final after the lapse of the thirty (30)-
day reglementary period are not appealable. Thus, the CTA should not have
entertained the petition at all.
[T]he CTA found the waiver executed by Phil. Journalists to be invalid for the
following reasons: (1) it does not indicate a definite expiration date; (2) it does
not state the date of acceptance by the BIR; and (3) Phil. Journalist, the
taxpayer, was not furnished a copy of the waiver. These grounds are merely
formal in nature. The date of acceptance by the BIR does not categorically
appear in the document but it states at the bottom page that the BIR
accepted and agreed to:, followed by the signature of the BIRs authorized
representative. Although the date of acceptance was not stated, the
document was dated 22 September 1997. This date could reasonably be
understood as the same date of acceptance by the BIR since a different date
was not otherwise indicated. As to the allegation that Phil. Journalists was
not furnished a copy of the waiver, this requirement appears ridiculous. Phil.
Journalists, through its comptroller, Lorenza Tolentino, signed the
waiver. Why would it need a copy of the document it knowingly executed
when the reason why copies are furnished to a party is to notify it of the
existence of a document, event or proceeding?
As regards the need for a definite expiration date, this is the biggest
flaw of the decision. The period of prescription for the assessment of taxes
may be extended provided that the extension be made in writing and that it
be made prior to the expiration of the period of prescription. These are the
requirements for a valid extension of the prescriptive period. To these
requirements provided by law, the memorandum order adds that the length
of the extension be specified by indicating its expiration date. This
requirement could be reasonably construed from the rule on extension of the
prescriptive period. But this requirement does not apply in the instant case
because what we have here is not an extension of the prescriptive period but
a waiver thereof. These are two (2) very different things. What Phil.
Journalists executed was a renunciation of its right to invoke the defense of
prescription. This is a valid waiver. When one waives the prescriptive
period, it is no longer necessary to indicate the length of the extension of the
prescriptive period since the person waiving may no longer use this defense.
WHEREFORE, the 02 August 2002 resolution and 14 May 2002

decision of the CTA are hereby SET ASIDE. Respondent Phil. Journalists is
ordered [to] pay its assessed tax liability of P111,291,214.46.
SO ORDERED.[15]
Petitioners Motion for Reconsideration was denied in a Resolution dated March 31,
2004. Hence, this appeal on the following assignment of errors:
I.
The Honorable Court of Appeals committed grave error in ruling that it is
outside the jurisdiction of the Court of Tax Appeals to entertain the Petition
for Review filed by the herein Petitioner at the CTA despite the fact that such
case inevitably rests upon the validity of the issuance by the BIR of warrants
of distraint and levy contrary to the provisions of Section 7(1) of Republic Act
No. 1125.
II.
The Honorable Court of Appeals gravely erred when it ruled that failure to
comply with the provisions of Revenue Memorandum Order (RMO) No. 20-90
is merely a formal defect that does not invalidate the waiver of the statute of
limitations without stating the legal justification for such conclusion. Such
ruling totally disregarded the mandatory requirements of Section 222(b) of
the Tax Code and its implementing regulation, RMO No. 20-90 which are
substantive in nature. The RMO provides that violation thereof subjects the
erring officer to administrative sanction. This directive shows that the RMO
is not merely cover forms.
III.
The Honorable Court of Appeals gravely erred when it ruled that the
assessment notices became final and unappealable. The assessment issued is
void and legally non-existent because the BIR has no power to issue an
assessment beyond the three-year prescriptive period where there is no valid
and binding waiver of the statute of limitation.
IV.
The Honorable Court of Appeals gravely erred when it held that the
assessment in question has became final and executory due to the failure of
the Petitioner to protest the same. Respondent had no power to issue an
assessment beyond the three year period under the mandatory provisions of
Section 203 of the NIRC. Such assessment should be held void and non-
existent, otherwise, Section 203, an expression of a public policy, would be
rendered useless and nugatory. Besides, such right to assess cannot be
validly granted after three years since it would arise from a violation of the
mandatory provisions of Section 203 and would go against the vested right of
the Petitioner to claim prescription of assessment.
V.
The Honorable Court of Appeals committed grave error when it HELD valid a
defective waiver by considering the latter a waiver of the right to invoke the
defense of prescription rather than an extension of the three year period of
prescription (to make an assessment) as provided under Section 222 in
relation to Section 203 of the Tax Code, an interpretation that is contrary to
law, existing jurisprudence and outside of the purpose and intent for which
they were enacted.[16]
We find merit in the appeal.
The first assigned error relates to the jurisdiction of the CTA over the issues in this
case. The Court of Appeals ruled that only decisions of the BIR denying a request for
reconsideration or reinvestigation may be appealed to the CTA. Since the petitioner did not
file a request for reinvestigation or reconsideration within thirty (30) days, the assessment
notices became final and unappealable. The petitioner now argue that the case was
brought to the CTA because the warrant of distraint or levy was illegally issued and that no
assessment was issued because it was based on an invalid waiver of the statutes of
limitations.
We agree with petitioner. Section 7(1) of Republic Act No. 1125, the Act Creating the
Court of Tax Appeals, provides for the jurisdiction of that special court:
SEC. 7. Jurisdiction. The Court of Tax Appeals shall exercise

exclusive appellate jurisdiction to review by appeal, as herein provided
(1) Decisions of the Commissioner of Internal Revenue in cases

involving disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereto, or other matters
arising under the National Internal Revenue Code or other laws or
part of law administered by the Bureau of Internal Revenue;
(Emphasis supplied).
The appellate jurisdiction of the CTA is not limited to cases which involve decisions of
the Commissioner of Internal Revenue on matters relating to assessments or refunds. The
second part of the provision covers other cases that arise out of the NIRC or related laws
administered by the Bureau of Internal Revenue. The wording of the provision is clear and
simple. It gives the CTA the jurisdiction to determine if the warrant of distraint and levy
issued by the BIR is valid and to rule if the Waiver of Statute of Limitations was validly
effected.
This is not the first case where the CTA validly ruled on issues that did not relate
directly to a disputed assessment or a claim for refund. In Pantoja v. David,[17] we upheld
the jurisdiction of the CTA to act on a petition to invalidate and annul the distraint orders
of the Commissioner of Internal Revenue. Also, in Commissioner of Internal Revenue v.
Court of Appeals,[18] the decision of the CTA declaring several waivers executed by the
taxpayer as null and void, thus invalidating the assessments issued by the BIR, was upheld
by this Court.
The second and fifth assigned errors both focus on Revenue Memorandum Circular
No. 20-90 (RMO No. 20-90) on the requisites of a valid waiver of the statute of
limitations. The Court of Appeals held that the requirements and procedures laid down in
the RMO are only formal in nature and did not invalidate the waiver that was signed even
if the requirements were not strictly observed.
The NIRC, under Sections 203 and 222,[19] provides for a statute of limitations on the
assessment and collection of internal revenue taxes in order to safeguard the interest of the
taxpayer against unreasonable investigation.[20] Unreasonable investigation contemplates
cases where the period for assessment extends indefinitely because this deprives the
taxpayer of the assurance that it will no longer be subjected to further investigation for
taxes after the expiration of a reasonable period of time. As was held in Republic of the
Phils. v. Ablaza:[21]
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 latters real liability, but to take advantage of every
opportunity to molest peaceful, law-abiding citizens. Without such a 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 beneficent purpose of affording protection to the taxpayer
within the contemplation of the Commission which recommend the
approval of the law. (Emphasis supplied)
RMO No. 20-90 implements these provisions of the NIRC relating to the period of
prescription for the assessment and collection of taxes. A cursory reading of the Order
supports petitioners argument that the RMO must be strictly followed, thus:
In the execution of said waiver, the following procedures should be followed:
1. The waiver must be in the form identified hereof. This form may be
reproduced by the Office concerned but there should be no
deviation from such form. The phrase but not after __________
19___ should be filled up
2.
Soon after the waiver is signed by the taxpayer, the Commissioner

of Internal Revenue or the revenue official authorized by him,
as hereinafter provided, shall sign the waiver indicating that
the Bureau has accepted and agreed to the waiver. The date of
such acceptance by the Bureau should be indicated
3. The following revenue officials are authorized to sign the waiver.
A. In the National Office
3. Commissioner For tax cases involving

more than P1M
B. In the Regional Offices
1. The Revenue District Officer with respect to tax cases

still pending investigation and the period to assess is
about to prescribe regardless of amount.
5. The foregoing procedures shall be strictly

followed. Any revenue official found not to have
complied with this Order resulting in
prescription of the right to assess/collect shall be
administratively dealt with. (Emphasis supplied)[22]
A waiver of the statute of limitations under the NIRC, to a certain extent, is a
derogation of the taxpayers right to security against prolonged and unscrupulous
investigations and must therefore be carefully and strictly construed.[23] The waiver of the
statute of limitations is not a waiver of the right to invoke the defense of prescription as
erroneously held by the Court of Appeals. It is an agreement between the taxpayer and the
BIR that the period to issue an assessment and collect the taxes due is extended to a date
certain. The waiver does not mean that the taxpayer relinquishes the right to invoke
prescription unequivocally particularly where the language of the document is
equivocal. For the purpose of safeguarding taxpayers from any unreasonable examination,
investigation or assessment, our tax law provides a statute of limitations in the collection of
taxes. Thus, the law on prescription, being a remedial measure, should be liberally
construed in order to afford such protection. As a corollary, the exceptions to the law on
prescription should perforce be strictly construed.[24] RMO No. 20-90 explains the rationale
of a waiver:
... The phrase but not after _________ 19___ should be filled up. This
indicates the expiry date of the period agreed upon to assess/collect the tax
after the regular three-year period of prescription. The period agreed
upon shall constitute the time within which to effect the
assessment/collection of the tax in addition to the ordinary
prescriptive period. (Emphasis supplied)
As found by the CTA, the Waiver of Statute of Limitations, signed by petitioners

comptroller on September 22, 1997 is not valid and binding because it does not conform
with the provisions of RMO No. 20-90. It did not specify a definite agreed date between the
BIR and petitioner, within which the former may assess and collect revenue taxes. Thus,
petitioners waiver became unlimited in time, violating Section 222(b) of the NIRC.
The waiver is also defective from the government side because it was signed only by
a revenue district officer, not the Commissioner, as mandated by the NIRC and RMO No.
20-90. The waiver is not a unilateral act by the taxpayer or the BIR, but is a bilateral
agreement between two parties to extend the period to a date certain. The conformity of
the BIR must be made by either the Commissioner or the Revenue District Officer. This
case involves taxes amounting to more than One Million Pesos (P1,000,000.00) and
executed almost seven months before the expiration of the three-year prescription
period. For this, RMO No. 20-90 requires the Commissioner of Internal Revenue to sign for
the BIR.
The case of Commissioner of Internal Revenue v. Court of Appeals,[25] dealt with

waivers that were not signed by the Commissioner but were argued to have been given
implied consent by the BIR. We invalidated the subject waivers and ruled:
Petitioners submission is inaccurate
The Court of Appeals itself also passed upon the validity of the
waivers executed by Carnation, observing thus:
We cannot go along with the petitioners theory. Section

319 of the Tax Code earlier quoted is clear and explicit that the
waiver of the five-year[26] prescriptive period must be in writing
and signed by both the BIR Commissioner and the taxpayer.
Here, the three waivers signed by Carnation do not bear

the written consent of the BIR Commissioner as required by
law.
We agree with the CTA in holding these waivers to be

invalid and without any binding effect on petitioner
(Carnation) for the reason that there was no consent by the
respondent (Commissioner of Internal Revenue).
For sure, no such written agreement concerning the said

three waivers exists between the petitioner and private
respondent Carnation.
What is more, the waivers in question reveal that they are in no wise
unequivocal, and therefore necessitates for its binding effect the concurrence
of the Commissioner of Internal Revenue. On this basis neither implied
consent can be presumed nor can it be contended that the waiver
required under Sec. 319 of the Tax Code is one which is unilateral
nor can it be said that concurrence to such an agreement is a mere
formality because it is the very signatures of both the Commissioner
of Internal Revenue and the taxpayer which give birth to such a
valid agreement.[27] (Emphasis supplied)
The other defect noted in this case is the date of acceptance which makes it difficult
to fix with certainty if the waiver was actually agreed before the expiration of the three-
year prescriptive period. The Court of Appeals held that the date of the execution of the
waiver on September 22, 1997 could reasonably be understood as the same date of
acceptance by the BIR. Petitioner points out however that Revenue District Officer
Sarmiento could not have accepted the waiver yet because she was not the Revenue District
Officer of RDO No. 33 on such date. Ms. Sarmientos transfer and assignment to RDO No.
33 was only signed by the BIR Commissioner on January 16, 1998 as shown by the Revenue
Travel Assignment Order No. 14-98.[28] The Court of Tax Appeals noted in its decision that
it is unlikely as well that Ms. Sarmiento made the acceptance on January 16, 1998 because
Revenue Officials normally have to conduct first an inventory of their pending papers and
property responsibilities.[29]
Finally, the records show that petitioner was not furnished a copy of the
waiver. Under RMO No. 20-90, the waiver must be executed in three copies with the
second copy for the taxpayer. The Court of Appeals did not think this was important
because the petitioner need not have a copy of the document it knowingly executed. It
stated that the reason copies are furnished is for a party to be notified of the existence of a
document, event or proceeding.
The flaw in the appellate courts reasoning stems from its assumption that the waiver
is a unilateral act of the taxpayer when it is in fact and in law an agreement between the
taxpayer and the BIR. When the petitioners comptroller signed the waiver on September
22, 1997, it was not yet complete and final because the BIR had not assented. There is
compliance with the provision of RMO No. 20-90 only after the taxpayer received a copy of
the waiver accepted by the BIR. The requirement to furnish the taxpayer with a copy of the
waiver is not only to give notice of the existence of the document but of the acceptance by
the BIR and the perfection of the agreement.
The waiver document is incomplete and defective and thus the three-year prescriptive
period was not tolled or extended and continued to run until April 17, 1998. Consequently,
the Assessment/Demand No. 33-1-000757-94 issued on December 9, 1998 was invalid
because it was issued beyond the three (3) year period. In the same manner, Warrant of
Distraint and/or Levy No. 33-06-046 which petitioner received on March 28, 2000 is also
null and void for having been issued pursuant to an invalid assessment.
WHEREFORE, premises considered, the instant petition for review

is GRANTED. The Decision of the Court of Appeals dated August 5, 2003 and its
Resolution dated March 31, 2004 are REVERSED and SET ASIDE. The Decision of the
Court of Tax Appeals in CTA Case No. 6108 dated May 14, 2002, declaring Warrant of
Distraint and/or Levy No. 33-06-046 null and void, is REINSTATED.
SO ORDERED.
COMMISSIONER OF INTERNAL G.R. No. 178087
REVENUE,
Petitioner, Present:
CARPIO, J., Chairperson,

BRION,
- versus - DEL CASTILLO,
ABAD, and
PEREZ, JJ.
KUDOS METAL CORPORATION, Promulgated:

Respondent. May 5, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The prescriptive period on when to assess taxes benefits both the government and the
taxpayer.[1] Exceptions extending the period to assess must, therefore, be strictly construed.
This Petition for Review on Certiorari seeks to set aside the Decision[2] dated March 30,
2007 of the Court of Tax Appeals (CTA) affirming the cancellation of the assessment notices for
having been issued beyond the prescriptive period and the Resolution[3] dated May 18,
2007 denying the motion for reconsideration.
Factual Antecedents
On April 15, 1999, respondent Kudos Metal Corporation filed its Annual Income Tax
Return (ITR) for the taxable year 1998.
Pursuant to a Letter of Authority dated September 7, 1999, the Bureau of Internal Revenue
(BIR) served upon respondent three Notices of Presentation of Records. Respondent failed to
comply with these notices, hence, the BIR issued a Subpeona Duces Tecum dated September 21,
2006, receipt of which was acknowledged by respondents President, Mr. Chan Ching Bio, in a letter
dated October 20, 2000.
A review and audit of respondents records then ensued.

On December 10, 2001, Nelia Pasco (Pasco), respondents accountant, executed a Waiver of
the Defense of Prescription,[4] which was notarized on January 22, 2002, received by the BIR
Enforcement Service on January 31, 2002 and by the BIR Tax Fraud Division on February 4, 2002,
and accepted by the Assistant Commissioner of the Enforcement Service, Percival T. Salazar
(Salazar).
This was followed by a second Waiver of Defense of Prescription[5] executed
by Pasco on February 18, 2003, notarized on February 19, 2003, received by the BIR Tax Fraud
Division on February 28, 2003 and accepted by Assistant Commissioner Salazar.
On August 25, 2003, the BIR issued a Preliminary Assessment Notice for the taxable year
1998 against the respondent. This was followed by a Formal Letter of Demand with Assessment
Notices for taxable year 1998, dated September 26, 2003 which was received by respondent
on November 12, 2003.
Respondent challenged the assessments by filing its Protest on Various Tax Assessments
on December 3, 2003 and its Legal Arguments and Documents in Support of Protests against
Various Assessments on February 2, 2004.
On June 22, 2004, the BIR rendered a final Decision[6] on the matter, requesting the
immediate payment of the following tax liabilities:
Kind of Tax Amount

Income Tax P 9,693,897.85
VAT 13,962,460.90
EWT 1,712,336.76
Withholding Tax-Compensation 247,353.24
Penalties 8,000.00
Total P25,624,048.76
Ruling of the Court of Tax Appeals, Second Division
Believing that the governments right to assess taxes had prescribed, respondent filed
on August 27, 2004 a Petition for Review[7] with the CTA.Petitioner in turn filed his Answer.[8]
On April 11, 2005, respondent filed an Urgent Motion for Preferential Resolution of the
Issue on Prescription.[9]
On October 4, 2005, the CTA Second Division issued a Resolution[10] canceling the
assessment notices issued against respondent for having been issued beyond the prescriptive
period. It found the first Waiver of the Statute of Limitations incomplete and defective for failure to
comply with the provisions of Revenue Memorandum Order (RMO) No. 20-90. Thus:
First, the Assistant Commissioner is not the revenue official authorized to
sign the waiver, as the tax case involves more than P1,000,000.00. In this regard,
only the Commissioner is authorized to enter into agreement with the petitioner in
extending the period of assessment;
Secondly, the waiver failed to indicate the date of acceptance. Such date of
acceptance is necessary to determine whether the acceptance was made within the
prescriptive period;
Third, the fact of receipt by the taxpayer of his file copy was not indicated on
the original copy. The requirement to furnish the taxpayer with a copy of the waiver
is not only to give notice of the existence of the document but also of the acceptance
by the BIR and the perfection of the agreement.
The subject waiver is therefore incomplete and defective. As such, the three-
year prescriptive period was not tolled or extended and continued to run. x x x[11]
Petitioner moved for reconsideration but the CTA Second Division denied the motion in a
Resolution[12] dated April 18, 2006.
Ruling of the Court of Tax Appeals, En Banc
On appeal, the CTA En Banc affirmed the cancellation of the assessment notices. Although it ruled
that the Assistant Commissioner was authorized to sign the waiver pursuant to Revenue
Delegation Authority Order (RDAO) No. 05-01, it found that the first waiver was still invalid based
on the second and third grounds stated by the CTA Second Division. Pertinent portions of the
Decision read as follows:
While the Court En Banc agrees with the second and third grounds for
invalidating the first waiver, it finds that the Assistant Commissioner of the
Enforcement Service is authorized to sign the waiver pursuant to RDAO No. 05-01,
which provides in part as follows:
A. For National Office cases
Designated Revenue Official
1. Assistant Commissioner (ACIR), For tax fraud and policy

Enforcement Service cases
2. ACIR, Large Taxpayers Service For large taxpayers cases

other than those cases falling under
Subsection B hereof
3. ACIR, Legal Service For cases pending

verification and awaiting
resolution of certain legal issues prior to
prescription and for
issuance/compliance of Subpoena
Duces Tecum
4. ACIR, Assessment Service (AS) For cases which are

pending in or subject to
review or approval by the
ACIR, AS
Based on the foregoing, the Assistant Commissioner, Enforcement Service is

authorized to sign waivers in tax fraud cases. A perusal of the records reveals that
the investigation of the subject deficiency taxes in this case was conducted by the
National Investigation Division of the BIR, which was formerly named the Tax
Fraud Division. Thus, the subject assessment is a tax fraud case.
Nevertheless, the first waiver is still invalid based on the second and third
grounds stated by the Court in Division. Hence, it did not extend the prescriptive
period to assess.
Moreover, assuming arguendo that the first waiver is valid, the second
waiver is invalid for violating Section 222(b) of the 1997 Tax Code which mandates
that the period agreed upon in a waiver of the statute can still be extended by
subsequent written agreement, provided that it is executed prior to the expiration of
the first period agreed upon. As previously discussed, the exceptions to the law on
prescription must be strictly construed.
In the case at bar, the period agreed upon in the subject first waiver expired
on December 31, 2002. The second waiver in the instant case which was supposed to
extend the period to assess to December 31, 2003 was executed on February 18,
2003 and was notarized on February 19, 2003. Clearly, the second waiver was
executed after the expiration of the first period agreed upon. Consequently, the
same could not have tolled the 3-year prescriptive period to assess.[13]
Petitioner sought reconsideration but the same was unavailing.
Issue
Hence, the present recourse where petitioner interposes that:

THE COURT OF TAX APPEALS EN BANC ERRED IN RULING THAT THE
GOVERNMENTS RIGHT TO ASSESS UNPAID TAXES OF RESPONDENT
PRESCRIBED.[14]
Petitioners Arguments
Petitioner argues that the governments right to assess taxes is not barred by prescription as
the two waivers executed by respondent, through its accountant, effectively tolled or extended the
period within which the assessment can be made. In disputing the conclusion of the CTA that the
waivers are invalid, petitioner claims that respondent is estopped from adopting a position contrary
to what it has previously taken. Petitioner insists that by acquiescing to the audit during the period
specified in the waivers, respondent led the government to believe that the delay in the process
would not be utilized against it. Thus, respondent may no longer repudiate the validity of the
waivers and raise the issue of prescription.
Respondents Arguments
Respondent maintains that prescription had set in due to the invalidity of the waivers executed
by Pasco, who executed the same without any written authority from it, in clear violation of RDAO
No. 5-01. As to the doctrine of estoppel by acquiescence relied upon by petitioner, respondent
counters that the principle of equity comes into play only when the law is doubtful, which is not
present in the instant case.
Our Ruling
The petition is bereft of merit.
Section 203[15] of the National Internal Revenue Code of 1997 (NIRC) mandates the
government to assess internal revenue taxes within three years from the last day prescribed by law
for the filing of the tax return or the actual date of filing of such return, whichever comes
later. Hence, an assessment notice issued after the three-year prescriptive period is no longer valid
and effective. Exceptions however are provided under Section 222[16] of the NIRC.
The waivers executed by respondents

accountant did not extend the period within
which the assessment can be made
Petitioner does not deny that the assessment notices were issued beyond the three-year
prescriptive period, but claims that the period was extended by the two waivers executed by
respondents accountant.
We do not agree.
Section 222 (b) of the NIRC provides that the period to assess and collect taxes may only be
extended upon a written agreement between the CIR and the taxpayer executed before the
expiration of the three-year period. RMO 20-90[17] issued on April 4, 1990 and RDAO 05-
01[18] issued on August 2, 2001 lay down the procedure for the proper execution of the waiver, to wit:
1. The waiver must be in the proper form prescribed by RMO 20-90. The phrase but
not after ______ 19 ___, which indicates the expiry date of the period agreed
upon to assess/collect the tax after the regular three-year period of prescription,
should be filled up.
2. The waiver must be signed by the taxpayer himself or his duly authorized
representative. In the case of a corporation, the waiver must be signed by any of
its responsible officials. In case the authority is delegated by the taxpayer to a
representative, such delegation should be in writing and duly notarized.
3. The waiver should be duly notarized.
4. The CIR or the revenue official authorized by him must sign the waiver
indicating that the BIR has accepted and agreed to the waiver. The date of such
acceptance by the BIR should be indicated. However, before signing the waiver,
the CIR or the revenue official authorized by him must make sure that the
waiver is in the prescribed form, duly notarized, and executed by the taxpayer
or his duly authorized representative.
5. Both the date of execution by the taxpayer and date of acceptance by the Bureau
should be before the expiration of the period of prescription or before the lapse of
the period agreed upon in case a subsequent agreement is executed.
6. The waiver must be executed in three copies, the original copy to be attached to
the docket of the case, the second copy for the taxpayer and the third copy for
the Office accepting the waiver. The fact of receipt by the taxpayer of his/her file
copy must be indicated in the original copy to show that the taxpayer was
notified of the acceptance of the BIR and the perfection of the agreement.[19]
A perusal of the waivers executed by respondents accountant reveals the following

infirmities:
1. The waivers were executed without the notarized written authority

of Pasco to sign the waiver in behalf of respondent.
2. The waivers failed to indicate the date of acceptance.
3. The fact of receipt by the respondent of its file copy was not indicated in the
original copies of the waivers.
Due to the defects in the waivers, the period to assess or collect taxes was not
extended. Consequently, the assessments were issued by the BIR beyond the three-year period and
are void.
Estoppel does not apply in this case
We find no merit in petitioners claim that respondent is now estopped from claiming
prescription since by executing the waivers, it was the one which asked for additional time to
submit the required documents.
In Collector of Internal Revenue v. Suyoc Consolidated Mining Company,[20] the doctrine of
estoppel prevented the taxpayer from raising the defense of prescription against the efforts of the
government to collect the assessed tax. However, it must be stressed that in the said case, estoppel
was applied as an exception to the statute of limitations on collection of taxes and not on
the assessment of taxes, as the BIR was able to make an assessment within the prescribed
period. More important, there was a finding that the taxpayer made several requests or positive
acts to convince the government to postpone the collection of taxes, viz:
It appears that the first assessment made against respondent based on its
second final return filed on November 28, 1946 was made on February 11, 1947.
Upon receipt of this assessment respondent requested for at least one year within
which to pay the amount assessed although it reserved its right to question the
correctness of the assessment before actual payment. Petitioner granted an
extension of only three months. When it failed to pay the tax within the period
extended, petitioner sent respondent a letter on November 28, 1950 demanding
payment of the tax as assessed, and upon receipt of the letter respondent asked for a
reinvestigation and reconsideration of the assessment. When this request was
denied, respondent again requested for a reconsideration on April 25, 1952, which
was denied on May 6, 1953, which denial was appealed to the Conference Staff. The
appeal was heard by the Conference Staff from September 2, 1953 to July 16, 1955,
and as a result of these various negotiations, the assessment was finally reduced
on July 26, 1955. This is the ruling which is now being questioned after a protracted
negotiation on the ground that the collection of the tax has already prescribed.
It is obvious from the foregoing that petitioner refrained from collecting the
tax by distraint or levy or by proceeding in court within the 5-year period from the
filing of the second amended final return due to the several requests of respondent
for extension to which petitioner yielded to give it every opportunity to prove its
claim regarding the correctness of the assessment. Because of such requests, several
reinvestigations were made and a hearing was even held by the Conference Staff
organized in the collection office to consider claims of such nature which, as the
record shows, lasted for several months. After inducing petitioner to delay collection
as he in fact did, it is most unfair for respondent to now take advantage of such
desistance to elude his deficiency income tax liability to the prejudice of the
Government invoking the technical ground of prescription.
While we may agree with the Court of Tax Appeals that a mere request for
reexamination or reinvestigation may not have the effect of suspending the running
of the period of limitation for in such case there is need of a written agreement to
extend the period between the Collector and the taxpayer, there are cases however
where a taxpayer may be prevented from setting up the defense of prescription even
if he has not previously waived it in writing as when by his repeated requests or
positive acts the Government has been, for good reasons, persuaded to postpone
collection to make him feel that the demand was not unreasonable or that no
harassment or injustice is meant by the Government. And when such situation
comes to pass there are authorities that hold, based on weighty reasons, that such
an attitude or behavior should not be countenanced if only to protect the interest of
the Government.
This case has no precedent in this jurisdiction for it is the first time that
such has risen, but there are several precedents that may be invoked in American
jurisprudence. As Mr. Justice Cardozo has said: The applicable principle is
fundamental and unquestioned. He who prevents a thing from being done may not
avail himself of the nonperformance which he has himself occasioned, for the law
says to him in effect this is your own act, and therefore you are not damnified. (R. H.
Stearns Co. vs. U.S., 78 L. ed., 647). Or, as was aptly said, The tax could have been
collected, but the government withheld action at the specific request of the plaintiff.
The plaintiff is now estopped and should not be permitted to raise the defense of the
Statute of Limitations. [Newport Co. vs. U.S., (DC-WIS), 34 F. Supp. 588].[21]
Conversely, in this case, the assessments were issued beyond the prescribed period. Also,
there is no showing that respondent made any request to persuade the BIR to postpone the
issuance of the assessments.
The doctrine of estoppel cannot be applied in this case as an exception to the statute of
limitations on the assessment of taxes considering that there is a detailed procedure for the proper
execution of the waiver, which the BIR must strictly follow. As we have often said, the doctrine of
estoppel is predicated on, and has its origin in, equity which, broadly defined, is justice according to
natural law and right.[22] As such, the doctrine of estoppel cannot give validity to an act that is
prohibited by law or one that is against public policy.[23] It should be resorted to solely as a means of
preventing injustice and should not be permitted to defeat the administration of the law, or to
accomplish a wrong or secure an undue advantage, or to extend beyond them requirements of the
transactions in which they originate.[24] Simply put, the doctrine of estoppel must be sparingly
applied.
Moreover, the BIR cannot hide behind the doctrine of estoppel to cover its failure to comply
with RMO 20-90 and RDAO 05-01, which the BIR itself issued. As stated earlier, the BIR failed to
verify whether a notarized written authority was given by the respondent to its accountant, and to
indicate the date of acceptance and the receipt by the respondent of the waivers. Having caused the
defects in the waivers, the BIR must bear the consequence. It cannot shift the blame to the
taxpayer. To stress, a waiver of the statute of limitations, being a derogation of the taxpayers right
to security against prolonged and unscrupulous investigations, must be carefully and strictly
construed.[25]
As to the alleged delay of the respondent to furnish the BIR of the required documents, this
cannot be taken against respondent. Neither can the BIR use this as an excuse for issuing the
assessments beyond the three-year period because with or without the required documents, the
CIR has the power to make assessments based on the best evidence obtainable.[26]
WHEREFORE, the petition is DENIED. The assailed Decision dated March 30, 2007 and
Resolution dated May 18, 2007 of the Court of Tax Appeals are hereby AFFIRMED.
SO ORDERED.

Philippines, Plaintiff, Versus Quirico Ungab, Accused " and To Restrain The Respondent Judge

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Philippines, Plaintiff, Versus Quirico Ungab, Accused " and To Restrain The Respondent Judge

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Republic of the Philippines

G.R. No. L-41919-24 May 30, 1980

QUIRICO P. UNGAB, petitioner,

The contention is made, and is here rejected, that an assessment of the

An assessment of a deficiency is not necessary to a criminal prosecution for

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. PASCOR REALTY

Statement of the Case

WHEREFORE, finding [the herein petitioners] Motion to Dismiss as UNMERITORIOUS,

Ruling of the Court of Appeals

The Courts Ruling

The petition is meritorious.

Main Issue: Assessment

Additional Issues: Assessment Not Necessary Before Filing of Criminal Complaint

PUNO, C.J., Chairperson,

of P26,318,398.32.[8] Therefore, respondent was entitled to tax refund or tax credit.[9]

Section 229 of the National Internal Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or

In any case, no such suit or proceeding shall be filed after the

right to claim a refund or credit commenced on that date.[13]

adjusted return, was filed beyond the reglementary period.[15]

According to the CA:

it is understood to be equivalent to 365 days. In National Marketing Corporation v.

Tecson,[25] we ruled that a year is equivalent to 365 days regardless of whether it is a

regular year or a leap year.[26]

Chapter VIII, Book I thereof provides:

Sec. 31. Legal Periods. Year shall be understood to be twelve calendar

2008 will be from February 1, 2008 until February 29, 2008.[30]

the Administrative Code of 1987 states:

identify or designate the laws to be abolished.[32]Thus, the provision above

Under the Administrative Code of 1987, however, a year is composed of 12 calendar

return[34] on April 14, 1998) consisted of 24 calendar months, computed as follows:

Year 1st calendar April 15, 1998 to May 14, 1998

Hence, it was filed within the reglementary period.

Davide, Jr., C.J. (Chairman),

This is a petition for review filed by Philippine Journalists, Incorporated (PJI)

Value Added Tax P 229,527.90

Income Tax P108,743,694.88

On March 16, 1999, a Preliminary Collection Letter was sent by Deputy

On May 14, 2002, the CTA rendered its decision,[13] to wit:

As to whether or not the assessment notices were received by the

To disprove petitioners allegation of non-receipt of the aforesaid

However, as to whether or not the Waiver of the Statute of

After carefully examining the questioned Waiver of the Statute of

The waiver is an unlimited waiver. It does not contain a definite

Secondly, the waiver failed to state the date of acceptance by the

Finally, petitioner was not furnished a copy of the waiver. It is to be

It bears stressing that RMO No. 20-90 is directed to all concerned

Thus, finding the waiver executed by the petitioner on September 22,

WHEREFORE, in view of all the foregoing, the instant Petition for

WHEREFORE, the 02 August 2002 resolution and 14 May 2002

We find merit in the appeal.

SEC. 7. Jurisdiction. The Court of Tax Appeals shall exercise

(1) Decisions of the Commissioner of Internal Revenue in cases

The law prescribing a limitation of actions for the collection of the

In the execution of said waiver, the following procedures should be followed:

Soon after the waiver is signed by the taxpayer, the Commissioner

3. The following revenue officials are authorized to sign the waiver.

A. In the National Office

3. Commissioner For tax cases involving

B. In the Regional Offices

1. The Revenue District Officer with respect to tax cases

5. The foregoing procedures shall be strictly

As found by the CTA, the Waiver of Statute of Limitations, signed by petitioners