Case No. 15: CIR vs Phil. Global Communications, G.R. No. 167146, October 31, 2006 ChicoNzario, J.

Facts: This involves a case of prescription so that the narration of specific dates on every action taken
is indispensable for a proper understanding thereof. The relevant dates are as follows:

April 15, 1991 respondent filed its ITR for income earned in 1990.

April 22, 1994 - Formal Assessment Notice was made assessing the taxpayer for deficiency
income tax in the total amount of P118, 271, 672.00.

May 6, 1994 filed a formal protest letter against the assessment.

May 23, 1994 - other protest was filed. The previous and present protest asked for the
cancellation of the assessment for being invalid for lack of factual and legal basis.

October 16, 2002 (more than eight years after the assessment was issued) taxpayer received
a Final Decision, dated October 8, 2002, from the Commissioner denying the protest.

November 15, 2002 respondent filed a Petition for Review with the CTA invoking prescription
as a defense.

June 9, 2004 - CTA rendered a decision in favor of the respondent. After the filing a Motion for
Reconsideration the CTA en banc affirmed.

Issue: Will the filing of the timely protest by the taxpayer toll the running of the prescriptive period to
collect the assessed deficiency income tax?
Held: The SC ruled in the negative. The running of the prescriptive period, by express provision of
Section 224 (now 223), can be suspended When the taxpayer requests for a reinvestigation which is
granted by the Commissioner.
RR No. 12-85 defined what is a request for reinvestigation on one hand and a request for
reconsideration on the other.
The main difference between these two types of protests lies in the records or evidence to be
examined by internal revenue officers, whether these are existing records or newly discovered or
additional evidence.
A re-evaluation of existing records which results from a request for reconsideration does not toll the
running of the prescription period for the collection of an assessed tax.

While it is true that the provisions of Section 223 of the NIRC is clear, the ruling of the SC in the
case of Wyeth Suaco (G.R. No. 76281, September 30, 1991, 202 SCRA 125) set a different tone
when the Court ruled that the prescriptive period provided by law to make a collection is
interrupted once a taxpayer requests for reinvestigation or reconsideration of the assessment.

In the case of BPI vs. CIR, G.R. No. 139736, October 17, 2005, the SC took occasion to
examine carefully the Wyeth decision and found out that there are inconsistencies with
the law. The provision of Section 223 is clear that a request for reinvestigation (not
reconsideration) which is granted by the Commissioner can suspend the running of the
prescriptive period to collect.