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petition and ordered the CIR to collect the deficiency taxes and
further ordered the CIR to pay Maniagos informers reward.
Issue: Whether or not Judge Savellano is correct.
Held: No. The power to assess or not to assess tax deficiency
against a taxpayer is a discretionary function vested in the CIR.
As such, the CIR may not be compelled by mandamus.
Mandamus only lies to enforce the performance of a ministerial
act or duty and not to control the performance of a
discretionary power. Especially so in this case where the CIR
found that no tax deficiency is due. It should be noted further
that regular courts have no jurisdiction over the subject matter
of this case. Section 7 of Republic Act No. 1125, enacted June
16, 1954, granted to the Court of Tax Appeals exclusive
appellate jurisdiction to review by appeal, among others,
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 law or part of law administered by the
Bureau of Internal Revenue.
IV. SY PO vs. Court of Tax Appeals G.R. No. 81446; August 18,
1988
In their Decisions, both the CTA and the Court of Appeals found
that the filing by petitioner BPI of a protest letter suspended the
running of the prescriptive period for collecting the assessed
DST. This Court, however, takes the opposing view, and, based
on the succeeding discussion, concludes that there is no valid
ground for suspending the running of the prescriptive period for
collection of the deficiency DST assessed against petitioner BPI.
The statute of limitations on assessment and collection of taxes
is for the protection of the taxpayer and, thus, shall be
construed liberally in his favor.
respectively paid for its services. PFI & PBFI withhold the
amount of equivalent to 5% creditable tax regulation. On April
3, 1998, filed ITR with a net loss thus incurred withholding tax.
Petitioner filed for refund from BIR but was unanswered. CTA
denied the petition for review. CA held that to request for either
a refund or credit of income tax paid, a corporation must signify
its intention by marking the corresponding box on its annual
corporate adjustment return.
Issue: Whether or not petitioner is entitled to a refund of its
creditable taxes.
Held: Any tax income that is paid in excess of its amount due to
the government may be refunded, provided that a taxpayer
properly applies for the refund. One can not get a tax refund
and a tax credit at the same time for the same excess to
income taxes paid. Failure to signify ones intention in Final
Assessment Return (FAR) does not mean outright barring of a
valid request for a refund
Requiring that the ITR on the FAR of the succeeding year be
presented to the BIR in requesting a tax refund has no basis in
law and jurisprudence. The Tax Code likewise allows the refund
of taxes to taxpayer that claims it in writing within 2 years after
payment of the taxes. Technicalities and legalism should not be
misused by the government to keep money not belonging to it,
and thereby enriched itself at the expense of its law-abiding
citizens.
a petition for the probate of his will was filed. The probate
court appointed Atty. Rafael Arsenio P. Dizon as administrator of
the Estate of Jose Fernandez.
An estate tax return was filed later on which showed ZERO
estate tax liability. BIR thereafter issued a deficiency estate tax
assessment, demanding payment of Php 66.97 million as
deficiency estate tax. This was subsequently reduced by CTA
to Php 37.42 million. The CA affirmed the CTAs ruling, hence,
the instant petition.
The petitioner claims that in as much as the valid claims of
creditors against the Estate are in excess of the gross estate,
no estate tax was due. On the other hand, respondents argue
that since the claims of the Estates creditors have been
condoned, such claims may no longer be deducted from the
gross estate of the decedent.
Issue: Whether the actual claims of creditors may be fully
allowed as deductions from the gross estate of Jose despite the
fact that the said claims were reduced or condoned through
compromise agreements entered into by the Estate with its
creditors
Held: Yes. Following the US Supreme Courts ruling in Ithaca
Trust Co. v. United States, the Court held that post-death
developments are not material in determining the amount of
deduction. This is because estate tax is a tax imposed on the
act of transferring property by will or intestacy and, because
the act on which the tax is levied occurs at a discrete time, i.e.,
the instance of death, the net value of the property transferred
should be ascertained, as nearly as possible, as of the that
time. This is the date-of-death valuation rule.
The Court, in adopting the date-of-death valuation principle,
explained that: First. There is no law, nor do we discern any
legislative intent in our tax laws, which disregards the date-ofdeath valuation principle and particularly provides that postdeath developments must be considered in determining the net
value of the estate. It bears emphasis that tax burdens are not
to be imposed, nor presumed to be imposed, beyond what the
statute expressly and clearly imports, tax statutes being
construed strictissimi juris against the government. Second.
CTA prescribed?
Held: No. The assessment against Respondent has not become
final and unappealable. It cannot be said that respondent failed
to submit relevant supporting documents that would render the
assessment final because when respondent submitted its
protest, respondent attached all the documents it felt were
necessary to support its claim. Further, CIR cannot insist on the
submission of proof of DST payment because such document
does not exist as respondent claims that it is not liable to pay,
and has not paid, the DST on the deposit on subscription.
The term relevant supporting documents are those
documents necessary to support the legal basis in disputing a
tax assessment as determined by the taxpayer. The BIR can
only inform the taxpayer to submit additional documents and
cannot demand what type of supporting documents should be
submitted. Otherwise, a taxpayer will be at the mercy of the
BIR, which may require the production of documents that a
taxpayer cannot submit. Since the taxpayer is deemed to have
submitted all supporting documents at the time of filing of its
protest, the 180-day period likewise started to run on that same
date.
TCC
A) Administrative Remedies
1. Protest
a. Any importer or
interested party
adversely affected
with the published
value of duties may
within 15 days from
date of publication
file a written protest
b. If the legality of
assessment or
appraisal is
questioned, taxpayer
may protest within
15 days from
assessment.
*Payment under
protest is necessary
2. Refund Abatement or
drawback (if
importation missing or
deficient or if reexported). (Sections
1701-1708 of TCC)
*Settlement of any seizure by
payment of fine or redemption
of foreclosed goods shall not
be allowed in any case where
importation is absolutely
prohibited or if released
thereof is prohibited by law.
(Sec. 2307 of TCC)
B) Judicial Remedies
1. Civil Action
a. Appeal to the CTA
within 30 days from
receipt of the
adverse decision of
the Commissioner of
Secretary of Finance
*Adverse decision of
the Collector is
appealable to the
Commissioner not to
the CTA within 15
days from receipt
thereof (notice to the
collector of appeal to
the Commissioner is
required) (Sec. 2313
TCC)
b. Action to question
the legality of the
seizure.
c. Abandonment of the
goods (Sec. 1802,
TCC)
B) Judicial Remedies
1. Civil Action:
a. Appeal to the CTA
within 30 days from
receipt of the
adverse decision of
the CIR of from lapse
of 180 days inaction
of the CIR on the
dispute (Sec. 228)
b. Action to contest
forfeiture of chattel.
(Sec. 231)
c. Action for damages
(Sec. 227)
d. Injustion when the
collection of the tax
may jeopardize
interest of taxpayer
or the government,
CTA may enjoin the
collection and may
require the taxpayer
to put in a bond.
(Sec. 1, RA 1125)
2. Criminal Action:
Acting erring and
abusive tax officials
and/or employees of
the BIR
Note: The taxpayers judicial relief both under the NIRC and the
TCC may lie either with the CTA (exclusive in all cases
cognizable by it) or the ordinary courts (in all other cases).
Assessment Defined: