CIR v.

Tulio
G.R. No. 139858 October 25, 2005

Facts: On February 28, 1991, Arturo Tulio, respondent taxpayer, received from CIR a demand letter with two final assessment notices requesting payment of his deficiency percentage taxes for the taxable years 1986 and 1987; taxpayer failed to act on the assessment notices. On October 15, 1991, to enforce the

collection of the taxes, CIR issued a warrant of distraint and/or levy against Tulio. However, he has no properties which can be placed under distraint and/or levy. On 3 different dates, CIR sent letters to taxpayer giving him the last opportunity to settle his deficiency tax liabilities; But the latter was obstinate. Thus, on

October 29, 1997, petitioner filed with the RTC of Baguio City a civil action for the collection of the deficiency percentage taxes. Taxpayer filed a motion to dismiss alleging that the complaint was filed beyond the three-year prescriptive period provided by Section 203 of the NIRC.
Issue: whether the complaint in the said civil case may be

dismissed on the ground of prescription.

Held: RTC erroneously applied Section 203 of the NIRC providing for the three-year prescriptive period from the filing of the tax return within which internal revenue taxes shall be assessed. The two final assessment notices were issued on February 28. the running of the ten-year prescriptive period within which to assess and collect the taxes due from respondent commenced on that date. or until March 30. Thereby the RTC had jurisdiction over this case. the same became final and executory. When respondent failed to question or protest the deficiency assessments thirty (30) days therefrom. well within the prescriptive period of three (3) years. 1991. petitioner found respondent’s omission to file a tax return. On September 14. respondent failed to file a tax return for 1986 and 1987. not the CTA for it is the ordinary courts which can entertain BIR money claims based on assessments that have become final and executory. Since the estate tax assessment had become final and unappealable. Hence. 1991. there . Such case is covered by Section 223 (now 222) of the NIRC providing for a ten-year prescriptive period from the discovery of the omission to file a tax return within which a proceeding in court may be filed. As shown by the records. 1989.

is now no reason why petitioner should not enforce its authority to collect respondent’s deficiency percentage taxes for 1986 and 1987. .

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