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Republic v Salud HIzon G.

R 130340 December 13, 1999 Facts: The BIR issued an income tax deficiency assessment to the respondent. The latter, not responding to assessment, was served notices of Levy/Distraint but the BIR no longer acted upon the attachment. After 3 years, the respondent asked for reconsideration regarding the deficiency but the same was denied. Hence, the respondent moved for dismissal based on the ground that: 1.the assessment was not filed upon the authority of the Commissioner since the complaint was not signed by the Commissioner and 2.the action for collection was barred by the 3-year prescription period. The court granted the respondents motion and dismissed the case. Hence, this petition. Issue: Whether or not the assessment was filed upon the authority of the Commissioner? Whether or not the action for collection was barred by prescription? Held: On the first issue, the Court ruled that the assessment was in fact filed with the authority of the Commissioner. Revenue Administrative Order No. 10-95 specifically authorizes the Litigation and Prosecution Section of the Legal Division of regional district offices to institute the necessary civil and criminal actions for tax collection. As the complaint filed in this case was signed by the BIRs Chief of Legal Division for Region 4 and verified by the Regional Director, there was, therefore, compliance with the law. Furthermore, Sec 7 of R.A 8424 of the NIRC authorizes the BIR Commissioner to delegate the powers vested in him under the pertinent provisions of the Code to any subordinate official with the rank equivalent to a division chief or higher, except the following:
The power to recommend the promulgation of rules and regulations by the Secretary of Finance; The power to issue rulings of first impression or to reverse, revoke or modify any existing ruling of the Bureau; The power to compromise or abate under 204(A) and (B) of this Code, any tax deficiency: Provided, however, that assessments issued by the Regional Offices involving basic deficiency taxes of five hundred thousand pesos (P500,000.00) or less, and minor criminal violations as may be determined by rules and regulations to be promulgated by the Secretary of Finance, upon the recommendation of the Commissioner, discovered by regional and district officials, may be compromised by a regional evaluation board which shall be composed of the Regional Director as Chairman, the Assistant Regional Director, heads of the Legal, Assessment and Collection Divisions and the Revenue District Officer having jurisdiction over the taxpayer, as members; and The power to assign or reassign internal revenue officers to establishments where articles subject to excise tax are produced or kept.

Hence, the Court held that the assessment was filed with the proper authority from the Commissioner.

However, the Court ruled that the assessment, although filed with the authority of the Commissioner, was barred by prescription. Petitioner argued that respondents request for reinvestigation of her tax deficiency assessment on November 3, 1992 effectively suspended the running of the period of prescription such that the government could still file a case for tax collection. The court does not agree with the petitioner. The request for reconsideration was not filed within the 30 day period hence no request for reconsideration was actually made. So, the period for prescription was not suspended. Consequently, the action is barred by the 3 year prescription period.