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COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
PHILIPPINE GLOBAL COMMUNICATION, INC., respondent.
Facts
Respondent, a corporation engaged in telecommunications, filed its Annual Income Tax Return.
the BIR sent a letter to respondent requesting the latter to present for examination certain records and documents,
but respondent failed to present any document.
respondent received a Preliminary Assessment Notice for deficiency income tax. Respondent filed a formal protest
letter against Assessment Notice requesting for the cancellation of the tax assessment for lack of factual and legal
basis. The CIR denied the protest.
respondent filed a Petition for Review with the CTA. After due notice and hearing, the CTA rendered a Decision in
favor of respondent. The CTA that since more than 3 years had lapsed from the time the assailed assessment notice
was issued, the CIRs right to collect the same has prescribed.
Issue: whether or not CIRs right to collect respondents alleged deficiency income tax is barred by prescription
under Section 269(c) of the Tax Code of 1977
Ruling
The assessment, in this case, was presumably issued on 14 April 1994 since the respondent did not dispute the CIRs
claim. Therefore, the BIR had until 13 April 1997. However, as there was no Warrant of Distraint and/or Levy
served on the respondents nor any judicial proceedings initiated by the BIR, the earliest attempt of the BIR to collect
the tax due based on this assessment was when it filed its Answer in CTA Case No. 6568 on 9 January 2003, which
was several years beyond the three-year prescriptive period. Thus, the CIR is now prescribed from collecting the
assessed tax.
Among the exceptions provided by the aforecited section, and invoked by the CIR as a ground for this petition, is
the instance when the taxpayer requests for a reinvestigation which is granted by the Commissioner. However, this
exception does not apply to this case since the respondent never requested for a reinvestigation. More importantly,
the CIR could not have conducted a reinvestigation where, as admitted by the CIR in its Petition, the respondent
refused to submit any new evidence.
Revenue Regulations No. 12-85, the Procedure Governing Administrative Protests of Assessment of the Bureau of
Internal Revenue, issued on 27 November 1985, defines the two types of protest, the request for reconsideration and
the request for reinvestigation, and distinguishes one from the other in this manner:
Section 6. Protest. - The taxpayer may protest administratively an assessment by filing a written request for
reconsideration or reinvestigation specifying the following particulars:
xxxx
For the purpose of protest herein
(a) Request for reconsideration-- refers to a plea for a re-evaluation of an assessment on the basis of
existing records without need of additional evidence. It may involve both a question of fact or of law or
both.

(b) Request for reinvestigationrefers to a plea for re-evaluation of an assessment on the basis of newlydiscovered evidence or additional evidence that a taxpayer intends to present in the investigation. It may
also involve a question of fact or law or both.
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.

BARCELON, ROXAS SECURITIES, INC. (now known as UBP Securities, Inc.) Petitioner,
vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Facts
Petitioner Barcelon, Roxas Securities Inc. (now known as UBP Securities, Inc.) is a corporation engaged in the
trading of securities. Petitioner filed its Annual Income Tax Return.
After an audit investigation conducted by the Bureau of Internal Revenue (BIR), respondent Commissioner of
Internal Revenue (CIR) issued an assessment for deficiency income tax arising from the disallowance of the item on
salaries, bonuses and allowances as part of the deductible business expense since petitioner failed to subject the
salaries, bonuses and allowances to withholding taxes.
petitioner was served with a Warrant of Distraint and/or Levy to enforce collection of the deficiency income tax
Petitioner filed a formal protest, against the Warrant of Distraint and/or Levy, requesting for its cancellation. It
thereafter received a letter from respondent denying the protest with finality.
petitioner filed a petition for review with the CTA. After due notice and hearing, the CTA rendered a decision in
favor of petitioner.
It maintained that while a mailed letter is deemed received by the addressee in the course of mail, this is merely a
disputable presumption. It reasoned that the direct denial of the petitioner shifts the burden of proof to the
respondent that the mailed letter was actually received by the petitioner.
Thereafter, respondent appealed to the Court of Appeals. In reversing the CTA decision, the Court of Appeals found
the evidence presented by the respondent to be sufficient proof that the tax assessment notice was mailed to the
petitioner, therefore the legal presumption that it was received should apply.
Issue: whether or not respondents right to assess petitioners alleged deficiency income tax is barred by
prescription, the resolution of which depends on reviewing the findings of fact of the Court of Appeals and the CTA.
Ruling
The failure of the respondent to prove receipt of the assessment by the Petitioner leads to the conclusion that no
assessment was issued.
Respondent utterly failed to discharge this duty. No substantial evidence was ever presented to prove that the
assessment notice No. FAN-1-87-91-000649 or other supposed notices subsequent thereto were in fact issued or sent
to the taxpayer.
it only submitted the BIR record book which allegedly contains the list of taxpayers names, the reference number,
the year, the nature of tax, the city/municipality and the amount.

Mere notations made without the taxpayers intervention, notice or control, without adequate supporting evidence
cannot suffice; otherwise, the taxpayer would be at the mercy of the revenue offices, without adequate protection or
defense."
In the present case, petitioner denies receiving the assessment notice, and the respondent was unable to present
substantial evidence that such notice was, indeed, mailed or sent by the respondent before the BIRs right to assess
had prescribed and that said notice was received by the petitioner.

COMMISSIONER OF INTERNAL REVENUE, Petitioner,


vs.
METRO STAR SUPERAMA, INC., Respondent.
Facts
Petitioner is a domestic corporation duly organized and existing by virtue of the laws of the Republic of the
Philippines
For petitioners failure to comply with several requests for the presentation of records and Subpoena Duces Tecum,
[the] OIC of BIR Legal Division issued an Indorsement informing Revenue District Officer of Revenue Region No.
67, Legazpi City to proceed with the investigation based on the best evidence obtainable preparatory to the issuance
of assessment notice.
Revenue District Officer issued a Preliminary 15-day Letter, which petitioner received. petitioner received a Formal
Letter of Demand for deficiency value-added and withholding taxes for the taxable year 1999.
Denying that it received a Preliminary Assessment Notice (PAN) and claiming that it was not accorded due process,
Metro Star filed a petition for review with the CTA.
The CTA granted the petition ruling that "[w]hile there [is] a disputable presumption that a mailed letter [is] deemed
received by the addressee in the ordinary course of mail, a direct denial of the receipt of mail shifts the burden upon
the party favored by the presumption to prove that the mailed letter was indeed received by the addressee.
It also found that there was no clear showing that Metro Star actually received the alleged PAN
Issue: whether or not Metro Star was denied due process.
Ruling
Jurisprudence is replete with cases holding that if the taxpayer denies ever having received an assessment from the
BIR, it is incumbent upon the latter to prove by competent evidence that such notice was indeed received by the
addressee.
The onus probandi was shifted to respondent to prove by contrary evidence that the Petitioner received the
assessment in the due course of mail.
"The facts to be proved to raise this presumption are
(a) that the letter was properly addressed with postage prepaid, and
(b) that it was mailed. Once these facts are proved, the presumption is that the letter was received by the addressee
as soon as it could have been transmitted to him in the ordinary course of the mail.
But if one of the said facts fails to appear, the presumption does not lie.
The taxpayers shall be informed in writing of the law and the facts on which the assessment is made; otherwise, the
assessment shall be void.

Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to
said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an
assessment based on his findings.
Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within
thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules
and regulations. Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been
submitted; otherwise, the assessment shall become final.
If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax
Appeals within thirty (30) days from receipt of the said decision, or from the lapse of one hundred eighty (180)-day
period; otherwise, the decision shall become final, executory and demandable. (Emphasis supplied).
Indeed, Section 228 of the Tax Code clearly requires that the taxpayer must first be informed that he is liable for
deficiency taxes through the sending of a PAN. He must be informed of the facts and the law upon which the
assessment is made. The law imposes a substantive, not merely a formal, requirement. To proceed heedlessly with
tax collection without first establishing a valid assessment is evidently violative of the cardinal principle in
administrative investigations - that taxpayers should be able to present their case and adduce supporting evidence. 14
This is confirmed under the provisions R.R. No. 12-99 of the BIR which pertinently provide:
SECTION 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment.
3.1 Mode of procedures in the issuance of a deficiency tax assessment:
3.1.1 Notice for informal conference. The Revenue Officer who audited the taxpayer's records shall,
among others, state in his report whether or not the taxpayer agrees with his findings that the taxpayer is
liable for deficiency tax or taxes. If the taxpayer is not amenable, based on the said Officer's submitted
report of investigation, the taxpayer shall be informed, in writing, by the Revenue District Office or by the
Special Investigation Division, as the case may be (in the case Revenue Regional Offices) or by the Chief
of Division concerned (in the case of the BIR National Office) of the discrepancy or discrepancies in the
taxpayer's payment of his internal revenue taxes, for the purpose of "Informal Conference," in order to
afford the taxpayer with an opportunity to present his side of the case. If the taxpayer fails to respond
within fifteen (15) days from date of receipt of the notice for informal conference, he shall be considered in
default, in which case, the Revenue District Officer or the Chief of the Special Investigation Division of the
Revenue Regional Office, or the Chief of Division in the National Office, as the case may be, shall endorse
the case with the least possible delay to the Assessment Division of the Revenue Regional Office or to the
Commissioner or his duly authorized representative, as the case may be, for appropriate review and
issuance of a deficiency tax assessment, if warranted.
3.1.2 Preliminary Assessment Notice (PAN). If after review and evaluation by the Assessment Division
or by the Commissioner or his duly authorized representative, as the case may be, it is determined that there
exists sufficient basis to assess the taxpayer for any deficiency tax or taxes, the said Office shall issue to the
taxpayer, at least by registered mail, a Preliminary Assessment Notice (PAN) for the proposed assessment,
showing in detail, the facts and the law, rules and regulations, or jurisprudence on which the proposed
assessment is based (see illustration in ANNEX A hereof). If the taxpayer fails to respond within fifteen
(15) days from date of receipt of the PAN, he shall be considered in default, in which case, a formal letter
of demand and assessment notice shall be caused to be issued by the said Office, calling for payment of the
taxpayer's deficiency tax liability, inclusive of the applicable penalties.

3.1.3 Exceptions to Prior Notice of the Assessment. The notice for informal conference and the
preliminary assessment notice shall not be required in any of the following cases, in which case, issuance of
the formal assessment notice for the payment of the taxpayer's deficiency tax liability shall be sufficient:
(i) When the finding for any deficiency tax is the result of mathematical error in the computation
of the tax appearing on the face of the tax return filed by the taxpayer; or
(ii) When a discrepancy has been determined between the tax withheld and the amount actually
remitted by the withholding agent; or
(iii) When a taxpayer who opted to claim a refund or tax credit of excess creditable withholding
tax for a taxable period was determined to have carried over and automatically applied the same
amount claimed against the estimated tax liabilities for the taxable quarter or quarters of the
succeeding taxable year; or
(iv) When the excise tax due on excisable articles has not been paid; or
(v) When an article locally purchased or imported by an exempt person, such as, but not limited to,
vehicles, capital equipment, machineries and spare parts, has been sold, traded or transferred to
non-exempt persons.
3.1.4 Formal Letter of Demand and Assessment Notice. The formal letter of demand and assessment
notice shall be issued by the Commissioner or his duly authorized representative. The letter of demand
calling for payment of the taxpayer's deficiency tax or taxes shall state the facts, the law, rules and
regulations, or jurisprudence on which the assessment is based, otherwise, the formal letter of demand and
assessment notice shall be void (see illustration in ANNEX B hereof).
The same shall be sent to the taxpayer only by registered mail or by personal delivery.
If sent by personal delivery, the taxpayer or his duly authorized representative shall acknowledge receipt thereof in
the duplicate copy of the letter of demand, showing the following: (a) His name; (b) signature; (c) designation and
authority to act for and in behalf of the taxpayer, if acknowledged received by a person other than the taxpayer
himself; and (d) date of receipt thereof.
From the provision quoted above, it is clear that the sending of a PAN to taxpayer to inform him of the assessment
made is but part of the "due process requirement in the issuance of a deficiency tax assessment," the absence of
which renders nugatory any assessment made by the tax authorities.
The Court need not belabor to discuss the matter of Metro Stars failure to file its protest, for it is well-settled that a
void assessment bears no fruit.

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.
Facts
BIR Examiner Ben Garcia examined the income tax returns filed by the herein petitioner, Quirico P. Ungab

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
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
Thereafter, State Prosecutor finding probable cause, filed six (6) informations against the petitioner with the Court of
First Instance
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;
(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.
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.
Ruling
The contention is without merit.
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, 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.
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 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.
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.

ANGELES CITY, Petitioner,


vs.
ANGELES CITY ELECTRIC CORPORATION and REGIONAL TRIAL COURT BRANCH 57, ANGELES
CITY,Respondents.
Facts
AEC was granted a legislative franchise under Republic Act No. (RA) 40792 to construct, maintain and operate an
electric light, heat, and power system for the purpose of generating and distributing electric light, heat and power for
sale in Angeles City, Pampanga.
Presidential Decree No. (PD) 551 reduced the franchise tax of electric franchise holders.
the Local Government Code (LGC) of 1991 was passed into law, conferring upon provinces and cities the power,
among others, to impose tax on businesses enjoying franchise.
In accordance with the LGC, the Sangguniang Panlungsod of Angeles City enacted Tax Ordinance No. 33, S-93,
otherwise known as the Revised Revenue Code of Angeles City (RRCAC).
a petition seeking the reduction of the tax rates and a review of the provisions of the RRCAC was filed with
the Sangguniang Panlungsod by Metro Angeles Chamber of Commerce and Industry Inc. (MACCI) of which AEC
is a member.
There being no action taken by the Sangguniang Panlungsod on the matter, MACCI elevated the petition to the
Department of Finance, which referred the same to the Bureau of Local Government Finance (BLGF).
In the petition, MACCI alleged that the RRCAC is oppressive, excessive, unjust and confiscatory; that it was
published only once, simultaneously on January 22, 1994; and that no public hearings were conducted prior to its
enactment.
the City Treasurer issued a Notice of Assessment to AEC for payment of business tax, license fee and other charges.
AEC protested the assessment claiming that it is exempt from paying business tax and that since it has been paying
franchise tax on business, it would result in double taxation.
The City Treasurer denied the protest for lack of merit and requested AEC to settle its tax liabilities.
the City Treasurer levied on the real properties of AEC. This prompted AEC to file with the RTC, an Urgent Motion
for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction to which the RTC subsequently
granted.
Angeles City and its City Treasurer filed a "Motion for Dissolution of Preliminary Injunction and Motion for
Reconsideration. The RTC denied the motions.
Issue: whether the RTC gravely abused its discretion in issuing the writ of preliminary injunction enjoining Angeles
City and its City Treasurer from levying, selling, and disposing the properties of AEC
Ruling
We find the petition bereft of merit.
in the case of the collection of local taxes as there is no express provision in the LGC prohibiting courts from issuing
an injunction to restrain local governments from collecting taxes.
Unlike the National Internal Revenue Code, the Local Tax Code does not contain any specific provision prohibiting
courts from enjoining the collection of local taxes.
In light of the foregoing, petitioners reliance on the above-cited case to support its view that the collection of taxes
cannot be enjoined is misplaced. The lower courts denial of the motion for the issuance of a writ of preliminary

injunction to enjoin the collection of the local tax was upheld in that case, not because courts are prohibited from
granting such injunction, but because the circumstances required for the issuance of writ of injunction were not
present.

COMMISSIONER OF INTERNAL REVENUE, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION, DEPUTY CITY SHERIFF CARMELO V. CACHERO,
MARITIME COMPANY OF THE PHILIPPINES, DOMINGO C. NIANGAR, DANIEL C. SABINO, FERNANDO
S. TULIAO and TULMAR TRADING CORPORATION, respondents.
Facts
the Commissioner of the Internal Revenue sent two letters of demand to the respondent Maritime Company of the
Philippines for deficiency common taxes.
The assessment became final and executory as private respondent did not contest it. But as private respondent did
not pay its tax liability either, the Commissioner of Internal Revenue issued warrants of distraint of personal
property and levy of real property of private respondent.
The receipt was prepared by the BIR for the signature of a representative of respondent Maritime Company of the
Philippines, but it was not in fact signed.
Petitioner later explained that the individuals who had possession of the barges had refused to sign the receipt.
it appears that four of the barges placed under constructive distraint were levied upon execution by respondent
deputy sheriff of Manila to satisfy a judgment for unpaid wages and other benefits of employees of respondent
Maritime Company
Four barges which were levied were sold by the deputy sheriff at a public auction. Petitioner however asked the
Labor Arbiter to annul the sale and to enjoin the sheriff from disposing the proceeds to remit the same for the
payment of its tax liabilities
Labor Arbiter denied the motion on the ground that petitioner Commissioner of Internal Revenue failed to show that
the barges which were levied upon in execution and sold at public auction had been validly placed under
constructive distraint.
The order was appealed to the NLRC, which affirmed the denial of the CIRs motion
Ruling
It is settled that the claim of the government predicated on a tax lien is superior to the claim of a private litigant
predicated on a judgment. The tax lien attaches not only from the service of the warrant of distraint of personal
property but from the time the tax became due and payable.
the distraint on the subject properties of the Maritime Company of the Philippines as well as the notice of their
seizure were made by petitioner, through the Commissioner of the Internal Revenue, long before the writ of the
execution was issued by the Regional Trial Court of Manila
There is no question then that at the time the writ of execution was issued, the fourbarges were no longer the
properties of the Maritime company of the Philippines.
The power of the court in execution of judgments extends only to properties unquestionably belonging to the
judgment debtor.

It is also well-settled that the sheriff is not authorized to attach or levy on property not belonging to the judgment
debtor.

COMMISSIONER OF INTERNAL REVENUE, Petitioner,


vs.
BANK OF THE PHILIPPINE ISLANDS, Respondent.
Facts
petitioner Commissioner of Internal Revenue (CIR) assessed respondent Bank of the Philippine Islands (BPIs)
deficiency percentage and documentary stamp taxes
BPI in its reply, requested that the examiner state the reasons why he believes that the taxpayer has deficiency
documentary and percentage taxes as it is important that the taxpayer be informed as to why he has incurred a
deficiency
The CIR then sent a letter to BPI stating that the letter sent by the latter failed to qualify as a protest.
BPI requested a reconsideration of the assessments which was denied.
BPI filed a petition for review in the CTA which it dismissed for lack of jurisdiction since the assessment had
become final and appealable
On appeal, the CA reversed the tax courts decision and resolution and remanded the case to the CTA. The CA ruled
that the notices were not valid assessments because they did not inform the taxpayer of the legal and factual bases
therefor.
Issue: whether or not the assessments issued to BPI for deficiency percentage and documentary stamp taxes for 1986
had already become final and unappealable
Ruling
BPIs contention has no merit.
Even though the law requires that [t]he taxpayers shall be informed in writing of the law and the facts on which the
assessment is made; otherwise, the assessment shall be void, BPI was not deprived of due process when the CIR
failed to inform it.
BPI was given the opportunity to discuss with the [CIR] when the latter issued the former a Pre-Assessment Notice
(which [BPI] ignored) but that the examiners themselves went to [BPI] and talked to them as to the issues and the
evidence that needed to be presented.
[BPI] was indeed aware of the nature and basis of the assessments, and was given all the opportunity to contest the
same but ignored.
BPIs failure to protest the assessments within the 30-day period provided in the former Section 270 meant that they
became final and unappealable.

COMMISSIONER OF INTERNAL REVENUE, Petitioner,


vs.
FIRST EXPRESS PAWNSHOP COMPANY, INC., Respondent.
Facts
Petitioner issued assessment notices against First Express Pawnshop Company, Inc. (respondent)

Respondent received the assessment notices and filed its written protest on the above assessments. Since petitioner
did not act on the protest during the 180-day period, respondent filed a petition before the CTA
Respondent maintained that pawnshops are not lending investors whose services are subject to VAT, hence it was not
liable for deficiency VAT
Respondent also alleged that no deficiency DST was due because Section 180 of the National Internal Revenue
Code (Tax Code) does not cover any document or transaction which relates to respondent.
In its Answer filed before the CTA, petitioner alleged that the assessment was valid and correct and the taxpayer had
the burden of proof to impugn its validity or correctness.
The CTA en banc ruled affirmed the decision of the respondents liability to pay the VAT but ruled against its liability
with regard to the payment of the DST
Ruling
petitioner requested respondent to present proof of payment of DST on subscription. In a letter-reply, respondent
stated that it could not produce any proof of DST payment because it was not required to pay DST under the law
considering that the deposit on subscription was an advance made by its stockholders for future subscription, and no
stock certificates were issued.
Since respondent has not allegedly submitted any relevant supporting documents, petitioner now claims that the
assessment has become final, executory and demandable, hence, unappealable.
petitioner 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" should be understood as those documents necessary to support the legal
basis in disputing a tax assessment as determined by the taxpayer.
The BIR 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.
Section 228 states that if the protest is not acted upon within 180 days from submission of documents, the taxpayer
adversely affected by the inaction may appeal to the CTA within 30 days from the lapse of the 180-day period.
Respondent, having submitted its supporting documents on the same day the protest was filed, had until 31 July
2002 to wait for petitioners reply to its protest. On 28 August 2002 or within 30 days after the lapse of the 180-day
period counted from the filing of the protest as the supporting documents were simultaneously filed, respondent filed
a petition before the CTA.
Respondent has complied with the requisites in disputing an assessment pursuant to Section 228 of the Tax Code.
Hence, the tax assessment cannot be considered as final, executory and demandable.

LASCONA LAND CO., INC., Petitioner,


vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Facts
the Commissioner of Internal Revenue (CIR) issued Assessment Notice against Lascona Land Co., Inc. (Lascona)
informing the latter of its alleged deficiency income tax

Lascona filed a letter protest, but was denied by the OIC regional director of the BIR.
Lascona appealed the decision before the CTA and alleged that the Regional Director erred in ruling that the failure
to appeal to the CTA within thirty (30) days from the lapse of the 180-day period rendered the assessment final and
executory.
The CIR, however, maintained that Lascona's failure to timely file an appeal with the CTA after the lapse of the 180day reglementary period provided under Section 228 of the National Internal Revenue Code (NIRC) resulted to the
finality of the assessment.
the CTA nullified the subject assessment. It held that in cases of inaction by the CIR on the protested assessment,
Section 228 of the NIRC provided two options for the taxpayer: (1) appeal to the CTA within thirty (30) days from
the lapse of the one hundred eighty (180)-day period, or (2) wait until the Commissioner decides on his protest
before he elevates the case.
On appeal to the CA, it reversed the decision and declared the assessment notices as executory and demandable
Issue: Whether the subject assessment has become final, executory and demandable due to the failure of petitioner to
file an appeal before the CTA within thirty (30) days from the lapse of the One Hundred Eighty (180)-day period
Ruling
The petition is meritorious.
SEC. 228. Protesting of Assessment. x x x
xxxx
Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to
said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an
assessment based on his findings.
Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within
thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules
and regulations.
Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been submitted;
otherwise, the assessment shall become final.
If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax
Appeals within (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day
period; otherwise the decision shall become final, executory and demandable.
in case of the inaction of the CIR on the protested assessment, while we reiterate the taxpayer has two options,
either: (1) file a petition for review with the CTA within 30 days after the expiration of the 180-day period; or (2)
await the final decision of the Commissioner on the disputed assessment and appeal such final decision to the CTA
within 30 days after the receipt of a copy of such decision, these options are mutually exclusive and resort to one
bars the application of the other.

Accordingly, considering that Lascona opted to await the final decision of the Commissioner on the protested
assessment, it then has the right to appeal such final decision to the Court by filing a petition for review within thirty
days after receipt of a copy of such decision or ruling, even after the expiration of the 180-day period fixed by law
for the Commissioner of Internal Revenue to act on the disputed assessments.

RIZAL COMMERCIAL BANKING CORPORATION, Petitioner,


vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Facts
petitioner Rizal Commercial Banking Corporation received a Formal Letter of Demand from the respondent
Commissioner of Internal Revenue for its tax liabilities.
petitioner filed a protest letter/request for reconsideration/reinvestigation.
As the protest was not acted upon by the respondent, petitioner filed a petition for review with the CTA for the
cancellation of the assessments.
The petition for review was dismissed because it was filed beyond the 30-day period following the lapse of 180 days
from petitioners submission of documents in support of its protest.
Petitioner did not file a motion for reconsideration or an appeal to the CTA En Banc from the dismissal of its
petition for review. Consequently the resolution became final and executory. Thereafter, respondent sent a Demand
Letter to petitioner for the payment of the deficiency tax assessments.
petitioner filed a Petition for Relief from Judgment on the ground of excusable negligence of its counsels secretary
who allegedly misfiled and lost the Resolution to which the CTA denied petitioners motion.
Petitioner then filed a petition for review with the CTA enbanc which affirmed the resolutions of the CTA second
division
Ruling
SEC. 228. Protesting of Assessment.- x x x.
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Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to
said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an
assessment based on his findings.
Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within
thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules
and regulations. Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been
submitted; otherwise, the assessment shall become final.
If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court
of Tax Appeals within (30) days from receipt of the said decision, or from the lapse of the one hundred eighty
(180)-day period; otherwise the decision shall become final, executory and demandable.

Following the periods provided for in the aforementioned laws, from July 20, 2001, that is, the date of petitioners
filing of protest, it had until September 18, 2001 to submit relevant documents and from September 18, 2001, the
Commissioner had until March 17, 2002 to issue his decision. As admitted by petitioner, the protest remained
unacted by the Commissioner of Internal Revenue. Therefore, it had until April 16, 2002 within which to elevate the
case to this court. Thus, when petitioner filed its Petition for Review on April 30, 2002, the same is outside the thirty
(30) period.
As provided in Section 228, the failure of a taxpayer to appeal from an assessment on time rendered the assessment
final, executory and demandable. Consequently, petitioner is precluded from disputing the correctness of the
assessment.