LAW OF BASIC TAXATION IN THE PHILIPPINES 3, Assessment is discrationgry on the part of the Commissioner. ‘Mandamus will not lie to compel him to assess a tax ifafter investigation he finds no ground to assess. Besides, mandamus to compel the Commissioner to assess will result in judicial encroachment on executive functions (Meralco Securities Corp. v. Savellano, et al., 1-36181 and L-36748, Oct. 28, 1992) In one case, however, the Court held that the Commissioner of Internal Revenue may be compelled to assess by mandamus ifin the exercise of his discretion there is evidence of arbitrariness and grave abuse of discretion as to go beyond statutory authority (Maceda v. Macaraig, Jr. etc. et al., G.R. No. 88291, June 8, 1993). 4, The authority vested in the Commissioner tp.assess taxes may be delegated. An assessment signed by an employee for and in behalf of the Commissioner of Internal Revenue is valid. However, itis settled that the power to make final assessments cannot be delegated. ‘Delegatus non potest delegari, The person to whom a duty is delegated ‘cannot lawfully delegate that duty to another (City Lumber, Inc. v. Domingo, ete., et al., L-18611, Jan. 30, 1964; Matic, op. cit. p. 272). 5. Assessments must be directed to the right party. Hence, iffor example, the taxpayer being assessed is an estate of a decedent, the administrator should be the party to whom the assessment should be Sent (Republic v, De la Rama, L-21108, Nov. 29, 1966), and not the heirs of the decedent. INVESTIGATIVE POWERS OF THE COMMISSIONER; FACTUAL BASIS OF ASSESSMENTS. Inasmuch as assessments must be based on facts, it is, therefore, necessary to know the different sources from which factual information is obtained by the BIR as the bases for said assessments as well as the means employed to secure them, To obtain the necessary information, which may be used as basis for tax assessments, Sec. 7 (now, Sec. 5, 1997 NIRC), authorizes the Commissioner to make use of the following powers: 1. To examine any book, paper, record or other data which may be relevant or material to such inquiry; 2, Toobtain on a regular basis information from any person other than the person whose internal revenue tax liability is subject to audit or investigation, or from any office or officer of the national and local governments, government agencies and instrumentalities including the Bangko Sentral ng Pilipinas and government-owned or controlled corporations any information such as, but not limited to, costs and ‘volumes of production, receipts or sales and gross incomes of taxpayers, and the names, addresses and financial statements of corporations, 178 JQ ((( (00 (0 (a =~ eEY ‘TAX ADMINISTRATION AND ENFORCEMENT mutual fund companies, insurance companies, regional headquarters of multinational companies, joint accounts, associations, joint ventures ‘or consortia and registered partnerships and their members; 3. To summon the person liable for tax or required tofile a return, or any officer or employee of such person or any person having possession, custody or care of the books of accounts and other accounting records containing entries relating to the business of the person liable for tax, or any other person, to appear before the ‘Commissioner or his duly authorized representative ata time and place specified in the summons and to produce such books, papers, records orother data, and to give testimony; 4, To take such testimony of the person concerned under oath as may be relevant or material to such inquiry; and 5. To cause revenue officers and employees to make a canvass from time to time of any revenue district or region and inquire after ‘and concerning all persons therein who may be liable to pay any internal revenue tax, and all persons owning or having the care, management ‘or possession of any object with respect to which a tax is imposed. It should be noted that notwithstanding the provisions of the foregoing paragraphs, nothing in said section shall be construed as granting the Commissioner the authority to inquire into bank deposits other than as provided for in Sec. 6(F) of the Tax Code (Ibid). MEANS EMPLOYED IN THE ASSESSMENT OF TAXES. Under Sec. 16 (now, Sec. 6 of the 1997 NIRC), the Commissioner or his duly authorized representative is authorized to use the following powers to make assessments and to prescribe additional requirements for tax administration and enforcement: (a) examination of returns and determination of tax due; (b) use of best evidence obtainable; (© authority to conduct inventory-taking, surveillance and prescribe presumptive gross sales and receipts; (@) authority to terminate taxable period; (e) authority to prescribe real property values; (f) authority to inquire into bank deposit accounts; (g) authority to accredit and register tax agents; and, (h) authority to prescribe additional procedural or documentary requirements. A, Examination of Returns; Confidentiality Rule - The Tax Code requires that after a return is filed, the Commissioner or his duly authorized representative shall examine the same and assess the correct amount of tax. The tax or the deficiency tax so assessed shall be paid upon notice and demand from the Commissioner or from his duly authorized representative. Any return, statement or declaration 179