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. Republic vs.

Hizon (December 13, 1999)_VALIX


G.R. No. 130430. December 13, 1999

Doctrine:

Sec. 7 of the present Code 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.

223(c) of the NIRC provides: Any internal revenue tax which has been assessed within the period of limitation
above-prescribed may be collected by distraint or levy or by a proceeding in court within three years
following the assessment of the tax.

Facts

On July 18, 1986, BIR issued to respondent Salud V. Hizon a deficiency income tax assessment of
P1,113,359.68 covering the fiscal year 1981-1982.

Respondent did not contest the assessment, so the BIR, on January 12, 1989, served warrants of
distraint and levy to collect the tax deficiency. However, for reasons not known, it did not proceed to
dispose of the attached properties.

On November 3, 1992, or more than three years later, respondent wrote the BIR requesting a
reconsideration of her tax deficiency assessment. The BIR, in a letter dated August 11, 1994, denied the
request. On January 1, 1997, it filed a case with RTC to collect the tax deficiency

Respondent moved to dismiss the case on two grounds: (1) that the complaint was not filed upon
authority of the BIR Commissioner as required by 221 NIRC, and (2) that the action had already prescribed.

Issues:

I. Whether or not the institution of the civil case for collection of taxes was without the approval of the
commissioner therefore in violation of section 221 of the NIRC. -NO
II. Whether or not the action for collection of taxes filed against respondent had already prescribed. - YES
Ruling:

1.Sec. 221 of the NIRC provides:

Form and mode of proceeding in actions arising under this Code. Civil and criminal actions and proceedings
instituted in behalf a of the Government under the authority of this Code or other law enforced by
the Bureau of Internal Revenue shall be brought in the name of the Government of the Philippines and shall
be conducted by the provincial or city fiscal, or the Solicitor General, or by the legal officers of the Bureau
of Internal Revenue deputized by the Secretary of Justice, but no civil and criminal actions for the recovery
of taxes or the enforcement of any fine, penalty or forfeiture under this Code shall be begun without the
approval of the Commissioner. (Emphasis supplied)

To implement this provision Revenue Administrative Order No. 5-83 of the BIR provides: That
criminal and civil cases including complaints for collection on cases falling within the jurisdiction of the
Region are to be handled by Special Attorneys and Special Counsels assigned in the Legal Branches of
Revenue Regions
The Regional Director is authorized to sign all pleadings filed in connection therewith which,
otherwise, requires the signature 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.

RAO Nos. 5-83 and 10-95 are in harmony with this statutory mandate.

As amended by R.A. No. 8424, the NIRC is now even more categorical. Sec. 7 of the present Code
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. It also provides
for the exceptions. However, none of the exceptions relates to the Commissioners power to approve the
filing of tax collection cases.

2. 223(c) of the NIRC provides:

Any internal revenue tax which has been assessed within the period of limitation above-prescribed may be
collected by distraint or levy or by a proceeding in court within three years following the assessment of the
tax.

The running of the three-year prescriptive period is suspended-

for the period during which the Commissioner is prohibited from making the assessment or beginning
distraint or levy or a proceeding in court and for sixty days thereafter; when the taxpayer requests for
a reinvestigation which is granted by the Commissioner; . . . . .

Petitioner argues 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 contention has no merit. Sec. 229 of the Code mandates that a request for reconsideration must
be made within 30 days from the taxpayers receipt of the tax deficiency assessment, otherwise the
assessment becomes final, unappealable and, therefore, demandable. The notice of assessment for
respondent’s tax deficiency was issued by petitioner on July 18, 1986. On the other hand, respondent made
her request for reconsideration thereof only on November 3, 1992, without stating when she received the
notice of tax assessment.

She explained that she was constrained to ask for a reconsideration in order to avoid the harassment
of BIR collectors. In all likelihood, she must have been referring to the distraint and levy of her properties
by petitioner’s agents which took place on January 12, 1989. Even assuming that she first learned of the
deficiency assessment on this date, her request for reconsideration was nonetheless filed late since she
made it more than 30 days thereafter. Hence, her request for reconsideration did not suspend the running
of the prescriptive period provided under 223(c). Although the Commissioner acted on her request by
eventually denying it on August 11, 1994, this is of no moment and does not detract from the fact that the
assessment had long become demandable.