COMMISSIONER OF INTERNAL REVENUE, 

Petitioner,
vs.
AZUCENA T. REYES, Respondent.

G.R. No. 159694             January 27, 2006

FACTS:

Maria C. Tancinco (or ‘decedent’) died, leaving a residential lot and an old house.
Revenue District Office conducted an investigation on the decedent’s estate.
Subsequently, it issued a Return Verification Order. It issued a Letter of Authority for
the regular investigation of the estate tax case without submitting the required
preliminary findings. BIR issued a preliminary assessment notice against the estate.
CIR issued a preliminary collection letter to Reyes, followed by a Final Notice Before
Seizure.

Then, a Warrant of Distraint and/or Levy was served upon the estate, followed by
Notices of Levy on Real Property and Tax Lien against it. Reyes protested the notice
of levy. However, the heirs proposed a compromise settlement of P1,000,000.00.

In a letter to the CIR, Reyes proposed to pay 50% of the basic tax due, citing the
heirs’ inability to pay the tax assessment. CIR rejected Reyes’s proposal. It
demanded payment , otherwise, the notice of sale of the subject property would be
published.

Without acting on Reyes’s protest and offer, the CIR instructed the Collection
Enforcement Division to proceed with the auction sale. Consequently, Reyes filed a
Petition for Review with CTA.

Upon Reyes’s filing of a surety bond, the CTA ordered CIR to desist and refrain from
proceeding with the auction sale of the subject property or from issuing a Warrant of
Distraint or Garnishment of Bank Account, pending determination of the case.

CIR filed a Motion to Dismiss the petition on the grounds that the CTA no longer has
jurisdiction over the case and that the petition was filed out of time. CTA denied the
CIR’s motion.

Reyes filed an application with the BIR for the compromise settlement. Reyes filed a
Motion to Declare Application for the Settlement of Disputed Assessment as a
Perfected Compromise. In said motion, she alleged that the CIR had not yet signed
the compromise CIR.

CTA denied Reyes’s motion, prompting her to file a Motion for Reconsideration.

CTA denied the Motion for Reconsideration with the suggestion that, for an orderly
presentation of her case, Reyes should file a Supplemental Petition for R]view,
setting forth the new issue of whether there was already a perfected compromise.
Reyes filed a Supplemental Petition for Review with the CTA . CTA denied the
petition.
Hence, this Petition.

ISSUES:

1. WON the assessment against the estate is valid.

2. WON the compromise is valid.

RULING:

1. NO. The assessment against the estate is not valid. Section 228 of the Tax
Code states that 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.

Here, Reyes was not informed in writing of the law and the facts on which the
assessment of estate taxes had been made. She was merely notified of the findings
by the CIR, who had simply relied upon the provisions of former Section 229 prior to
its amendment by Republic Act (RA) No. 8424, otherwise known as the Tax Reform
Act of 1997.

To be simply informed in writing of the investigation being conducted and of the

recommendation for the assessment of the estate taxes due is nothing but a
perfunctory discharge of the tax function of correctly assessing a taxpayer.

2. The court held that it would be premature for it to declare that the compromise on
the estate tax liability has been perfected and consummated, considering the earlier
determination that the assessment against the estate was void. Nothing has been
settled or finalized.
 BANK OF THE PHILIPPINE ISLANDS, Petitioner,vs. COMMISSIONER OF
INTERNAL REVENUE, Respondent.

G.R. No. 139736 October 17, 2005

FACTS:

On 10 October 1989, BIR issued Assessment No. FAS-5-85-89-002054, finding

petitioner BPI liable for deficiency DST on its 1985 sales of foreign bill. BPI received
the Assessment, together with the attached Assessment Notice, on 20 October
1989.

BPI protested the Assessment in a letter filed with the BIR on 17 November 1989.
Petitioner BPI did not receive any immediate reply to its protest.

However, on 15 October 1992, the BIR issued a Warrant of Distraint and/or

Levy against petitioner for the assessed deficiency DST for taxable year 1985. BIR
served the Warrant on petitioner only on 23 October 1992.

BPI did not hear from the BIR until 11 September 1997, when its counsel received a
letter, dated 13 August 1997, signed by then BIR Commissioner denying its "request
for reconsideration," and addressing the points raised by petitioner BPI in its protest
letter.

Upon receipt of the letter from the BIR, petitioner filed a Petition with the CTA on 10
October 1997 to which respondent BIR Commissioner filed an Answer on 08
December 1997.

Petitioner raised in its Petition for Review before the CTA. It alleged that respondent
BIR Commissioner only had three years to collect on Assessment No. FAS-5-85-89-
002054, but she waited for seven years and nine months to deny the protest.

CTA ruled that the statute of limitations for BIR Commissioner to collect on
Assessment No. FAS-5-85-89-002054 had not yet prescribed.

BIR Commissioner appealed the Decision of the CTA to the Court of Appeals. The
CA sustained the finding of the CTA.

Hence, this petition.

ISSUE:

Whether or not the right of BIR to collect from petitioner the alleged deficiency DST
for taxable year 1985 had prescribed.

RULING:

YES. The SC ruled that the statute of limitations on collection of the deficiency DST
in Assessment No. FAS-5-85-89-002054 had already prescribed.
The statute of limitations on collection may only be interrupted or suspended by a
valid waiver executed in accordance with paragraph (d) of Section 223 of the Tax
Code of 1977, as amended, and the existence of the circumstances enumerated in
Section 224 of the same Code, which include a request for reinvestigation granted
by the BIR Commissioner.

Here , respondent BIR Commissioner and other BIR officials failed to act promptly in
resolving and denying the request for reconsideration filed by petitioner and in
enforcing collection on the assessment. They presented no reason or explanation as
to why it took them almost eight years to address the protest of petitioner. The
statute on limitations imposed by the Tax Code precisely intends to protect the
taxpayer from such prolonged and unreasonable assessment and investigation by
the BIR.
 SOUTHERN CROSS CEMENT CORPORATION, petitioner,
vs.
THE PHILIPPINE CEMENT MANUFACTURERS CORP., THE SECRETARY OF
THE DEPARTMENT OF TRADE & INDUSTRY, THE SECRETARY OF THE
DEPARTMENT OF FINANCE, and THE COMMISSIONER OF THE BUREAU OF
CUSTOMS, respondents.

G.R. No. 158540             July 8, 2004

FACTS :
On 22 May 2001, DTI accepted an application from Philcemcor, alleging that the
importation of gray Portland cement in increased quantities has caused declines in
domestic production and caused depressed local prices. Accordingly, Philcemcor
sought the imposition of definitive safeguard measures on the import of cement
pursuant to the Safeguard Measures Act (SMA) .
The application was opposed by Southern Cross Cement Corporation, a domestic
corporation engaged in the business of cement manufacturing, production,
exportation, and importation.

The DTI denied the safeguard measures against the importation of gray Portland
cement filed by PHILCEMCOR.

Philcemcor received a copy of the DTI Decision on 12 April 2002. Ten days later, it
filed with the Court of Appeals a Petition for Certiorari, Prohibition and Mandamus
seeking to set aside the DTI Decision.

Philcemcor likewise applied for a TRO to enjoin the DTI and the BOC from
implementing the questioned Decision and Report. It prayed that the Court of
Appeals direct the DTI Secretary to disregard the Report and to render judgment
independently of the Report.

On 10 June 2002, Southern Cross filed its Comment arguing that the Court of
Appeals had no jurisdiction over Philcemcor's Petition, for it is on the Court of Tax
Appeals ("CTA") that the SMA conferred jurisdiction to review rulings of the
Secretary in connection with the imposition of a safeguard measure.

Despite the efforts of Southern Cross, the Court of Appeals ruled that it had
jurisdiction over the petition for certiorari since it alleged grave abuse of discretion.

Southern Cross filed the present petition, assailing the appellate court's Decision for
departing from the accepted and usual course of judicial proceedings, and not
deciding the substantial questions in accordance with law and jurisprudence.

ISSUE

Whether the Decision of the DTI Secretary is appealable to the CTA

RULING :

YES. The Decision of the DTI Secretary is appealable to the CTA .

The Supreme Court said that while the CA had certiorari powers, the special civil
action of certiorari was available only when there was no plain, speedy and adequate
remedy in the ordinary course of law.

A plain, speedy and adequate remedy in the ordinary course of law was, however,
provided by Section 29 of the SMA, which states that any interested party who is
adversely affected by the ruling of the Secretary in connection with the imposition of
a safeguard measure may file with the CTA, a petition for review of such ruling within
thirty (30) days from receipt thereof

The SC emphasized that jurisprudence had long recognized the legislative

determination to vest in a specialized court the sole and exclusive jurisdiction over
matters involving internal revenue and customs duties.The CTA was one such court.
By the very nature of its function, it was dedicated exclusively to the study and
consideration of tax and tariff matters.
 STEAG STATE POWER, INC. (FORMERLY STATE POWER DEVELOPMENT
CORPORATION), PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE,
RESPONDENT.

FACTS:
Steag State Power filed its quarterly value-added tax returns from the first to fourth
quarters of 2004 on April 26, 2004, July 26, 2004, October 25, 2004, and January
25, 2005. It later filed amended value-added tax returns for the taxable quarters on
December 16, 2004 and April 22, 2005.
Steag State Power also filed its quarterly value-added tax returns on April 22, 2005,
July 26, 2005, October 25, 2005, and January 25, 2006.

Steag State Power filed before the BIR claims for refund of its allegedly unutilized
input value-added tax payments on capital goods.
Due to the CIR’s inaction on its administrative claims, Steag filed a Petition before
the CTA on April 20, 2006, elevating its claim for refund for the taxable year 2004.
Through another Petition, filed on December 27, 2006, it sought judicial recourse
involving its claim for refund for the taxable year 2005. Eventually, the Petitions were
consolidated.
On August 27, 2009, CTA denied the petitions for the administrative claims due to
insufficiency of evidence. It held that the appeals for the administrative claims for
refund of input taxes for January 2004 to May 2005, or the first judicial claim, were
filed late. CTA also denied the second judicial claim for Steag State Power's failure
to prove that its purchases.
CTA En Banc affirmed the dismissal of the cases. Hence, petitioner filed this petition.
Petitioner argues that, although the claims were filed beyond the 120+30-day
periods under Section 112 of the National Internal Revenue Code, as amended
(Tax Code), they were nonetheless filed within the two (2)-year period under Section
229 of the same law.
It contends that the timing was in accordance with Revenue Regulation No. 7-95,
which establishes that appeals before the Court of Tax Appeals may be made
after the 120-day period and before the lapse of the two (2)-year period.

ISSUE:
WON STEAG’s contentions are tenable.
HELD:
NO. STEAG’s contentions are not tenable. The court ruled that claims for refund or
tax credit of excess input tax are governed not by Section 229, but by Section 112 of
the Tax Code.
Section 112, in providing the 120+30 day periods to appeal before the Court of Tax
Appeals, must be applied exactly as worded since it is clear, plain, and unequivocal.
Moreover, petitioner's claim that it filed its judicial claims under Revenue Regulation
No. 7-95, which supposedly allowed claims for refund filed after the 120-day period
but before the lapse of the two (2)-year period, is untenable.

Petitioner's judicial claims were filed on April 20, 2006 and December 27,
2006; hence, they were governed by the Tax Code, which clearly provided: (1) 120
days for the Commissioner to act on a taxpayer's claim; and (2) 30 days for the
taxpayer to appeal either from the Commissioner's decision or from the expiration of
the 120-day period in case of the Commissioner's inaction.
 PHILIPPINE AIRLINES, INC., PETITIONER,
vs.
COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

G.R. No. 198759               July 1, 2013

Facts

Caltex sold imported fuel to PAL for the latter’s domestic operations. Consequently,
Caltex electronically filed with the Bureau of Internal Revenue (BIR) its Excise Tax
Returns for Petroleum Products.

On August 3, 2004, PAL received from Caltex an Invoice for the purchased aviation
fuel.

This was confirmed by Caltex in a Certification where it indicated that: (a) the excise
taxes it paid on the imported petroleum products amounted to ₱2,952,037.90, i.e.,
the; (b) the foregoing excise tax payment was passed on by it to PAL; and (c) it did
not file any claim for the refund of the said excise tax with the BIR.

PAL, through a letter-request addressed to respondent CIR, sought a refund of the

excise taxes passed on to it by Caltex. It hinged its tax refund claim on its operating
franchise, which conferred upon it certain tax exemption privileges on its purchase
and/or importation of aviation gas, fuel and oil, including those which are passed on
to it by the seller and/or importer thereof. Further, PAL asserted that it had the legal
personality to file the aforesaid tax refund claim.

Due to the CIR’s inaction, PAL filed a Petition for Review with the CTA.

CTA denied PAL’s petition on the ground that only a statutory taxpayer (referring to
Caltex in this case) may seek a refund of the excise taxes it paid. It added that even
if the tax burden was shifted to PAL, the latter cannot be deemed a statutory
taxpayer.It further ruled that PAL’s claim for refund should be denied.

PAL moved for reconsideration, but the same was denied, prompting it to elevate the
matter to the CTA En Banc.

CTA En Banc affirmed the ruling of the CTA. Aggrieved, PAL filed a motion for
reconsideration which was, however, denied.

Hence, the instant petition.

ISSUE:

Whether PAL has sufficiently proved its entitlement to refund.

RULING:.

The Court finds that the evidence on record shows that PAL was able to sufficiently
prove its entitlement to the subject tax refund.

First, PAL timely filed its claim for refund.

Section 229 of the NIRC provides that the claim for refund should be filed within two
(2) years from the date of payment of the tax.

Shortly after imported aviation fuel was delivered to PAL, Caltex electronically filed
the requisite excise tax. PAL filed its administrative claim for refund on October 29,
2004 and its judicial claim with the CTA on July 25, 2006. In this regard, PAL’s
claims for refund were filed on time in accordance with the 2-year prescriptive period.

Second, PAL paid the lower of the basic corporate income tax or the franchise tax as
provided for in the afore-quoted Section 13 of its franchise.

In its income tax return for FY 2004-2005, PAL reported no net taxable income for
the period resulting in zero basic corporate income tax, which would necessarily be
lower than any franchise tax due from PAL for the same period.

Third, the subject excise taxes were duly declared and remitted to the BIR.

Thus, PAL has sufficiently proved its entitlement to refund.

 G.R. NO. 176290 : September 21, 2007]

SYSTRA PHILIPPINES, INC., Petitioner, v. COMMISSIONER OF INTERNAL

REVENUE, Respondent.

FACTS:
Petitioner filed with the Bureau of Internal Revenue its Annual Income Tax Return for
the taxable year ended December 31, 2000. For the same period, petitioner reflected
a minimum corporate income tax of P75,043.

Said MCIT of P75,043 was offset against its total tax credits for the year 2000
leaving a total unutilized tax credits of P4,627,976.

Petitioner opted to carry over the said excess tax credit to the succeeding taxable
year 2001.

For the taxable year 2001, petitioner filed with the BIR its Annual ITR on April 12,
2002, reflecting a total gross and a total creditable taxes withheld of P1,111,587.

Petitioner indicated in the 2001 ITR the option "To be issued a Tax Credit Certificate"
relative to its tax overpayments.

Petitioner instituted a claim for refund or issuance of a tax credit certificate with the
BIR of its unutilized creditable withholding taxes in the amount of P5,342,246.00 as
of December 31, 2001."

Due to the inaction of the BIR on petitioner's claim for, petitioner filed a Petition for
Review.

The First Division of the CTA partially granted the petition and ordered the issuance
of a tax credit certificate to petitioner in the amount of P1,111,587 representing the
excess or unutilized creditable withholding taxes for taxable year 2001.

The CTA, however, denied petitioner's claim for refund of the excess tax credits for
the year 2000 . It ruled that petitioner was precluded from claiming a refund thereof
or requesting a tax credit certificate therefor. Once it was made for a particular
taxable period, the option to carry over became irrevocable.

Petitioner moved for reconsideration but it was denied. Thus, this petition.

ISSUE:

Whether the exercise of the option to carry-over excess income tax credits under
Section 76 of the Tax Code bars a taxpayer from claiming the excess tax credits for
refund even if the amount remains unutilized in the succeeding taxable year
RULING :

Section 76 of the Tax Code provides:

SEC. 76. Final Adjustment Return. - Every corporation liable to tax under

Section 27 shall file a final adjustment return covering the total taxable income
for the preceding calendar or fiscal year. If the sum of the quarterly tax
payments made during the said taxable year is not equal to the total tax due
on the entire taxable net income of that year the corporation shall either:

(A) Pay the balance of tax still due; or

(B) Carry-over the excess credit; or

(C) Be credited or refunded with the excess amount paid, as the case may be.

In case the corporation is entitled to a tax credit or refund of the excess estimated
quarterly income taxes paid, the excess amount shown on its final adjustment return
may be carried over and credited against the estimated quarterly income tax
liabilities for the taxable quarters of the succeeding taxable years. Once the option
to carry-over and apply the excess quarterly income tax against income tax
due for the taxable quarters of the succeeding taxable years has been made,
such option shall be considered irrevocable for that taxable period and no
application for cash refund or issuance of a tax credit certificate shall be
allowed therefor.

In this case, it was in the year 2000 that petitioner derived excess tax credits and
exercised the irrevocable option to carry them over as tax credits for the next taxable
year. Under Section 76 of the Tax Code, a claim for refund of such excess credits
can no longer be made. The excess credits will only be applied "against income tax
due for the taxable quarters of the succeeding taxable years."
 COMMISSIONER OF INTERNAL REVENUE v. ROSEMARIE ACOSTA
G.R. No. 154068
August 3, 2007
FACTS :

On March 21, 1997, respondent and her husband filed with the BIR their Joint
Individual Income Tax Return for the year 1996. Later, on June 17, 1997,
respondent, through her representative, filed an amended return and a Non-Resident
Citizen Income Tax Return, and paid the BIR P17,693.37 plus interests.
On October 8, 1997, she filed another amended return indicating an overpayment.

Claiming that the income taxes withheld and paid by Intel and respondent resulted in
an overpayment, respondent filed on April 15, 1999 a petition for review with the
Court of Tax Appeals.
CIR moved to dismiss the petition for failure of respondent to file the mandatory
written claim for refund before the CIR.

CTA dismissed respondents petition. CTA ruled that respondent failed to file a
written claim for refund with the CIR, a condition precedent to the filing of a petition
for review before the CTA.
CTA noted that respondents omission deprived the court of its jurisdiction over the
subject matter of the case.

Upon review, the Court of Appeals reversed the CTA and directed the latter to
resolve respondents petition for review. Applying Section 204(c) of the 1997 National
Internal Revenue Code (NIRC), the Court of Appeals ruled that respondents filing of
an amended return indicating an overpayment was sufficient compliance with the
requirement of a written claim for refund.

Petitioner sought reconsideration, but it was denied.

ISSUE :

1. WON the amended return filed by respondent indicating an overpayment

constitute the written claim for refund required by law ?
2. Can the 1997 NIRC be applied retroactively
RULING :
1. The applicable law on refund of taxes pertaining to the 1996 compensation
income is Section 230 of the old Tax Code, which was the law then in effect,
and not Section 204(c) of the new Tax Code, which was effective starting only
on January 1, 1998. Under Section 230 of the old Tax Code , a written claim
for refund or tax credit must be filed by the taxpayer with the Commissioner.
A claimant must first file a written claim for refund, categorically demanding
recovery of overpaid taxes with the CIR, before resorting to an action in court.
This obviously is intended to afford the CIR an opportunity to correct the
action of subordinate officers and to notify the government that such taxes
have been questioned, and the notice should then be borne in mind in
estimating the revenue available for expenditure.

Hence, the SC ruled that the amended return filed by respondent does not
constitute the written claim for refund required by the old Tax Code, the law
prevailing at that time.

2. NO. The 1997 NIRC cannot be applied retroactively as the instant case
involved refund of taxes withheld on a 1996 income. Tax laws are prospective
in operation, unless the language of the statute clearly provides otherwise.

In this case, at the time respondent filed her amended return, the 1997 NIRC
was not yet in effect. Hence, respondent had no reason at that time to think
that the filing of an amended return would constitute the written claim for
refund required by applicable law.
 G.R. NOS. 156637/162004 December 14, 2005]

PHILAM ASSET MANAGEMENT, INC., Petitioner, v. COMMISSIONER OF

INTERNAL REVENUE, Respondent.

Facts

Petitioner, formerly Philam Fund Management, Inc., filed its annual corporate income
tax return for the taxable year 1997 representing a net loss of P2,689,242.00.

Consequently, it failed to utilize the creditable tax withheld in the amount of Five
Hundred Twenty-Two Thousand Ninety-Two Pesos (P522,092.00)

On September 11, 1998, petitioner filed an administrative claim for refund with the
BIR Appellate Division in the amount of P522,092.00 representing unutilized excess
tax credits for calendar year 1997.

Thereafter, on July 28, 1999, a written request was filed with the same division for
the early resolution of petitioner's claim for refund.

Respondent did not act on petitioner's claim for refund; hence, a Petition for Review
was filed with the CTA to toll the running of the two-year prescriptive period.

The CTA denied the Petition for Review. Its Motion for Reconsideration was likewise
denied.

The CA denied the claim of petitioner for a refund of the latter's excess creditable
taxes withheld for the years 1997 and 1998, despite compliance with the basic
requirements of Revenue Regulations (RR) No. 12-94.

The appellate court pointed out that, in the respective Income Tax Returns (ITRs)
for both years, petitioner did not indicate its option to have the amounts either
refunded or carried over and applied to the succeeding year. .

The CA further held that the failure to present the 1998 ITR was fatal to the claim for
a refund, because there was no way to verify if the tax credit for 1997 could not have
been applied against the 1998 tax liabilities of petitioner.

Issues

1. Whether or not the failure of the petitioner to indicate in its annual income tax
return the option to refund its creditable withholding tax is fatal to its claim for
refund.

2. Whether or not the presentation in evidence of the petitioner's annual income

tax return for the succeeding calendar year is a legal requisite in a claim for
refund of unapplied creditable withholding tax.
Ruling

1. NO. The failure of the petitioner to indicate in its annual income tax return the
option to refund its creditable withholding tax is not fatal to its claim for refund.

Under Section 76 of the National Internal Revenue Code, a taxable corporation with
excess quarterly income tax payments may apply for either a tax refund or a
tax credit, but not both. The choice of one precludes the other. Failure to indicate a
choice, however, will not bar a valid request for a refund, should this option be
chosen by the taxpayer later on.

In BPI-Family Savings Bank v. CA, this Court even ordered the refund of a

taxpayer's excess creditable taxes, despite the express declaration in the FAR to
apply the excess to the succeeding year. When circumstances show that a choice of
tax credit has been made, it should be respected. But when indubitable
circumstances clearly show that another choice - - a tax refund - - is in order, it
should be granted. "Technicalities and legalisms, however exalted, should not be
misused by the government to keep money not belonging to it and thereby enrich
itself at the expense of its law-abiding citizens.

2. NO. The presentation in evidence of the petitioner's annual income tax return for
the succeeding calendar year is not a legal requisite in a claim for refund of
unapplied creditable withholding tax.

Requiring that the ITR or the FAR of the succeeding year be presented to the BIR in
requesting a tax refund has no basis in law and jurisprudence.

Section 76 of the Tax Code does not mandate it. The law merely requires the filing of
the FAR for the preceding not the succeeding taxable year.
 G.R. No. 162155               August 28, 2007

COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his

official capacity as Revenue District Officer of Revenue District No. 049
(Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.

FACTS

On March 11, 1999, Gilbert Yap , VP of Primetown Property Group , applied for the
refund or credit of income tax respondent paid in 1997.

In Yap's letter to petitioner revenue district officer Parcero, he explained that the
increase in the cost of labour caused the real estate industry to slowdown.
Therefore, while business was good during the first quarter of 1997, respondent
suffered losses that year.

According to Yap, because respondent suffered losses, it was not liable for income
taxes. Nevertheless, respondent paid its quarterly corporate income tax and remitted
creditable withholding tax from real estate sales to the BIR .Therefore, respondent
was entitled to tax refund or tax credit.

On May 13, 1999, revenue officer required respondent to submit additional

documents to support its claim. Respondent complied but its claim was not acted
upon. Thus, on April 14, 2000, it filed a petition for review before the (CTA).

On December 15, 2000, the CTA dismissed the petition as it was filed beyond the
two-year prescriptive period for filing a judicial claim for tax refund or tax credit. It
invoked Section 229 of the National Internal Revenue Code (NIRC):

The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus,
its right to claim a refund or credit commenced on that date.

According to the CTA, the two-year prescriptive period under Section 229 of the
NIRC for the filing of judicial claims was equivalent to 730 days. Because the year
2000 was a leap year, respondent's petition, which was filed 731 days after
respondent filed its final adjusted return, was filed beyond the reglementary period.

Respondent moved for reconsideration but it was denied Hence, it filed an appeal in

the CA.

CA reversed and set aside the decision of the CTA. It ruled that Article 13 of the Civil
Code did not distinguish between a regular year and a leap year.

Petitioners moved for reconsideration but it was denied. Thus, this appeal.

ISSUE:
WON respondent's petition was filed within the reglementary period

RULING :

Yes. The respondent's petition filed on April 14, 2000 was filed within the
reglementary period.

Both Article 13 of the Civil Code and Section 31, of the Administrative Code of 1987
deal with the same subject matter — the computation of legal periods. Under the
Civil Code, a year is equivalent to 365 days whether it be a regular year or a leap
year. Under the Administrative Code of 1987, however, a year is composed of 12
calendar months. Needless to state, under the Administrative Code of 1987, the
number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of computing legal

periods under the Civil Code and the Administrative Code of 1987. For this reason,
we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987,
being the more recent law, governs the computation of legal periods. 

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this
case, the two-year prescriptive period (reckoned from the time respondent filed its
final adjusted return on April 14, 1998) consisted of 24 calendar months.

The court held that the respondent's petition was filed on the last day of the 24th
calendar month from the day respondent filed its final adjusted return. Hence, it was
filed within the reglementary period.
 FERDINAND E. MARCOS II v. COURT OF APPEALS
273 SCRA 47

FACTS:
On September 29, 1989, a Special Tax Audit Team was created to conduct
investigations and examinations of the tax liabilities and obligations of the late
president Marcos.
The investigation disclosed that the Marcoses failed to file a written notice of the
death of the decedent, an estate tax return, as well as several income tax returns
covering the years 1982 to 1986.
The BIR issued deficiency income tax assessments against the Spouses Marcos
and Ferdinand Marcos II and deficiency estate tax assessment against the estate of
the decedent on July 26, 1991.
Despite personal and constructive notice, the heirs of the decedent did not protest
these deficiency tax assessments.
In 1993, the BIR Commissioner caused the collection of the deficiency estate and
income tax delinquencies by resorting to the summary remedy of levy on real
properties.
Ferdinand R. Marcos II questioned the actuations of the Commissioner in assessing
and collecting through the summary remedy of levy upon the estate and properties of
his father, despite the pendency of the proceeding on probate of his will.
He asserted that  authority of the Bureau of Internal Revenue to collect by the
summary remedy of levying upon, and sale of real properties of the decedent, estate
tax deficiencies, without the cognition and authority of the court sitting in probate
over the supposed will of the deceased., which placed all properties forming part of
the decedent's estate in custodia legis to the exclusion of all other courts and
administrative agencies.
He further argued that the Notices of Levy were issued beyond the allowed period
and are therefore null and void.
ISSUE:
WON the approval of the court, sitting in probate, or as a settlement tribunal over the
deceased is a mandatory requirement in the collection of estate taxes.

WON the omission to file an estate tax return and the subsequent failure to contest
or appeal the assessment made by the BIR is fatal to the petitioner's cause.
HELD:
1. NO. The approval of the court, sitting in probate, or as a settlement tribunal over
the deceased is not a mandatory requirement in the collection of estate taxes. It
cannot therefore be argued that the Tax Bureau erred in proceeding with the levying
and sale of the properties allegedly owned by the late President, on the ground that it
was required to seek first the probate court's sanction.
There is nothing in the Tax Code, and in the pertinent remedial laws that implies the
necessity of the probate or estate settlement court's approval of the state's claim for
estate taxes, before the same can be enforced and collected.
2. YES. The omission to file an estate tax return, and the subsequent failure to
contest or appeal the assessment made by the BIR is fatal to the petitioner's cause,
as under Section 223, NIRC, (now Sec. 222) in case of failure to file a return, the tax
may be assessed at any time within ten (10) years after the omission, and any tax so
assessed may be collected by levy upon real property within three (3) years (now
within five years following the assessment of the tax.
Since the estate tax assessment had become final and unappealable by the
petitioner's default as regards protesting the validity of the said assessment, there is
now no reason why the BIR cannot continue with the collection of the said tax.