Judicial Remedies
you-file system in which case collection
B. Procedure:
1. Filing of an action for collection of
taxes.
2. Civil Cases
Civil action – case filed before the
regular courts requiring the taxpayer to
pay taxes. The jurisdiction depends on
the amount: o ≥ P1M basic assessed tax
– file a collection case with the CTA o <
P1M basic assessed tax – file a
collection case with the RTC /MTC
There are remedies that may be
availed of by the government. There
are remedies that may be resorted to
by the taxpayer.
What are the ASPECTS OF
TAXATION ;
There are two aspects of taxation;
1. Assessment; and
2. Collection;
Q: What is the difference between
assessment and collection?
A: Assessment is the written notice and
demand to the taxpayer of his due tax
liability. Collection is the enforcement of
the assessment.
Q: Which comes first, assessment or
collection?
A: Assessment precedes collection
except when the unpaid tax is a tax due
per return as in the case of a self-
assessed income tax under the pay-as-
may be instituted without need of
assessment.
Q: Is assessment a condition sine
qua non to collection insofar as the
NIRC is concerned?
A: NO. Sections 203 and 222 of the
NIRC do not require prior assessment
before collection may be made.
Therefore, collection may be made with
or without prior assessment.
Q: What is meant by assessment?
A: An assessment contains not only a
computation of tax liabilities, but also a
demand for payment within a prescribed
period. It also signals the time when
penalties and interests begin to accrue
against the taxpayer. To enable the
taxpayer to determine his remedies
thereon, due process requires that it
must be served on and received by the
taxpayer.
B) Judicial remedies of the government,
procedure;
When may the government avail the
Remedy of COLLECTION?
The government may avail the remedy
of collection when the assessment shall
have become final, executory, and
demandable.
The BIR can collect delinquent internal
revenue taxes either by distraint and
levy or by judicial action or both
simultaneously. There should however
first be an assessment, except in case
of false or fraudulent return with intent to PRESCRIBED FOR THE FILING
evade the tax or of a failure to file a of the RETURN, whichever is
return. later, but ONLYBY JUDICIAL
PROCEEDINGS
The taxpayer’s failure to appeal to the
CTA in due time makes the assessment IN THE MAJORITY VIEW;
final, executory, and demandable and
the TP is barred from disputing the 1.) Collection shall be made within
correctness of the assessment or FIVE YEARS ** from the date of
invoking any defense that would reopen the FINAL ASSESSMENT
the question of its liability on the merits NOTICE (FAN) of the tax due,
in the collection case that the BIR may either or both simultaneously:
file. (Republic v. Tim Tian Teng Sons, (a) By distraint of personal
Inc. 16 SCRA 584). property, or by levy of real
property; or (b) By judicial
proceedings, thru civil or criminal
action.
What are the RULES ON NORMAL
PRESCRIPTIVE PERIOD FOR WHAT ARE THE RULES ON
COLLECTION OF TAXES? EXCEPTIONAL PRESCRIPTIVE
PERIOD FOR COLLECTION OF
We have to views here, MINORITY TAXES?
VIEW and MAJORITY VIEW;
 In case there is PRIOR
IN THE MINORITY VIEW; ASSESSMENT, collection shall
be made within FIVE (5) years
1. In case there is PRIOR from the date of the final
ASSESSMENT, collection shall assessment notice (FAN) of the
be made within THREE YEARS return either or both
from the date of the FINAL simultaneously: A. By distraint of
ASSESSMENT NOTICE (FAN) personal property, or by levy of
of the tax due, either or both real property of the TP, or B. By
simultaneously: (a) By distraint judicial proceedings, thru civil or
of personal property, or by levy of criminal actions • In case there is
real property; or (b) By judicial NO PRIOR ASSESSMENT,
proceedings, thru civil or criminal ACTIONS for collection of tax
action. 2. In case there is NO may be filed within TEN (10)
PRIOR ASSESSMENT, years after the discovery of the
collection proceedings SHALL BE falsity, fraud or failure to file a
BEGUN within THREE YEARS return, but only by judicial
from the DATE OF FILING of the proceedings. • Any internal
RETURN, or from the LAST DAY revenue tax, which has been
 assessed within the period 8. Civil penalties;
agreed upon between the TP and
the CIR in writing may be Q: What is the purpose of the
collected by distraint or levy or by remedies insofar as the government
a proceeding in court within the is concerned?
period agreed upon before the A: These remedies available to the
expiration of the 5-year period. government are designed to ensure the
The period so agreed upon may collection of taxes. In resorting to these
be extended by subsequent remedies, the government must
written agreements made before observe/comply with the legal
the expiration of the period parameters that are set forth in the tax
previously agreed upon. laws.

WHAT IS THE CONSTRUCTION OF Q: On the other hand, what is the

THE RULES ON PRESCRIPTION? underlying purpose of the remedies
that may be resorted to by the
 In civil tax cases involving the taxpayer?
collection of internal revenue A: The purpose of these taxpayer’s
taxes, prescription is construed remedies is to safeguard the interests of
strictly against the government the taxpayers against unreasonable or
and liberally in favor of the arbitrary assessment, collection or
taxpayer. • In criminal tax cases investigation.
involving tax offenses punishable
under the Tax Code, prescription These remedies are either
is construed strictly against the administrative or judicial.
taxpayer. • Note: Once the right
to collect has prescribed, the Q: What is the difference between
Commissioner can no longer these administrative and judicial
enforce collection of the tax remedies?
liability against the taxpayer. A: Administrative remedies are those that
do not require judicial proceedings, whereas

Q: What are the remedies of the judicial remedies are those that require
/necessitate /warrant judicial actions or
government?
proceedings.
A: These are:
1. Compromise;
2. Enforcement of a tax lien; 1. Civil action by the Government:
3. Forfeiture;
4. Distraint of personal property; Two ways;
1. Filing of a civil case for collection of sum
5. Levy of real property;
of money. MTC or RTC depending on
6. Civil action;
amount
7. Criminal action;
2. Filing an answer on the petition for review if there is a return (NIRC, Sec.
filed by the taxpayer with the CTA 203)

When resorted to;

Exceptions: Five (5) years from date of
Ordinary civil actions are resorted to when
final assessment notice
the tax becomes delinquent and if it
a.) False or Fraudulent Return
becomes due and demandable. Otherwise,
b.) Failure to File a Return/No
the civil action is a premature case.
Return

Q. When is it considered due and

demandable? Exceptions to the Exceptions: Ten years
1. If the self-assessed tax was not paid from date of discovery if the government
within the date prescribed by law will collect without assessment. (NIRC,
2. If the final assessment is not protested Sec. 222. (a))
administratively within 30 days from receipt
3. Non-compliance on the conditions laid on
Reckoning point:
the protest, or
A. Collection through summary
4. Failure to file an appeal to the CTA on the
remedies.
decision of the CIR or duly authorized
B. Collection through Judicial
representatives.
Remedies.

What are the defenses precluded?

1. Invalidity or illegality of assessment What are the grounds for Suspension of
2. Prescription of government right to Statute of Limitations? (NIRC, Sec. 223)
assess –the same for as assessment and
collection
What are the Civil actions filed with the
CTA ?
1.) when the CIR is PROHIBITED
The fact that no action was filed with the
from making the assessment or
RTC or MTC does not mean that there
beginning the distraint or levy or
is no more ground to file for civil claim
a proceeding in court, AND 60
by the BIR. The answer filed by the
days thereafter;
Government in the CTA in response to
2.) when the taxpayer request for a
an appeal is tantamount to the filing of a
REINVESTIGATION which is
civil action for collection in the regular
GRANTED by the CIR;
court and has the effect of tolling the
3.) when the taxpayer cannot be
prescriptive period.
located in the ADDRESS given
by him in the return UNLESS he
Collection of Taxes;
informs the CIR of any change in
his address;
What is the prescriptive period for the
collection of tax?
As a matter of fact under the
 Gen. Rule: Three years from the latest amendment rules on
date of final assessment notice, assessment, it is provided that
 the BIR can already issue or send assessment on the basis of
an assessment on the last known newly-discovered or additional
address of the taxpayer and the evidence that a taxpayer intends
last known address need not be to present in the reinvestigation. It
the one registered. So long as the involves a question of fact or law
BIR has knowledge of the or both.
address that would already
suffice. 3. Request for reconsideration – A
plea for re-evaluation of the
4.) When the warrant of distraint or assessment on the basis of
levy is duly served, AND No existing records without need of
property is located additional evidence. This involves
5.) When the taxpayer is out of the a question of fact or law or both.
Philippibes. (RR No. 12-85)

Within 60 days from filing of protest, all

C) Judicial Remedies of the Tax relevant supporting documents should
Payer have been submitted; OW, the
assessment shall become FINAL.
A. Civil action (cannot be appealed). (Sec. 228 NIRC)

What are the Remedies of the What is the Remedy of the Taxpayer
taxpayer? if Protest is Denied?

i. Appeal to CTA – within 30 days If the protest is denied in whole or in part

from receipt of decision on the by the CIR or his duly authorized
protest or from the lapse of 180 representative:
days due to inaction of the  Appeal to the CTA within 30 days
Commissioner; from date of receipt of the
decision; OR
ii. Action to contest forfeiture of  File an administrative appeal to
chattel; and the CIR through request for
reconsideration within 30 days
iii. Action for damages from date or receipt of the
decision but only issues raised in
Protest of Assessment the decision of the duly
1. File a request for reinvestigation authorized representative shall be
or reconsideration within 30 days entertained (denial by authorized
from receipt of the assessment rep)

2. Request for reinvestigation – A

plea for re-evaluation of an
If the administrative appeal is denied by
the CIR: 1. Civil action through appeal to the CTA for

 File a motion for reconsideration assessment, which must be filed within 30

days from receipt of the decision or lapse of
with the CIR; OR
the 180 days due to the inaction of the CIR.
 Appeal to the CTA within 30 days
2. Action to contest forfeiture of chattel
from date of receipt of decision.
3. Action for damages
 4. Criminal action against the erring BIR
If the protest is denied, in whole or in employee or officer
part, by the CIR: 5. Injunction that the collection may
 Appeal to the CTA within 30 days jeopardize the taxpayer (should involve
from date of receipt of decision; public interest

OR
 File an MR with the CIR
What is the effect of failure to protest or
(Fishwealth Canning Corp. V
appeal?
CIR, G.R. No. 179343, 2010)
The decision becomes final and
demandable.
But TN:

Appeal of protest to the CTA (Section

if the LOA starts in the revenue region, 228)
the PAN is also issued by the revenue Grounds:
region, and the decision is also laid 1. Protest is denied in whole or in part

out by the regional director. And if that 2. If protest for reconsideration – not acted

happens, there are two options: within 180 days from filing of protest
3. If protest for reinvestigation – not acted
 File a reconsideration to the CIR;
within 180 days from submission of
OR
documents
 Appeal to the CTA within 30 days
from receipt. What is the period to appeal?
Taxpayer can appeal to the CTA within 30
The MR that you will file to the CIR will days from either::
toll or suspend the running of the 30-day (a) Receipt of denial of protest
period. (b) Lapse of 180 days in case of inaction

 But if it is the national office (CIR) What is the effect of failure to appeal?
Decision shall be final, executory, and
that issued the LOA, the PAN and
demandable.
made the adverse decision, the
filing of an MR to the CIR will
Taxpayer’s suit
NOT suspend the running of the
Involves disposition of the general funds of
30-day period to appeal to the the government. The tax money is being
CTA. spent in violation of constitutional
protections and for improper purpose.
Judicial remedies
Important: The funds disbursed must come
from taxation. Taxpayer’s suit is not proper
if the source of the fund is from donation.
This is filed directly to Supreme Court
considering the requirements to file (e.g
locus standi, and others)
Prescription or statute of limitations
This is to prevent harassment of the
taxpayers. This is beneficial as well to the
government because the officers will act
promptly.
When imprescriptible
1. If prescription to tax is not provided under
the law
2. If no return is filed
Difference between prescriptions for
refund of input VAT v. Assessment v.
Collection
SUMMARY OF RULES ON
PRESCRIPTIVE PERIODS FOR CLAIMING
REFUND OR CREDIT OF INPUT VAT
(SECTION 112, NIRC)
1. Two-year prescriptive period
a. It is only the administrative claim that
must be filed within the two year period.
b. The proper reckoning date for the two-
year prescriptive period is the close of the
taxable quarter.
c. Exception to the rule are judicial claims
filed within June 8, 2007 and September 12,
2008, where the proper reckoning date is
the date of filing the VAT return and
payment of the tax because of the Atlas
Ruling which was later abandoned by the
Mirant Ruling.
2. 120+30 day Rule
a. The taxpayer can file an appeal in one of
two ways:
i. File the judicial claim within 30
days after the Commissioner denies within
the 120 day period
ii. Filed the judicial claim within 30
days from the expiration of the 120-day
period if the Commissioner does not act
within the 120-day period.
b. 30-day period always applies, whether
there is a denial or inaction on the part of
the CIR.
c. As a general rule, the 30-day period to
appeal is both mandatory and jurisdictional.
d. As an exception, premature filing is
allowed only between December 10, 2003
and October 5, 2010, when BIR Ruling DA-
489-03.
e. Late filing is prohibited, even during the
time when BIR Ruling No. DA-489-03 was
in force.
PRESCRIPTIVE PERIOD FOR
ASSESSMENT
GR: Prescriptive period is 3 years from
either:
(a) Last day prescribed by law for the filing
of return
(b) Date of actual filing of return (when
return is filed beyond the period prescribed
by law – late filing)
XPNs: In these three cases, prescriptive
period is 10 years from the time the false,
fraudulent or omitted information is
discovered.
1. False return
2. Fraudulent return with intent to evade tax
3. Omission or failure to file a return
Extension of 3-year prescriptive period
The prescriptive period of 3 years may be
extended in writing between the taxpayer
and the CIR. This agreement must be
entered within the 3 year period. B. 3 years if normal assessment
Conversely, the taxpayer can also have a
waiver or renunciation of the prescription. GR: 3 years, provided there is no
assessment for false or fraudulent return or
Requisites for Valid Waiver. no assessment which is subject to
1. Must be duly signed by the CIR or his agreement between CIR and Taxpayer.
duly authorized representative (Standard charter bank case)
2. Must be duly signed by the taxpayer
3. The waiver must indicate the period when XPNs:

it was accepted or signed by the CIR to 1. 5 years if there is already an assessment

determine if the waiver was entered within for false or fraudulent return or an

the 3 year period. assessment which is subject to agreement

between CIR and Taxpayer.

Relevant provision 2. 10 year prescriptive period for collection,

when due to fraud. Abnormal assessment

Section 203. Period of Limitation Upon also included in the 10 year prescriptive

Assessment and Collection – Except as period.

provided in Section 222, internal revenue

taxes shall be assessed within 3 years after
the last day prescribed by law for the filing
of the return, and no proceeding in court Relevant provision

without assessment for the collection of

such taxes shall be begun after the Section. 222. Exceptions as to Period of

expiration of such period: Provided, That in Limitation of Assessment and Collection of

a case where a return is filed beyond the Taxes. –

period prescribed by law, the 3-year period (a) In the case of a false or fraudulent return

shall be counted from the day the return with intent to evade tax or of failure to file a

was filed. For purposes of this Section, a return, the tax may be assessed, or a

return filed before the last day prescribed by proceeding in court for the collection of such

law for the filing thereof shall be considered tax may be filed without assessment, at any

as filed on such last day. time within ten (10) years after the discovery
of the falsity, fraud or omission: Provided,

Defective That in a fraud assessment which has

The heading provides that it is for become final and executory, the fact of

assessment and collection but the content fraud shall be judicially taken cognizance of

does not provide for prescription for in the civil or criminal action for the

collection. collection thereof.

No prescription for collection provided (b) If before the expiration of the time

Therefore, 2 views. prescribed in Section 203 for the

1. 5 years following previous provision assessment of the tax, both the

before the amended NIRC. Commissioner and the taxpayer have

2. 3 years following Section 203. agreed in writing to its assessment after

such time, the tax may be assessed within

A. 10 years if abnormal assessment the period agreed upon. The period so

agreed upon may be extended
subsequent written agreement made before
the expiration of the period previously
agreed upon.
(c) Any internal revenue tax which has been
assessed within the period of limitation as
prescribed in paragraph (a) hereof may be
collected by distraint or levy or by a
proceeding in court within five (5) years
following the assessment of the tax.
(d) Any internal revenue tax, which has
been assessed within the period agreed
upon as provided in paragraph
hereinabove, may be collected by distraint
or levy or by a proceeding in court within the
period agreed upon in writing before the
expiration of the five (5) -year period. The
period so agreed upon may be extended by
subsequent written agreements
before the expiration of the
previously agreed upon.
(e) Provided, however, That nothing in the
immediately preceding and paragraph (a)
hereof shall be construed to authorize the
examination and investigation or inquiry into
any tax return filed in accordance with the
provisions of any tax amnesty law or decree
What are the grounds for suspension of
3-prescriptive period
1. The CIR is prohibited from making the
assessment, or distraint or levy,
proceeding in court.
2. The taxpayer requests for reconsideration
AND it is granted by the CIR.
3. When the taxpayer cannot be located or
out of the Philippines.
Q. Can the taxpayer amend his return?
NO, unless:
by 1. The amendment made within 3 years
from the filing of the original return; or
2. No notice of audit of such return has in
the meantime been actually served upon
the taxpayer
When prescription runs in an amended
return
A. Substantial amendment – from the date
of the filing of the amended return.
B. Minor amendment – From the filing of the
original return if the same is sufficiently
(b) complete to enable the CIR to intelligently
determine the proper amount of tax to be
assessed.
Important: There’s no really hard and
fast rule as to when the amendment is
made substantial or only minor [case to case
period
basis]. But generally, it is substantial if it
alters or it changes tax liability of the
taxpayer specifically if it causes a
reduction to the tax liability. In some
cases, a mere changing of the tax
identification number is just a minor
change.
NOTE:
 In cases within the jurisdiction of
the Court, the criminal action and
the corresponding civil action for
the recovery of civil liability for
or
taxes and penalties shall be
deemed jointly instituted in the
same proceeding
 The filing of the criminal action
shall necessarily carry with it the
filing of the civil action. No right to
reserve the filing of the civil
action. No right to reserve the
 filing of such civil action reinvestigation of its 1952 income tax
separately from the criminal liability. The Collector of Internal
action shall be allowed or Revenue did not reply; instead, he
recognize. referred the case to the Solicitor General
for collection by judicial action. Lim Tian
Cases: Teng Sons & Co., Inc. reiterated its
Republic v. Lim Tan Tieng request for reinvestigation. Thereupon,
(G.R. No. L-21731. March 31, 1966) the Deputy Collector of Internal
Revenue, informed the taxpayer that its
FACTS: Lim Tian Teng Sons & Co., request for reinvestigation would be
Inc., a domestic corporation engaged in granted provided it executed within ten
the exportation of copra in the year 1951 days a waiver of the statute of
and 1952. The copra was weighed limitations. As Lim Tian Teng Sons &
before shipment in the port of departure, Co., Inc. failed to file a waiver of the
called copra outturn, and upon arrival in statute of limitations, the Collector of
the port of destination. On March 30, Internal Revenue instituted eight months
1953 Lim Tian Teng Sons & Co., Inc. after an action in the Court of First
filed its income tax return for 1952 Instance of Cebu for the collection of
based on accrued income and deficiency income tax. Plaintiff
expenses. Its return showed a loss of maintains that the lower court has no
P56,109.98. It took up as part of the jurisdiction to entertain this case on the
beginning inventory for 1952 the copra ground that the Collector of Internal
outturn shipped in 1951 in the sum of Revenue has not yet issued his final
P95,500.00 already partially collected, decision on its requests for
as part of its outstanding stock as of reinvestigation. The taxpayer's stand is
December 31, 1951. In the audit and that final decision of the Collector of
examination of taxpayer's 1952 income Internal Revenue on the disputed
tax return, the Collector of Internal assessment is a condition precedent to
Revenue eliminated the P95,500.00 the filing of an action in the Court of First
outturn from the beginning inventory for Instance for the collection of a tax.
1952 and considered it as accrued
income for 1951 which increased ISSUE: whether or not the assessment
taxpayer's 1952 net income by contained in the letter of the Collector of
P95,500.00 and raised the taxpayer's Internal Revenue is final and executory.
net taxable income for 1952 to
P50,370.87. The Collector of Internal HELD: YES. Said court, to our mind,
Revenue assessed a deficiency income committed no error. For what is more
tax of P10,074.00 and 50% surcharge indicative of the Collector's decision
thereon amounting to P5,037.00. against reinvestigation than his
insistence to collect the tax? On
On January 31, 1957 Lim Tian Teng October 15, 1957 the Collector of
Sons & Co., Inc. requested Internal Revenue wrote defendant that
its "request for a reinvestigation will be
granted only upon compliance with
General Circular No. V-258
August 20, 1957, which requires as a
prerequisite to the grant
reinvestigation the execution of a waiver
of the statute of limitations". In a
subsequent letter, he extended the
period within which to submit the
aforesaid waiver to December 31, 1957.
In effect, the Collector of Internal
Revenue placed in the hands of the
defendant the holding of
reinvestigation. However, no
reinvestigation was made inasmuch as
taxpayer failed to submit a written
waiver of the statute of limitations on or
before December 31, 1957.
omission automatically brought about
the denial of the request
reinvestigation.
Surigao Electric co. v. CTA
G.R. No. L-25289. June 28, 1974
FACTS: The petitioner Surigao Electric
Co., Inc., grantee of a legislative electric
franchise, received a warrant of distraint
and levy to enforce the collection from
"Mainit Electric" of a deficiency franchise
tax plus surcharge in the total amount of
P718.59. In a letter to the Commissioner
of Internal Revenue, the petitioner
contested this warrant, stating that it did
not have a franchise in Mainit, Surigao.
Thereafter the Commissioner advised
the petitioner to take up the matter with
the General Auditing Office. In a letter to
the Auditor General, the petitioner asked
for reconsideration of the assessment,
admitting liability only for the 2%
franchise tax in accordance with its
dated legislative franchise and not at the
higher rate of 5% imposed by section
of a 259 of the National Internal Revenue
Code, as amended, which latter rate the
Auditor General used as basis in
computing the petitioner's deficiency
franchise tax.
The controversy culminated in a revised
assessment in the amount of
P11,533.53, representing the petitioner's
a deficiency franchise-tax and surcharges
such thereon for the period from April 1, 1956
to June 30, 1959. The petitioner then
requested a recomputation of the
revised assessment. The
Such Commissioner, however, denied the
request for recomputation. On August
for 1, 1963 the petitioner appealed to the
Court of Tax Appeals. The tax court
dismissed the appeal on October 1,
1965 on the ground that the appeal was
filed beyond the thirty-day period of
appeal provided by section 11 of
Republic Act 1125.
ISSUE: whether or not the petitioner's
appeal to the Court of Tax Appeals was
time-barred.
HELD: YES. A close reading of the
numerous letters exchanged between
the petitioner and the Commissioner
clearly discloses that the letter of
demand issued by the Commissioner
constitutes the definite determination of
the petitioner's deficiency franchise tax
liability or the decision on the disputed
assessment and, therefore, the decision
appealable to the tax court. Moreover,
the letter of demand dated April 29,
1963 unquestionably constitutes the
final action taken by the Commissioner
on the petitioner's several requests for
reconsideration and recomputation. In
this letter, the Commissioner not only in
effect demanded that the petitioner pay
the amount of P11,533.53 but also gave
warning that in the event it failed to pay,
the said Commissioner would be
constrained to enforce the collection
thereof by means of the remedies
provided by law. The tenor of the letter,
specifically, the statement regarding the
resort to legal remedies, unmistakably
indicates the final nature of the
determination made by the
Commissioner of the petitioner's
deficiency franchise tax liability.
To sustain the petitioner's contention
that the Commissioner's letter of June
28, 1963 denying its request for further
amendment of the revised assessment
constitutes the ruling appealable to the
tax court and that the thirty-day period
should, therefore, be counted from July
16, 1963, the day it received the June
28, 1963 letter, would, in effect, leave
solely to the petitioner's will the
determination of the commencement of
the statutory thirty-day period, and place
the petitioner — and for that matter, any
taxpayer — in a position, to delay at will
and on convenience the finality of a tax
assessment. This absurd interpretation
espoused by the petitioner would result
in grave detriment to the interests of the
Government, considering that taxes
constitute its life-blood and their prompt
and certain availability is an imperative
need.6
The revised assessment embodied in
the Commissioner's letter dated April 29,
1963 being, in legal contemplation, the
final ruling reviewable by the tax court,
the thirty-day appeal period should be
counted from May 8, 1963 (the day the
petitioner received a copy of the said
letter). From May 8, 1963 to June 7,
1963 (the day the petitioner, by
registered mail, sent to the
Commissioner its letter of June 6, 1963
requesting for further recomputation of
the amount demanded from it) saw the
lapse of thirty days. The June 6, 1963
request for further recomputation,
partaking of a motion for
reconsideration, tolled the running of the
thirty-day period from June 7, 1963 (the
day the petitioner sent its letter by
registered mail) to July 16, 1963 (the
day the petitioner received the letter of
the Commissioner dated June 28, 1963
turning down its request). The
prescriptive period commenced to run
again on July 16, 1963. The petitioner
filed its petition for review with the tax
court on August 1, 1963 — after the
lapse of an additional sixteen days. The
petition for review having been filed
beyond the thirty-day period, we rule
that the Court of Tax Appeals correctly
dismissed the same
Advertising Assoc. v. CA G.R. No. L-
59758 December 26, 1984
FACTS: Advertising Associates alleged
that it sold in 1949 its advertising agency
business to Philippine Advertising
Counsellors, that its business is limited
to the making, construction and personal properties as would be
installation of billboards and electric sufficient to satisfy the deficiency taxes.
signs and making and printing of The warrants were served upon the
posters, signs, handbills, etc. It contends taxpayer on April 18 and May 25, 1978.
that it is a media company, not an More than a year later, Acting
advertising company, It paid sales taxes Commissioner Efren I. Plana wrote a
for selling billboards, electric signs, letter justifying the assessments by
calendars, posters, etc., realty dealer's stating that the rental income of
tax for leasing billboards and electric Advertising Associates from billboards
signs and 3% contractor's tax for and neon signs constituted fees or
repairing electric signs. compensation for its advertising
The Commissioner required Advertising services. He requested the taxpayer to
Associates to pay P297,927.06 and pay the deficiency taxes within ten days
P84,773.10 as contractor's tax for 1967- from receipt of the demand; otherwise,
1971 and 1972, respectively, including the Bureau would enforce the warrants
25% surcharge (the latter amount of distraint. He closed his demand letter
includes interest) on its income from with this paragraph:
billboards and neon signs. The basis of
the assessment is the fact that the “T_h_i_s_ _y_o_u_ _m_a_y_
taxpayer's articles of incorporation _a_p_p_e_a_l_ _t_o_ _t_h_e_
provide that its primary purpose is to _C_o_u_r_t_ _o_f_ _T_a_x_
engage in general advertising business. _A_p_p_e_a_l_s_ _w_i_t_h_i_n_ _3_0_
Its income tax returns indicate that its _d_a_y_s_ _f_r_o_m_ _r_e_c_e_i_p_t_
business was advertising. _o_f_ _t_h_i_s_ _l_e_t_t_e_r_
_c_o_n_s_t_i_t_u_t_e_s_ _o_u_r_
Advertising Associates contested the _f_i_n_a_l_ _d_e_c_i_s_i_o_n_ _o_n_
assessments in its 'letters of June 25, _t_h_e_ _m_a_t_t_e_r_._ _I_f_
1973 (for the 1967-71 deficiency taxes) _y_o_u_ _a_r_e_ _n_o_t_
and March 7, 1974 (for the 1972 _a_g_r_e_e_a_b_l_e_._” _
deficiency). The Commissioner
reiterated the assessments in his letters Advertising Associates received that
of July 12 and September 16,1974. The letter on June 18, 1979. Nineteen days
taxpayer requested the cancellation of later or on July 7, it filed its petition for
the assessments in its letters of review. The Tax Court did not resolve
September 13 and November 21, 1974. the case on the merits. It ruled that the
Inexplicably, for about four years there warrants of distraint were the
was no movement in the case. Then, on Commissioner's appealable decisions.
March 31, 1978, the Commissioner Since Advertising Associates appealed
resorted to the summary remedy of from the decision of May 23, 1979, the
issuing two warrants of distraint, petition for review was filed out of time.
directing the collection enforcement It was dismissed. The taxpayer
division to levy on the taxpayer's appealed to this Court.

Issue: Whether or not the petition for
Review was filed on time.
HELD: YES. No amount of quibbling or
sophistry can blink the fact that said
letter, as its tenor shows, embodies the
Commissioner's final decision within the
meaning of section 7 of Republic Act
No. 1125. The Commissioner said so.
He even directed the taxpayer to appeal
it to the Tax Court.
The directive is in consonance with this
Court's dictum that the Commissioner
should always indicate to the taxpayer in
clear and unequivocal language what
constitutes his final determination of the
disputed assessment. That procedure is
demanded by the pressing need for fair
play, regularity and orderliness in
administrative action.
CIR v. Algue G.R. No. L-28896
February 17, 1988
FACTS: The record shows that on
January 14, 1965, the private
respondent, a domestic corporation
engaged in engineering, construction
and other allied activities, received a
letter from the petitioner assessing it in
the total amount of P83,183.85 as
delinquency income taxes for the years
1958 and 1959.
On January 18, 1965, Algue flied a letter
of protest or request for reconsideration,
which letter was stamp received on the
same day in the office of the petitioner.
On March 12, 1965, a warrant of
distraint and levy was presented to the
private respondent, through its counsel,
Atty. Alberto Guevara, Jr., who refused
to receive it on the ground of the
pending protest. A search of the protest
in the dockets of the case proved
fruitless. Atty. Guevara produced his file
copy and gave a photostat to BIR agent
Ramon Reyes, who deferred service of
the warrant. On April 7, 1965, Atty.
Guevara was finally informed that the
BIR was not taking any action on the
protest and it was only then that he
accepted the warrant of distraint and
levy earlier sought to be served. Sixteen
days later, on April 23, 1965, Algue filed
a petition for review of the decision of
the Commissioner of Internal Revenue
with the Court of Tax Appeals.
ISSUE: Whether or not the petition was
seasonably filed.
HELD: YES. The above chronology
shows that the petition was filed
seasonably. According to Rep. Act No.
1125, the appeal may be made within
thirty days after receipt of the decision or
ruling challenged. It is true that as a rule
the warrant of distraint and levy is "proof
of the finality of the assessment" and
renders hopeless a request for
reconsideration," being "tantamount to
an outright denial thereof and makes the
said request deemed rejected." But
there is a special circumstance in the
case at bar that prevents application of
this accepted doctrine. The proven fact
is that four days after the private
respondent received the petitioner's
notice of assessment, it filed its letter of
protest. This was apparently not taken
into account before the warrant of reconsideration or cancellation of the
distraint and levy was issued; indeed, same in a letter to the BIR
such protest could not be located in the Commissioner dated April 12, 1988.
office of the petitioner. It was only after BIR reiterated the tax assessments
Atty. Guevara gave the BIR a copy of while denying petitioner’s request for
the protest that it was, if at all, reinvestigation in a letter 1 dated
considered by the tax authorities. During January 24, 1991. Upon petitioner’s
the intervening period, the warrant was failure to pay the subject tax
premature and could therefore not be assessments within the prescribed
served. period, the Assistant Commissioner for
Collection, acting for the Commissioner
As the Court of Tax Appeals correctly of Internal Revenue, issued the
noted," the protest filed by private corresponding warrants of distraint
respondent was not pro forma and was and/or levy and garnishment. On
based on strong legal considerations. It November 8, 1991, petitioner filed a
thus had the effect of suspending on Petition for Review to contest the
January 18, 1965, when it was filed, the issuance of the warrants to enforce the
reglementary period which started on collection of the tax assessments.
the date the assessment was received,
viz., January 14, 1965. The period ISSUE: is whether or not a demand
started running again only on April 7, letter for tax deficiency assessments
1965, when the private respondent was issued and signed by a subordinate
definitely informed of the implied officer who was acting in behalf of the
rejection of the said protest and the Commissioner of Internal Revenue, is
warrant was finally served on it. Hence, deemed final and executory.
when the appeal was filed on April 23,
1965, only 20 days of the reglementary A demand letter for payment of
period had been consumed. delinquent taxes may be considered a
decision on a disputed or protested
assessment. The determination on
whether or not a demand letter is final is
conditioned upon the language used or
Oceanic Wireless v. CIR G.R. No. the tenor of the letter being sent to the
148380 December 9, 2005 taxpayer. We laid down the rule that the
Commissioner of Internal Revenue
FACTS: On March 17, 1988, petitioner should always indicate to the taxpayer in
received from the Bureau of Internal clear and unequivocal language what
Revenue (BIR) deficiency tax constitutes his final determination of the
assessments for the taxable year 1984 disputed assessment.
in the total amount of ₱8,644,998.71.
Petitioner filed its protest against the tax The rule of conduct would also obviate
assessments and requested a all desire and opportunity on the part of
the taxpayer to continually delay the
finality of the assessment – and,
consequently, the collection of the
amount demanded as taxes – by
repeated requests for recomputation
and reconsideration. On the part of the
Commissioner, this would encourage his
office to conduct a careful and thorough
study of every questioned assessment
and render a correct and definite
decision thereon in the first instance.
This would also deter the Commissioner
from unfairly making the taxpayer grope
in the dark and speculate as to which
action constitutes the decision
appealable to the tax court. Of greater
import, this rule of conduct would meet a
pressing need for fair play, regularity,
and orderliness in administrative action.

In this case, the letter of demand dated

January 24, 1991, unquestionably
constitutes the final action taken by the
Bureau of Internal Revenue on
petitioner’s request for reconsideration
when it reiterated the tax deficiency
assessments due from petitioner, and
requested its payment. Failure to do so
would result in the "issuance of a
warrant of distraint and levy to enforce
its collection without further notice."11 In
addition, the letter contained a notation
indicating that petitioner’s request for
reconsideration had been denied for
lack of supporting documents.