Barcelon V CIR

5/22/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 498 5/22/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 498
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* FIRST DIVISION.
127
126 SUPREME COURT REPORTS ANNOTATED
Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal
Revenue VOL. 498, AUGUST 7, 2006 127
* Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue
G.R. No. 157064. August 7, 2006.
Tax Appeals, which by the very nature of its function is dedicated
BARCELON, ROXAS SECURITIES, INC. (now known as UBP
exclusively to the consideration of tax problems, has necessarily developed
Securities, Inc.), petitioner, vs. COMMISSIONER OF INTERNAL
an expertise on the subject, and its conclusions will not be overturned unless
REVENUE, respondent.
there has been an abuse or improvident exercise of authority. Such findings
can only be disturbed on appeal if they are not supported by substantial
Appeals; Factual findings of the Court of Appeals are binding on the evidence or there is a showing of gross error or abuse on the part of the Tax
Supreme Court; Exceptions.—While the general rule is that factual findings Court. In the absence of any clear and convincing proof to the contrary, this
of the Court of Appeals are binding on this Court, there are, however, Court must presume that the CTA rendered a decision which is valid in
recognized exceptions thereto, such as when the findings are contrary to every respect.
those of the trial court or, in this case, the CTA. Instances when the findings
of fact of the trial court and/or Court of Appeals may be reviewed by the Taxation; Assessment Notices; An assessment is made within the
Supreme Court are (1) when the conclusion is a finding grounded entirely prescriptive period if notice to this effect is released, mailed or sent by the
on speculation, surmises or conjectures; (2) when the inference made is Commissioner of Internal Revenue to the taxpayer within said period—
manifestly mistaken, absurd or impossible; (3) where there is a grave abuse receipt thereof by the taxpayer within the prescriptive period is not
of discretion; (4) when the judgment is based on a misapprehension of facts; necessary but this rule does not dispense with the requirement that the
(5) when the findings of fact are conflicting; (6) when the Court of Appeals, taxpayer should actually receive, even beyond the prescriptive period, the
in making its findings, went beyond the issues of the case and the same is assessment notice.—Under Section 203 of the National Internal Revenue
contrary to the admissions of both appellant and appellee; (7) the findings of Code (NIRC), respondent had three (3) years from the last day for the filing
the Court of Appeals are contrary to those of the trial court; (8) when the of the return to send an assessment notice to petitioner. In the case of
findings of fact are conclusions without citation of specific evidence on Collector of Internal Revenue v. Bautista, 105 Phil. 1326 (1959), this Court
which they are based; (9) when the facts set forth in the petition as well as in held that an assessment is made within the prescriptive period if notice to
the petitioners main and reply briefs are not disputed by the respondents; this effect is released, mailed or sent by the CIR to the taxpayer within said
and (10) the finding of fact of the Court of Appeals is premised on the period. Receipt thereof by the taxpayer within the prescriptive period is not
supposed absence of evidence and is contradicted by the evidence on record. necessary. At this point, it should be clarified that the rule does not dispense
(Misa v. Court of Appeals, G.R. No. 97291, 5 August 1992, 212 SCRA 217, with the requirement that the taxpayer should actually receive, even beyond
221-222) the prescriptive period, the assessment notice which was timely released,
mailed and sent.
Same; Court of Tax Appeals (CTA); The Supreme Court accords the
findings of fact by the Court of Tax Appeals (CTA) with the highest respect— Same; Presumptions; While a mailed letter is deemed received by the
the absence of any clear and convincing proof to the contrary, the Supreme addressee in the ordinary course of mail, this is still merely a disputable
Court must presume that the CTA rendered a decision which is valid in presumption subject to contravention, and a direct denial of the receipt
every respect.—Jurisprudence has consistently shown that this Court thereof shifts the burden upon the party favored by the presumption to prove
accords the findings of fact by the CTA with the highest respect. In Sea- that the mailed letter was indeed received by the addressee.—In Protector’s
Land Service Inc. v. Court of Appeals, 357 SCRA 441 (2001), this Court Services, Inc. v. Court of Appeals, 330 SCRA 404 (2000), this Court ruled
recognizes that the Court of that when a mail matter is sent by registered mail, there exists a
presumption, set forth under Section 3(v), Rule 131 of the Rules of Court,
https://central.com.ph/sfsreader/session/00000179932dbc27616e7a66000d00d40059004a/t/?o=False 1/15 https://central.com.ph/sfsreader/session/00000179932dbc27616e7a66000d00d40059004a/t/?o=False 2/15
that it was received in the regular course of mail. The facts to be proved in information. Moreover, she did not attest to the fact that she acquired the
order to raise this presumption are: (a) that the letter was properly addressed reports from
with
129
128
VOL. 498, AUGUST 7, 2006 129

Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue
persons under a legal duty to submit the same. Hence, Rule 130, Section 44
postage prepaid; and (b) that it was mailed. While a mailed letter is deemed finds no application in the present case. Thus, the evidence offered by
received by the addressee in the ordinary course of mail, this is still merely a respondent does not qualify as an exception to the rule against hearsay
disputable presumption subject to contravention, and a direct denial of the evidence.
receipt thereof shifts the burden upon the party favored by the presumption
to prove that the mailed letter was indeed received by the addressee. Assessment Notices; While an assessment is made when sent within the
prescribed period, even if received by the taxpayer after its expiration, this
Evidence; Presumptions; Hearsay Evidence; The presumption that rule makes it more imperative that the release, mailing, or sending of the
entries in official records made in the performance of his duty by a public notice be clearly and satisfactorily proved—mere notations made without
officer or by a person in the performance of a duty specially enjoined by the taxpayer’s intervention, notice, or control, without adequate supporting
law, are prima facie evidence of the facts therein stated, must be read in evidence, cannot suffice; otherwise, the taxpayer would be at the mercy of
accordance with the Court’s pronouncement in Africa v. Caltex (Phil.), Inc., the revenue offices, without adequate protection or defense.—Independent
16 SCRA 448 (1966), that an entrant must have personal knowledge of the evidence, such as the registry receipt of the assessment notice, or a
facts stated by him or such facts were acquired by him from reports made by certification from the Bureau of Posts, could have easily been obtained. Yet
persons under a legal duty to submit the same.—Respondent offered the respondent failed to present such evidence. In the case of Nava v.
entry in the BIR record book and the testimony of its record custodian as Commissioner of Internal Revenue, 13 SCRA 104 (1965), this Court
entries in official records in accordance with Section 44, Rule 130 of the stressed on the importance of proving the release, mailing or sending of the
Rules of Court, which states that: Section 44. Entries in official records.— notice. While we have held that an assessment is made when sent within the
Entries in official records made in the performance of his duty by a public prescribed period, even if received by the taxpayer after its expiration (Coll.
officer of the Philippines, or by a person in the performance of a duty of Int. Rev. vs. Bautista, L-12250 and L-12259, May 27, 1959), this ruling
specially enjoined by law, are prima facie evidence of the facts therein makes it the more imperative that the release, mailing, or sending of the
stated. The foregoing rule on evidence, however, must be read in accordance notice be clearly and satisfactorily proved. Mere notations made without the
with this Court’s pronouncement in Africa v. Caltex (Phil.), Inc., 16 SCRA taxpayer’s intervention, notice, or control, without adequate supporting
448 (1966), where it has been held that an entrant must have personal evidence, cannot suffice; otherwise, the taxpayer would be at the mercy of
knowledge of the facts stated by him or such facts were acquired by him the revenue offices, without adequate protection or defense.
from reports made by persons under a legal duty to submit the same. There
are three requisites for admissibility under the rule just mentioned: (a) that PETITION for review on certiorari of a decision of the Court of
the entry was made by a public officer, or by another person specially Appeals.
enjoined by law to do so; (b) that it was made by the public officer in the
performance of his duties, or by such other person in the performance of a The facts are stated in the opinion of the Court.
duty specially enjoined by law; and (c) that the public officer or other person Macalino & Associates for petitioner.
had sufficient knowledge of the facts by him stated, which must have been Pablo M. Bastes, Jr. for respondent.
acquired by him personally or through official information x x x. In this
CHICO-NAZARIO, J.:
case, the entries made by Ingrid Versola were not based on her personal
knowledge as she did not attest to the fact that she personally prepared and This is a Petition for Review on Certiorari, under Rule 45 of the
mailed the assessment notice. Nor was it stated in the transcript of Rules of Court, seeking to set aside the Decision of the Court of
stenographic notes how and from whom she obtained the pertinent Appeals in CA-G.R. SP No. 60209 dated 11 July

130 On 31 July 1998, petitioner filed a petition for review with the CTA.
After due notice and hearing, the CTA rendered a decision in favor
of petitioner on 17 May 2000. The CTA ruled on the primary issue
of prescription and found it unnecessary to decide the issues on the
Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal validity and propriety of the assessment. It maintained that while a
Revenue mailed letter is deemed received by the addressee in the course of
mail, this is merely a disputable presumption. It reasoned that the
1
2002, ordering the petitioner to pay the Government the amount of direct denial of the petitioner shifts the burden of proof to the
P826,698.31 as deficiency income tax for the year 1987 plus 25% respondent that the mailed letter was actually received by the
surcharge and 20% interest per annum. The Court of Appeals, in its petitioner. The CTA found the BIR records submitted by the
assailed Decision, reversed the Decision of the Court of Tax Appeals respondent immaterial, self-serving, and therefore insufficient to
2
(CTA) dated 17 May 2000 in C.T.A. Case No. 5662. prove that the assessment notice was mailed and duly received by
5
Petitioner Barcelon, Roxas Securities Inc. (now known as UBP the petitioner. The dispositive portion of this decision reads:
Securities, Inc.) is a corporation engaged in the trading of securities.
“WHEREFORE, in view of the foregoing, the 1988 deficiency tax
On 14 April 1988, petitioner filed its Annual Income Tax Return for
assessment against petitioner is hereby CANCELLED. Respondent is
taxable year 1987. After an audit investigation conducted by the
hereby ORDERED TO DESIST from collecting said deficiency tax. No
Bureau of Internal Revenue (BIR), respondent Commissioner of 6
pronouncement as to costs.”
Internal Revenue (CIR) issued an assessment for deficiency income
tax in the amount of P826,698.31 arising from the disallowance of
On 6 June 2000, respondent moved for reconsideration of the
the item on salaries, bonuses and allowances in the amount of
aforesaid decision but was denied by the CTA in a Resolution dated
P1,219,093,93 as part of the deductible business expense since
25 July 2000. Thereafter, respondent appealed to the Court of
petitioner failed to subject the salaries, bonuses and allowances to
Appeals on 31 August 2001. In reversing the CTA decision, the
withholding taxes. This assessment was covered by Formal
Court of Appeals found the evidence presented by the respondent to
Assessment Notice No. FAN-1-87-91-000649 dated 1 February
be sufficient proof that the tax assessment notice was mailed to the
1991, which, respondent alleges, was sent to petitioner through
petitioner, therefore the legal presumption that it was received
registered mail on 6 February 1991.3 However, petitioner denies 7
should apply. Thus, the Court of Appeals ruled that:
receiving the formal assessment notice.
On 17 March 1992, petitioner was served with a Warrant of “WHEREFORE, the petition is hereby GRANTED. The decision dated May
Distraint and/or Levy to enforce collection of the deficiency income 17, 2000 as well as the Resolution dated July 25, 2000 are hereby
tax for the year 1987. Petitioner filed a formal protest, dated 25 REVERSED and SET ASIDE, and a new on entered ordering the
March 1992, against the Warrant of Distraint and/or Levy, respondent to pay the amount of P826,698.31 as defi-
requesting for its cancellation. On 3 July 1998, petitioner received a
letter dated 30 April 1998 from the respondent denying the protest _______________
4
with finality.
5 Id., at pp. 22-27.
6 Id., at p. 27.
_______________
7 Id., at pp. 16-17.
1 Penned by Associate Justice Delilah Vidallon-Magtolis with Associate Justice
Candido Rivera and Associate Justice Sergio Pestaño, concurring. Rollo, pp. 12-17. 132
2 Id., at pp. 18-28.
3 Id., at p. 18. 132 SUPREME COURT REPORTS ANNOTATED
4 Id., at pp. 18-19.
131
ciency income tax for the year 1987 plus 25% surcharge and 20% interest
per annum from February 6, 1991 until fully paid pursuant to Sections 248
8
VOL. 498, AUGUST 7, 2006 131 and 249 of the Tax Code.”
Revenue Petitioner moved for reconsideration of the said decision but the
same was denied by the9 Court of Appeals in its assailed Resolution
9
dated 30 January 2003. The core issue in this case is whether or not respondent’s right to
Hence, this Petition for Review on Certiorari raising the assess petitioner’s alleged deficiency income tax is barred by
following issues: prescription, the resolution of which depends on reviewing the
findings of fact of the Court of Appeals and the CTA.
I While the general rule is that factual findings of the Court of
WHETHER OR NOT LEGAL BASES EXIST FOR THE COURT OF
Appeals are binding on this Court, there are, however, recognized
11
APPEALS’ FINDING THAT THE COURT OF TAX APPEALS

exceptions thereto, such as when the findings are contrary to those
12
COMMITTED “GROSS ERROR IN THE APPRECIATION OF FACTS.”

of the trial court or, in this case, the CTA.
In its Decision, the CTA resolved the issues raised by the parties
II thus:
WHETHER OR NOT THE COURT OF APPEALS WAS CORRECT IN

_______________
REVERSING THE SUBJECT DECISION OF THE COURT OF TAX
APPEALS. 10 Rollo, pp. 55-56.
11 Instances when the findings of fact of the trial court and/or Court of Appeals
III may be reviewed by the Supreme Court are (1) when the conclusion is a finding
grounded entirely on speculation, surmises or conjectures; (2) when the inference
WHETHER OR NOT THE RIGHT OF THE BUREAU OF INTERNAL
made is manifestly mistaken, absurd or impossible; (3) where there is a grave abuse
REVENUE TO ASSESS PETITIONER FOR ALLEGED DEFICIENCY
of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when
INCOME TAX FOR 1987 HAS PRESCRIBED.
the findings of fact are conflicting; (6) when the Court of Appeals, in making its
IV findings, went beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee; (7) the findings of the Court of Appeals
WHETHER OR NOT THE RIGHT OF THE BUREAU OF INTERNAL are contrary to those of the trial court; (8) when the findings of fact are conclusions
REVENUE TO COLLECT THE SUBJECT ALLEGED DEFICIENCY without citation of specific evidence on which they are based; (9) when the facts set
INCOME TAX FOR 1987 HAS PRESCRIBED. forth in the petition as well as in the petitioners main and reply briefs are not disputed
by the respondents; and (10) the finding of fact of the Court of Appeals is premised
V
on the supposed absence of evidence and is contradicted by the evidence on record.
WHETHER OR NOT PETITIONER IS LIABLE FOR THE ALLEGED (Misa v. Court of Appeals, G.R. No. 97291, 5 August 1992, 212 SCRA 217, 221-222)
DEFICIENCY INCOME TAX ASSESSMENT FOR 1987. 12 Metro Construction, Inc. v. Chatham Properties, Inc., 418 Phil. 176, 206; 365
SCRA 697, 726 (2001).
_______________ 134
8 Id., at p. 17.
9 CA Rollo, p. 147. 134 SUPREME COURT REPORTS ANNOTATED
133
Revenue
VOL. 498, AUGUST 7, 2006 133 Jurisprudence is replete with cases holding that if the taxpayer denies ever
Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal having received an assessment from the BIR, it is incumbent upon the latter
Revenue to prove by competent evidence that such notice was indeed received by the
addressee. The onus probandi was shifted to respondent to prove by
VI contrary evidence that the Petitioner received the assessment in the due
course of mail. The Supreme Court has consistently held that while a mailed
WHETHER OR NOT THE SUBJECT ASSESSMENT IS VIOLATIVE OF letter is deemed received by the addressee in the course of mail, this is
10
THE RIGHT OF PETITIONER TO DUE PROCESS. merely a disputable presumption subject to contravention and a direct denial
thereof shifts the burden to the party favored by the presumption to prove
This Court finds the instant Petition meritorious. that the mailed letter was indeed received by the addressee (Republic vs.
Court of Appeals, 149 SCRA 351). Thus as held by the Supreme Court in

Gonzalo P. Nava vs. Commissioner of Internal Revenue, 13 SCRA 104, the taxpayer would be at the mercy of the revenue offices, without adequate
January 30, 1965: protection or defense.” (Nava vs. CIR, 13 SCRA 104, January 30, 1965).
“The facts to be proved to raise this presumption are (a) that the letter was properly xxxx
addressed with postage prepaid, and (b) that it was mailed. Once these facts are The failure of the respondent to prove receipt of the assessment by the
proved, the presumption is that the letter was received by the addressee as soon as it Petitioner leads to the conclusion that no assessment was issued.
could have been transmitted to him in the ordinary course of the mail. But if one of Consequently, the government’s right to issue an assessment for the said
the said facts fails to appear, the presumption does not lie. (VI, Moran, Comments on period has already prescribed. (Industrial Textile Manufacturing Co. of the
13
the Rules of Court, 1963 ed, 56-57 citing Enriquez vs. Sunlife Assurance of Canada, Phils., Inc. vs. CIR CTA Case 4885, August 22, 1996).
41 Phil 269).”
Jurisprudence has consistently shown that this Court accords the
In the instant case, Respondent utterly failed to discharge this duty. No findings of fact by the CTA with the highest respect. In Sea-Land
14
substantial evidence was ever presented to prove that the assessment notice Service Inc. v. Court of Appeals this Court recognizes that the
No. FAN-1-87-91-000649 or other supposed notices subsequent thereto Court of Tax Appeals, which by the very nature of its function is
were in fact issued or sent to the taxpayer. As a matter of fact, it only dedicated exclusively to the consideration of tax problems, has
submitted the BIR record book which allegedly contains the list of necessarily developed an expertise on the subject, and its
taxpayer’s names, the reference number, the year, the nature of tax, the conclusions will not be overturned unless there has been an abuse or
city/municipality and the amount (see Exh. “5-a” for the Respondent). improvident exercise of
Purportedly, Respondent intended to show to this Court that all assessments
made are entered into a record book in chronological order outlining the _______________
details of the assessment and the taxpayer liable thereon. However, as can
be gleaned from the face of the exhibit, all entries thereon appears to be 13 Rollo, pp. 24-27.
immaterial and impertinent in proving that the assessment notice was mailed 14 G.R. No. 122605, 30 April 2001, 357 SCRA 441, 445-446.
and duly received by Petitioner. Nothing indicates therein all essential facts
that could sustain the burden of proof being shifted to the Respondent. What 136
is essential to prove the fact of mailing is the registry receipt issued by the
Bureau of Posts or the 136 SUPREME COURT REPORTS ANNOTATED
135 Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal

Revenue
VOL. 498, AUGUST 7, 2006 135

authority. Such findings can only be disturbed on appeal if they are
Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue not supported by substantial evidence or there is a showing of gross
15
error or abuse on the part of the Tax Court. In the absence of any
Registry return card which would have been signed by the Petitioner or its clear and convincing proof to the contrary, this Court must presume
authorized representative. And if said documents cannot be located, that the CTA rendered a16decision which is valid in every respect.
Respondent at the very least, should have submitted to the Court a Under Section 203 of the National Internal Revenue Code
certification issued by the Bureau of Posts and any other pertinent document (NIRC), respondent had three (3) years from the last day for the
which is executed with the intervention of the Bureau of Posts. This Court filing of the return to send an assessment notice to17petitioner. In the
does not put much credence to the self serving documentations made by the case of Collector of Internal Revenue v. Bautista, this Court held
BIR personnel especially if they are unsupported by substantial evidence that an assessment is made within the prescriptive period if notice to
establishing the fact of mailing. Thus: this effect is released, mailed or sent by the CIR to the taxpayer
“While we have held that an assessment is made when sent within the prescribed
within said period. Receipt thereof by the taxpayer within the
period, even if received by the taxpayer after its expiration (Coll. of Int. Rev. vs.
prescriptive period is not necessary. At this point, it should be
Bautista, L-12250 and L-12259, May 27, 1959), this ruling makes it the more
clarified that the rule does not dispense with the requirement that the
imperative that the release, mailing or sending of the notice be clearly and
taxpayer should actually receive, even beyond the prescriptive
satisfactorily proved. Mere notations made without the taxpayer’s intervention,
period, the assessment notice which was timely released, mailed and
notice or control, without adequate supporting evidence cannot suffice; otherwise,
sent.
In the present case, records show that petitioner filed its Annual
18
Income Tax Return for taxable year 1987 on 14 April 1988. The
last day for filing by petitioner of its return was year. The final adjustment return shall be filed on or before the fifteenth (15th) day of April, or
on or before the fifteenth (15th) day of the fourth (4th) month following the close of the fiscal
year, as the case may be.
_______________
15 Commissioner of Internal Revenue v. Mitsubishi Metal Corp., G.R. Nos. 54908

20 Rollo, pp. 53-54.
and 80041, 22 January 1990, 181 SCRA 214, 220.

21 386 Phil. 611, 623; 330 SCRA 404, 414-415 (2000).
16 Section 203. Period of Limitation Upon Assessment and Collection.—Except as
22 Section 3(v), Rule 131, of the 1997 Rules of Court provides:
provided in the Section 222, internal revenue taxes shall be assessed within three (3) Sec. 3. Disputable presumptions.—The following presumptions are satisfactory if
years after the last day prescribed by law for the filing of the return, and no uncontradicted, but may be contradicted and overcome by other evidence:
proceeding in court without assessment for the collection of such taxes shall be begun xxxx
after expiration of such period: Provided, that in a case where a return is filed beyond (v) That a letter duly directed and mailed was received in the regular course of the mail;
the period prescribed by law, the three (3)-year period shall be counted from the day
the return was filed. For purposes of this Section, a return filed before the last day 138
prescribed by law for the filing thereof shall be considered as filed on such last day.
17 105 Phil. 1326, 1327 (1959).
18 Rollo, pp. 14 and 24.
137 Revenue
VOL. 498, AUGUST 7, 2006 137 thereof shifts the burden upon the party favored by the presumption
to prove 23that the mailed letter was indeed received by the
addressee.
Revenue
In the present case, petitioner denies receiving the assessment
19 notice, and the respondent was unable to present substantial
on 15 April 1988, thus, giving respondent until 15 April 1991 evidence that such notice was, indeed, mailed or sent by the
within which to send an assessment notice. While respondent avers respondent before the BIR’s right to assess had prescribed and that
that it sent the assessment notice dated 1 February 1991 on 6 said notice was received by the petitioner. The respondent presented
February 1991, within the three (3)-year period prescribed by law, the BIR record book where the name of the taxpayer, the kind of tax
petitioner denies having received an assessment notice from assessed, the registry receipt number and the date of mailing were
respondent. Petitioner alleges that it came to know of the deficiency noted. The BIR records custodian, Ingrid Versola, also testified that
tax assessment only on 17 March 1992 when it was served with the she made the entries therein. Respondent offered the entry in the
20
Warrant of Distraint and Levy. BIR record book and the testimony of its record custodian as entries
21
In Protector’s Services, Inc. v. Court of Appeals, this Court in official records in accordance with Section 44, Rule 130 of the
24
ruled that when a mail matter is sent by registered mail, there exists Rules of Court, which states that:
a presumption, set forth under Section 3(v), Rule 131 of the Rules of
22
Court, that it was received in the regular course of mail. The facts Section 44. Entries in official records.—Entries in official records made in
to be proved in order to raise this presumption are: (a) that the letter the performance of his duty by a public officer of the Philippines, or by a
was properly addressed with postage prepaid; and (b) that it was person in the performance of a duty specially enjoined by law, are prima
mailed. While a mailed letter is deemed received by the addressee in facie evidence of the facts therein stated.
the ordinary course of mail, this is still merely a disputable
presumption subject to controversion, and a direct denial of the The foregoing rule on evidence, however, must be read in
receipt accordance with this Court’s pronouncement in Africa v. Caltex
25
(Phil.), Inc., where it has been held that an entrant must have
personal knowledge of the facts stated by him or such facts were
_______________
acquired by him from reports made by persons under a legal duty to
19 Section 77 (B) of the NIRC states that: submit the same.
(B) Time of Filing the Income Tax Return.—The corporate quarterly declaration shall be filed “There are three requisites for admissibility under the rule just mentioned:
within sixty (60) days following the close of each of the first three (3) quarters of the taxable (a) that the entry was made by a public officer, or by another person

specially enjoined by law to do so; (b) that it was made by the public officer 26 Transcript of Stenographic Notes, Barcelon, Roxas Securities, Inc. v.
in the performance of his duties, or by Commissioner of Internal Revenue, CTA Case No. 5662, 25 August 1998, pp. 1-13.
27 121 Phil. 117, 123-124; 13 SCRA 104, 110 (1965).
_______________
140
23 Republic v. Court of Appeals, G.R. No. L-38540, 30 April 1987, 149 SCRA 351, 355.
24 Rollo, p. 56.
25 123 Phil. 272, 277; 16 SCRA 448, 452 (1966).
139 Revenue
VOL. 498, AUGUST 7, 2006 139 In the present case, the evidence offered by the respondent fails to
convince this Court that Formal Assessment Notice No. FAN-1-87-
91-000649 was released, mailed, or sent before 15 April 1991, or
such other person in the performance of a duty specially enjoined by law;
before the lapse of the period of limitation upon assessment and
and (c) that the public officer or other person had sufficient knowledge of
collection prescribed by Section 203 of the NIRC. Such evidence,
the facts by him stated, which must have been acquired by him personally or
therefore, is insufficient to give rise to the presumption that the
through official information x x x.”
assessment notice was received in the regular course of mail.
Consequently, the right of the government to assess and collect the
In this case, the entries made by Ingrid Versola were not based on alleged deficiency tax is barred by prescription.
her personal knowledge as she did not attest to the fact that she IN VIEW OF THE FOREGOING, the instant Petition is
personally prepared and mailed the assessment notice. Nor was it GRANTED. The assailed Decision of the Court of Appeals in CA-
26
stated in the transcript of stenographic notes how and from whom G.R. SP No. 60209 dated 11 July 2002, is hereby REVERSED and
she obtained the pertinent information. Moreover, she did not attest SET ASIDE, and the Decision of the Court of Tax Appeals in C.T.A.
to the fact that she acquired the reports from persons under a legal Case No. 5662, dated 17 May 2000, cancelling the 1988 Deficiency
duty to submit the same. Hence, Rule 130, Section 44 finds no Tax Assessment against Barce-lon, Roxas Securitites, Inc. (now
application in the present case. Thus, the evidence offered by known as UPB Securities, Inc.) for being barred by prescription, is
respondent does not qualify as an exception to the rule against hereby REINSTATED. No costs.
hearsay evidence. SO ORDERED.
Furthermore, independent evidence, such as the registry receipt
of the assessment notice, or a certification from the Bureau of Posts, Panganiban (C.J., Chairman), Ynares-Santiago, Austria-
could have easily been obtained. Yet respondent failed to present Martinez and Callejo, Sr., JJ., concur.
such evidence.
27 Petition granted, assailed decision reversed and set aside.
In the case of Nava v. Commissioner of Internal Revenue, this
Court stressed on the importance of proving the release, mailing or Notes.—Almost invariably in an ad valorem tax, as well as in
sending of the notice. income tax, estate and gift taxes, and the value added tax, the tax
paid or withheld is not deducted from the tax base. (Bank of America
“While we have held that an assessment is made when sent within the
NT & SA vs. Court of Appeals, 234 SCRA 302 [1994])
prescribed period, even if received by the taxpayer after its expiration (Coll.
Where the Secretary of Justice reviews, pursuant to law, a tax
of Int. Rev. vs. Bautista, L-12250 and L-12259, May 27, 1959), this ruling
measure enacted by a local government unit to determine if the
makes it the more imperative that the release, mailing, or sending of the
officials performed their functions in accordance with law, that is,
notice be clearly and satisfactorily proved. Mere notations made without the
with the prescribed procedure for the enactment of tax ordinances
taxpayer’s intervention, notice, or control, without adequate supporting
and the grant of powers under the Local
evidence, cannot suffice; otherwise, the taxpayer would be at the mercy of
the revenue offices, without adequate protection or defense.” 141
_______________
VOL. 498, AUGUST 7, 2006 141
Heirs of Enrique Diaz vs. Virata
5/22/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 498
Government Code, the same is an act of mere supervision, not

control. (Drilon vs. Lim, 235 SCRA 135 [1994])
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Barcelon V CIR

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Barcelon V CIR

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5/22/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 498 5/22/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 498

VOL. 498, AUGUST 7, 2006 129

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APPEALS’ FINDING THAT THE COURT OF TAX APPEALS

COMMITTED “GROSS ERROR IN THE APPRECIATION OF FACTS.”

WHETHER OR NOT THE COURT OF APPEALS WAS CORRECT IN

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135 Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal

VOL. 498, AUGUST 7, 2006 135

15 Commissioner of Internal Revenue v. Mitsubishi Metal Corp., G.R. Nos. 54908

and 80041, 22 January 1990, 181 SCRA 214, 220.

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Government Code, the same is an act of mere supervision, not

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