2. CIR vs. Marubeni Corp., G.R. no.

137377, December 18, 2001

FACTS: CIR examined the Manila branch’s books of accounts for fiscal year ending March 1985 of
Marubeni, and found that respondent had undeclared income from contracts with NDC and Philphos for
construction of a wharf/port complex and ammonia storage complex respectively.
On August 27, 1986, Marubeni received a letter from CIR assessing it for several deficiency
taxes. CIR claims that the income respondent derived were income from Philippine sources, hence
subject to internal revenue taxes. On Sept 1986, respondent filed 2 petitions for review with CTA: the
first, questioned the deficiency income, branch profit remittance and contractor’s tax assessments and
second questioned the deficiency commercial broker’s assessment.
On Aug 2, 1986, EO 41 declared a tax amnesty for unpaid income taxes for 1981-85, and that
taxpayers who wished to avail this should on or before Oct 31, 1986. Marubeni filed its tax amnesty
return on Oct 30, 1986. On Nov 17, 1986, EO 64 expanded EO 41’s scope to include estate and donor’s
taxes, extended the period of availment to Dec 15, 1986 and stated those who already availed amnesty
under EO 41 should file an amended return to avail of the new benefits. Marubeni filed a supplemental
tax amnesty return on Dec 15, 1986.
CTA found that Marubeni properly availed of the tax amnesty and deemed cancelled the
deficiency taxes. CA affirmed on appeal.

ISSUE: W/N Marubeni is exempted from paying tax.

HELD: Yes.
CIR claims Marubeni is disqualified from the tax amnesty because it falls under the exception in
Sec 4b of EO 41: “b)  Those with income tax cases already filed in Court as of the effectivity hereof;”
Petitioner argues that at the time respondent filed for income tax amnesty on Oct 30, 1986, a case had
already been filed and was pending before the CTA and Marubeni therefore fell under the exception.
However, the point of reference is the date of effectivity of EO 41 and that the filing of income
tax cases must have been made before and as of its effectivity. EO 41 took effect on Aug 22, 1986. The
case questioning the 1985 deficiency was filed with CTA on Sept 26, 1986. When EO 41 became
effective, the case had not yet been filed. Marubeni does not fall in the exception and is thus, not
disqualified from availing of the amnesty under EO 41 for taxes on income and branch profit remittance.
The difficulty herein is with respect to the contractor’s tax assessment (business tax) and
respondent’s availment of the amnesty under EO 64, which expanded EO 41’s coverage. When EO 64
took effect on Nov 17, 1986, it did not provide for exceptions to the coverage of the amnesty for
business, estate and donor’s taxes. Instead, Section 8 said EO provided that:
“Section 8. The provisions of Executive Orders Nos. 41 and 54 which are not contrary to or
inconsistent with this amendatory Executive Order shall remain in full force and effect.”
Due to the EO 64 amendment, Sec 4b cannot be construed to refer to EO 41 and its date of
effectivity. The general rule is that an amendatory act operates prospectively. It may not be given a
retroactive effect unless it is so provided expressly or by necessary implication and no vested right or
obligations of contract are thereby impaired.