002 CIR v.

VILLA (PELIÑO)
January 2, 1968 | Bengzon, J.P., J. | Jurisdiction

PETITIONER: Commissioner of Internal Revenue

RESPONDENTS: Leonardo S. Villa and The Court of Appeals

SUMMARY: Leonardo (a doctor) and his wife (Spouses Villa) filed joint income tax
returns for the years 1951-1956 (and certain dates). The BIR determined the income of
Spouses Villa by the use of networth method and issued on February 23, 1961
assessments for deficiency income for the years 1951-1954 and 1956 and also for
residence tax for 1951 to 1957. Leonardo received the assessments on April 7, 1961.
Without contesting the assessments in the BIR, he filed on May 4, 1961 a petition for
review in the CTA. CTA took cognizance and tried the case on the merits, wherein they
ruled that Spouses Villa are not liable to pay the deficiency income tax but liable only for
the deficiency residence tax. Hence, this petition by the CIR. The issue in this case is
whether or not the CTA had jurisdiction to entertain the appeal. The SC held in the
negative. The law conferring jurisdiction in the CTA is found in Sec. 7 of RA 1125. The
word ‘decisions’ in that par. 1 of that section has been interpreted to mean decisions of
the CIR on the protest of the taxpayer against the assessments. Definitely, the word does
not signify the assessment itself. This interpretation finds support in Sec. 11 of RA 1125
which pertains to who may appeal and the effect of appeal. The provision uses the word
‘decisions’ and not ‘assessments’, further indicating the legislative intention to subject to
judicial review the decision of the Commissioner on the protest against an assessment but
not the assessment itself. Since in this case, Spouses Villa appealed the assessment of
the CIR without previously contesting the same, the appeal was premature and the
CTA had no jurisdiction to entertain the appeal. For as stated, the jurisdiction of the
CTA is to review by appeal decisions of Internal Revenue on disputed assessments. The
CTA is a court of special jurisdiction. As such, it can take cognizance only of such
matters as are clearly within its jurisdiction.

DOCTRINE: CTA has jurisdiction to review the decision of the CIR on the protest
against an assessment, but not to review the assessment itself. CTA is a court of special
jurisdiction. As such, it can take cognizance only of such matters that are clearly within
its jurisdiction.