Petit | vs. Commissionrr of Internal Arvente

SEPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

Petit

| versus CTA CASE NO, 1571.

COMMISSIONRR OF INTERNAL

ARVENTE, Respondent.

Rtonwnenunnrnanvwwenewe §

dine se

Drereros

Ths ds an appeal from the decision of re- spondent assessing and demanding from petitioner the total amount of P25,651.5% aa deficiency in- come tax for the years 1954 to 1960, inclusive of surcherge and interest.

‘8 an offshoot of the iovestigation conducted

by the Presidential Anti-Graft Committee (PAGCOM)

against petitioner, a former goverrment official, for unexplained weelth under Republic Act to. 1379, a tentative report on the tex aspeet of the investigation wae made by Sr. Nevenve “xaminer “Alfonse B, Camillo to the respondent Commissioner ef Internal Revenue. Thereafter, the case was referred to "xaminer Conrado A. Svesada for re- investigation who rendered his report dated June 29, 1962. ‘Under date of August 29, 1962, respon- dent assessed and demanded fron petitioner the

DECISION «

CTA CASK WO, 1971 aggregate amount of 025,651.84 as deficienay in-~ come tax for the years 195% te 1960, inclusive eof surcharge and interest, computed as follows:

i1gc% Compromise for non-filing of return . . « « 220,00 AB=6.1%3-62/55 per returm . «sso seen ose Lees: Personal & additional exemptions. . oe ees Me ees es ene s ax : eeeeeeoenee Less: Amount elready avsersed . . » « « Pela ce soe ee © 6 © @ @ 6 Adds ea eo ys 59 to 6-20-62 eo © ee © 8 8 TOTAL AMOUNT DUR oes 2@ @ @ @ @ £ bB=19532~62/56 po As pad yp tori esneseeee 1) Undeclared selaries from ;

(3) Undeclared e income favicon «. °° ess bral @ aaaitional ¢ ons Tax due oh aS e¢¢98 6 @#e#2e#s# gurchar or “a a a 2 9 ° oO s

Fa)

® e o * Net income by reconstruction — aa tax ein cleees ee v6 * * e 645002090 ; income detailed as fellows:

305 a

DECISION «

CTA CASE WO, 457% 3 —— ’ 60.00

(1) mera me re 1 ed ret. filed in Total net income per invest. Fie Hi8s Less: Net income per ret.

reconstruetion ong 500008 | income «s tetatan (7! epemelale Net income as reinvestigation .. « « 9726 Less: Personal & additional exemptions aS Ge 2 ae eseee 9 e Tax due thereon Leih @ h @etee « Less: Amount already assessed eeeeee , 9 oe¢np tO @ @ @ @ 6 6 a 1 $F surehar erest fron :

ae Ce ee ee ee ee ee ee) ed 901-1071 9-62/58 Net ineome ty reconstruction based peid ar a) *¢* @ P41,636 46 — ar bots ty PeamnePtt ase income e reo.

Adds Income not reflected :

rete Sotel ant Toscan ane tneest. WET a ® eeeeksbr+tras#e oe Tax due cose oe evaeseeese Less: Amount already assessed .« 5 2s * Bela @¢ oneneenetses @ adds o*# eve @e © we © 8 . erest from 6-2 -59 t 6-20-62. *6¢eeen8 © © @ TOTAL 7 ose * © a a ee er

QQnMRn 1407252/59

Net income per return ee ee ee ee ee ee ee ® 7,560,060 306

DECIGION

CAsr NO. 1571 ie Net income et e@eees2e#e##ee8e @ 8© @ ®@ + 8,00 Undeclared incons ince to sequire hae * Undeclared wAPCO “aifferential oe eet to eet @ Tax due thereon e o 0 * Leser rere already assessed. ° * ses ¢e¢ *# Adas 598 sur a ee!

uonthiy interest at tw TOTAL ANOUNT DUE cence enns 18.6.9 ‘Undeclared inecne used te sequire eee # @ Lesat cersonal adaitional exec rts ons Amovnt eubject te tex .

Aad: surcharge -e* © © @ ar} 2,53 6.00 monthly intersst from 4-18-64 to 8-19-62 TORAL AMOUNT DUE oe os ee eee Emus (Exhas B and 25, pre 199-202, BIN ree.)

Tn a letter dated September 17, 1962, petitioner through counsel disputed the legelity of the afere- Said assessment and requested the reinvestigetion thereof. In reply to the request, respondent esked petitioner to accomplish a» blank form for waiver ef preseription in order that the request for reinves- tigation way be given due eourse. Setober 17, 1962, petitioner executed a waiver, except for the years 199%, 1955 and 1956, the prescriptive periods of which were not weived on the ground that the right of the Government to assess the tax for said

DRCISION «

CTA CASE NO. 1571 5 years hed long preseribed. in a letter dated November 5S, 1962, respondent informed petitioner that no reinvestigation could be granted unlesa the waiver also covered the years 195%, 1955 and 1956. Peti- tioner acceded te the condition imposed, thereby eliminating the exception fer the said years.

On May 31, 1963, counsel for petitioner sub- mitted their meworandum on the request for reeon- sideration, stating, among other things, that the sums of $10,000.00 and ®%,000.00 represent leans extended to petitioner and that certain amounts were erroneously considered by respondent as coming from the funds of petitioner. ‘etitioner also assailed the imposition of 50% fraud penalty (pps 231~237, BIR ree.)s Om May 13, 1964, re- spondent informed the counsel te request petitioner to pay the deficiency tex, otherwise he vould be constrained te enforce the collection through the remedies provided for by law. In reply te this communication, petitioner requested that the letter of May 31, 1963 be considered re~subnitted and be the basis of the decision ef the Appellate Divi- sion, On September 23, 1964, respondent issued @ warrant of distraint and levy against the pro- perties ef petitioner to enforce the eellection 308

DECISIGN «

CTA CASK NO. 1571 ‘ of the income taxes involved in this case. Gub- sequently, in a letter dated November 17, 196%, petitioner requested that the warrant ef distraint and levy be lifted.

Finally, respondent informed petitioner, in a@ letter dated January 4, 1965, that the issuance eof: the warrant of distraint and levy all the more proved the finality of the assessments and there- fore, the collection through the warrant of the sum of 025,691.84, plus inerements ineident te Gelingueney would proceed. | lence, the filing of the instant petition for review on February 12, 1965, te which re- sponéent filed his answer on Apri 125 1965 (po 33, OTA ree.).

The issues raised fer our consideration aret

1. Whether of not this Court has jurisdiction ever the case;

the Government te essess pets for defi income tax for 199, 1955 and 1956 has already bed;

3. Whether or not the “Sources and Application of Fund" method used respondent in determining the de- fieieney income tax herein is aceen~ table in this jurisdiction and a valid method of reconstrueting income; and Seeneee eanes or not petitioner £25 65.2 or Fo ogy Bo as deficiency income ’ of deficiency ete rend ine! fount

DECISION «

CTA CAS® BW. 157% 7 1 the 199+, 1955, 1956 997, 1958, 1959 amd 1900.

The issue of jurisdiction is an affirmative . defense raised in respondent's answer where it is contended thet the appealable decision in this case is the letter-decision dated August 20, 1962. This 4ssue is alse raised in respondent's memo- randum. ‘etitioner, on the other hand, considers the letter dated January 4+, 1965, as the final and appealable decision but his memorandum dees not press the point.

To our mind, the appealable decision is the letter of respontent dated May 13, 196%, addressed te counsel for petitioner which reads in part:

Ia view thereof, you are hereby requested to afvise your client to 1962, els the pebuhete ties for’ 2 ’ Saebdiees Office be constrained to the remedies ded for by law. Ip.

259, Bin Fee. ” ad ( the foregoing demand appears to have a tenor of finality for it threatens collection of the deficteney tax upon failure to pay the sawe on a stated date. (St. Stephen's Assn. v. Coll., 1% hile 34%.) It 49 significant on the other hand that although counsel for petitioner asked re- 310

DECISION «

submission of their letter to respondent é¢ated May 3%, 1963, respondent appears to have brushed this onside with his silence and instead issued s warrant of distraint for the collection of the Geficieney tex as stated in his letter of May 134 As eeid in Nepublic v. Lim Tian long (9.R. Ho. in21731, March 31, 1966), what can be more im Gieative of finality than respondent's insistence to colleet the tax!) In the ease of Prederié b. Hahn v. Comme of Internal Revenue (0.7.4. Case Wo. 1987), this Court said:

ie formal resciution was made rant of distraint and da Apri thy 2k 1 Was served on petitioner on " a ae :

3

Hel

5 érastic action of all uedia of en- on of tax, and ee payne gene Ba, denial" thereof, and askes the sai t Bg rejeeted.' ey 1256, at ay 4 4 Guss ie Me. eae 7 Ja airs deltgars ane te present net itfoner on Sune 48 aR, bee “eget 341

DECISION «

CTA CAST NO. 9971 9 Sate of fecsint of the’ sypestatie deeision, after disgeounting the Tob. (Resolution, April 30 1965.)

The request dated November 17, 196% for a resubmission of petitioner's memorandum of “fay 31, 1963 which had already been considered by re- sponmfent is a rro forma motion for reconsideration for it adduees no new grounds nor raises new issues and hence it did not interrupt the period for ap- peal to the Court of Tax Appeals (Tuason « Legarda, Ltd. ve Commissioner of internal Revenue, Gf. ilo. | ln18552, September 30, 1965; Filipinas Investment & Finanee Corp. v. Commissioner of Internal fe- venue, GR. No, 1-23591, May 16, 1967).

C sven if we count the period for appeal from notice by petitioner of the warrant of. distraint whieh, eside from other things, is alse equivalent | to en outright denial and rejectian with patent fina ity of petitioner's request for re-subaission of his memorandum of “ay 31, 1963, the present appeal ds sti22 out of tine.) Notice of the wer- rant must have been received by petitioner not later than “November 17, 1964, the date of his letter veecvesting the lifting of the warrant.

The petition for review herein was filed only on “ebruary 94, 484° . a4ehteceauan Agye (97) after 312

DECISION «-

CTA Casr NO. 15971 10 Wowember 17, 196%. The 30-day period for appeal provided in Seetion 11, Republie Aet Ne. 1125 is jurisdictional (Johnston Lumber Co. v. Court of Tex Appeals, 191 Phil. 151, FAlipinas investment — & Pananee Corp. v. Commissioner of Internal Re- venue, (eli. Wo. 23501, May 16, 1967).

Having reached the conelusion that we have no jurisdietion to hear the present petition, ve deem it unnecessary to pass upon the other issues raised by the parties.

WEPREPORE, we hereby dismiss the present petition for review fer laek of juriséiectian.

SO ORUFRED, | | Queson City, Ogtober 29, 1979.

RAMON Le AVAMORLA

Assoaiate Judge

{

We CONCUR:

ROMAN *. UMALI > Presi¢ing Judge

Associate Judge

313