Republ!<. of THL 1ilip Pines Gourt of Ar Appbals Manera ~ Kuenzle & Streiff, Inc., et al. vs. < “} the Commissioner of Internal Revenue

REPUBL!<. OF THL 1ILIP PINES GOURT OF [ar APPBALS**

MANERA ~

KUENZLE & STREIFF, INC., \) Petitioner, AY - versus < “} C.T.A. CASE NO. 551

THE COMMISSIONER OF

INTERNAL REVENUE, Respondent. , Xe#eeweseeeeeeae mw ZX

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The petitioner has filed a motion sp reconsider- ation of our decision of April 28, 1961, on the grounds that (1) this Court erred in sustaining respondent's deci- sion in disellowing the deduction by petitioner from its gross incomes for the years 1953, 1954 and 1955 of « per- tion of the bonuses and additional compensation given te its renking officers during said years; (2) it is net liable for the 5% surcharge and LY monthly interest *con- sidering the absolute geod fatth of the petitioner in contesting the assessment of the alleged deficiency in- come tax in question;* and (3) assuming thet it is liable for said surcharge and interest, the maximum amount of interest that may be collected should not exceed the amount correspending to a period of three years.

With respect to the first ground, we find that the arguments in support thereof have been fully considered in our decision of April 26, 1961, hence there is no just- ification to reverse or modify the decision on this point.

AS regards the second ground, the allegation that the surcharge and interest may not be imposed because ef the good faith of petitioner is without merit. Good faith 200 EO — ee ae

BECISION « AT

C.T.Ae CASE NO. G2?

-~2- is no defense against the impesition of the said surcharge and interest. Under the law, the said surcharge and inter- est accrue automatically upon delinquency in the payment ef the deficiency income tax.

In connection with the third ground, we agree with petitioner that the interest on deficiency income tex can- not exceed the amount corresponding to three years. It may be stated, however, thet in the answer of respondent he claimed the payment of the 1% monthly interest by pe- titioner “from the dates said deficiency income taxes ac- crued te the date of payment thereof.” This was reiter- ated in the memorendum of counsel for the Sovernment deted June 16, 196. No attempt was made by petitioner in the course of the trial or in its various memoranda to dispute this claim of respondent. It is only now thet the ques- tion in regard to the maximum amount interest has been raised. Be this as it may, since the law is clear that the meximum amount of interest that may be collected on deficiency income tax cannot exceed the amount correspond- ing te a period ef three years, pursuant to Section 5l(e)

(2) of the National Internal Revenue Code, as amended by Section @ ef Republic Act Ne. 2343, which took effect on June 20, 1959, the dispositive pertion of our decision is hereby amended to read as followss PO hy yh ego with respect to the deficiency assessment deficiency assessment for the year 1984, the same is hereby modified in the sense that the amount due from petitioner is 11,248.00, instead of 16,648.00, Accord- ingly. petitioner is ordered to pay within days from the dete this decision be- comes final the sums of P40,455.00 and 201 Ba om

DECISION ~

{ C.T.Ae CASE NO. 582 «a ¥= 4 #16,228.00, plus 5% surcharge and 1% month- : ly interest from October ], 1957 until d.

It is likewise ordered to pay the sum 211,248.00 within the same periced, and, if } not so paid, there shall be added thereto | 5% surcharge and 1% monthly interest from the dete of delinquency te the date ef pay- ment. In both cases, the maximum smount ef interest shall not exceed the amount correspending to a period of three years, pursuant to Section 5l(e)(2) ef the Nationel Internal Revenue Code, as amended by Section 8 of Republic Act No. 2343, With costs against petitioner.”

Associate Judge

WE CONCUR?S

Presiding ‘on