CIR vs.
Yuseco
Gr L-12518
Facts:
It was found out that for two years, Yuseco failed to file his income
taxreturns. This prompted the tax authorities to assess and hold
Yuseco liable for the deficiency in payment. Yuseco asked for a report
on how the amount was derived but this request was denied. He asked
for reconsideration which was also denied. This prompted BIR to ask
still for payment. Yuseco then filed a petition for prohibition with the
CTA, which the latter granted and now is being questioned by the
Commissioner.
Issue:
Whether or not the CTA have original jurisdiction to issue writs of
prohibition and injunction from an appealed case
Ruling:
Nowhere does the law expressly vest in the Court of Tax Appeals
original jurisdiction to issue writs of prohibition and injunction
independently of, and apart from, an appealed case. The writ of
prohibition or injunction that it may issue under the provisions of section
11, Republic Act No. 1125, to suspend the collection of taxes, is merely
ancillary to and in furtherance of its appellate jurisdiction in the cases
mentioned in section 7 of the Act. The power to issue the writ exists
only in cases appealed to it.
CIR v. Philamlife
Gr L- 105208
Facts:
On May 30, 1983, Philamlife paid its 1983 1st Quarter income tax of
P3,246,141. On August 29, 1983, it paid P396,874 for the 2nd Quarter
and also paid P708,464 for the3rd Quarter. In the 4th Quarter however,
it suffered loss and thereby had no income tax liability. It therefore
declared refund of the 1st and 2nd Quarter payments. In 198r,
Philamlife suffered loss again and applied for tax credit of its overpaid
taxes in 1983 and 1982. ON December 16, 1985, it filed another claim
for refund with the CIR‘s appellate division for an amended and
increased amount. On January 2, 1986, it filed petition for review with
the CTA.
The issue is the reckoning date of the two-year prescriptive period
provided in Section 230 of the NIRC for the recovery of tax erroneously
or illegally collected. CIR claims that the running of the prescriptive
period commences from the remittance/payment at the end of the first
quarter of the tax withheld instead of from the filing of the Final
Adjustment Return. In such a case, Philamlife is not entitled for refund.
Held:
CIR is wrong. The prescriptive period of two years should commence
to run only from the time that the refund is ascertained, which can only
be determined after a final adjustment return is accomplished. In the
present case, this date is April 16, 1984, and two years from this date
would be April 19, 1986. The record shows that the claim for refund
was field on December 10, 1985 and the petition for review was brought
before the CTA on January 2, 1986. Both dates are within the two-year
reglementary period. Even if the two-year prescriptive period had
already lapsed, the same is not jurisdictional and may be suspended
for reasons of equity and other special circumstances.

COMMISSIONER OF INTERNAL REVENUE
vs.
UNION SHIPPING CORPORATION and THE COURT OF TAX
APPEALS
Gr. L-66160
Facts:
In a letter dated December 27, 1974 petitioner assessed against Yee
Fong Hong, Ltd. and/or herein private respondent Union Shipping
Corporation for deficiency income taxes due for the years 1971 and
1972. Private respondent protested the assessment.
Petitioner, without ruling on the protest, issued a Warrant of Distraint
and Levy. In a letter, private respondent reiterated its request for
reinvestigation. Petitioner, again, without acting on the request for
reinvestigation and reconsideration of the Warrant of Distraint and
Levy, filed a collection suit against private respondent.
In 1979, private respondent filed with respondent court a Petition for
Review. The CTA ruled in favor of private respondent. Hence, this is a
petition for review on certiorari
Issue:
Whether or not issuance of writ of distraint and levy is a proof of
finality of an assessment.
Held:
Yes. The main thrust of their petition is that the issuance of a
warrant distraint and levy is proof of the finality of an assessment
because it is the most drastic action of all media of enforcing the
collection of tax, and is tantamount to an outright denial of a motion for
reconsideration of an assessment. Among others, petitioners contends
that the warrant of distraint and levy was issued after respondent
corporation filed a request for reconsideration of subject assessment,
thus constituting petitioner’s final decision in the disputed assessment.
We deem it appropriate to state that the commissioner of
internal revenue should always indicate to the taxpayer is clear and
unequivocal language whenever his action on an assessment
questioned by a taxpayer constitute his final determination on the
disputed assessment as contemplated by sections 7 and 11 of RA 1125
as amended. On the basis of this statement indubitably showing that
the commissioner’s communicated action is his final decision on the
contested assessment, the aggrieved taxpayer would then be able to
take recourse to the tax court at the opportune time. Without needless
difficulty, the taxpayer would be able to determine when his right to
appeal to the tax court accrues. This rule of conduct would also obviate
all desire and opportunity on the part of the taxpayer to continually delay
the finality of the assessment — and, consequently, the collection of
the amount demanded as taxes – by repeated request for
recomputation and reconsideration. On the part of the commissioner,
this would encourage his office to conduct a careful and thorough study
of every questioned assessment and render a correct and definite
decision thereon in the first instance. This would also deter the
commissioner from unfairly making the taxpayer grope in the dark and
speculate as to which action continues the decision appealable to the
tax court of greater imports this rule of conduct would must a pressing
need for fair play, regularity, and orderliness in the administrative
action.
Under the circumstances, the commissioner of internal revenue,
not having clearly signified his final action on the disputed assessment,
legally the period to appeal has not commenced to run. Thus, it was
only when private respondent received the summons on the civil suit
for collection of deficiency income on December 28, 1978 that the
period of appeal commenced to run.