CIR V. WESTERN PACIFIC CORP, G.R.

NO 18804
(1965)
FACTS: On March 2, 1959, respondent Western Pacific
Corp was assessed deficiency income tax for the year
1953. The assessment was brought about by the
disallowance listed in respondents return as bad debts
1. The assessment was received by respondent on
the same date (March 2, 1959).
2. On March 5, 1959, CIR wrote a demand letter with
the final breakdown of the assessment.
3. However, on June 29, 1959, Western Pacific Corp
requested for non-assessment, claiming that the
claim had prescribed and that said items should be
considered as allowable deductions
4. On July 30, 1959, CIR denied the request and
demanded payment of the same within 30 days
from receipt of demand
5. Respondent corporation, on September 19, 1959,
requested that it be allowed until September 25 to
submit its formal objections to the assessment.
The formal objections submitted by Western Pacific
were identical to its former objections and as such,
CIR denied the request.
6. The CIR, then, sent on October 28, 1959 a letter
demanding payment within 10 days
7. On appeal, CA absolved the respondent from the
assessment however it ruled out that the
assessment letter dated March 2, 1959 was within
5-year prescriptive period

ISSUE: WON the assessment had prescribed

HELD: No. February 28, 1959 fell on a Saturday. Pursuant
to Republic Act No. 1880, as, implemented by Executive
Order No. 25, effective July 1, 1959, all bureaus and
offices of the government, except schools, court, hospitals
and health clinics, hold office only five days a week or from
Monday to Friday. Saturday and Sunday, are constituted
public holidays or days of exemption from labor or work as
far as government offices, including that of respondent
Commissioner, are concerned. The offices and bureaus
concerned are officially closed on those days. So that on
February 28, 1959 and March 1, 1959, which were
Saturday and Sunday, respectively, the office of
respondent was officially closed. And where the last
day for doing an act required by law falls on a
holiday, the act may be done on the next succeeding
business day. (Section 31, Revised Administrative Code.)
Similarly, in computing any period of time prescribed by
statute, the day of the act after which the designated
period of time begins to run is not included. But the last
day of the period so computed is to be included, unless it
is a Sunday or a legal holiday, in which event the time
shall run until the end of the next day which is neither a
Sunday or a holiday (Section 1, Rule 28, Rules of Court).
Consequently, since February 28, 1959 was a
Saturday and the next day, March 1, 1959, a Sunday,
respondent had until the next succeeding business
day, March 2, 1959, Monday, within which to issue
the deficiency assessment. The assessment in question
having been issued on March 2, 1959, it was, therefore,
seasonably made.

However, contrary to the ruling of the CTA, the
assessment made by the Commissioner should be
maintained, for the simple reason that when the petition
for review was brought to the CTA by the respondent
corporation, the said Court no longer had jurisdiction
to entertain the same. The assessment had long
become final. A petition for review should be
presented, within the reglementary period, as
provided for in Section 11, Republic Act No. 1125,
which is "thirty (30) days from receipt of the
assessment." The thirty (30) day period is
jurisdictional.

CAB: The assessment was received by the respondent
corporation on March 2, 1959. It was only on June 29,
1959, when said corporation formally assailed the
assessment, on the grounds of prescription in making the
assessment and the impropriety of the disallowance of the
listed deductions. From March 3 to June 29, 1959,
manifestly more than thirty (30) days had lapsed and the
assessment became final, executory and demandable.








BISAYA LAND TRANSPORATION CO INC V. CIR, 105 PHIL
1338 (1960)
DOCTRINE: In order that the filing of a return may serve as the
starting point of the period for the making of an assessment, the
return must be as substantive complete as to include the needed
details on which the full assessment may be made, and appellants
have not shown that such was the nature of the return they would
infer had been filed by the corporation.

When there is no provision in the law requiring the filing of return
but the tax is such that its amount cannot be ascertained without
the date that is pertinent thereto, the Commissioner may, by
appropriate regulations, require the filing of the necessary returns.
In any event, with or without such regulations, it is to the interest
of the taxpayer to file said return if he wishes to avail himself of
the benefits of the three-year prescriptive period. If this
notwithstanding, he does not file return at all, then an assessment
may be made at anytime within the ten-year prescriptive period.

FACTS: BLTC acquired equipment from US Commercial Co. which
it used in the operation of its buses without paying the
corresponding taxes.
1. The revenue agents who investigated its books discovered
that its gross receipts of the transportation business from
1946-1951 were not declared for taxation. And from 1945-
1952, petitioner issued freight receipts but the
corresponding documentary stamps were not affixed;
deficiency additional tax was also determined.
2. CIR assessed and demanded P4,949.91consisting of 1)
compensating tax, 2) common carriers percentage tax, 3)
documentary stamp tax, and 4) additional residence tax.
3. January 11, 1955, BLTC filed a petition for review with the
CTA which upheld the assessment. But ruled that the
deficiency common carriers percentage tax for 1946, the
1
st
quarter of 1947, and the additional residence tax of
1947 were barred by the statute of limitations. Both
parties appealed.
4. Petitioner alleged that CTA erred in not holding that the
compensating and residence tax have also prescribed
because the period of prescription should be computed
from the filing of its income tax returns. And that the
compensating, documentary stamp, and common carrier
percentage tax were not chargeable.

ISSUE: Has the assessment made by the CIR been barred by
Statute of Limitations?

HELD: No.

The income tax returns were not introduced in evidence, therefore,
there was no means to determine what data were included to
apprise the BIR that the company should pay the compensating
tax.

When there is no provision in the law requiring the filing of
return but the tax is such that its amount cannot be
ascertained without the date that is pertinent thereto, the
Commissioner may, by appropriate regulations, require the
filing of the necessary returns. In any event, with or without
such regulations, it is to the interest of the taxpayer to file said
return if he wishes to avail himself of the benefits of the three-year
prescriptive period. If this notwithstanding, he does not file
return at all, then an assessment may be made at anytime
within the ten-year prescriptive period.



















REPUBLIC V. LIM DE YU, 10 SCRA 738 (1964)
FACTS: Respondent Lim de Yu filed her yearly income tax returns
from 1948 through 1953. BIR assed the taxes due thereon and
respondent paid them accordingly
1. On July 17, 1956, BIR assessed respondent deficiency
income tax for the years 1945 to 1953.
2. Lim de Yu protested the assessment and requested a
reinvestigation.
3. On August 30, 1956, respondent signed a waiver of the
statute of limitations under NIRC as a condition to the
reinvestigation requested.
4. Thereafter, on July 18, 1958, BIR issued respondent
income tax notices for the year 1948 to 1953 amounting to
P35,379.63. The last assessment included the basic
deficiency income tax and 50% surcharge
5. Petitioner claims that the lower court erred in ruling that
(1) the deficiency income taxes due from Lim for the years
1049, 1949 and 1956 were not assessed on tine; and (2)
in dismissing the case, CIRs right to collect had already
prescribed. Petitioner maintains that since the respondent
filed false or fraudulent returns (the annual net income
reported in the returns were much less than what was
computed by BIR), under Sec 332(a) NIRC, BIR had 10
years from the date of the discovery of the fraud or falsity,
i.e. May 25, 1955, to assess the taxes or file a collection
suit.

ISSUE: WON CIRs right to collect based on the assessment had
already prescribed

HELD: As to the years 1948 to 1950, it had already prescribed.

Fraud must not only be alleged in the complaint, it should also be
established. It appears that BIR was not sure as to the
amounts of respondents net income since it arrived at
different computations on 3 different occasions. Fraud not
having been proven, the period of limitation for assessment
was five years from the filing of the return (Sec 331). The
right to assess or collected for the years 1948 to 1950 had
already prescribed when BIR issued the deficiency tax
assessment on July 17, 1956.

The tax years 1948 to 1950 cannot be deemed included in the
waiver of the statute of limitations under the NIRC executed by
the respondent on August 30, 1956. The 5-year period
assessment, counted from the date the return is filed, may be
extended upon the agreement of the CIR and the taxpayer, but
such agreement must be made before the expiration of the original
period.

However, the waiver validly covers the tax years 1951 and
1952, since the 5-year period had not yet elapsed when the
said waiver was executed. With respect to the tax year
1953, the waiver was not necessary because the
assessment was within the original 5-year period provided
by law (July 18, 1958).

Respondents theory that collection could be made only up to the
end of the period of extension stated in the waiver (December 31,
1958) is without merit. Assessment and collection. Thus,
although under the waiver Lim consented to the
assessment and collection if not made later than
December 31, 1958, such expiration must be deemed to
refer only to the extension of the assessment period.
Insofar as collection is concerned, the period does not apply
because otherwise the effect of the waiver would be to
shorten the legal period for that purpose. As such, BIR had
within 5 years from 1958 within which to file his action,
which was actually filed in 1959.

Hence, respondent is liable to pay the deficiency income taxes due
for the years 1951, 1952 and 1953 plus 5% surcharge and 1%
monthly interest until full satisfaction.











SY CHUICO V. COLLECTOR, 107 PHIL 428
DOCTRINE: For the purposes of amusement tax, the term
"GROSS RECEIPTS" embraces all the receipts of the proprietor or
operator of the business. Prescription is evidentiary in nature.

FACTS: Petitioner was the owner and operator of the La Loma
Cabaret in QC from 1926 to January 1956. It charged its
customers P0.30 per dance: P0.10 entrance fee and the remaining
P0.20 to be paid to the "bailarinas" after the dance. The
customers were informed of the fees by means of posters found in
conspicuous places of the cabaret stating:

1. From January 1947 - August 1950, petitioner declared
in his return only the following gross receipts:
o receipts from gate admissions at P0.10 each,
P59,160.40;
o receipts from restaurant sales, P5,339.90;
o receipts from bar sales, P47,459.10,
o --- and paid thereon a 10 % amusement tax of
P11,197.40.

2. Petitioner failed to declare for tax purposes the P0.20
dance fee. Thus, respondent assessed against him a
deficiency amusement tax, including50 % surcharge of
P17,616.05. As well as P300.00 penalty in settlement of
his violation of Section 260 of the Tax Code and the
Bookkeeping Regulations.

3. Petitioner appealed to the CTA which affirmed the
contention of respondent holding petitioner liable to pay
P17,616.05 as deficiency amusement tax and surcharge
for January 1947 - August, 1950; but, CTA rejected the
P300.00 penalty alleging lack of power or authority to
order the payment of such penalty. Hence, this petition.

4. Petitioner contends that because those dance fees go to
the "bailarinas", they could not be considered as part of
the gross receipts of the cabaret.

ISSUES:
1. Should the gross receipts include the dance fee charged by
the cabaret for its "bailarinas"? YES.
2. Has the collection of the tax in question already
prescribed? SC considered that petitioner waived this
defense.

HELD: Section 260 of the Tax Code applies. The owner or
operator of a cabaret is required to pay an amusement tax
equivalent to 10 % of the gross receipts of his business
irrespective of whether or not any amount is charged or paid for
admission. The law further adds that, for the purposes of
amusement tax, the term "GROSS RECEIPTS" embraces all the
receipts of the proprietor or operator of the business. A cabaret is
a place of amusement where customers go because of their desire
to dance and where the "bailarinas" are the main attraction.
Dancing is the main business and customers patronize the place
attracted by the "bailarinas". As a matter of fact, "bailarinas" are
the indispensable factor in the operation of the business. Whatever
is paid to them should, therefore, be considered as paid on
account of the business, and as such it should be considered as
part of petitioner's gross receipts.

RE SURCHARGE: While there is no direct evidence to show actual
fraud on the part of petitioner, the circumstances found by the CTA
indicate that he has deliberately omitted in his book a
sizeable portion of his taxable income which in substance
amounts to fraud.

RE PRESCRIPTION: This was not raised as an issue in the petition
for review filed in the CTA. It was not even touched by him in the
memorandum he submitted. There is, therefore, enough reason to
believethat petitioner has waived this defense and so it
cannot now be entertained. To hold otherwise would be to
deprive respondent of his right to show the contrary, this matter
being evidentiary in nature.










CIR V. BF GOODRICH PHILS, G.R. NO 104171 (1999)
FACTS:

ISSUE:

HELD: