Lacsona Land vs.

CIR
Therefore, as in Section 228, when the law provided for the remedy to appeal the
inaction of the CIR, it did not intend to limit it to a single remedy of filing of an
appeal after the lapse of the 180-day prescribed period. Precisely, when a taxpayer
protested an assessment, he naturally expects the CIR to decide either positively or
negatively. A taxpayer cannot be prejudiced if he chooses to wait for the final
decision of the CIR on the protested assessment. More so, because the law and
jurisprudence have always contemplated a scenario where the CIR will decide on
the protested assessment.
It must be emphasized, however, that in case of the inaction of the CIR on the
protested assessment, while we reiterate the taxpayer has two options, either: (1)
file a petition for review with the CTA within 30 days after the expiration of the 180day period; or (2) await the final decision of the Commissioner on the disputed
assessment and appeal such final decision to the CTA within 30 days after the
receipt of a copy of such decision, these options are mutually exclusive and resort
to one bars the application of the other.
Accordingly, considering that Lascona opted to await the final decision of the
Commissioner on the protested assessment, it then has the right to appeal such
final decision to the Court by filing a petition for review within thirty days after
receipt of a copy of such decision or ruling, even after the expiration of the 180-day
period fixed by law for the Commissioner of Internal Revenue to act on the disputed
assessments.[17] Thus, Lascona, when it filed an appeal on April 12, 1999 before
the CTA, after its receipt of the Letter[18] dated March 3, 1999 on March 12, 1999,
the appeal was timely made as it was filed within 30 days after receipt of the copy
of the decision.
Finally, the CIR should be reminded that taxpayers cannot be left in quandary by its
inaction on the protested assessment. It is imperative that the taxpayers are
informed of its action in order that the taxpayer should then at least be able to take
recourse to the tax court at the opportune time. As correctly pointed out by the tax
court:
x x x to adopt the interpretation of the respondent will not only sanction
inefficiency, but will likewise condone the Bureau's inaction. This is especially true in
the instant case when despite the fact that respondent found petitioner's arguments
to be in order, the assessment will become final, executory and demandable for
petitioner's failure to appeal before us within the thirty (30) day period.[19]

CIR vs. Primetown Property

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the
Administrative Code of 1987 deal with the same subject matter the computation of
legal periods. Under the Civil Code, a year is equivalent to 365 days whether it be a
regular year or a leap year. Under the Administrative Code of 1987, however, a year
is composed of 12 calendar months. Needless to state, under the Administrative
Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of computing legal

periods under the Civil Code and the Administrative Code of 1987. For this reason,
we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987,
being the more recent law, governs the computation of legal periods. Lex posteriori
derogat priori.

CIR vs. Metro Star Superama

Indeed, Section 228 of the Tax Code clearly requires that the taxpayer must first be
informed that he is liable for deficiency taxes through the sending of a PAN. He must
be informed of the facts and the law upon which the assessment is made. The law
imposes a substantive, not merely a formal, requirement. To proceed heedlessly
with tax collection without first establishing a valid assessment is evidently violative
of the cardinal principle in administrative investigations - that taxpayers should be
able to present their case and adduce supporting evidence.[14]
From the provision quoted above, it is clear that the sending of a PAN to taxpayer
to inform him of the assessment made is but part of the due process requirement in
the issuance of a deficiency tax assessment, the absence of which renders nugatory
any assessment made by the tax authorities. The use of the word shall in
subsection 3.1.2 describes the mandatory nature of the service of a PAN. The
persuasiveness of the right to due process reaches both substantial and procedural
rights and the failure of the CIR to strictly comply with the requirements laid down
by law and its own rules is a denial of Metro Stars right to due process.[15] Thus, for
its failure to send the PAN stating the facts and the law on which the assessment
was made as required by Section 228 of R.A. No. 8424, the assessment made by the
CIR is void.

Allied Banking Corporation vs. CIR

The key to effective communication is clarity.
The Commissioner of Internal Revenue (CIR) as well as his duly authorized
representative must indicate clearly and unequivocally to the taxpayer whether an

action constitutes a final determination on a disputed assessment.[1] Words must

be carefully chosen in order to avoid any confusion that could adversely affect the
rights and interest of the taxpayer.
In this case, records show that petitioner disputed the PAN but not the Formal Letter
of Demand with Assessment Notices.Nevertheless, we cannot blame petitioner for
not filing a protest against the Formal Letter of Demand with Assessment Notices
since the language used and the tenor of the demand letter indicate that it is the
final decision of the respondent on the matter. We have time and again reminded
the CIR to indicate, in a clear and unequivocal language, whether his action on a
disputed assessment constitutes his final determination thereon in order for the
taxpayer concerned to determine when his or her right to appeal to the tax court
accrues.[26] Viewed in the light of the foregoing, respondent is now estopped from
claiming that he did not intend the Formal Letter of Demand with Assessment
Notices to be a final decision.

Philippine Journalist Inc. vs. CIR

A waiver of the statute of limitations under the NIRC, to a certain extent, is a
derogation of the taxpayers right to security against prolonged and unscrupulous
investigations and must therefore be carefully and strictly construed.23 The waiver
of the statute of limitations is not a waiver of the right to invoke the defense of
prescription as erroneously held by the Court of Appeals. It is an agreement
between the taxpayer and the BIR that the period to issue an assessment and
collect the taxes due is extended to a date certain. The waiver does not mean that
the taxpayer relinquishes the right to invoke prescription unequivocally particularly
where the language of the document is equivocal. For the purpose of safeguarding
taxpayers from any unreasonable examination, investigation or assessment, our tax
law provides a statute of limitations in the collection of taxes. Thus, the law on
prescription, being a remedial measure, should be liberally construed in order to
afford such protection.
In the execution of waiver of defense of prescription, Section 1 of RMO No. 20-90
requires, among others, that: (a) the waiver must be in the form identified under
RMO 20-90; (b) the waiver shall be signed by the taxpayer himself or his duly
appointed representative; and (c) the date of acceptance by the Bureau of Internal
Revenue (BIR) should be indicated in the waiver. In case of failure to comply with
the provisions of RMO No. 20-90, the waiver shall be deemed defective, and thus, it
shall not extend the three-year prescriptive period of assessment.
After review of the agreement between the BIR and the taxpayer, the Court of Tax
Appeals (CTA) found the waiver defective and therefore no valid agreement
between the taxpayer and BIR can be construed to have taken place due to the
following reasons: (a) the waiver did not state the amount of assessed taxes as

required under the prescribed form; and (b) the waiver lacks the required signature
and date of acceptance of the taxpayer or of the duly authorized representatives of
the BIR (Dole Philippines, Inc., vs. Commissioner of Internal Revenue, CTA Case No.
8155, March 21, 2014).

CIR vs. Kudos Metal Corp.

The doctrine of estoppel cannot be applied in this case as an exception to the
statute of limitations on the assessment of taxes considering that there is a detailed
procedure for the proper execution of the waiver, which the BIR must strictly
follow. As we have often said, the doctrine of estoppel is predicated on, and has its
origin in, equity which, broadly defined, is justice according to natural law and right.
[22] As such, the doctrine of estoppel cannot give validity to an act that is
prohibited by law or one that is against public policy.[23] It should be resorted to
solely as a means of preventing injustice and should not be permitted to defeat the
administration of the law, or to accomplish a wrong or secure an undue advantage,
or to extend beyond them requirements of the transactions in which they originate.
[24] Simply put, the doctrine of estoppel must be sparingly applied.
Moreover, the BIR cannot hide behind the doctrine of estoppel to cover its failure to
comply with RMO 20-90 and RDAO 05-01, which the BIR itself issued. As stated
earlier, the BIR failed to verify whether a notarized written authority was given by
the respondent to its accountant, and to indicate the date of acceptance and the
receipt by the respondent of the waivers. Having caused the defects in the waivers,
the BIR must bear the consequence. It cannot shift the blame to the taxpayer. To
stress, a waiver of the statute of limitations, being a derogation of the taxpayers
right to security against prolonged and unscrupulous investigations, must be
carefully and strictly construed.[25]
As to the alleged delay of the respondent to furnish the BIR of the required
documents, this cannot be taken against respondent. Neither can the BIR use this
as an excuse for issuing the assessments beyond the three-year period because
with or without the required documents, the CIR has the power to make
assessments based on the best evidence obtainable.

Philippine American Life and General Insurance vs. Secretary of Finance

Preliminarily,it bears stressing that there is no dispute that what is involved herein
is the respondent Commissioners exercise of power under the first paragraph of
Sec. 4 of the NIRCthe power to interpret tax laws. This, in fact, was recognized by
the appellate court itself, but erroneously held that her action in the exercise of
such power is appealable directly to the CTA. As correctly pointed out by petitioner,

Sec. 4 of the NIRC readily provides that the Commissioners power to interpret the
provisions of this Code and other tax laws is subject to review by the Secretary of
Finance. The issue that now arises is thiswhere does one seek immediate recourse
from the adverse ruling of the Secretary of Finance in its exercise of its power of
review under Sec. 4?
Admittedly, there is no provision in law that expressly provides where exactly the
ruling of the Secretary of Finance under the adverted NIRC provision is appealable
to. However,We find that Sec. 7(a)(1) of RA 1125, as amended, addresses the
seeming gap in the law as it vests the CTA, albeit impliedly, with jurisdiction over
the CA petition as other mattersarising under the NIRC or other laws administered
by the BIR. As stated:chanroblesvirtuallawlibrary
Sec. 7. Jurisdiction. - The CTA shall exercise:
Exclusive appellate jurisdiction to review by appeal, as herein provided:
1. Decisions of the Commissioner of Internal Revenue in cases involving
disputed assessments, refunds of internal revenue taxes, fees or other charges,
penalties in relation thereto, or other matters arising under the National Internal
Revenue or other laws administered by the Bureau of Internal Revenue. (emphasis
supplied)
Even though the provision suggests that it only covers rulings of the Commissioner,
We hold that it is, nonetheless, sufficient enough to include appeals from the
Secretarys review under Sec. 4 of the NIRC.

Input Vat Refund; Prescriptive Period; 120-30 Day Rule

Commissioner of Internal Revenue vs. Aichi Forging Company of
Asia, Inc.
G.R. No. 184823, October 6, 2010
Issues:
1 What is the reckoning point for the two-year prescriptive period for filing of
claims for input VAT refund?
2 Does the two-year prescriptive period apply to both the administrative and the
judicial claims for input VAT refund?
3 Is the observance of the 120-30 day rule provided in Section 112(C) of the
NIRC mandatory or permissive?

Rulings:
Ruling on First Issue
In computing the two-year prescriptive period for claiming a refund/credit of
unutilized input VAT, the Supreme Court ruled that the applicable provision is
Section 112(A) of the National Internal Revenue Code (NIRC) of 1997 which
provides that the unutilized input VAT must be claimed within two (2) years after
the close of the taxable quarter when the sales were made.
According to the Supreme Court, Sections 114(A), 204(C) and 229 of the
NIRC are inapplicable because both provisions apply only to instances of
erroneous payment or illegal collection of internal revenue taxes. Thus, the CTA
En Banc erroneously applied Sections 114(A) and 229 of the NIRC in computing
the two-year prescriptive period for claiming refund/credit of unutilized input VAT.
The Supreme Court held that Section 112(A) of the NIRC is the pertinent
provision for the refund/credit of input VAT. Hence, the two-year period should be
reckoned from the close of the taxable quarter when the sales were made.
Ruling on Second Issue
The Supreme Court held that the two-year prescriptive period applies only
to the administrative claims for input VAT refund. Section 112(D) of the NIRC
clearly provides that the Commissioner of Internal Revenue (CIR) has 120 days
from the date of the submission of the complete documents in support of the
application for tax refund/credit within which to grant or deny the claim. In case of
full or partial denial by the CIR, the taxpayers recourse is to file an appeal before
the Court of Tax Appeals (CTA) within 30 days from receipt of the decision of the
CIR. However, if after the 120-day period the CIR fails to act on the application for
tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to
the CTA within 30 days.
According to the Supreme Court, applying the two-year prescriptive period
to judicial claims for input VAT refund would render nugatory Section 112(D) of the
NIRC, which already provides for a specific period within which a taxpayer should
appeal the decision or inaction of the CIR. The second paragraph of Section
112(D) of the NIRC envisions two scenarios: (a) when a decision is issued by the
CIR before the lapse of the 120-day period; and (b) when no decision is made after
the 120-day period. In both instances, the taxpayer has 30 days within which to
file an appeal with the CTA. Therefore, the 120-day period is crucial in filing an
appeal with the CTA.
Ruling on Third Issue
The Supreme Court ruled that the observance of the 120-30 day rule is
mandatory and jurisdictional. In other words, the taxpayer may appeal to the
Court of Tax Appeals within 30 days only in case there is full or partial denial by
the Commissioner of Internal Revenue (CIR) of the application for refund before

the lapse of the 120-day period or in case the said period lapses without action on
the part of the CIR.
In the present case, the administrative and the judicial claims were
simultaneously filed by respondent Aichi Forging Company on September 30,
2004. Obviously, respondent did not wait for the decision of the CIR or the lapse
of the 120-day period before filing the judicial claim with the CTA. Thus, the
Supreme Court ruled that the respondents filing of the judicial claim for input VAT
refund with the CTA on September 30, 2004 was premature as no jurisdiction was
acquired by the CTA.