251.

Visayan Electric Co vs Commissioner

Facts: Respondent commissioner assessed and demanded from petitioner a
deficiency franchise Tax. Petitioner protested to such assessment but the same was
denied. Before the CA, petitioner interposed the defense of prescription for the first
time.
Issue: Whether the defense of prescription will prosper
Ruling. No. well settled is the rule that prescription as a defense is waived if not
seasonably interposed.

252. Mambulao Lumber v Republic

Facts: Sometime in 1957 Agent Nestor Banzuela of the Bureau of Internal Revenue,
Regional District No. 6, Bicol Region, Naga City, conducted an examination of the
books of accounts of herein petitioner Mambulao number Company for the purpose
of determining said taxpayer's forest charges and percentage tax liabilities.
Thereafter, On August 29, 1958 an assessment and demand letter was addressed to
the petitioner. For failure of petitioner to comply with the above letter-request
and/or to pay its tax liability despite demands for the payment thereof, respondent
Commissioner of Internal Revenue filed. a complaint for collection in the Court of
First Instance of Manila on August 25, 1961

Issue: whether or not the right of plaintiff (respondent herein) to file a judicial
action for the collection of aforest charges and surcharges due from the petitioner
Mambulao Lumber Company for the year 1949 has already prescribed.
Ruling: No, Where the taxpayer did not contest the deficiency income tax assessed
against him, the same became final and properly collectible by means of an ordinary
court action. The taxpayer cannot dispute an assessment which is being enforced by
judicial action, He should have disputed it before it was brought to court.
The plea of prescription is also deemed waived by the failure to allege it in the
answer.
253. Sy Chiuco v Collector

Facts: During the period from January, 1947 to August, 1950, petitioner declared
in his return only the following gross receipts: receipts from gate admissions at
P0.10 each, P59,160.40; receipts from restaurant sales, P5,339.90; receipts from bar
sales, P47,459.10, and paid thereon a 10 per cent amusement tax in the amount of
P11,197.40. Having failed to declare for tax purposes the P0.20 dance fee payable to
the "bailarinas" which petitioner collected as part of his business, respondent
assessed against him a deficiency amusement tax, including 50 per cent surcharge,
in the amount of P17,616.05. Respondent also assessed against petitioner the
further sum of P300.00 as penalty in settlement of his violation of Section 260 of the
Tax Code and the Bookkeeping Regulations.

From the above assessment, petitioner took the case on appeal to the Court of Tax
Appeals where, after due hearing, said court rendered decision affirming the
contention of respondent insofar as he holds petitioner liable to pay the sum of
P17,616.05 as deficiency amusement tax and surcharge for the period from
January, 1947 to August, 1950. However, the Court of Tax Appeals rejected the
imposition of the penalty in the sum of P300.00 alleging lack of power or authority
to order the payment of such penalty. In due time, petitioner filed the present
petition for review. The petitioner also contends before the SC that the collection of
the tax in question has already prescribed

Issue: Whether the collection of the tax in question has already prescribed?

Ruling: As regards the contention that the collection of the tax in question has
already prescribed, it appears that this question was not raised as an issue in the
petition for review filed by petitioner in the Court of Tax Appeals. It was not even
touched by him in the memorandum he submitted. There is, therefore, enough
reason to believe that 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.

254. Sambrano v CTA

Facts: On February 23, 1950 Santiago Sambrano, the owner and operator of a fleet
of passenger and freight trucks with lines between Manila and the northern
provinces of Luzon, received from the Collector of Internal Revenue a demand for
the payment of his income tax liabilities. Petitioner's tax liabilities were reassessed
on April 28, 1951 and the assessment of taxes accrued from 1939-1941. As early as
January 29, 1951, petitioner already signified his intention to file a surety bond to
guarantee the payment of his tax liability and May 3,1951, executed a chattel
mortgage on 67 of his TPU buses in favor of the Government. Said mortgage was
duly approved by the Public Service Commission as required by law and registered
with the Register of Deeds of Manila on November 7, 1951. On account of
petitioner's failure to comply with the terms and conditions of the mortgage, the
respondent Collector of Internal Revenue issued on September 27, 1952, warrants of
distraint and levy covering the taxpayer's properties. Petitioner, assisted by a new
counsel, promptly filed a petition for certiorari before the Court of Tax Appeals on
December 23, 1954, praying that the respondent Collector of Internal Revenue be
enjoined from proceeding with the contemplated public sale of his properties on the
ground of prescription.

Issue: Whether the respondent collector is already barred from collecting the tax
liabilities of the petitioner on the ground of prescription

Ruling: It is to be noted, however, that petitioner's tax liabilities were reassessed

only on April 28, 1951 and the assessment of taxes accrued from 1939-1941 was
clearly beyond the 5-year prescriptive period provided for by said section 331 of the
Tax Code. However, by virtue of chattel mortgage executed by the petitioner in
favor of the government, petitioner in fact acknowledged the existence of the tax
liabilities. He is now estopped from the raising the defense of prescription.

255. Republic v Lim de Yu

Facts: Appellee Rita Lim de Yu filed her yearly income tax returns from 1948
through 1953. The Bureau of Internal Revenue assessed the taxes due on each
return, and appellee paid them accordingly. On July 17, 1956 the Bureau issued to
appellee deficiency income tax assessments for the years 1945 to 1953 in the total
amount of P22,450.50. She protested the assessments and requested a
reinvestigation. On August 30, 1956 she signed a "waiver" of the statute of
limitations under the Tax Code as condition to the reinvestigation requested.
Thereafter, or on July 18, 1958, the Bureau issued to her income tax assessment
notices for the years 1948 to 1953 totalling P35,379.63. This last assessment, like
the one issued in 1956, covered not only the basic deficiency income taxes, but also
50% thereof as surcharge. Upon appellee's failure to pay, an action for collection
was filed against her in the Court of First Instance of Cotabato on May 11, 1959.
After trial the suit was dismissed, and the Government appealed to the Court of
Appeals, which forwarded the case to this Court.

Issue: Whether the lower court erred in dismissing the case on the ground that the
right of appellant to collect the deficiency income tax assessment had already
prescribed.

Ruling. Yes. Settled is the rule that voluntary renunciation of the benefit of
prescription already obtained is considered as waiver of the defense of
prescription.However, The waiver validly covers only the tax years with respect to
which the five-year period had not yet elapsed when the said waiver was executed.

256. Phil Journalist v Commissioner

Facts: The Revenue District Office of the Bureau of Internal Revenue (BIR) issued
Letter of Authority for Revenue Officer Federico de Vera, Jr. and Group Supervisor
Vivencio Gapasin to examine petitioner’s books of account and other accounting
records for internal revenue taxes. Revenue District Officer Jaime Concepcion
invited petitioner to send a representative to an informal conference for an
opportunity to object and present documentary evidence relative to the proposed
assessment. Petitioner’s Comptroller, LorenzaTolentino, executed a “Waiver of the
Statute of Limitation Under the National Internal Revenue Code (NIRC)”. Records
show that, it did not bear the date of acceptance, that petitioner was not furnished a
copy of the waiver, and the waiver was signed only by the Revenue District Officer.
The tax liability exceeds One Million Pesos (P1,000,000.00).

Issue:Whether the waiver is in accordance with RMO No. 20-90 to validly extend
the three-year prescriptive period under the NIRC.

Ruling: No. 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 to the taxpayer.
257. Pfizer v Commissioner, CTA case No.6135( Full text cannot be
found)

MP: 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 to the taxpayer

258. FMF Dev Corp v Commissioner, CTA Case No.6153 (Still, full text
cannot be found)
MP: 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 to the taxpayer