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G.R. No. 112675. January 25, 1999.
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* THIRD DIVISION.
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the Court takes judicial notice that it took effect only later, on
December 14, 1984.
Same; Prescription; Whether the governments right to collect
and assess the tax has prescribed involves facts which were ruled
upon by the lower courts, and in the absence of a clear showing of
palpable error or grave abuse of discretion, the Supreme Court
must not overturn such factual findings of the Court of Appeals
and the Court of Tax Appeals.The CA and the CTA categorically
found that the prescriptive period was tolled under then Section
333 of the NIRC, because the taxpayer cannot be located at the
address given in the information return filed and for which reason
there was delay in sending the assessment. Indeed, whether the
governments right to collect and assess the tax has prescribed
involves facts which have been ruled upon by the lower courts. It
is axiomatic that in the absence of a clear showing of palpable
error or grave abuse of discretion, as in this case, this Court must
not overturn the factual findings of the CA and the CTA.
PANGANIBAN, J.:
The Case
WHEREFORE, 5
the petition is DISMISSED, with costs against
petitioners.
The Facts
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The antecedent facts, as found by the Court of Appeals, are
as follows:
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The Issues
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First Issue:
Pool Taxable as a Corporation
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[I]t has been the long standing policy and practice of this Court
to respect the conclusions of quasi-judicial agencies, such as the
Court of Tax Appeals which, by the nature of its functions, is
dedicated exclusively to the study and consideration of tax
problems and has necessarily developed an expertise on the
subject, unless20 there has been an abuse or improvident exercise of
its authority.
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Thus, the
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Court in Evangelista v. Collector of Internal
Revenue held that Section 24 covered these unregistered
partnerships and even associations or joint accounts, which
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had no legal
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personalities apart from their individual
members. 24The Court of Appeals astutely applied
Evangelista:
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insurance businesses
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covered under their quota-share
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reinsurance treaty and surplus reinsurance treaty with
Munich. The following unmistakably indicates a
partnership or an association covered by Section 24 of the
NIRC:
x x x The fact that the pool does not retain any profit or income
does not obliterate an antecedent fact, that of the pool being used
in the transaction of business for profit. It is apparent, and
petitioners admit, that their association or coaction was
indispensable [to] the transaction of the business. x x x If together
they have conducted business, profit must have been the object as,
indeed, profit was earned. Though the profit was apportioned
among the members, this is only a 37 matter of consequence, as it
implies that profit actually resulted.
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The petitioners reliance on Pascual v. Commissioner is
misplaced, because the facts obtaining therein are not on
all fours with the present case. In Pascual, there was no
unregistered partnership, but merely a co-ownership
39
which
took up only two isolated transactions. The Court of
Appeals did not err in applying Evangelista, which involved
a partnership that engaged in a series of transactions
spanning more than ten years, as in the case before us.
Second Issue:
Pools Remittances Are Taxable
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49 Rollo, p. 73.
The Ceding Companies undertake to cede to the Munich fixed quota
share of 40% of all insurances mentioned in Article 2 and the Munich
shall be obliged to accept all insurances so ceded.
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50 Ibid., p. 76.
The Munichs proportion of any loss shall be settled by debiting it in
account, and a monthly list comprising all losses paid shall be rendered to
the Munich x x x.
51Ibid., p. 102.
The Ceding Companies bind themselves to cede to the Munich the
entire 15 line surplus of the insurances specified in Article 2 hereof.
The surplus shall consist of all sums insured remaining after deduction
of the Quota Share and of the proportion combined net retention of the
Pool.
The Munich undertakes to accept the amounts so ceded up to fifteen
times the Ceding Companys proportionate retention.
52Ibid., p. 105.
The Munichs proportion of any loss shall be settled by debiting it in
account. A monthly list comprising all losses paid shall be rendered to the
Munich on forms to be agreed. x x x.
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Third Issue:
Prescription
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o0o
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