BANK OF THE PHILIPPINE ISLANDS VS CIR before the expiration of the ordinary prescriptive periods for assessment
G.R. No. 139736; October 17, 2005 and collection; and (4) for a definite period beyond the ordinary
Chico-Nazario, J:
Facts:
On June 1985, the Bank of the Philippine Islands sold US $500,000.00 to the
Central Bank for the total sales of US $1,000,000.00. On October 20, 1989, BIR
issued an assessment notice finding BPI liable for a deficiency documentary
stamp tax (DST) in the amount of P28,020.00 for the said sales. On November
16, 1989, a protest was filed by BPI however there was no immediate reply from
BIR. Only on October 15, 1992, four days before the expiration of period to
collect, the Commissioner issued a Warrant of Distraint/Levy against BPI for the
satisfaction of the assessed tax. A letter denying the request for reconsideration
was received by BPI on September 11, 1997.
BPI filed a petition for review with the Court of Tax Appeals, alleging the
defense of prescription stating that BIR only had three years to collect but it had
been almost eight years when it denied the protest. The CTA held that the statute
of limitation for BIR to collect on the assessment had not prescribed since it was
suspended by the protest filed by BPI. CTA likewise ruled that the sales of
foreign currency by BIR were not subject to DST. The Court of Appeals
sustained the finding of the CTA that the running of the prescriptive period for
collection was suspended when BPI filed a protest, however, it reversed the
decision as to the issue whether the sale was subject to DST.
Issues:
Whether or not the filing of the protest by BPI suspended the running of the
prescriptive period
Whether or not the BIR’s right to collect the assessed tax has prescribed
Ruling:
No. The filing of the protest by BPI did not suspend the running of the three-year
prescriptive period of the BIR to collect the assessed tax. The statute of
limitations for collection of the deficiency DST in Assessment Notice issued
against BPI, had already expired and none of the conditions and requirements
for exceptions from the statute of limitations on collection exists in the present
case.
As laid down by the Court, the rules on the exceptions to the statute of limitations
on collections are as follows:
1. A valid waiver executed in accordance with paragraph (d) of Section
223 of the Tax Code of 1977, as amended. A valid waiver must be: (1)
in writing; (2) agreed to by both the Commissioner and the taxpayer; (3)
prescriptive periods for assessment and collection.
2. Section 224 the Tax Code, which include a request for reinvestigation
granted by the BIR Commissioner.
In this case, BPI’s protest did not indicate whether it was a request for
reconsideration or a request for reinvestigation. Section 6 of Revenue
Regulation No.12-85 distinguishes these two types of protest:
(a) Request for reconsideration refers to a plea for a re-
evaluation of an assessment on the basis of existing
records without need of additional evidence. It may involve
both a question of fact or of law or both.
(b) Request for reinvestigation. refers to a plea for re-
evaluation of an assessment on the basis of newly-discovered
or additional evidence that a taxpayer intends to present in the
reinvestigation. It may also involve a question of fact or law or
both.
Since BPI did not adduce additional evidence, it should be treated as a
request for reconsideration. Under the Tax Code, a request for
reconsideration does not suspend the running of the prescriptive period.
Even assuming that the protest is a request for reinvestigation, the same
did not toll the running of the prescriptive period because the CIR failed
to show proof that the request has been granted and that a
reinvestigation has been actually conducted.
3. Even when the request for reconsideration or reinvestigation is not
accompanied by a valid waiver or there is no request for reinvestigation
that had been granted by the BIR Commissioner, the taxpayer may still
be held in estoppel and be prevented from setting up the defense of
prescription of the statute of limitations on collection when, by his own
repeated requests or positive acts, the Government had been, for good
reasons, persuaded to postpone collection to make the taxpayer feel that
the demand is not unreasonable or that no harassment or injustice is
meant by the Government, as laid down by this Court in the Suyoc case.