Appealing BIR assessment at the CTA by: Arnold P.

Supilanas
While the present administration is making good on its campaign promise not to impose new taxes nor increase existing tax
rates, the Bureau of Internal Revenue (BIR), as the countrys primary revenue-generating agency, is tasked to collect P1.066
trillion for the year 2012. Given this constraint, the BIR is still determined to achieve its collection goal through strict
enforcement and extensive tax investigation.
With this development, it would be prudent for the taxpayers to know their rights during tax examination and the remedies
against tax assessment. Knowing your rights involves understanding the assessment process, including, among others, the
counting of the periods within which to file a protest in case you disagree with the tax assessment.
To review the periods in protesting tax assessments, a taxpayer has the right to file an administrative protest to the tax
assessment by filing a request for reconsideration or reinvestigation within 30 days from the receipt of the final assessment
notice. Within 60 days from filing of the protest, taxpayers should submit the relevant supporting documents.
If the protest is denied or is not acted upon within 180 days from submission of documents, under Section 228 of the Tax
Code, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals (CTA) within 30
days from the receipt of the said decision, or from the lapse of the 180-day period; otherwise, the decision shall become
final, executory and demandable.
Does the assessment become final and demandable if the taxpayer failed to timely file an appeal with the CTA after the
lapse of the 180-day reglementary period?
Last Feb. 2, 2012, the CTA en banc (EB) in CTA EB No. 672 denied a taxpayers petition for review for want of jurisdiction
because said petition was filed beyond the 180-day period. According to the CTA EB, the 30-day period to appeal set by
Section 228 of the National Internal Revenue Code (NIRC), as amended, should be reckoned from the 180-day period of
inaction and not from the receipt of the final decision on disputed assessment (FDDA).
However, in a recent separate case (G.R. No. 171251) dated March 5, 2012, the Supreme Court settled the issue when it
held that in case the Commissioner failed to act on the disputed assessment within the 180-day period from date of
submission of documents, a taxpayer can either: (1) file a petition for review with the CTA within 30 days after the expiration
of the 180-day period; or (2) await the final decision of the commissioner on the disputed assessments and appeal such final
decision with the CTA within 30 days after receipt of a copy of such decision.
This position is consistent with Section 3 (A)(2), Rule 4 of the Revised Rules of the CTA which provides, in part, that in case
of disputed assessment, the inaction of the Commission of Internal Revenue (CIR) within the 180-day period under Section
228 of the NIRC shall be deemed a denial for purposes of allowing the taxpayer to appeal his case to the Court and does
not necessarily constitute a formal decision of the CIR on the tax case; provided, further, that should the taxpayer opt to
await the final decision of the CIR on the disputed assessments beyond the 180-day period abovementioned, the taxpayer
may appeal such final decision to the Court.
According to the Supreme Court, 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 for an appeal after the lapse of the 180-day prescribed period. 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 is clear from the above decision that the taxpa yers remedy to appeal the disputed assessment to the CTA will be
reckoned either from the 180-day inaction or receipt of the FDDA. These options according to the Supreme Court are
mutually exclusive and resort to one bars the application of the other.
Paying the right amount of taxes is a humble act of concern and love for our country. Knowing your rights and obligations as
taxpayers and remedies against tax assessment would somehow ensure that your tax payments are made in accordance
with the law.