REMEDIES/COLLECTION

CIR v. PINEDA
21 SCRA 105

The Government resorted to the administrative remedy of enforcement of tax lien in trying
to collect deficiency income tax of the estate of Atanasio Pineda. Manuel B. Pineda, the eldest son
of the deceased, who was made to pay the full amount taxes assessed questioned the assessment on
the ground that as an heir he is liable for unpaid income tax due to the estate only up to the extent
of and in proportion to any share he received.

BASILIA CABRERA v. THE PROVINCIAL TREASURER OF TAYABAS AND PEDRO J.

CATIGBAC
C.A. No. 502, January 29, 1946

FACTS:

The Provincial Treasurer of Tayabas issued a notice for the sale at public auction of
numerous real properties forfeited for tax delinquency "on December 15, 1940 at 9 a.m and everyday
thereafter, at the same place and hour until all the properties shall have been sold by registered mail
to Nemesio Cabrera, but the envelope containing the same was returned with the remark
"Unclaimed", undoubtedly because Nemesio Cabrera had died in 1935. The sale of the land involved
herein was executed on May 12, 1944.

Thereafter, Basilia Cabrera filed a complaint in the then Court of First Instance of Tayabas
attacking the validity of the sale on the grounds that she was not notified thereof, and that although
the land had remained in the assessment booking the name of Nemesio Cabrera, a former owner,
she has become the registered owner since 1934 when a Torrens title was issued to her by the register
of deeds of Tayabas.

UNGAB DOCTRINE SUSTAINED IN CIR v. PASCOR

309 SCRA 402

In Ungab V. Cusi, 97 SCRA 887, the Supreme Court held that while there can be no civil
action to enforce collection before the assessment procedures provided in the Code have been
followed, there is no requirement for the precise computation and assessment of the tax before there
can be a criminal prosecution under the Tax Code.

In the subsequent case of CIR v. CA, 257 SCRA 200, it was held that before one is
prosecuted for willful attempt to evade or defeat any tax under Sections 253 and 255 of the Tax
Code, the fact that a tax due must first be proved.

However, in the recent case of CIR v. PASCOR, 309 SCRA 402, the Court ruled that an
assessment is not necessary before a criminal charge can be filed.

First - Section 205 of the Tax Code clearly mandates that the civil and criminal aspects of
the case may be pursued simultaneously.

Second - A criminal complaint is instituted not to demand payment, but to penalize the
taxpayer for violation of the Tax Code.

Third - The crime is complete when the violator has knowingly and willfully filed a
fraudulent return with intent to evade and defeat a part of all of the tax. (Guzik v. U.S. 54 F 2d. 618)

REMEDIES/PROTEST
NORTH CAMARINES LUMBER CO. v. CIR
109 Phil. 511

As the petitioner had consumed thirty-three days, its appeal was clearly filed out of time. it
is argued, however, that in computing the 30-day period fixed in Section 11 of Republic Act No.
1125, the letter of the respondent Collector dated January 30, 1956, denying the second request for
reconsideration, should be considered as the final decision contemplated in Section 7, and not the
letter of demand dated August 30, 1955.

This contention is untenable. We cannot countenance the theory that would make the
commencement of the statutory 30-day period solely dependent on the will of the taxpayer and place
the latter in a position to put off indefinitely and at his convenience the finality of the tax assessment.
Such an absurd procedure would be detrimental to the interest of the Government, for 'taxes are the
lifeblood of the government, and their prompt and certain availability is an imperious need.' (Bull
v. U.S. 295, U.S. 247)

REMEDIES/TAX REFUND

JUAN LUNA SUBDIVISION, INC. v. SARMIENTO, et al.

91 Phil. 371

Juan Luna Subdivisions, Inc. bought a suit against the City Treasurer and the Philippine
Trust Company as defendants in the alternative to determine which of the two defendants is liable
for plaintiff's check. It appears that plaintiff issued to the City of Treasurer of manila a check to be
applied to plaintiff's land tax for the second semester of 1941, the exact amount of which was yet
undetermined. On February 20, 1942, after the amount had been verified, which was P341.60, the
balance of P1,868.92, covered by voucher no. 1487 of the City Treasurer's Office, was noted in the
ledger as a credit to the Juan Luna Subdivision, Inc. Thereafter, the books of the Philippine Trust
Company revealed that plaintiff's check was deposited by the City Treasurer with the Philippine
National Bank, and the latter was paid the cash equivalent thereof by the Philippine Trust Company,
which debited the amount against Juan Luna Subd., Inc. However, the City Treasurer refused after
liberation to refund the plaintiff's deposit of apply it to such future taxes as might be found due.

The plaintiff claims the whole amount of the check contending that taxes for the last
semester of 1941 had been remitted by C.A. No. 703.

CIR v. CTA
234 SCRA 348

A petition for review of the decision of the BIR denying the tax refund of Citytrust was
filed with the CTA. It was submitted for decision based solely on the pleadings and evidence
submitted by Citytrust. CIR could not present any evidence by reason of the repeated failure of the
Tax Credit/ Refund Division of the BIR to transmit the record thereon, to the Solicitor General.
The CTA rendered its decision ordering BIR to grant a refund to Citytrust in the amount of
P13,314,506.14. The CA affirmed the judgment of the CTA.

REMEDIES/PRESCRIPTION

MISAEL P. VERA, et al. v. HON. JOSE F. FERNANDEZ, et al.

89 SCRA 199

The Government of the Republic of the Philippines claimed deficiency income taxes
against the Estate of the late Lius D. Tongoy. The Administrator argued that the claim was barred
under Section 5, Rule 86 of the Rules of Court. Hence, the issue as to whether or not the Statute of
Non-Claims - Sec. 5, Rule 86 of the New Rules of Court - barred the claim of the government for
unpaid taxes, though it was filed within the period of limitation prescribed in Sections 331(now 203)
and 332 (now 222) of the NIRC.

REPUBLIC OF THE PHILIPPINES v. SALUD H. HIZON

320 SCRA 574

FACTS:

On July 18, 1986, the BIR issued to Salud Hizon a deficiency income tax assessment
covering the fiscal year 1981-1982. Hizon not having contested the assessment, the BIR, on January
12, 1989, served warrants of distraint and levy to collect the tax deficiency. However, it did not
proceed to dispose of the attached properties.

More than three (3) years later, or on November 3, 1992, Hizon wrote the BIR requesting
a reconsideration of her tax deficiency assessment. The BIR, in a latter dated August 11, 1994,
denied the request. On January 1, 1997, it filed a case with the RTC to collect the tax deficiency.
The complaint was dismissed on the ground of prescription.
 MAMBULAO LUMBER COMPANY v. REPUBLIC OF THE PHILIPPINES
132 SCRA 1

FACTS:

On January 15, 1949, the Bureau of Forestry demanded from Mambulao Lumber Company
the payment of assessed forest charges and surcharges. The company protested the assessment. On
August 29, 1958, the Acting Commissioner of Internal Revenue likewise wrote a letter to the
company demanding payment, which subsequently requested reinvestigation. The BIR gave the
company twenty (20) days within which to submit its verification of payments. For failure of the
company to comply, the BIR, on August 25, 1961, filed a complaint for collection with the then
Court of First Instance. The company raised the defense of prescription, arguing that from January
15, 1949, when the Bureau of Forestry made an assessment and demand for payment up to the filing
of the complaint for collection on August 25, 1961, more than five (5) years had elapsed.

FERNANDEZ HERMANOS, INC. v. COMMISIONER OF INTERNAL REVENUE

29 SCRA 552

FACTS:

Upon verification of the taxpayer's income tax returns for the years 1950 to 1954 and for
the year 1957, the Commissioner of Internal Revenue assessed against the taxpayer alleged
deficiency income taxes for the said period. The assessment was assailed before the Court of Tax
Appeals, and was eventually elevated to the Supreme Court. One of the main issues raised was
whether or not the government's right to collect the deficiency income taxes in question has already
prescribed. The taxpayer contented that the prescription has set in for failure on the part of the
Commissioner to file a complaint for collection against it in an appropriate civil action.

REPUBLIC OF THE PHILIPPINES v. AMADO ARANETA, et al.

2 SCRA 144

FACTS:

On February 22, 1957, the Republic filed before the then Court of First Instance of Manila
an action against J. Amado Araneta and J. Amado Araneta & Company, Inc., as principals, and the
Manila Surety & Fidelity Company, Inc., as surety to recover from them internal revenue taxes
including surcharge, the payment of which was guaranteed by bond executed on March 18, 1949,
including interest from December 6, 1951, when the first extrajudicial demand was made.
Defendants argued that the five-year period of limitation provided for in Section 332, paragraph
(now Section 222) of the National Internal Revenue Code already had lapsed, hence the
Government's action was barred; and that granting that the said bond was valid, the enforcement of
the principal obligation having been barred, it follows that the government of the obligation
undertaken in the said bond was also barred.