CTA Case No. 104 (Decision)

REPUBLIC OF THE PHILIPPINES COUHT OF TAX APPEALS MANlLA ORlANDO V. CALSADO, C. I.A. CASE NO. 104 Petitioner , - versus - THE COLLECTOR OF INTERNAL REVENUE , Re spondent . x- - - - - - - ~ - - - ~ - - x DECISION This is a case arising from a claim for refund of petitioner for the sum of �:55.00 alleged to have been illegall y and erroneou sly collected by the res- pondent Collector of Internal Revenue by way of in~ come tax for the year 1950 , and further , for a review of respondent ' s assessment for the sum . of 40.19 as income tax rlue from petitioner for the year 1949, contending that in both instances he is exempt there- from . This case has been submitted partly on an agreed stipulation of facts in add tion to the evidence pre- sented by both parties. The pertinent and established facts may be summarized as follows: � In the income tax return filed by the petitioner for the year 1949 (Exh . u2") , it appears that peti- tioner had a taxable net - income of P2 , 339 . 50; and in his income tax return for the year 1950 , (Exh . 3 11 11 ), there appears a taxable net income of ~2,892 . 00. ~ The peti- tioner has a brother, Abelardo Calsado , then 19 years of age in 1949 and a sister, Angeles Calsado of legal 1~

DECISION .. CoT.A. CASE NO. 104 - 2- age, both of whom lived with petitioner and were fully dependent on the latter for education and support dur- ing the taxable years 1949 and 1950. (Pars. 2 and 3, Stipulation of Facts) . The tax assessment of P55 .00 for 1950 has been paid under protest on May 15 and August 15, 1951, under Official Receipts Nos . 90788 and 348042 respectively, and refund thereof has been requested on May 16, 1951, (Exhibit "F", and par. 8 , Stipulation of Facts). Furthermore , ~ tfie assessment for the year 1949, in the sum of ~40 .19 has also been contested by petitioner (Exhibit A 11 11 , par . 9, Stipu- lation of Facts) � .The decision of the respondent regarding the claim for refund ano the protest on the assessment (Exhibit "5") from which appeal has been taken is dated February 15, 1955, but it does not appear in the record nor has evidence been adduced as to when petitioner received a copy of the said decision. However, we assume that the petitioner filed his petition for review within the 30-day period following the receipt of the said decision. As provided for by the Income Tax Law, the per- sonal exemption then enforced in 1949 for an unmarried person was ~1,000 . 00 and 2,000.00 for a married per- son or head of a family and in the year 1950, the personal exemption allowed an unmarried person was ~1,800o00 , and for a married person or head of a fa- mily, 3,000.00. " The petitioner contends that for purposes of paying income taxes, although unmarried, he is, and should be, classified as "head of a family", as de -

DECISION - C.I.A. CASE NOo 104 - 3- fined in section 23, paro (b) of the Internal Revenue Code in view of the fact that during the taxable years 1949 and 1950, a minor brother, Abelardo Calsado, 19 years of age, and a sister, Angeles Calsado of age were fully dependent on him for education and supporto The statutory rule involved in this case is found in section 23, par. (b) of the National Internal Re- venue Code which defin~the term "head of the family.. , as follows: II X X lx X X� For the purpose of this section, the term 'head of a family' includes an unmarried man or woman with one _or both parents, or one or more brothers or sisters, or one or more le- gitimate, recognize natural, or adopted chil- dren dependent upon him or her for their chief support where such brothers, sisters, or chil- dren are less than twenty-one years of age or where such children are incapable of self-sup- port because mentally or physically defective." Internal Revenue Regulations No. 2, implementing this provision of the Tax Code, defines "head of a fa- mily" as follows: "A head of a family is an individual who actua!ly supports and maintains in one house- hold one or more individuals, who are closely , connected with him by blood relationship, rela- tionship by marriage , or by adoption, and whose right to exercise family control and provide for these dependent individuals is based upon some moral or legal obligation. In the absence of continuous actual residence together, whe- ther or not a person with dependent relatives is a head of a family within the meaning of t e statute must depend on the character Qf the se- parationo If a father is absent on bu~iness, or a child or other dependent is away at school~ or on a visit~ the common home being still � / maintained, the additional exemption still ap- plies. If,moreover, thru force of circumstances a parent is obliged to maintain his dependent children with relatives or in a boarding house, while he lives elsewhere, the additional exemp- tion may still applyo" l39 OoG. 325) 1f

DECISION - ~oT.Ao CASE NO. 104 We believe that the foregoing definitio~have to be read in connection with the applicable provisions of the New Civil Code relating to support, more parti- cularly Articles 291, 294, 295 and 299 thereof (for- merly Arts. 143-145 and 149, Spano Civo Code) which we quote hereunder: 11Art. 291. The following are obliged to suppoft each other to the whole extent set forth in the preceding article: ~~~ The spouses; Legitimate ascendants and descen- dants7 ~3) Parents and acknowledge natural chil- dren and the legitimate or illegitimate des- cendants of the latter; X X X X X X "Brothers and sisters owe their legi- timat~ and natural brothers and sisters, al- though they are only of the half-blood, the necessaries for life ., when by a_"physical or mental defect, or any other cause not impu- table to the recipients, the latter cannot secure their subsistenceo This assistance includes, in the proper case, expenses neces- sary for elementary education and for profes- sional or vocational training." "Art. 294. The claim for support, when prope~ and two or more persons are obliged to give it, shall be made in the following order: (1) Form the spouse; (2) From the descendants of the nearest degree(~�) From the ascendants, also of the nearest degree; (4) From the brothers and sisterso "Among descendants and ascendants the order _in which they are called to the intes- tate succession of the person who has a right to claim support shall be observed. 11 � A 11 rto 294o X X X - X X When two . or more recipients at the same t ime claim support from one and the same per- son legally obliged to give it, and the latter should not have sufficient means to satisfy ,.. lc} I

I DECISION - CoT.A. C SE NO. 104 - 5- all , the order established in the preceding articles shall be followed, unless the con- current obligees should be the spouse and a child subject to parental authority, in which case the latter shall be pref erred." "Art . 299. The person obliged to give suppo~t may , at his option , fulfill his obli- gation either by paying the allowance fixed or by receiving and maintaining in his house the .. person who has a right to receive support . The latter alternative cannot be availed of in case there is a moral or legal obstacle thereto . �� In relation to the foregoing rules , we have the following undisputed facts: that during the taxable years 1949 and 1950, the petitioner had two dependents , one a minor brother and the other a sister , both being fully dependent upon him for support and education; that petitioner and his dependents rented a home for their residence in Pasay; that both dependents were jobless; that during 1949 and 1950 , petitioner ' s father was earning a meager monthly salary of 110.00 and was in turn supporting his wife and two minor children , all of whom were likewise wholly dependent upon peti- tioner's father for support; that on account of the financial limitation of petitioner's father , the father seldom , if at all , sent money to his son and daughter in Manila living with petitioner; and that the peti- tioner having the means to do so out of his monthly income of 225.00 , he undertook to provide the entire support of his brother and sister first above- mentioned, then under his control. Viewed in the light of the foregoing provisions tl of law, this Court believes and so hold$that under the ,,

DECISION - C.T.A. CASE NOo 104 - 6- facts as stated above, the petitioner is included .within the term "head of a family" as contemplated in section 23, paragraph (b) of the Tax Code, as implemented by Revenue Regulations Noo 2. We believe that the petitioner, under the circumstances was at least legally obliged to give support to his minor brother, in view of the financial inability of his parents to so provide support (Artso 294, 295 and 299, Civil Code) and having actually -maintained such sup- port, placed the petitioner squarely within the pur- view of the aforecited provisions of the Tax Code. The petitioner is therefore entitled to claim the bene- fits of the corresponding personal exemptions as uhead of a familyM for the years 1949 and 1950, with the result that -considering these exemptions in relation to the income of petitioner as declared in his income tax returns (Exhs. "2" and "3"), the latter has no taxabl~ income upon~ which an income tax liability may If arise. However, this Court has noted from the pleadings of the parties that the petition for review in this case was filed only on March 28, 1955, which is more than two years after the petitioner has paid under pro- test the sum of 55~00 on May 15, 1951 (Exhibit ttF'') the incom~ tax corresponding to 1950, which petitioner / contests. Since it is provided in section 306 of the National Internal Revenue Code that a suit for the re- covery of a tax alleged to have been erroneously or illegally assessed and collected should be maintained within two years from the date of payment thereof, a '17

DECISION - C. I.A. CASE NO. 104 - 7- requirement we have held as substantial and jurisdic- tional~ a matter which this Court may raise and resolve ~proprio , (Hoa Hin Co ., Inc. v. David , (CTA) Civil Case No . R- 3213 , August 11 , 1955 , citing inter alia Venus v. Posadas , 54 Phil. 832; Wee Poco v. Posadas, L- 6135, March 31 , 1955 , 51 O.G. No . 4 , Po 1860), the fact that petitioner's action has been commenced beyond this period , we believe and hold to be fatal to his claim for the refund of the sum paid. IN VIEW OF THE FOREGOING CONSIDERATIONS , the claim for refund of the sum of 55. 00 as income tax for 1950 alleged to have been illegally and erroneously collected is hereby dismissed for lack of jurisdiction of this Court to entertain the same. ith respect to the tax assessment of ~40.19 for the year 1949 , still uncollected and protested , the respondent's assessment therefore is hereby reversed and petitioner is hereby declared free from liability thereto. Without pronouncement as to costs. SO ORDERED . Manila , Philippines, January 11 , 1956. I CON-

DECISION - - 8- C.I.A. CASE NO. 104 CUR: I concur. However, my concurrence in regard to the dismissal of the claim for refund of 55 . 00, which was paid on May 15, 1951 , :s based solely on the ground stated n my concurring opinion � n College of Oral & Dental Surgery Vo The Collector of nternal Revenue, C. I. a No. 121. ROMAN M. UN L Associate Judge 19