CTA Case No. 4580 (Resolution)

. REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ANTAK CONSOLIDATED. INC�� C.T.A. CASE NO. 4580 Petitioner, - versus - COftftiSSIONER OF INTERNAL REVJt. UE, Respondent. >t - - - - RESOLUTION The instant petition for 'reviev seeks to set aside the decisions of the respondent Commissioner o� Interna Revenue <1> assessing petitioner for the taxable year 1981 the amounts o� ?4,224,537.60 as deficiency income tax, P67,309,28 as deficiency documentary stamp tax, P6, 708. 00 as deficiency fixed tax, P400. 00 as co'l'promise penal ties and <2 > issuing warrant of distraint and/or levy against the petitioner. From the pleadings and evidence presented by the parties, the following f cts have been made clear: On April 18, 1986, petitioner, a corporation duly organized and existing under and by virtue of the laws 64G

RESOLUTION - C.T.A. CASE HO. 4580 - 2-' of the Philippines, received an assessment letter fr om the respondent dated April 15, 1985. Respondent assessed and demanded from the petitioner the amounts of P4, 224, 537. 60, P400. 00 and P67~ 309. 28 representing deficiency income tax, compromise penalties and deficiency documentary stamp tax, respectively, inclusive of interests thereon, as computed below: Net loss per return <P 110,363.78) Add: Disallowance-undeclared _t;,.~, QQ01 QOO. Q..Q rental income P_?~.. 88'?.'- 62_6. ?_~ Net income per review P2,640,336.60 Tax due thereon Add: 20X interest from 4-16-82 1, 584, 201. 60 P4,224,537.60 to 4-15-85 (604 max. ) Total amount due and collect~ble No comparative xinancial P300.00 statement 10~.0Q No schedule of taxes paid Total P400.00 Qeficiency Documentary Stamp Tax Paid-up capital stock f.1?-t-.18~L~Q_?_~- 0~ Documentary stamp tax due p 67, 00'3. 28 thereon Compromise penalty r� - - - '3.09. Q_Q Total 67L:m9. 28 Petitioner timely protested he above assessments in a letter dated May 15, 1986 which responden t received on May 16, 1986.

C.T.A. CASE NO. 4580 -3- On October 30, 1986, petitioner availed of tax amnesty under Executive Order No. 41 as amended, filing the necessary tax amnesty return and comparative statement of assets, liabilities and net worth as of December 31, 1980 and Dece er 31, 198 , and paying the minimum mount of P10,000.00. Respondent, however, served petitioner a warrant of distraint and/or levy on Janu ry 15, 1991 for a total amount of P4, 298, 9 4. 88, n amount exceeding by P6, 708. 00 the ssessmen notice originally issued by the respondent. Petitioner media ely filed his petition without awa~ting the final dec� ion of the respondent on the merits of the protest. This Court i again faced with the issue of Its jurisdiction. Section 7 of Republic Act No. 1125 as amended, provides: �sec. 7. .Jurisdiction The Court of Tax Appeals shall exercise exclusive appellat jurisdiction to review by appeal as herein provided - <1) Deci ions of the Com issioner of Internal Revenue.in cases involving disputed assessments, refunds of internal revenue t xes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue

RESOLUTION - C.T.A. CASE NO. 4580 -4- Code or other law or part o:f law administered by the Bureau o:f Internal Revenue~ XXX XXX xxx.� The Supreme Court, in the case o:f Co��i.ssioner o:f Internal Revenue v. Villa, 22 SCRA 3, held: "Jurisdiction over the subject matter is fundamental for a court to act on a given controversy. It is conferred by law, not by consent of the parties. It can be challenged at any stage of the proceedings and :for lack of it, a court can dismiss a case e.'V: mero motu. To inquire into the existence o:f jurisdiction over the subject matter is the primary concern of a court, for thereon would depend the a ility of its entire proceedings. XXX. The word �decisions" in paragraph 1, Section 7 of Republic Act 1125, quoted above has been interpreted to mean the decisions of the Commissioner of Internal Revenue on the protest of the taxpayer against the assessments. xxx." Does the issuance of the warrant of distraint and/or levy constitute the final decision of the respondent appealable before this Court? This Court does not think so. The protest filed by the petitioner on May 16, 1986 over the assessment has not been :finally resolved by the respondent. This Court cannot consider the warrant issued on January 15, 1991 as the final

RESOLUTION - C.T.A. CASE NO. 4580 -5- decision of the respondent to be the basis in bringing the case before this Court. The Supreme Court ruled: ~<T>he reviewable decision of the Bureau of Internal Revenue is that contained in the letter of its Commissioner, that such constitutes the final decision on the ma tter which may be appealed to the Court of Tax Appeals and not the ft'arrants of distraint. � ( Co��issioner of Internal Revenue v. Union Shipping Corporation, 185 SCRA 547) Petitioner, in order to protect itself, may question the warrant in the administrative level pending resolution of its protest. Furthermore, based on the Memorandum dated December 13, 1990 <B.I.R. Records, p. 78) of the Chief, Appellate Division and the First Endorsement dated February 1991 <Ibid. P� 99) of the Chief, Collection Enforcement Division, the warrant of distraint and/or levy was issued merely to forestall the running of the prescriptive period on matters of enforcing collection. In fact after issuance of this warrant the petitioner's docket was forwarded back to the Appellate Division for resolution of the protest. It clearly shows that there was yet no final decision on the protest. The warrant cannot be considered to be the final decision because of lack of

. .... RESOLUTION - C.T.A. CASE HO. 4580 -6- intention on the part of the respondent to en.force collection. WHEREFORE, in view of the .foregoing, this Court hereby RESOLVES to DISMISS this case .for lack o.f jurisdiction without prejudice to the filing of another petition on the part of the petitioner upon receipt o.f respondent's final decision on the protest. SO ORDERED. Quezon City, Metro Manila~ August 24t 1993. e . .~-: "<- ~ ERHESTO D. ACOSTA Presiding , Judge ~UE K. GRUBA Associate Judge