CTA Case No. 4195 (Decision)

REPUBLIC OF THE PH ILIPPINES COURT OF TAX APPEALS Quezon City ROSA PAOI n, NC., Petitioner, -vers us- C. T. A. CASE NO. 4195 COMMISSIONER OF INTERNAL R V _NU _, - )( - - - - - - Respcmdent. ~ - ~ )( This is petition 'for rev iew 'filed by petitioner, Ro~a Padilla, Inc., appealing the assessment re pendent, Commissioner of" Internal Revenue, in the amount of P108,161.34 representing deficiency income ta>< plus increments thereon for the fiscal year ended June 30, 1979, including P600. 00 as comprom ise penalty 'for violation of bookkeeping regulations committed by said petitioner. The assessment notice addressed to the petitioner was dated January 30, 1984 and signed by Tomas C. Toledo, Deputy Commissioner, and ac knowledged to have been received by J:)etitioner on Apri 1 9, 1984 (par . 3, Petition fol"' Review] � . ' 964

- DECI S ION- eTA CASE NO . 41 95 -2- On Oct ober 8 , 19 84, in a n effort to " s ettle finally" theta>< li a bility of Rosa Padilla, Inc., based on the assessment made by respondent, its author ized representative in the person of Antonio Cruz Chua, paid the amount of P5,529~14 a s "c om promise " on t he afor e s aid a sses sment <No. NARD -79- 1 - 84-00186), co v eri n g Fiscal Ye ar 1978- 1 979 ending Jurye 30, 1979 [E >< h . F , F-1 a nd F - 2, pp . 51 -52 , CTA records). Clear l y , this is not a pr ot est as contempl a ted by law. On Augus t 03, 1987, re s p onde n t, t h rough his As s istant Co mmissioner for Collec t ion , r esponded to petitioner' s letter of Oc tobe r 8, 1984, d e nyin g t h e compromise o'f'fer a nd pay ment for "lack of legal and 'fac tual b as is, " thereby re i terating that i'f a compromi s e se t t l e ment is to b e effected, it should be b a sed on the total assess ment of P 1 08 , 16 1 .34 and not o n it s own f igures and com p utation . Accord in gl y, t he Bureau o f Int erna l Revenue re qu ested fo r the pay ment of P10 2 , 63~ . 14 <P 108 , 1 61 . 34 les s P 5 , 5 29.14 p aid on Oc t o b er 17 , 1 984> pl u s incre me nts in c ident to deli nq uen c y and t h e c ompromise p ~h alt y of P 600.00 [E>< h . G, p . 52, CTA reco r d s ] .

-DECISION- eTA CASE NO. 4195 -3- In his Answer to the Petition for Review, respondent averred that all presu�ptions are in favor of' the correctness of' tax assess�ents; that the govern�ent cannot be held liable for attorney's fees in the of' its official f'unct ions, particularly in the collection of' taxes; that the grounds for Section 295 <1> o~ the Tax Cod� and that any of' the and ~inally, that th� asse����nt ~inal and �x�cutory "when the petitioner failed to protest the assess�ent dated January 30, 1984 within 30 days fro� receipt thereo~ as required by Section 319 of' the Tax Code of' 1977." Quaere: Did the Court acquire jurisdiction to review on appeal respondent? Regrettably, it did not. Respondent in his Answer did �ention that the assess�ent has beco�e final and executory for failure on the part of the petitioner to protest the assess�ent citing Section 319 of' the Tax Cod� of' 1977. We agree with respondent � .. Fro� the evidence on record, it is clear that petitioner rec�iv�d the deficiency tax assess�ent, dated January 30, 966

- DECISION- CTA CASE NO. 4195 - 4- 1984, presumably on April 9, 1984. No action was made by petitioner until September 15, 1984, when it answe red a letter of de man d, dated August 30, 1984 , from the Chief o f the Accounts Receivable Di vision, requesting for a "reinvest iga tio n .of its Income Tax Returns for th e fiscal year s 1978- 1979 , giving us a mo ng ot he rs , th e oppo r tu ni ty to prove such ite ms disallowed" tExh. E , pp. 49-50, CTA rePordsl , and ~inall y, the lett er of October a, 1984 whef'l and payment of a "compr omi se" in the amount of PS,529. 14 was made tExh. F'J. Th e deficiency made by the respondent o n January 30. 1984 is t he "decision or ru l ing" rQfer 'l"" ed t o in B.ection 11, R. A. 1125, which has "adver sely af'f'ect9d" th e petitioner and the date of r eceipt of t h is assessment notice is essenti al for purpo se s of elevating an appeal of such deci sion or r uling of the respondent. "Assessment" should be distinguished from "collecti on" which a r e t wo dif f r ent processes. " ' Assess me nt' is n o t an a c tion or proce eding for t he collect io n of taxe s . It is me rely a no tice t o the eff e ct that th e amo unt th er ei n stated i s due as tai and a demand for the payment there o f. It is a step prelimi n ary , b ut essenti a i , to war rant di strai nt, if still f easi bl e, and also to establish a cause f or 'judicial act ion ' as the 96

-DECISION- eTA CASE NO. 4195 -5- phrase is used in Section 315 <now 302> of the Tax Code. [Alha�bra Cigar and Cigarette Manufacturing Co. vs CIR, Nos. L-12025 and L-12131, May 29, 1959]. From the time therefore petitioner received the deficiency assessment, dated January 30, 1984, which adversely affected it, it lost precious time in taking administrative and judicial action which was fatal to its cause. No protest was made at the Administrative level within the thirty-day period from receipt of the assessment of the respondent. In Fine, the disputed assessment has become final and executory pursuant to Section 229 of the Tax Code (formerly Section 319 of the Tax Code of 1977>. Consequently, this Court has no jurisdiction to take cognizance of the case because the assessment has already become final and unappealable. One final word on jurisdiction. It was actually raised by responden t in his Answer but not effectively challenged by him in the early stages of the proceeding. Be that as it may, jurisdiction is conferred by law and not by consent of the parties. It c ~I n be inquired into and raised at any time of 'the proceeding or looked into by the court ex proprio motu. 968

-DECISION- eTA CASE NO. 4195 -6- As decided by our Supreme Court in the case of Commissioner of Internal Revenue vs. Villa, 22 SCRA 4: "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 ~ mer.Q. !!!.9..t!!� To inquire into the existence of jurisdiction over the subject matter is the primary concern of the court, for thereon would depend the ability of its proceedings." Having arrived at the conclusion that this Court has no jurisdiction to entertain the appeal, there is no necessity in further looking into the merits of the petition for review. WHEREFORE, in view of the foregoing, the instant petition for review is hereby DISMISSED for lack of jurisdiction. No pronouncement as to costs. SO ORDERED. Quezon City, Metro Manila, Septe�ber 15, 1993. '~<~~ 'lt--1 . RAMON 0. DE V A Assoc'iate Ju ge 969

- DECISION- eTA CASE NO. 4195 -7- WE CONCUR: Cl~ta-~ ERNESTO D. ACOSTA Presiding Judge ~E � GRUBA Associate Judge CE:RTI:Fl:CATI ON I hereby ~ertify that t h i s de~ision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Se~tion 13, Arti~le VIII, of the Constitution. ~\Q.~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals 970