CTA Case No. 4498 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION~ Petitioner, - versus - C.I.A. CASE NO. 4498 COMMISSIONER OF INTERNAL Promulgated: REVENUE �. MAY 031996~, Respondent. / X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION Th1s case involves a deiic:1ency mcome tax and e::-rpanded � vvithtwldmg tax assessments, inclus1ve oi mcrernents; and penalties ior late payment of the quarterly income tax all for tl1e year 1979 in tl1e total amount of P4l\69 1335.65. Petitioner (Atlas ior short) 1s a domestlc corporation duly organized and existing under the laws of the Philippines. It is engaged m the business of mining gold, copper ores and concentrates. 484

DF.CISION- C.T.A. CASE NO. 4498 - Page2- An inv~stigation '�Nas conducted by tlle Bureau of Internal Revenue on Atlas's income and busint-ss t-1x liabiliti~s f�x t11e y~ar 1979. As a rt-sult t11ert-of tilt- R~venue E~�illminiC'rs V�lllo have .;:.:.nduct~d t11~ ~xa.mination prepar~d a lvlemorandum Report (E:z:hs. 1, 2, 3 and 4, pp. 5-20, :giP. records), dated March 25, 1935, addresserj to t11o;;. rt-spo.)nd~nt, Commissioner of Internal Revenue. Ther!:?after. r;,;,.spond~nt issued an assessment letter (E::dl. l�d, liatJ?.j l�..pril 12, 19&5, against tllo;;. p;,;,.titioner d;,;,.manding for the payment of the sum of P40. 691J.35.&5, representing alleged deficiency itKome and ~~-rpan(jed \.vitllllolding taL~es, inclusive of increments tllereon, and penalties for late payment of tlle quarterly income t.ax, computed as f�.)llO'YVS: (Ez:ll. A -1) Deficiency Income Tax - 1979 N-t income per return P331))62,7.36.00 Add: Unallowable deductions: Exchange earned (Capitalizeable) ............. P 2,004.000.00 Gt-n~ral vverhJ:?ad (privr y;,;,.ar�s E.-~�q:~ens;,;,.) ............. 360,�394.&9 Adjusttnent ~')f accrual of tax differential on taxable income (prior ..-..xp T;T~fv:<.;c�rs "'.)1::~7-nc-..f..:.<. ,��~ ...���.���.��� Management fee (No EiNT) ......................... . Net income per investigation� Tax due tllereon p 155, 157,&90.00 Less: ..a..mount already paid per return 1)2.747,)12.')1) Defi.:~iency income tax Add: 14% int. fr. 4/15/60 to 7/31/.')0 P .?:.?.-/�/ 1u').. 577.'f./_t.:J: q.�.::r.. 1..(..l"tl.~.:J . .-.~J"./";I 485

DECISION- C.T.A. CASE NO. 4.498 - Page3- to --�oco> � r- (� t <. 1'0 111 . 1. VI~1 I.. voU~ . '�t'IlL.~)I~,v..,) 12,1)6.)0~.. 71) TOT.8. ...L AlviOUNT DUE AND COLLECTIBLE p )1).468.9�34.~.4 Penalties fo.r Late Payment of Quarterly Income Tax - 1979 Income tax due ior Etld- 9 C.n..l-~�~r\�+-l,h,.i- 1.119 ., 1' ~., 1;�~, ������~������������������������� 0..,) Less: ..<\mount paid for tl1B- qll-�a1-+~A-.;A" .r l~...+-ca: tV�;;"''-~.+ L.)II ''"Z' 0/'7t 9. ........................ . Basic deficiency income tax - paid on 4/ 14/()0 under O.R. # 4088343 .............................. 1. t-=�x I 0/70 n�-.u. ~r'"t' c.r�-�lT.I1 Ji.",lf~'�(~��,+J.VJ.JICv . �-<� f~"1+U""'' 1.): .r),7 �..��.�........ p ?f-)t::, 7?? .... �~� ?~ � I I ..... - ...... . J Interest tor late payment - 14::t int. . I.f. 5'!"5"0/'"(?(J~to 'i"/14"/("Sl) ..................................... . p Deficiency Expanded Withholding� Tax Amount of Management fees ........................... Tax due thereon (5%) ........................................... p 2,614,495.60 Less: Amount already paid .............................. DM1c1ency Expanded Vofithholding Tax ........ . Add: 25:~ surcharge ............................................ 14% int. fr. 2/1/80 to 5/1/35 ............ TOT.~. ..LAMOUNT DUE AND COLLECTIBLE .... On Ivla.v 16. 1Y8). a letter-protest (Exh. C), dated 1vlay 11 1985, w�as fileci by Atlas through the Gadioma La�v., Offices contesting the assessments as null and void. Pertinent portion of the protest reads as follows: 48G

DECISION- C.T.A. CASE NO. 4498 - Pa~4- "On behalf of our client called ~t:.~CMDC for short, -..;-?e file this protest under the provisions of law requiring ta~~ayers to protest deficiency assessments -:..vithin 30 days from receipt dse the)1 become linal and executory. This is not a request for reconsideration or remvestigation or a plea for ac:commodation in any sense. It shoulci not therefore be inwrpreted to estop our client ffi)m invoking the defense of prescription whenever this becomes available." �11~tlas�s representative, Mr. Zoil<) Y. Castrillo, Jr., Senior Vice President and ~t.~ssistant Treasurer, signed a Waiver of the Statute of Limit3.tion (undated) valid up to December .31, 19&9 (p. 76, BIR record). On December 29, 19&9, another waiver \"ras signed by trJ.e same represent3.tive valid up to March ~~ 1, 1990 (p. 79, BIR record). The last \\Taiver signed (also undated) VvTas valid up to June 30, 1990 (p. 140, BIR record). But in all instances, the three (3) wa.ivers v;ere not signed by the Commissioner of Internal Revenue. On i�.u.gust 29. 1qqo. Atlas received the Decision of Victor i�~. Deoferio, Jr., tr1en Deputy Commissioner, dated 1v1ay 23, 1990, denying the request for cancellation of tlle assessments and reiterated trJ.e collection of the sum of P40,691,335.&5 (Exh. D), portion thereof is quoted hereunder, to wit: "Please be informed that as per report of re- . investigation conducted by Revenue Officer Rolando IvL Dionisio, relative to v' our deiiciencv income and business tax liabilities for the year 1979, tllere V�tas still found due and collectil)le from you U1e total amount of P40,691,335.&5, inclusive of increments.

DECISION- C.T.A. CASE NO. 4498 - Page5 - In this conn~ction, pl~as~ be inform~d that our decision on the matter is to reiterate the collection of the aforesaid amount as originally assessed for the reas~:.n that you failed to substantiate t11e allegations cont:.uned in your letter- protest dunng the re-mvestlgatlon. :x: x }L" (Underlining Ours.) Hence. petitioner filed an appeal witl1 this Court �)11 Septeml)er 2&, 1990. Petitioner questioned t11e disallovvatKes made by respon(lent. namely: ( 1) the exchange earned of P2,004,000.00; (2) General overhead of P360,&94.&9; (3) Adjustn1ent of Accrual of Tax Differential on Net TaY:.able IrKome (196&) ()i P 1,602, 1c�3.00; (4) Management Fee of P52,2&9,911.92; as well as the penalties for laB payment of the Quarterly Incom.;: Tax Return ending Iv!arc11 31, 1979 and the colledion of e~1Janded withholding tax on t11e Iv1anagement Fees paid to ANSCOR amounting t~) P52,2o9,911.92. Resp�)ndent filed an answer contending t11at t11e al)ove- n1entioned disalh)Wed de(!uctions. totalling P56,256,9&9.& 1, are valid and legal for the reasons indicated in t11e Iv!emorandum Report of the Revenue Examiners, dated 1viarc11 2~\ 1935 (Exhs. 1-4, pp. 5-20. BIR records). The issue raised is V.lht?t11er or not the deficietKy tax liabilities in t11e total amount of P40,69 1,335.05 assessed by respondent against petitioner vvas proper. After a thorough examination of the BIR records and t11e pleadings of both parties, the Court found t.11at a discussion of eac11 of 4 .-.- ()U

DF.CISION- C.T.A. CASE NO. 4498 - Page6 - the arguments raised by both parties would be inutile until the question of prescription is first settled. Thus, the determination of this case on the merits would be futile if prescription has set in. The primordial issue presented to this Court is whether or not tile period to collect on tlle part of respondent has prescribed. The pertinent provisions of tile Tax Code relevant to tile issue above-mentioned are Sections 31 & and 319 (now 203 and 22.3, respectively) which read as follo\.vs: �sEc. 318. Period of limitation upon assessment and collection. - Except as provided in the succeeding sedion, internal revenue taxes shall l)e assessed Within five years after the return was filed. and no proceeding 111 court w1t11out. ass(-}ssment for tile collection of such taxes shall be begun after expiration of suc11 period. x x x." SEC. 319. Exceptions as to period of limitation of assessment and collection of taxes. - (a.) x x x. (b) Where bef()re the expiration of tlle time prescribecl in tlle precooing section ior tlle assessment of tile t:.tx, both the Commissioner of Internal Revenue and the taz:payer have consented in \�Vriting to its assessment after such time, the tax may be assE-ssed at any time prior to the expiration of the period agreed upon.. The period so agreed upon may be extended by subsequent agreements in writing made before tile e};:piration of tl1e period previously agreed upon. (c) Where the assessment of any internal revenue taxes h;�Js been made 'l;hithin tlle period of 48J

DF.CISION- C.T.A. CASE NO. 4.498 - Page7- limitation abo~.re prescribed. such tax may be collected by distraint or levv or by a proceeding in court. but only if begun ( 1) within five years after the assessment of the tax. or (2) prior to the exp1ration of any penod for collection aQTeed upon in writing bv the Commissioner oi Internal Revenue and t11e taxpaver before t11e expiration of such five-vear period. The period so agreed upon may be e:xtended by subsequent agreements in V-lriting made before the expiration of the period previous1v agreed upon. (Underlining ours.) The following material facts are determinative in the resolution of the issue posed regarding t11e prescriptive period to collect the assailed assessments issued by the respondent: 1. The assessment letter (EY.hs. l!.. and i�..-1, pp. 6-7, CTA rec.), dated April 12, 1985, subject matter of t11is case vilas duly issued witllin the five (5) year limitation t;) assess pursuant to ~ection .318 (novvT 203) of the Tax Code; l�.. protest �was filed by iU1as on May 16, 19�~5 (Exh. C, pp. 9-14, CTi�.. rec.). The same having been admitted by respondent; 3. Three (3) v'laivers of the Statute of Lhnit3.tion were signed by the official represent3.tive of Atlas, namely: (a) First �waiver (undated) -.;Nas prepared by petitioner as shown in the letter head of t11e document and signed by i�..tlas�s . representative -.;Nhicll is valid up to December 31, 1989 (p. 76, BIR records);

-- DEClSION- C.T.A. CASE NO. 4498 - Page8- {b) So&cond waiver �was executed by Atlas's rE:-presentative on December 29, 19&9, valid up to t-.1arch .31, 1990 (p. 79, BIR rec.); and (c) Third 'YV'a.iver (undated) \�Vas signed by ...::.~tlas's representative, valid up t) June 30, 1990 (p. 140, BIR rec.); 4. The Waivers of the Statute of Limitation above- mentione�j were not signed by the Commissioner of Internal R~venue; C" On August 1990, Atlas received the Deciskm of ). respondent, dated 1viay 1990, reiterating the ())llection of tlle amount of P40,69 C335.&5 (Exhs. Dand D- C.P� 15, CTA rec.); and 6. Lastly, .e. .. tlas filed a petition for review ~..vitll this Court on September 2&, 1990. While it may be true that respondent has issued an assessment T-Nithin the five (5) year period to assess under Section 313 (now 203) of the Tax Code, still it cannot be denied that respondent's Decision, dated May 23, 1990, was rendered beyond t11e five-year period to collect counted from tl1e date of the assessment. 1�'lore than five years have elapsed V�Ihen the Decision v\ldS rendered by the respondent counted from the date of the assessment (for calendar year 1979) on April 12, 19&5. Although tl1e vVaivers of tlle Statute of Limitation were signee! by Atlas's representative, the same has no force and effect .:onsidering that t11e CommissionB-r of Internal Revenue did not sign it. The only logical conclusion that can be reached is tl1at there were 4 Cl. OJ..

- ... D.F.CISION- C.T.A. CASE NO. 4498 - Page9 - no valid waivers execuwd there being no agreement that V�lill toll tl1e running of the statuw of limitation on the part of respondent. The "Yniver is vital for the suspension of the running of the period to collect the assessments issued by the respondent. Of sad note, the Court cannot comprehend vmy a simple vvaiver cannot be signed by the respondent Commissioner knowing fully '=Nell that it is to his advantage if the same have been properly signed and accepted. In t11e case of Collector of Internal Revenue v _ Pineda# No. L-14522, May 31, 1961 (2 SCRA 40 1), the Supreme Court in adopting the case of Collector of Internal Revenue v _ Solano, No. L-11475. July 31. 1958 (unreported 104 PhiL 1050), quowd the decision therein rendered as fol1ov.rs: ..~{ x x the petitioner Collectx urges that respondent Solano is estopped from putting up the defEmse of prescription because he repeatedly made verbal requests for extensions of time to pay his tax obligation for 1948, as allegedly shown by the testimon:.J or Bureau of Internal Revenue agent Benjamin S. Valenzuela. The argum~ :1t is also untenable, first, because �valenzuela categorically declared that respondent Solano did not request for an extension of time V~litb.in which to pay his 1948 income tax liability (t.s.n. pp. 49-50); and second, the onlv agreement th:::1.t could have suspended the running oi the prescriptive period for the collection of the t:lx in question is. as correctly pointed out b-.:.1 t11e Court of Tax Appeals. a wntt.e11 agreement between Solano and the Collector. entered into before the expiration of the five-vear prescriptive period. extending the period of limitation prescril)ed by lav..r (se-c. )32kl. N.I.R.C.). The rule is in accord w1t11 the generallavl on prescription that requires a 4 .q.-._. r.� {...-

- DECISION- C.T.A. CASE NO. 4498 - Page10 - vvritten ad~nowledgment of the debtor to renew the cause of action or interrupt the running of the limitation period (..ll..ct 190, sec. 50; New Civil Code. Art. 1155). The Court of Tax Appeals found, and the records show, that no such written agreement was ever entered into between respondent Solano and tile petitioner Collector ... (Emphasis Ours.) � The above-mentioned case was also cited in the case of Cordero v_ Gonda, No_ L-22369.. October 15. 1966 (18 SCRA 330.. where it was held: "1. Our Tax Code provides for two main period of prescription. The first refers to assessment, the second to t11e remedies of collection. Not concerned T+lith the first, \~o,re are with ti1e second. That an assessment has here been made, V�le do not dou.l)t. B}T t11e very fact that, on September 18, 1953, a formal demand was macle by the government upon t11e deceased Patricio Ponferrada for the payment of forest charges in a d.;?lijJJt& amount - P3,805.88 - assessment is deemed to have been made. September 18, 1953 then is a safe sts.rt..~'lg � l>t'>int for t11e statutorv limitation to commenceI ~olle.;:tion suit. Here, tll>;? court claim was filed on July 29, 1959. From September 1&, 1953 to Jul"~., 29, 1959, a period of 5 years, 10 months and 11 days has passed. The five-year prescriptive period had thus elapsed. Section 322(c)of the Tax Code reads: '(c) '1il'here the assessment of anv I internal-revenue tax has been made witllin tlle period of limitation above prescribed such tax m.::17 M coJJ.e...-:ted t:-l distraint or levy or l~Y .:1 p.rt')'..�'-&>.:"L~'lg

... - DECISION- C.T.A. CASE NO. 4498 - Page11 - ill coun~ but only if begun (1) wit.l11i1 fiv~ Flf...'ifs L:rft.rJr t.h~ Lsrs..:;>&::i'StJJ~nt ~,)/ t.!J~ t..sr.1s; or (2) pfl{?f b.? t.h~ ~}spliLsrti.'>.lJ {?/ L~l..~Y .I.V&fl{~�:l /{?f {>..?1}-&-..'":t}{.?O L'igfMd l~[){.W .LtJ wntJ!Jg by the Commissioner of Internal Revenue .:1Jld the tm~:payer before tlle expiration of sucll five-year. The period so agreed upon tnay be e;;,ienijed by subsequent agreements Jil ~-v.riting made before the expiration of the period previously agreed upon.� V'le notB tlle narro"Wly-confinec! restriction of time T"'Jlthin which a proceeding in court mav be brought: �.but OJJlv 1! begu11 ( 1) ~,.\fithin five vears after the assessment of the tax�. Implicit in the words but ().tJ/yis that. unless othervvise aut.l10rized by stat.u.te. the C)-year period is absolute. The Code itself recognizEts but onEt excEtption: n suit is sta.rted 'prior to the exptration of any penod ior collection tifff~&d l~fP.?.tJ in wnli.tJgt bv tl1e Commissioner of Internal Revenue ~'W{it.lle taxpaver before t.l1e expiration of such five-vear perio<l' - T;~-!hich may be eAi.ended bv subsequent written agreements made 'before t.l1e expira.t.ion of the period previously agreed up(>n �. In Collector of Internal Revenue vs. Pineda, etc., L-1452 2, Ivlay 31, 1961, this Court said in terms equally pertinent here, tl1at: 'the only agreement that could have suspE;>nded tl1e nmning of the prescriptive period for tt1e collection of the tax in question is, x x x a WJitt&B agreement between Solano (the taxpayer) and the Collector, entered into before the expiration of the five-year prescriptive period, extending tbe period of limitation prescribed by law (Sec. 332kL N.I.R.C.).' No such written agreement exists here. The original five-year limit governs. (Emphasis Ours.) 4 f:~ I~ L; 7..

-- DEOSION- C.T.A. CASE NO. 4498 - Page12- 2. Appellant's brief dra-ws our attention to jurisprudence \Alhere a taxpayer may not avail of the limitations statute. These cases are inapposite. In A.t"(',:h1.le, delay in tax collection T-Aras excused because of 'hts [taxpayer's] own repeated request for re- investigation and similar!}' repeated requests of extension or time to pay�. In Sison, 'tlle ta.l~ayer�s petition for reconsideration or reinvestigation had stvpped the running of the five-year limitation period'. In Capitol Subdivision, the pendency of a taxpayer's petition for clarification interrupted said period. None of these situations obtains here. The government also argues tl1at partial payment is �ackn<)\Vledgment of the tax obligation�, hence, a �waiver of the dMense of prescription�. But partial payment vvould not prevent the government from suing t.he taxpayer. Because, �by such act of payment, tlN government is n..-)t thereby 'persuadecl to postpone collection to make him feel that the demand \�Vas not unreasonable or that no harassment ()r injustice is meant'. Which, as stated in Collectx '7S. Suyoc Consolidated Il�tining Co., et al., L-11527, November 25, 195&, is tl1e underlying reason behind the rule tl1at prescriptive period is arrested by tlle taxpayer's request for re-examination or reinvestigation - even if he 'has not previously -.:Naived it [prescription! in ~Nriting�. And, partial payment 1s no v1a1ver 'in wnting�. Particularly is this true here where, out of tl1e clatm of P3,805.8&, but P2 62.2 7 VNre paid:: atl(l in reference to the otl1er .::;laim of P6)20.65, appellee macle a substantial payment of P6,000.00 and ac.J.:no~v..l~dg~d liat�ility of P .?..?"O .6~.). .. In another case, the Supreme Court held that: "Th-? plaintiff contends that the period of prescription vvas suspended by the defendant's

- DEOSION- C.T.A. CASE NO. 4498 - Page13- various requests for reinvestigation or reconsideration of the tax assessment. The trial court rejected this contention, saying that a mere rE>quest for reinvestigation or reconsideration of an ~ssessment does not have the eifect of such suspenswn. The ruling is logical. other\h.lise there would be no point to the legal requirement that. the extension of the oriqinal period be agreed upon in 'YVTiting. To be sure, this legal provision, according to some decisions of this Court, does not rule out a s1tuation v111ere the taxpayer may lJe m estoppel to claim prescription. Thus we said in Commissioner oi Inwrnal Revenue vs. Consolidated Mining Co., L- 11527, Nov. 25, 1955: �;-~ x x T11ere are cases however where a taxpayer may be prevented from setting up the defense of prescnption even if he has not prevwusly waived it in writing 3S w.!Jen b,Y illS JPp&.:rtlf.'i..i 1-equests (Jf ;.~t'>sitivt? a~,.--:ts the Government 11as been, for g(P,.I(/ reLiS>..?J.lS, persuaded to postpone collection to make him feel that the demand was not unreasonable or that nc� harassment or injustice is meant by the Government.' (Italics supplied.) t-::-t�,_,...,�:;,TT���r� a Ll.zh;....,.:..,;.'{~0/ATlv�c-~� �' ~'~lrtl-!1.:~:�:,!1 �:::> .~.....I.... ~'-;' t::: �:<�::-1.�,:� fO!" C.\. \.AoJt'r.oJ reinvestigation of tlle tax assessment issued to l1in1 and such reinvestigation is made, on tlle basis of v-lhidl the Government makes another assessment, the five-year period within which an action for collection may b'2.' commenced should be counted from this last assessment. (Republic vs. Lopez, L- .:.o, 13007, lvlarch 196~.; Commissioner v. Sison, et al., L-1.37.39, April 30_. 196})

DECISION- C.T.A. CASE NO. 4498 - Page14- In the case at bar, the defendant, after receiving the assessment notice of September 24, 1949, asked for a reinvestigation thereof on October 11, 1949 {E~{J.~. A). There is no evidence that this request v.,as considered or acted upon. In fact, on October 23, 1950 the then Collector of Internal Revenue issued a warrant of distraint and 1evv for I the full amount of the assessment (Exll. D), but tl1ere -.:!Vas no follow up of this warrant. Consequently, the request for reinvestigation did not suspend t.lle running of the period for filing an action for collection. The next communication oi record is a letter signe<.i for the defendant b;1 one Troadio Concha and dated October 6, 1951, again, requesting a reinvestigation of his tax liability (EYlL B). Nothing came of this request either. Then �on February 9, 1954, the defendant's lav\l}'ers wrote tl1e Collector of Internal Revenue informing him that t11e books of their client were ready at tlwir office for exammation (Exh. C). The reply was dated more than a year later, or on October 4, 1955. when the Collector bestirred himself for tl1e first time in connection vvitl1 the reinvestigation sought, and required that the defendant specify his objections to t11e assessment and execute 'tl1e enclosed fonns for ~Naiver of the statute of limitations�. (Exll. E). The last part of the letter v?as a 'Y\Tarning that unless the -waiver �was accomplished and submitted within 10 days the collection of the deficiency taxes would be enforced by means of t11e remedies provide(j for by law.' It will be noted that up to October 4, 1955 the clelay in collection could not t)e attributed to t11e deiendant at all. His requests in fact had been unheeded until then, and there \AJaS nothing to impede enforcement of the tax liability by any of t11e means provided by la'v'v�. By October 4, 1955, more 4 1 I"' \�.-.ll I"

.... - DECISION- C.T.A. CASE NO. 4498 - Page15- than five years had elapsed since the assessment in question Tv\las made, and hence prescription had already set in, mal{.ing subsequent events in connection with the said assessment entirely tmmaterial. Even the vvntten waiver of the st-1tute signed by the defendant on �December 17, 1959 could no longer revive the right of action, for uncler t11e law such waiver must be executed witl1in tbe original five-year period �within which suit could be commenced." (Republic vs_ Acebedo~ L-20477. March 29. 1968. 22 SCRA 1356J In all the abf)Ve-cited cases, the Supreme Court ruled that t11e statute of limitation shall be suspended only "t,\Then there is a valid written agreement between the taxpayer and the Commissioner of Internal Revenue pursuant to Section 31 9(c) of t11e Tax Code. Also in point is t11e provision of the Nev�l Civil Code, to V�lit: �ART_ 1155- The prescnption of actions is interrupted when they are filed before the court, when there is a �written extrajudicial demand by t11e creditors, and when there is any written acknovvledgment of the debt by the debtor_- In t11e case at bar, the five-;�ear limitation to collect vras not suspended there being no valid written agreement executed by the Commissioner of Internal Revenue. Only the petitioner signed the Waiver of the Statute of Limitation therefore there was no meeting of the minds by the parties to said agreement. The acceptance of the Vv'aiver of statute of limitation by the Commissioner must be indicated therein simply by affi:~-ting her signature. There was none.

DF.CISION- C.T.A. CASE NO. 4498 - Page16- As stated by the petitioner in its protest letter, date(! May 1.3., 1905, it ..Nas not requesting for a reconsideration or a reinvestigation or a plea of accommodation indicative that the defense of prescription is not being ~..vaived (Exh. C). Nothing in the records of the case would show that by the acts c�f petitioner, respondent v.ras made to believe and vvas persuaded for good reasons to postpone the collection of the tax. Neither vvas a request of reinvestigation sufficient to t:>ll the running of the prescriptive period to collect. Otherv.,ise there would be no need for the legal requirement that an e~rtension of the original period can be agreed upon by the parties in writing. 1Nitll more reason, lit.e in the case at bar, if tl1e petitioner did not even request for a reinvestigation or a reconsideration in its protest. Therefore, the assessments issued on April 12, 19&5 cannot anyTmon? be enforced by summary remedy nor by judicial action for collection of tl1e taxes involved herein. Hence, the same cannot be given force and effect. WHEREFORE~ in vievoT of the foregoing, the petition for review is hereby GRANTED on the ground of prescription pursuant to tl1e provisions of ~ction 31 9(c) [now 223] of the Tax Code. Respondent's Decision, dated May 23, 1990, cannot be enforced by lav�l having been issued beyond the five (5) year period to collect, therefore, the same is hereby set aside. Accordingly, the assessment letter, dated April 12, 19&5, issued by the respondent against petitioner amounting to P40,69 1,335.&5 is hereby cancelled and v.iithdrav�m. No pronouncement as to costs of suits.

DECISION- C.T.A. CASE NO. 4498 - Page17- SO ORDERED. R-A~~I0 . tf~Jv DE VEYR .A.ssociate Judge � WE CONCUR: Q~lQ, ERNESTO D. ACOSTA CERTIFICATION I hereby certify that this decision -.;,vas reached after due consultation between the members of the Court of Tax i�..ppeals in accordance witll Section 13, Article VI II of the Constitution. <2..::: lQ~ ~~ ERNESTO D. ACOSTA Court of Tax Appeals Presiding Judge 50l) .