CTA Case No. 4956 (Decision)

- - RF: PIIni . U : IJF' Til E PHTf . fP P fNF. ~; C I JIJH T n r- Ti\ X 1\PPEi\T.S m I F.?. f I N C t T Y J OSE Y . F E H r II . , j n h 'i ~::; t. he E s t;_1Lr? ef Jo se ,r:J� .d l) f\ ~ \J s 1: i n , Pe+.:itionr:>.r , - '/ e r !::! t' s - C.T.A CASE No. 4956 C DMM H->~ HlNf.:: R OF INTE RNAL REV E NUE , He !::: pondE;> nt. . X- - - - - - - - - - - X f.J ECISION T l 1e f<'H~t~; of t. h P C"lS I? are not cordroverted . Atty . Jose San A t;l\l s t i n o _f 2904 l<:aka:c� nn g S t . , Olympia , l'1<=Jl-;at i diPd on .ht n>:> 7.7 , 1 990 lea vi n q h is wife Dra . Fe l isa L. San A cr u f-J"t in a s so 1 e h eir .' The d ece dent J ef t. ~ holographi~ will exe c uted on April 21 , 1980 g i ving 311 his estate lo his widow a nd narnin~ reti1 �ed Jus t i c e 01J A tllf1.1St r.-t p'"" l :i. t :i. r� n �f c� r� tlte ~�:r uha �te C>f the hol C> uraphic wi l l W "lB filecl with t h P. Heqional T ria l Court . B.rBn ch lT:~ , Makati rle si qnated as ::;p. PRCIC . NO . 298

nr:::r.nnn G. T. A GA~)E NO. 4956 -- 2 - In �~ l ~t t er d e d Auq ust 30, 1990 petitioner 9ave n\l t ice �~ f 0 the Commis ioner of 8, l :':JCII!, t hF> es ate tax return of the which reflec ed un es a e tax due of P . ,67 6 ,4 12.00 wa R fi Pd by pP i inner wi h a reques for nf wr"l v r �q r� � f o r 1e payment ~f such tax P ir d oes not personnlly tn p8y th !=� ~;�r: l atP tax which will have� to carne frr-.�" tt P. es ta e . JR 1ecord s , p. 34) 4, 990 but rP.~ei ved ,I h� nn ly ,.,,, 990, BIR Deputy gran ed an ex ension r r� fHt 1 y mnrdh, nu hjPct 0t imposition of unt r ~ec ion 248 of the National Intr:rna a . this juncture t .ha judicial o '"'i h raw thP amount needed for the p ;'l y!Ylent �:>f the es a e a:t. On OC?.i� ob P.r 11, Branch n l ati a ll owed the will and appointed petitioner as F.:~ ec: u to 1 c f he e tat e <Exhibit "E">. On November 19, 1990, 1 �? tt ers estamen ary were issued to petitioner 299

DF:CTSTON C.T.A CA~~ HO. 19~6 - ~1 - <E>:hi bi s "F'"). On 1990, su hmiltpri r~n invPntory ctf the> e> ate> <Exhibi "G"> and filP.cl R motion fox aurh ori y to withdraw funds :for the> "H " l. On re>bruary 22, 1991. pet.:. t. i one>r aq in filed An urqent motion for a utho:ri+ y to wilhch<HI 11rf , ltH' pnyme>n he>reof <Exhibit "T '' l . g anted p ioner �the nn l'' n 1 ch f\, l 'J , f��Pt :it .t onP<r �aiel he est a e tax due 1 '?1:. rn tn 0 P1,676, 432.00. This was after CO\lrt. authority was ob ained by pr-> it i onc�:r anti w(:.>ll w .h:ln he s ix <G> months extension q ant ed by r~npon P n � t h a r epondent issued <'~ 1 r> t t ,-.. r� ':"1 f au t h or � y f n r hr-> exami nat ion of the estate 23, 19 �1 , he widow of the deceased, F<=� l jpR 1 . � , _;;_:lf l Agu s in, r . cPiVP a pre-assessment no ice a ed Attqust 29 , h �Winq a defici ncy estate tax of which nc 1d'ng surc h ar~e, interest and pert a t i P.!'1 will total ?976,540 .00. Th e detailed 30 0

' � � � �.....,..-- - � - �� - � - � ...... � ' � � fl' ~ �- . .... .' nr-:r: r~~ Tr!N ~.T. A ~A~~ NO. ~9~6 - 4- rr'l!!S F!':t ate - P1,43B.2 5.00 P8, 043,6 !1.31 Conj ~al real proper ty r.~njug~l perr~nal rrorerty _p, 605 _!03.!..~1 __ 48g_, !}29. 9!L EY.c l u~ive lsepara e) rorPrty 8, 523, 658.31 Fun~ra exrenses 50,000.00 200,000.00 Atl Nney 's f pes Cuur t El!rensP.s 1 ~, 353.30 2, 214~ 94 1. 50 �s�~ ar �> o! !:'.IT vi vi n~ spouse 1 676,j32. 00_ - ~' ~89 152. 5J N o ~ T~~ahle Est~te p . 538, 509. 50 P1,393,<150.00 134,627.00 - Estate tax rl~e - _gl 491. 50 3,{1(1'],(11!0.00 130,779.73 1,3&9,252.50. 601. 15 ,633. 27 t~ ss: A~ unt paid 20,000.00 ll3! 1n::: <? __t, QOQ.@_ P__'!!_~,_ 549. 00 Ad~: 75X Surrharo' 7~% int. fr. 9-25 -9Q l'l 9� ~ - ql I. 1'11 !H l 201. i~l . !r. 9-25 -90 to 3-0~ - 9 (.IJI045 ) r'l"!lrfl"'iSP. No CP A rerti f' cA t P Tot~l Def icienrv F~tate TaY. n r t. rJ h.-.r 1 '=l'l1, n r within the ten -da y per�iod petitioner f i l~d with P}-:pn?RH i nq t .h P I> ., � i r � d P f i. --: j e n c y est at P. t::Jx of r�:.: n, ~:i f"l'1. 50 a s s. 0 n ~~ �: " '" R~" f.l ional T r ia l Court approve w j +. h d ,- rl w ~ th ~ s ur c ha ge , i. n t.r? ,.. "'rot.. . c tc . he wa j v~, rJ s i neE> t he d e fi cie ncy a rose only th e d'ff P rPn~P in z an 1 valuation u sp rl and t . x due pPl' rPt.urn of Pl , 676,4~2.00 was a JrP~dy p a id with in the ex t ensio n period <Ex h ibit " K"> . �' 301

OF.C:TSHIN G.T. A CASE NO. 1936 - 3- nn C' ol:> r 4, 991, re~pondent issue d an assessmen r,oticE� practica . ly reit~=>rntin~ the pre-assessmen � no t ice <=~nd T eqtH"D inq pay men on or befor e thirty <30) days u pon rpceipt thereof CAnn ex "B"> . In let er rlaterl n~tn qr 31 ~ 1991 , whi ch wa s rr:ce:iv d on November 4, 1991 , petitioner� wr o e to re ponden hnt he had o tained a Cou rt brder on Oc �crh E?r �1. l(:}ql for th~ pRyment of the deficiency es tat e fnr recon - ideration of the uf p cl7(; , ~49. [l(l And W iver o f h e surchar g e , ;n P1P.F:l. elc. <Exllihil. " .. "), 1B, pet i ioner received the wri i:~=>ii '.1 I . hrlT . . y payment of the basic def.ici~->rrr:~y t x in he a moun� o:f F''13 B, 509.50 <Ann ex " C " >. 19, 1q9 , pe t.i ti crner paid in full the hnnir dPfiri . nry s R P tax of P538, 509.50 per Central Bar~ Cr<nfirmation Re ~t> � pt No . 92441559 1 ( p. 146, BIR 1qg1, p titioner filed a Project of of he sta .e. This was approved by he R e~iunal Trial Court in an Order dated J anuary 9 , 1992 whir::h was en ered on February 26, 1 992 <Exhibit �o �>. 302

r�:r: r !:; 1 1 r1 r:. T . A GA~W NO. 1'1~(} �- fi fin M;;:u c h 1(;,, ( -. , wrote- to respondent .f (IT ax clearance enclosing therr>wi.t h a Gopy of hP CCinfirma ion Receipt showing f ull he final and t h�" :ou r � approving the Project of P .. r t. i i o ., ( E ;~ h i b i. "N",. On f\pt . 1. ao in requested for a ,I ~ } I f � was no delay in paying ~"'!-.tnt~> :-� tl ' ~'"' nne! �( �1r th e waivpr� o � th t? ~urc harges and int r>rt.n < r �H:tr . 7�-P ), 111 '('-' .ords) . 0!1 .T tHit ' }' ""' 1 ; 99~. peti ictner received .,. her e " )p ~t"pte mber 21 , 1 992 a ating that "' n tt t i 1 ,1 I ic~t Clfl for the waiver of the in his case, n nd rt:qllfi'Fl Ll'nCJ ttJJI. . �\38, 640 . within ten <lO> - ~ ~�cc r tJ <Ann )C "D 11 ) . Ort J8nuary 2F. , 1 9CJ3, pt> � i t ner paid the amount of per Confirma tion Receipt No . B7 �'l4:J G7f.5 . <Exhi bi "Q"). 18, 1993, the instant petition f or review was f iled with this Court with the prayer that r espondE>n ' s d ecision dated September 21, 1992, but received 1y Peti ioner on Januar y 21 , 1993, b e revE?rsed 303

DEGISTON -- C.T . A CASE NO. 49~6 -7- and tl-Jat a refund of the amo unt of P438,040.38 be orde red. The issues for resolution of t his Court are the follo wi ng : 1. Whether or not this Court has jurisdiction over the case at bar. 2. Whether of not t he imposition of surcharqe , interest and compromise penalties amounting to P438,040.38 have le1-Jal iustification. Anent the first issue , respondent is of the view that lhi s Co urt has no jurisd iction over the instant petiti on f or r e vie w having failed to comply with the require ments p r escribed by Section 230 in relation to Section 204(3) of the Tax Code, as amended, in the matter of claims for refund of any national internal revenue tax alleged to have been illegally or erroneously assessed or c o l lected or of any penalty claimed to have been c oll e cted without authority. Quoted herewith are the per tinent provisions of Section 230 and Section 204<3> of the Tax Code: "SEC. 230. Reccn;ery of tax erroneousl)'' or i.llef]ally collected. Nq___~uit or proceeding g J.J.Io! J._1.__I.J__�_' ___ma_;!, _n..t..a:h~1�'SL_..i, _n_ --~Jl....Y_____go tg:: L _ .1Q.L._ :t_b._g :c_E;?_g_p_y e :[ y of an_y national interna_l__I.:.._E;_? y_~n ue~..�; h e reafter alleged to have b~en ~Lf.Q.D..~OI..I�._.ly___gx t i 11 ~q a l_~_y___..si..S se_~!,?_eq____o _L.__Q.O),_1 ec eq.~ .2 .� o � any Q.�:!J.f!.J.J:,_y_ggj,_.JllecJ___ to h a ve b&.?::..!!. collectt>d with o ut ~. u t.hori..1.Y.L-.9I"_ of <!I!Y_SUJ!!.... alleg�.'g___t_o_ })ave been ~xq_g_,.~�..i~_g__ _Q L in any manne1- wrong_fu liY. 304

DECISION - C.T.A CASE NO. 49~5 - 8 -- <;: q_.l:_J:..g:t.~c;!_, ~T1j:..:!-l_____~_ c1.!=!.i~. ____.fQI__I.:":�'_;f_und o_:r__ cr_~ di t :s____ h .~ p_~S'_ D____q _y_t._y___;t;_~ L~_~:L ~j.__t_!:!_~_l}_e__G:Q mm._i.l? s -!..9 n �'.I., but suc h s uit or proceeding may be maintained, wh ether or not suc h tax , penal ty or sum has be en ~aid under protest or duress. " <Underscoring suppled. ) "In any case, no such suit or proceeding shall be begun a�ter the expiration o� two years from the date of payment o� the tax or penalty regardless of any supervening cause that may arise a fter payment : Provided, however, that -t;,h~_______G_ornrn_:i,__g;si_oner may, ~ t ~j._t. b.QJ,~J.,____a_ LJ,::_i _t, t.~n ....91.�.~_\!!.___ h ~r 9_f or:.~.... r ef und or cred.i,._~D_Y tax_,_ wh ~re o n the face of the return u_p_on _ whj._c_l} _p_~.Y!ll~D. .t. ... .W.s!.~ -- ma g.�' , such payment �.P.P.'?_~LG_Q.l earJ,_y_ i;;g___h�.y_G,>_~'? n e r r o n_eQ_\L~P.~.!-~ " <Underscoring supplied.) " SEC. 2 04. Atd.hority of the Commissioner t.o com �promise , abat.e, and refun d /cre dit ta x es. Th e Commissioner may - XXX XXX XXX (3) Credit or refund taxes erroneously or illegally received , penalties imposed without authority, re�und t h e value of internal r evenue stamps when they are returned in good condition by th e purchaser, and , in his di scretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No cre~it or refund o :{_ taxes or p e I:t9J_t _j.._G,>_EL_q_h_�l_.l,_1_j;}_g___a 11 owed u n 1 es s :the _ taxpaye ~i l_E;'_S _i.!!_____ writing with the Q.!=!m!!!.L~sioner a 9l_a_j._\!!___J._g_L_ refund within twg ye<;!n=~-- ~fter the payment of the tax or penalty. " <Underscori ng s upp lied. ) I n the case at b ar, there is no evidence on record t .o sho w that petitioner filed in writing with the Commissioner o f Internal Revenue a clairn for refund of ?438 , 040.38 as alleged erroneously or illegally paid surchar~:te, interests and penalties i mposed on the '� 305

DECISION �- C.T. A CASE NO. 49~6 -9- de:ficiency estate tax due on t h e transmission o� the esta te o:f the late Jo se San Agu st in. Hence , res pondent contended that this Court ha s no jurisdicti o n to t�ke cognizance o� herein petition :for review. Wh ile it is not disputed that petitioner did not :file a written claim :for re :fund 0~ the amount of P438,040.38, a consideration o� the circumstances o:f this case is in order. With in �ten(lO> days from receipt o:f the Pre- Assessment Notice by peti t ioner o n September 23, 1991, a request that the surcharge, interest , etc. be waived wa s :filed by p e titioner with respondent. When the f ormal assessment dated October 4, 1991 was issued by r espondent , petitioner, in a letter dated October 31, 1991 or within thirty<30> days from receipt thereof, reiterated its request ~or reconsideration o:f the assessment and waiver of the s u rcha rge, interest, etc .. Petitioner again requested for the waiver of surcharge and interest on Ap ril 2, 1992. The denial o:f a:forementioned request was received by petitioner only on January 21, 1993 and on February 18, 1993, or within thir y<30) days from receipt thereof, petit ioner filed the instant petition for review in this Court wi t h the primary prayer that the Commissioner's decision denying t h e request for rebonsideration cd the deficiency 306

I I DECTSIDN - C.T. A CASE NO. 4956 ~ - 10 - assessment be reversed . In the interregnum , petitioner wa s cons t rained to pay under duress the amou nt o� P438,040.3B on January 26 , 1993 because o� responde nt' s re�usal, despite petitioner'~ persist en t req uests, to issue the tax clearance required to be submitted to t h e Proba �t.e Court. Petitioner s hould not be strictl y bound by the requirements for claims for refund because at the very onset i t wa s the assessment that is being assailed . Th e petition for review that was filed , in the main sough t th e assessment's reversal and only as a necessary consequence the refund o f the payment made under duress. The �act remains that it involves a disputed assessment, a reconsideration of which was so u g h t wi t h i n t h e re qlementary period. When i t was turned d o wn , a ti mely appeal was made to this Court in order to reverse the d en ial of the reconsideration of the deficiency assessment. Jurisdiction over the subject matter is determined upon t he allegations made in the complaint, irrespecti ve of whether the plaintiff is enti t.lecl or not t .o reco ver upon the claims assert.ed therein - a matter resol v ed only after and as a result o� the trial. Neither can t h e jurisdiction of the court be made to depend upon t h e 307

DECISION -- C.T.A CASE NO. 4956 - 11 pleas or defen ses made by t he defendant in his answer or mot i on to di s miss . If such were the r ule, the question of jur isdiction would depend almost e nti rely upon the defendant. <Cardenas vs. Camus, G.R. No. L-17191 , July 30, 1952 . The s ubject matter of an y given case is determined, not by the nature of the action which a party i s entitled und er the fa c ts and the law t o bring , but by th e na ure and c hara c ter of the pleadings and issues su bm i tted by the parties t, o t he court fo r tri;:il and <Ph i l i ppin e Association of Free Labor Unions a nd Bautista vs. Padilla, et. al., G.R. No . L-11722, November 28, 1959. In view o f the circumstances pecul ia~ to this case , We find that it is within the j u ris diction of this Court t o take cogni za nce of the petition for revi ew at bar. On the issue c on c erning the l eqal justification for \ th e imposition of s urcharge, interest and compromise pe nalti es in the total amount of P438, 040.38, it would be be s t to have first an understanding of how it wa s a rrived a t. The su r cha r ge in the amount of P134,527.38 represent 2 5~ o f the ba s ic d eficiency est ate tax of P538,509.50, which i s the differ e nce between t h e estate tax due per investiqatioo of P2, 2 14, 941 . =�0 less the estate tax pai d 308

DECISION - C.T.A CASE NO. 4956 - 12 - per return of ?1,676,432.00. Th is was attributed to the di s cre~ a r1 c y in the zon al valuation u sed in determining th e gross e state. An inte r e s t of 20X per annum wa s charged for alleged delay in the payment of the estate tax per return of P1,676,432.00 and the sum total of the basic deficiency estate tax per investiqation of P538,509.50 and surcharge of P134,627.38. The interest due on the estate tax per return i s P151,633.27 comput ed from September 25, 1990 or the 90~h day from . the death of the decedent to March 8, 1991 which i s the actual payment of the estate tax due per return . Th e interest d ue on the deficiency estate tax per investigation and the s urcharge is P130,799.73, computed from September 25, 1990 to September 15, 1991 which is the date stip ul ated in the Pre - As sessment No tice. Added to the above a re the compromise penalty of P 2 0 , 000.00 and penalty for having no CPA certificate of Pl,OOO.OO. It i s respondent' s view that surcharge, interest and pen~lties on the deficien cy estate tax is mandatory pursuant to Se ction 248 in relation to Section 249 of the Ta x Code . Reproduced below a re t he pertinent portions of said provi s ions, viz: 309

nr::cr~;JnN - C. T. A CM~F. NU. 119:.-if; 13 -- 2 1\ B . Ci v.i 1 rc-.-�nn .l { i es. <a ) There t n th e ta:-: ~-;: It :1 I b '=' �i Til p n !~: n r I , i T1 "'l dr:fi-ticon equ i va l en t to amc�vn t due in l '"' qui .rPd ~n b r:-� paid, penalty t�,;{;-�rJty -.five pE�rr:.:t=-� rJ! <:?s:~l of the IIi(-? fullowinq c ::n:;P~: : <11 Failure tn file any return required under tlJ '? prnvisions o� t .hi s Cod e or r Pq 11J <:\+inn!:: nn thr::> d;::~te p1 esc:ri b e d; or (:?l Fil :ill~J n -retu rn with an intecn<'~l wi t h r-ev en u F.:' o J i i c P r r:. t h f" r t h a n t h o E: e whom the r ~turn ~ i s re~tti re d t o h P :fiJed; <::n Failu r<? to within the (4l F ailur<? tn p ;;1y -1-hf? f11Jl a mount Clf ta;.-: !:=; h c�~IT' tH1 <'~ny �et \IJ n r'?q11irE'd t o be fiJ ed und er ih <.? r�roviE::ionr-; of thif': Cnr:lr? or- re q~ll;-4t_ i_unF: , o r the full amCiu nt o f tax due for which no re tu r n i �:; r E�q u i r :::� d l o be J i J e cf , o n n T be f or e t he d a t e p r <? !3 c r i. b e d f o r �i t s r ::-1 ymE' n t .. ( c l Th e p Pr talt .iPs i.rnposed herPund P.r s h all for'" p e:n t o f th e t a:-~ and �th e e nt. i r e amoun �t s h all be ;::\lbject to th e interest prescri b ed in Section 2 49. Respondent t .h e surcharge on t .he basic e s t.a b ? st <-lt.i.ng th at is rnandat.ory f�urc::uartl lo ~3<::.ct ion 2 4 8<c l o f t h e T a;.J; Code. T h e c l ear in\(;>nl uf ll1!'::' la w in impc�sin1:1 the sta tuto ry penalties is a J 1 e t,l e cl l y t c� cl i s c o u r a q e d e 1 a y .i o t h E' pay men I due the HtJ wevPr , i t dc�e~: r1 ot. a l.�pet'J r in �t.he 1 r=-cr.�rdE: ur1 wh :-~l qrnun cl uJ t .he four<4 l cases ~n umerated in ~ 310

nF.CISJON r:.T. A CASF. NO. 1<J5G 11 - r:>J -�.l. r.� the 25% surcharqe beinq i rn p o r;; f."' rl . cume to rnind. Whr-n rrf dt? :fi cj ency ta:�: after �sur char qe aut ornatica 11 y imposed clC dr:tot� lty lh e DJR irr this cus�2 ? Wha+ is t h e sta tutory Whnt i s the t.ime prescri bed fo.r deficiency ta:;.: for purposes of is fa ilu1e to pay the same within t h c� r e Ltlt-:- rro e n L '1 r y p P. :c i '-'d ? A closE� r E�adinq of Secticn 248 of the Tax Code does a con c 1 us i L' rr that whenever a deficiency taic is fou nd due, thE� 2~~~ surr:h;Hqe will b e imposed . For the surchar~1e t .o a p p 1 y , i t mu s +. I a .1.1 within nny o :f the four ( 4) case�s rnerd.. i1 'ned irt Section 248(a ). Other wi se , it e houlJ be stricken to stand !t II . The .law does not ('e rrni t of j u!:; �t any case other� t han l l rns �."' t.h err:::i.r1 . COl T ect interpretation of Section 247(a ) of �the T:.=t~: C: o1 I P ~1h _ich s t a t e s : :?11.7 . GeneT i:.LZ r.n c� vi s ions. <a> Th P �~�!d :j. t :i. C"l!l ~- c.: ._ __t.)y? ___ t_ a ;.: or . u e_;f_i _g i _e rrc_y__ __ _.:t..?. .>.~ 1 r � t:�'~~c ,.. i l"" d in t.hi ~=; Chapl-: e z.. s h"l.ll "lflp.ly to a l l I_ ;I~: P �-4, rF> P:�~ "lnd �.:- h ::t ,- 9 P ~~ i m r> n :;;: ~.::� d i Tl I_ h i :-= Cod '"' . Tl�,,,, .'!mnU IJ'\. :::;u r.~ddf:::' d t . <J LhP l:r.~x s h :.=tl l be l"ttl l.��~,,- LPd ; ~I: tilt=> ~:; ~me 1-..i rnP, :i. n the s8m e manner ;~ "�3 ;.1 :� ; !' ;_ll � t nr t . hP t . ,:;n.; . ( Und�-?r :,; r:; or i. nq S I JI'll 1 i. '?II. ) 311

DECISIOt-J -- .15 -- C.T.A CnSE ~0 . ~956 ........ ._, 'l'lol Tli i .. ��hnt\) �-! it ~ ) L' r l :�\ I !: \ 1; , cas es enumerated in r;. I~ n IJ 1 rt f .-.l !. . i. li �'\11(1 <1c�t t�i��m�inl~" t.hr~ l. :i. ,3b i l i t y of of Internal Revenue vs. Garmen t Man u f 21.c t u t~ i n g c a t.... p. ' ::. r�~ :.:~ '' !cnuvm to v t t.l. �:-< 1.' Ct c r�-. '.. t! (1 , ..� of' F1S !-;e ssment. Cr�.n" '~q �_� ;� :�.�!: 1_ \' 1: , ,, �1: _; r� c- I :� i . ~: ~; C l ' .i. f_t ~-2 C f o l ' .;....J..� {..,'i is the 1. 1: -[;,:-\)<!<ce\yc-�i��� f ,':i j ls to , t, � F i . � .i. ,, 11 r ~ '.i ~�Ji. th.i. n l'.:h P ; i Ill f:~ nt��~sct~i L>c1c.l j n ,,.., '-; !c c~ ~:. <;, 111 c� n t not �ice will the .-�,r:::;- "1 C.'-' I� ten- �! ;J'y' !'!'l'.i 01. ! IJ i_ Vt'!l i. !l (; llP p1��<~� ;:~ � :c:P"S Hif?!l l ; nol;ic!.e,J ~H~ ti t i nnt-~ t~ the <~OO TI i1S !;he the I ~ 1 '� ".� � ' ~ t i ~~ ~ 1 !..) i ,,, i_ll 1: 1-1 .i t' 1.: y ( .V.l) c.i;_�. v s of the tl1e ~">���)� ! .:' ~; r.l P~H 'PVd .l 0 f !.) d )- 111 p 1) l; � W i:'.~ S '\ 'i I 1 '/ () 7! ])ro r (-�lfth~ll'' :1 f-\_ 1 '~)9 1 t: h ;:~ t t h p =~ u t: llcn~i.t.y i': o accept 312

nr.r.T!'~rm lf9~ i!, C.T. fl Cfi~>F. NfJ . J (, J~Hrv,� diatPl y 19, was r i I:'") r l � 11 0 ju~:: tifi.c::rtion f o r E'\l r r:� lt 3 :r q P on l he d e fi.r.:.,j <? n c:y T �1e r.Jel:3y , :i.f ar1y . :in :i. +:- r''' "l fi1Prlt ca nnot b E� at t r i buted to R,::.�s: r� r_~r, rl '"fl t� i::: WFJ .J -~1 W8T e C::turt ' "'' aut h ority i:=:- necess n ry b efore oaym e nt can be can It. can readiJ.y b e f' r : rn r r�c:n�r d ~ . that pPtitione:c l!J e immediate se ttlement. o f t l1 F' F' r:: t� r:l t n �~: ' F: t ''~ :c r:� h 1 i. q <1 t i. n r1 F: � As fu r th e inte.rool on th e es tate ta x due� per ret urn :::Jnd th e d e fi c ' E�r,cy ,~n t. CJlP t a:;: , th e pE?ct:irJe rd . provision of t:ht? National Code (NJRC: l is re p:cod 1ced SEC . ?.49. In t e.rest. (a) In pene:r al. s hr~ll cn.JJec t ed CIT! any llfi P ''li rl :'lmO \lnt t o:f 3)( , int~:o r e s t at the rate of t . �r1enty percent <2 0/.) J.�er ann liiiJ , ur r:: �lC }J ra t e as may be pre sc rib e d by :requlat :i oJJ s , f r c.�rn l.hr�:� d;:1'lr:- (l.rescr ib ed f or pa}� rnent until Ute arr.nont. is fully paid . (hJ (lefic�.ien(..y .inie :rt::>Bl . AIJy dr-�f. L( '. iPrtc:y 'i.11 �~l lP l a)! cln P , a:-: I.IJ P !. er rn iB d(:.f i n(" d i.t1 thi s Codt? , s h a l.1 be !c:> ll, ,iect t.c� th e _i.r , lt~'I P!.:l p rpc: c r i hPd in pi.'lr '~ Cl ra~ � h<al h ereof , wlt i.c: lt i. n l eJP!3 l. s h::~lJ lte aE:~:essed an d .. l':~<l'--Jec_i._ed 313

DECISION - C. T.A CASE NO. 4956 - 17 frum the date prescrib~d for its payment until the full pavment thereof. <Undersco ri ng s upplied) . ,. (c) Delinquency .intel�"est. In case of f c\i l ttl"" e t o p a y : ( 1) Th e amount of the tax due on any i��� e t tn" n t" e q 'J i 1��' e d t o LH? f i l e d , o t' The amount of the tax due for which no .,.., e t u Y'n i s r' e qui 1�' e d, ol�' (3) A deficiency t ax, or an y surcharge or i n t e 1' P. �; t t h. P.l�' r~ on , n n t h e d u e d at e �a p peat' i n g i n. the notice and demand of the Commissioner, sha ll be a s ses sed and collected on the unpaid .::~mount, intel�'est at the t�ate pt�escribed in paraqraph (a) hereof unti l the amount is fully pa id, wht~n inb-')rest sha ll fot�m pat�t �of t h e �L :n< � (d) .Tnt: f?l''e .s -t on ext ended pa _'y'm ent. I f any p erson required to pa y the tax is qualifie d and el ect s to pay thQ tax on installment under the pt�o vi s:ions of thi s Code-? , but f ai ls to p.o<y the tax or any installment thereof, or any part of such .o<mount o 1~ installment on Dt' befot' e the date prescribed for its payme nt , or where the Commissione r h as authorized an extensi on of time within which to oa y a tax or a deficiency tax Ot" any pm't ttH?t' eof, thet'f! s hall be a s sessed and collect ed interest at the rate h erei nabove prescribed un the tax ur deficiency t ax or anv part thereof unpaid from the date of noti ce and demand until it is paid. <Und ~rsc oring sup p lied) It rnust b~ noted that the notice of the decedent's dc? a l~h .=Js filed on August 30, 1990, well-�vlithin the two- months p~�ovided under Section 82 of the Tax Code while the est;.:d;e tax r'etun1 was filed on September 30, 1990, also within tl1e ninety <90) days prescribed by Secti on 83 314

DECISION - C.T.A CASE NO. 4956 - 18 - ( b ) of th e Tax Code as rec kon ed from the decedent's death on -Tune C.: 7, 1990. A six month s extensio n was grat:~ t ed by the BIR Deputy Commissioner fur the payment of the estate tax due per return of P1 ,G76 , 4 32.00 and this was paid on ., M.:n-ch B , 1991 or withi n t h e exten sion peri od and bat'e 1 y aft et' the probate Court 's a uthori t y for its pnyment wa ~ ubtainnd. of the Ta>< Code provides that the Commission e r�' a. uthor�iz~. d an e xt ensio n of t ime within which to pay a t a >< , intet'est sha ll be imposed from the date of not ice c.~nc.l de mc.\T1d until it is paid. In this case, payment o f the estate ta>< pet' t'et Ut' n was made b e f Ot'e the dat !) of the e >< p i r' a t i o n of the period of extensi on and without notic e and demand . no .interest should be charoed aqainst the petitioner. It may be argued that t he extens ion that was granted conditi oned up on the imposition of s twchat'ge a nd \ interost under Section 2 48 of th e Tax Cod e. Howeve t', the int et'pt' e t atio n o f said pro visi o n negat es said :i mposition as pre vio us ly discussed. . /.1( . With rega rds to the on the deficiency e s tate ta>< found due , Sec t ion ;:::A9 (b) of the Tax Code is applicable. I nterest s hall be charg ed from the date for' .its payme nt until the full payme;n t �. ' I I .I 315

DECISION - C.T.A CASE NO. 4956 .,�,�� - 19 - �'� �~~ I fol�� the p ,::~ymPnt of F.t deficiency tax, not due to willf u l n e ~.ll rJct is the time fixed i n the assess ment notice ~-.J i t h j. n i t ~;h ould be paid. In' the case at b.:n'., petit i orH.> r' has '+ , unt:i.l N nv~~mbet~ 1991 <this is 30th day from receipt of the assessment notice on October 4 , 1':391 ) ) it was only paid on December~ 19, 1991. Accot~d i ng 1 y , / on tht? deficie n cy estate ta>< shou.ld be recomputed as follows : Deficiency estate tax Inter�est Rate Terll P538,50'3.50 201. per annuli x 1~ �onth/ 12 onths = P131462. 74 (11\04\1991 to 12\1 '3\1991 As to th e compromise pen alty of P20,000.00, , it is well-se ttl ed that tt1o taxpayor ca nnot be co mpelle d by the BIR Commission e l�~ t o accept a compr~omise penalt y, compromis e bein g mutual in nat twe. <Br inas Colle c tor , CTA Case l\lo. 1 E,, Septe, mbet~ 14, 1955 ) . Petitioner~ ' s payment does not \ signify acquiescence there to as it wa s made under protest. The r e is t:het~ e f ot' P. no basis fo r chat~ging the same in the absence of anv agreement pert aining thereto. Certif icati on by a certified p ubli c accountant is required in estate t ax returns showing a gross value of 316

DECISION - C.T.A CASE NO. 4955 - 20 - P50, 000 .. 00 o r' mon=~ CS1~ ct i. on f1.3 (a) , NI RC) . A penalt y of Pl , OOO.OO was imposed in th is case for having no CPA ~-1it l� 1 n o s P fJ C :if i c o bj ec~ ion the pet :it; ion �~t~. ; I Based on the f orego ing , petiti oner's assessment f or und oU.let~ penalties should be accordinqly mo d i fi ed. petitioner has alread y paid, ulbLit under protest, the surcharge, irite rests ~nd other penalties tot all i ng P438,040.38 whereas h~ should only be liable fo r the interest o~ the deficiency estate .\ tax du e amountinp to P13, 462.74 and penal ty for ha v ing no CPA c er t i f ic~ t e o f P1,000.00 or an overpayment of P423, 577 . EA. WHEREFORE , respondent ' s de ficiency assessment fat~ ,.) s twchat'g e, and other p~nalties is modi fi e d and since pet itioner has already paid the full .~ mo 1.1 nl; of P'~38, 0't0. 38 ~ responden t is hereby ordered to refund to the Estate of Jo se San Agu sti n the overpayment a mount .i. nq to P4~"?3 ,577 .6't. SO ORDERED. Que:zon City, Metro 1'1anila, Apt'il 21, 1994. ~- .... ~<Q , ~ ERNESTO D. ACOSTA f..:Ot'esiding Judge 317

DECISIOn - C.T.A CASE NO. 4956 t-JE CONCUR: / CERTl:FICATl:ON , af~er due consultation am on g the members of the Court ' of Tax Appeals VIII , Section 1.7... of the Con.s t i t u t i on. e..J;;:;;uz_._~ ERNESTO D. ACOSTA . Pt'esiding Judge Court of Tax Appe~ls �J 318