CTA Case No. 2916 (Decision)

RF.PURUC: OF TRE PIIILIPPINES COURT OF TAX APPEALS QUEZON CITY GOVERNMENT SERVICE C.T.A �. CASE NO. 2916 INSURANCE SYSTEM, Petitioner, versus - COMMI SSIONER OF IN- TERNAL REVENUE, Respondent. X- - - - - - - - - - X DE C I S I 0 N This is an a~peal taken by petitioner from t he assessment of respondent imposing against it deficiency income tax for the period from January 1 to June 30* 1974, and from July 1, 1974 to March 31, 1975, in the total amount of ~17,210,385o37, inclusive of interest~ Petitioner, the Government Service Insurance System, is a government-owned and controlled corpo- ration established pursuant to Commonwealth Act 186, as amended, which administers a program of benefit for government employees (Par. 1, Petition for Review, p. 1, admitted in par. 1, Answer, p .. 24, CTA. rec.) "" On December 1, 1977 (Par. 4, Petition for Review, Annex 11 A", p .. 7, CTA. rec.) petitioner received from respondent deficiency income tax assessment dated October 31, 1977, covering the perioffifrom January 1 to June 30, 1974, and from July 1, 1974 to March 31, 1975, inclusive of interest � in the amounts of �3,452,906 .. 08 and ~13,757,479.29, respectively 232

DECISION - CTA CASE NO . 2916 - 2- computed as follows : . ACR-36 - 10-4-08000994-74/77 Net income per investigation � � � � � ~26,512,752.14 Income tax due thereon ����� o � o 9,346,841.00 . Income tax already paid �� o � � � � 6~915~217.00 � Ueficiency income tax � o � o o ��� P 2,431,624.00 Add: 14% Int. fr. 10/15/74 to 10/15/77 � � � � � � � � � � 1,021,282 . 08 ' TOTAL AMOUNT DUE AND COLLECTIBLE � � � 3,452,906.08 ACR-36-4-08001163-75/7I Net income per investigation o ���� P45t518,366.19 Income tax due the.reon ���� o ��� 15,911,428 . 00 Income tax already paid . � � � � o o � __5..t.l:14, 682.98 0 eficiency income tax �������� P10,696,745.02 Add: 14% Int. fr. 10/15/75 to 10/31/77 ���� o o o � � � 3,060,734.2~ TOTAL AMOUNT DUE AND COLLECTIBLE o � � ~13,757,479.29 and requesting that the said amounts be paid on November 30, 1977 (Annex "A", p. 6, CTA. rec.) Subsequently, petitioner, on December 19, 1977 filed a request for a reconsideration or protest alleging that the aforesaid assessment of respondent has been condoned under Section 36 of Presidential Decree 1146, which took effect on May 31 , 1977. (Annex "B"; p. 8, CTA. rec . ; see also par. 5, Peti- tion for Review, and par. 1, Answer, pp. 1 and 2, and 24, CTA. rec.) Without waiting for an action on its request for reconsideration or protest of the aforementioned assess- ment, petitioner, on December 29, 1977, filed its � Petition for .Revie\�1 in this ~curt (:c;xh. "1-D", par. 6, Petition for Review , p. 2, CTA. rec.) 233

DECISION CTA CASE NO. 2916 - 3- The only issue is whether or not this Court has jurisdiction to entertain the instant petition for review~ / The pertinent provisions of law that confers juris- diction to this Court are Sections '7 (1), and 11 of Republic Act Noo 1125, pertinent portions of which pro.- vide as follows: Seco 7. Jurisdiction.- The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided- (1) Decisions of the Collector (now Commissioner ) of Internal Revenue in cases involving di~puted assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue; XXX XXX XXX Sec .. 11. Who may <2.2oeal i effect.___of appe~l�- Any person, association or corpo- ration adversely affected by a decision or ruling of the Collector (now Corru11issioner) of Internal Revenue, the Collector (now Commissioner) of Customs or any provincial or City Board of hssessmenf Appeals may file an appeal in the Court of ax Appeals with- in thirty days after the receipt of such decision or ruling. The word "decision" provided for in sa .id para- graph 1, Sections 7 and 11 of Hepublic Act No. 1125 has been interpreted to mean the decision of the CoiTmissioner of Internal Revenue rendered based upon a written protest filed by the taxpayer against the assessment and not the "assessment" itselfo It is already a well-settled rule that when the Commissioner 1 see Co~~issioner of Internal Revenue vs. Leonardo s. Villa6 etc., G.R. No. L-23988, Jan. 2, 1968, 22 SCRA 3, at page 6. "')""'V~ /1 L.

DECISION ... CTA CASE No. 2916 - 4- of Internal Revenue issues an assessment against the ta~cpayer and the said taxpayer files a protest thereon, the taxpayer c an appeal to this Court within 30 days from the receipt of the deci sion of the Commissioner denying taxpayer 1 s protest. In the case of Commissioner of Internal Revenue vs. Leonardo s. Villa, etc. (G.R. No. L-23988, January 2, 19681 22 SCRA �-6), the Supreme Court held thus - XXX XXX XXX The word " decisions 11 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 pro- test of the taxpayer against the assessments. Definitely, said word does not signify the assessment itself. We quote what this Court said aptly in a previous case: ' 11 In the first place, we believe the respondent court erred in holding that the !ssessment in question is ~he respondent Collector's decision or ruling appealable to it~ and that consequently~ the period of thirty days prescribed by section 11 of Republic Act No. 1125 't-rithin \"lhich peti- tioner should have appealed to the respon- dent court must be counted from its receipt of said assessment. Where a taxpayer questions an assessment and asks the Col- lector to reconsider or cancel the same because he (the taxpayer) believes he is not liable therefor, the assessment and becomes a 'disputed assessment� that the Collector must decide, and the taxpayer can appeal to the Court of Tax Appeals only upom receipt of the decision of the Collector on the disputed assessment, x x x (Italics supplied) The same interpretation finds support in Section 1 1 of Republic Act 1125~ w.1ich states: 235

DECISION CTA CASE NO. 2916 - 5- "Sec. 11. \�lho mav _?ppeal; effect_Qf appeal.- Any person, association or corpo- ration adversely affected by a decision or ruling of the Collector of In~ernal Revenue, the Collector of Customs or any provincial or city Board of Assessment App~als may file an appeal in the Court of lax Appeals within thirty days after the receipt of such decision or ruling~ (Italics supplied) Note that the law uses the Hord "decisions", not"assessments", thus further indicating the legislative intention to subject to judicial review the decision of the Com- missioner on th ep rote st agaL1st an l f .2 .. as sessment but not the a sessment it s s e XXX XXX XXX In the instant case, since petitioner has appealed to this Court without waiting for the decision of the Commissioner of Internal Revenue on i ts request for. reconsideration or protest of the assessment, petitioner had in fact appealed from the assessment itself, and not from said decision and hence, the appeal is prematurely filed, and this Court has no jurisdiction to enter- tain the same~ (Commissioner of Internal Revenue vs. Leonardo s � .Villa, etc~ Qp. cit.~ p. 7; J. Romero and Associates, Inc., vs. the Commissioner of Internal Revenue, CTA Case Noo 26 70, February 27, 1979 .. ) Se e Villamin v. Court of 'l 'ax Appeals, L-11536, October 31, 1960. 23G

... DECISION CTA CASE NO . 2916 - 6- WHEREFORE, f or being prematurely filed and for lack of jurisdiction, this appeal is hereby dis- mis sed. With costs against petitioner. SO ORDERED. uuezon City, July 26, 1979. 7 C? ~(7-L~ - CON STANTE ROAIJUIN Associate Judge / I CONCUR: -- z;~-e(.-~ , �,'___:L_ --<:~ AHANTE F LER ev h cting Presiding Judge