CTA Case No. 2217 (Resolution)

,EPU:BLJC OJ' TJI'E PBILIPPINEI COUR'r Olt~ ~ TAX APPE.4Ut QUEZON C..ITY FLORENCIO REYES, JR., and C.T.A. CASE NO. 2217 TERESA R . lGNACIO, Petitioner, versus TEE COMMISSIONER OF INTERNAL REVENl.JE , Respondent. X- - - - ----X R �E S mL UTI 0 N .. This refers to a Motion dated J�1ay 26, 1971 ,, filed by respondent to dismiss the Petition for Review on the ground of lack of jurisdiction on the part of this Court to take cognizance there- of. It appears that in a letter dated January 6., 1969 , respondent requested petitioner Florencio Reyes, ~r . to call at the for~er�s .office on January 13, _1969 , for an informal conference in connection with a report of one of his examiners that petitioner� has income tax .liabilities for the years 1963 to 1966 and.� 1963 donor's and donee's gift taxes. Subsequently, respondent sent petitioner a letter dated December 15, 1969, �:itf�, the following tenor:

,' , RE' SOLUTION - CTA CASE NO. 2217 ;2 I have the honor to inform that, in the course of an investigation conducted by its Office of YOUR 1963 income tax liability, it was found that you sold real properties for less than adequate an,d full con- siderations. ofHethnece~axpuCrsoudeantthetod�if- Section 111 ference between the selling price of �412,500.00 and the value thereof at the time the sale was consumated, , per investigation, in the amount of �708,428.10 or �295,928.10 is deemed a gift, subject therefore to donor's and donee's gift taxes. On account thereof, the �sums of �25,965.11 and ~84,317.91 as donor's and donee's gift taxes and penalties was recommended for assessment against you and your sister, Teresa R. Ignacio. In view however, of the policy of this Office to give taxpayers all . t he opportunity to give their side of ' the case before final assessment is issued, you and your sister or your authorized repres~ntative who should ,pos- ~e�ss (s:Jo) t he Income Tax Division, BIR, Room 219 Finance Building, Manila, on January 8, 1970. Please bring with you document that has a bearing on tht:f case. Please give this matter your preferential attention because after said period we do not hear from you final assessment ~11 be issued im- . mediately. Petitioner answered the aforequoted letter with a letter-memorandum dated February 17', 1970. Thereafter, in a letter and in two assessment fqrms duly accomplished, one for Florencio Reyes, Jr. and the other for his sister Teresa R. Ignacio, respondent assessed petitioners Florendb Reyes, Jr.

RESOLUTION - CTA CASE NO. 2217 3 and Teresa R. Ignacio ' in the sum of ~25 ,486.64 and ~81,801.53, respectively, as donor's and donee's gift taxes at the same time demanding payment thereof on or before February 1, 1971. The letter and the assessment forms all bear the date of Dec- ember 14, 1970 . I The foregoing facts appear in the allegations and annexes of the Petition for Review . , Nothing i~ the said allegations and annexes show that the aforesaid assessments were ever disputed by petitioners. Obviously, what is brought to this Court on appeal are the assessments against peti- tioners. Under Section 7 of Republic Act No . 1125, an assessment is not appealable; what is appealable is a decision on a disputed assess- ment. Th~ assessment has first to be adminis- tratively contested or protested formally and it is the decision on this protest that constitutes the decision on a disputed assessment. In the first place , we believe ~ the respondent court erred in holding _that the assessment in question is the respondent Collector's decision or ruling appealable to it, and that consequently, the period of the thirty days prescribed by section -11 of Republic Act Noo 1125 within which petitioner should have appealed to th~ respondent court must be counted from its receint of said assessment. When a taxpayer questions an assess- ment and asks the Collector to re- consider or cancel the same because he (the taxpayer) believes he is not

I RESOLti'TION - CTJ~ CASE NO. 2217 T 4 liable therefpr, the assessment be- comes a 11disputed assessment" that the Collector must decide, and the taxpayer can appeal to the Court of Tax Appeals only upon receipt of the decision of the Collector on the dis- puted assessment, .in accordance with par. (1) of Sec. 7, Republic Act ~o. 1125 conferring appellate jurisdic- tion upon the Court of Tax Appeals to revietv a "decision" of the Col- lector of Internal Revenue in cases involving disputed assessments ��� I The period to �appeal to the re- spondent court in this case must; . therefore, be computed from the time petitioners received the decision of the respondent Collector of In- ternal Revenue on the disputed assess- ment and not from t he time they re- ceived the assessment ��� (St. Stephen's Association and St. Ste- ph~n�s Chinese Girls School �v. Comm. of Internal Revenue, G.R . No. L- 11238, August 21 ., 1958.) In another case,- the Supreme Court also h~ld that: Since in the instant case the taxpayer appealed from the assessment of the Commissioner of Internal Re- venue without previously contesting the sa.me t1.:� otuhret appeal was premature and the of Tax Appeals has no jurisdiction to entertain said ap- peal. For, as stated, the juris- diction of the Tax Court is to re- vie\'1 by appeal decisions of the Com- missioner of Internal Revenue on dis- puted assessments. The Tax Court is a court of special jurisdiction. As such, it can take cognizance only of such matters as are clearly within its jurisdiction. (Commissioner of Internal Revenue v. Leonardo s. Villa, G.R. No. L-23988, Jan. 2, 1968.) � . Since there is nothing to show that the assessment appealed to this Court has been formally contested administratively a.nd the p.cotest has

. �.� ... 1 RESOLUTION - CTA CASE NO . 2217 5 been decided, it goes without saying that this Court has no authority to take cognizance of this appeal. vmEREFORE , the present Petition for Review is hereby dif:imissed, confirming the order given in open Court on September 18 , 1971 . , SO ORDERED . Quezon City, September 24, 1971 � .fL-.-- 1 ~~ RAMON L . AVA.r~CENA ssociate Judge viE CONCUR: ROHAN ~-1 . DMALI �esiding ~e ~ ~~K!~ ,___,,.........,ISIAO R. ALVAR:et:-7- Associate Judge / ...