CTA Case No. 337 (Decision)

1\l:.PUUL IL. lP THF. I H ILTPPINE'.S COURT 01 TAX APPEALS WANU...A � ver$uS - E � 37 espond n � X� � � � � � � � � � � � � i

�7 - 2- ann hund1: d " nte n ( 97. 71 � } so � � � � 11 s A ax lit"� s for the ca end r ni 19 to th xt nt only of 28, - .oo�� p fl 18, 19~0. !thin th t' of xten� t1o f t f l f co .e tw-n fo 1 � p t o er oint r. - tu.rn for d y ar income .l ty of 5 . 26, thlet, p � �n t 11 nts on ay l � 19 It 14, 19 � u ,.e ntl , r on July 2, t1on of t a X t on nd v � ��� d ga 'st t cX n, r - c f 41 , 101.~3. T {$ def c td , () after 1 a n In t � su of 1 , ao.oo � n rs f 0 - t � tr nsfer o 49 to ella � t t � c. f :: latt r . t f r con d r tio , r- vel'al y X 1: r t� f tern 1 evenu � respo d nt , in 1r of OCto r 13, 1 a6 , _ ece :f.v d n :r on tob r 17. 19t6, r uced t . 8:X �� I& h red cti n ' of th s nt & e to h ftn l g of cler n n t c plt 1 e n o 2b7, ... tr~sfe.r o t elr prop rt as to r sc �la $t t , petit 0 der .rd'n �y an ins n t � of 1, 79. � ( xh. f r pt t on r � � ) �' 38 4J

�7 �� 12 r .,spond r. . } n hl 'tO 19. 1 1 f r p t !t - t d r eo rat 0 e r �! GIS n � at th apo 0 Sl s n t 11eet ncy IX � enlal of r r on51 � or �� � t � � fo � lo .tn rs.. collect t e ... c:r d? t on 1 41 . 39

� S37 -4- her co of this c sa ow t a 0 t x return of pet t on rs for 1 9 waa on pz-11 18, 19~. I � def c c ome tax ot ass ssed o t � 17, 1 56, the date ......~.--nt ' � letter of to r 13, 19o6 as r c vod tl ner , or ore t an tx ( ) fr t� urn was f led. h s ent tnter al revenu X ade with n 5 ars o tbe d t th turn was ~t ia , h r i r , clear t at h tf 0 ��� � cr d, and co � ntly th coll cte � at e r ~lnal ������- nt a ed I tit! ners in uly, 1 2, or will tb ��r P fro pxf.l 1 , n 'the 1:' f 1 c� nd th t t .. to t � nt f t to r lS, 9 re n en !rat nd t could o n tt ri ssesa nee exe c sed cont n ore sub� t on of se uent er .ex� 9, - rc1a J. h � ( a 1 ro� n t.) cc pt pol! on. held hat n as � a � wit !n the ftve-ye�r perio ut auc sse ent s a t a$1 � and odlfied y another, th ��v r ;� 40 4

- � 7 . per1o ith!n tn Sect on 31 of the e nue C de to D co nt fco t a date of �111 g f , r turn to the dat th ne assess nt a& <i � Th ts n he the en assel5 .J ~� no asse&nmeot a t oP (Juy . o. � Col ctor of Int. rn�l evenJ ' c. � � � 18 �, ' nc yeo v. oll ctor of rntcrnal �� u � . t . � o. 2 7. ov r 14, 1957.) I t theory of r spo t � to eec p d � , c ul n 1� l1fy t pro 1 n 1 1 m t in 1 r to �s s &nd collect !J t rn 1 .ra y rl � :nn his f rmer It s also r d t ti. ne.l'" ' requ�sta for recons on � � � upn d th t the ru n n of the oacr en the r invest tio on ct � ( p. ru t . } e ! d no 1 1 s!& fo~ thi co~et~ ion . h l w or th uapension f th nn ng tl. 5t t � 0 limit t pon �aess J\t on of nt rn 1 ~ v nu taxes in n rill ce � o wit.a 2. h r e ollector f Intornel - venue is pr n1 1 ea rom akin; the ������� nt or inn g dis ralnt or levy or � ceed!n in court, ancl for sixty eys tl'a re� after. ( ction 93 � avenue C e. ) 41

- ;;:.C l.S t 1 � 37 � � �c l:oher do ' t 1 - 6- ple :te~eat cc ~nied or r cons d rat Oft r co n % th t .c n sess en't , u ny $ die t Ofl th t t t r 1 atv� n� ht 0 Q rt t'"t n e of lpt ion, has th effect u p nd �ng t.h r nn'"ng f t sta� tute of li tat! n � Th lly � as !n th"s ea , th or �n 1 6 a$ o nd to � rroneou th r eon on wa ot t ut to c n� � we ho t ;uat fJc tion . y 1o d vl.n t � ttatut of s cl r re orr cons� er t on eff et f u th �unn "n of th 1 t t ons ould to d cour ucl re sta, w !eh s contr y to t 1 shad p .tl'-'Y of re irL"l tne exhaust �on of � � .�str-t� r d" s b f ore re� ort g to h cour ~ fh pro~ nt p- ct ce n the ur u of Intern l ppar ~t y su port$ i v! � �� 42 44

� 37 st e of l a G colt t on of ,.. ternal revenu � n ... ee o .;;)"'1 ,., 2 of the ~even C d .ot p t x, c tin oll ctor of in r evcnu �� o. L� 202, 1, ot r pon en 1 h n th ri nt co lee tax hro 1 � er ptibl � , nt -� ugua , 957. un 1 for t ande 1 h ry f r y i s n t nl y th rl ht c 1l t on ut t ri. ht t X pre er f or ent. ) 0f upre Court h c c por� t!on d c t y coun el r r ond nt , t hav foLAn noth n t r �n r \l h ch ny nf y nd �t nt ot pr G� collect inc x v ju ic c �on do cribe. t t on r� ae y the part! s n - he cl � y t � u re e ou~t !n the Avel o c ,, 4 3

� SS7 �s- val rr nt of tr nt nd 1 v ssu d c 0 of rn 1 n to orce c 1� 1 ct on of nco , r ro t e tr dt t turn ~a f 1 d or du � t tc h ld t co 1 ct t nco t X y - by trai r ft r turn n1 nthr G fil d or �n mpt to col ct s d tax ht frh -~ r p r o s l an v � - hs f r t. col ct 0 X d c 1 e" on. The r s n f r t �nc 1( d) of h l t of thA to col� 1 ct ne t X 31 an 33? of th cv nt ro f 1 tX ener 1 t0 ot l to nc t x. ec n c1 on sp c � c 11 p- c 1 to co t x, ns 1 nd 2 v p ic en r lly 0 nt rn'!">l r v nuc X s. rt1 T ly c ~f l ct 2n on ol d) han an ct1ons l n oth r re ,, I

- - � 37 � the pe~ o of lfJD!tat!on upon t p er to co lee co tax by d tra nt an i�vy, an4 th Sup~e Cour r �.,htly h lcl that eet!on 51( d) ~ing a special pt-o'Vfe on ts h one eppl ca le . uith spect to th r! ht to � �� � ad collect !nto ta � y ~ud1c1al action, the~ ia bsolut~ly no con lict etwetn th said ~ovl 1 a of law. Section 5l{d) . the speoial provi�1on, D 1n & l�nt on t s bj et, &etioNt 331 end 33,, the e a r l r v ~on , ~JS b ld o ap 1 � Tber s nothin :f.n ct ons 331 n 332 h1ch ~xc 1des ope at on the rig t of h Coll ctor of ln� t�rnal � nue ~o &$eSs ar.d e �et nco tax y ju- die� 1 ct on. ~no h!s Court has expreesed t v 1n � long l .n of dee s!ons. � aummar!z our v ~ on ~ s 1 j et n nceyc v. Collector of nternal �venu , �T. � o. �287, ove11 r 14, ~7, 1ro 1c 1. .te.r ttu:�� of an eo t th l. ff!r upre � ou.rt n � o� �1 � 28, 1958. ,, 45 I '

7 - 1 .. � , l 12 57, �� 46

B � 37 - l l .. j uxth 1� u� refer to the clat ~tl� f��� plu r~ esonn l a ount fo~ att ey'a nd t e ��pen._, of th1 l1t!gat on, ae!de fr c~�ts.� To justify t tr cj.a for 4a o� , petit!o te.ra alleget 380. fac t~.wl an "H:T T .. twl~� :r�qu�ated , to explain ow !s Off!c: r r !ved at uch r e� ~�d prof t of 11 879. 1. t � mer ly stated fn h.1e let"ter of v � , 19~6. n� nex � '� that the �aid profit , & ~a&e up n I tb� all gtd total aaset� of 11 t6S7. 3 tr~n�f�r~ ltl te he ~1~11� E�- tato , rne., w thout explaining how such figure �� axr!.ved at. He laeral>ly faUecl ancJ atu bornly refused to give out the detatla thereof, to wit� t he cost� to PETlTl of each of the r�t�� PI' pertie trantfeuecl, tM!r retpec:tlv tts� signed values, and t and ounts of deprecl&t!.on taken ln o a~e unt. ,, 47 t

�7 - 12- ae 1 ... t n nt. ho clal th t ta nc nd th 1 r cr at petit onar � X !lity r y c 1: tly sc n that petit oner 8}'l'iY I ue c s � nor enle � al th laws. � 0 s nte y p ti on r ur 1 t e ar ill upp rt of at!on tha hey auf d et per� cat1on n� ce nt y actually auatatne � oth g of appears y c t t �. t r t de� tte p d to ep ve , ny of pro r y � t oc��� of 1 � n ac � 1 eve th t of the off cars of t � of n� hn l c- a � to the v n~ � o petit onars. r f 1 r o 48 38

�r�� � 37 -l - nt to a �� t d f eteney t ~ n tstio thin th per prescr d y 1 , m de tt poas blt for pettt on rs to t&t up t G d fen e of on. The Ql�~ f r da ges st p rforce b d s issed unteneble. F � nd pur uent o ect on 14 of epabl c et o. , t, dec s on appealed fro s er eby r versed. o costs. M~il� � Phil pp es, Fe ruary 28, 1958. 49