CTA Case No. 5275 (Resolution)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY AIRPORT BUILDERS AND MANAGEMENT CORPORATION (ABMC} AND THE SPOUSES ROGELIO A. AND VIRGINIA s. DIO, Petitioners, - versus - C.T.A. CASE NO. 5275 THE HONORABLE LIWAYWAY VINZONS- CHATO IN HER CAPACITY AS THE COMMISSIONER OF INTERNAL Promulgated: REVENUE, FEB 19 1998 ~ Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - X RESOLUTION Acting on the instant motion to dismiss filed by respondent on September 21, 1995, this Court, after a thorough study of the background facts and premises alleged in the petition and the opposition and reply to said motion as wei I as petitioners' memorandum on the same, RESOLVES to GRANT said motion in� view of the fact that, contrary to petitioners allegation, a computation of tax I i ab i I it i es in a criminal complaint cannot be considered as a formal assessment, as held in Commissioner of Internal Revenue vs. Court of Tax Appeals and Spouses Antonio L. Sanchez and Editha Vito-Sanchez, CA-G.R. SP No. 36564, promulgated on July 03, 1996, to quote:

RESOLUTION C.T.A. CASE NO. 5275 - 2- "We agree with the Solicitor General in his position on the matter, and we quote with approval, thus: 'x x x Here, the civi I aspect, i.e., deficiency income taxes assessment is not deemed included in the criminal complaint filed against respondent spouses. This is so because the amounts of the proposed tax assessment were merely mentioned in the criminal complaint to show the discrepancy between the amounts indicated in the Income Tax Returns and the findings shown in the investigation/audit report submitted by petitioner's revenue examiners. This is in consonance with the rulings of the Supreme Court in the Ungab case (supra).' (Ungab vs. Cusi, Jr., 9 SCRA 877)." Even assuming for the sake of argument that there is an assessment as a I I eged by the petitioners, We st i I I chose to grant the instant motion due to the clear absence of a decision on a disputed assessment in the case at bar as can be gleaned readily from the petition, to quote: "It is respectfu I I y submitted that the f iIi ng of a criminal action for tax evasion involving an assessment of P26,041,509.00 by herein respondent Commissioner against herein petitioners consists in a formal assessment which may be appealed to the Honorable Court of Appeals(sic> within 30 days or until August 6, 1995 <a Sunday) and, as such, petitioners have unt i I the next working day or unt i I August 7, 1995 within which to perfect an appeal." <Petition, p. 11; italics supplied) The Court of Tax Appeals is a court of special jurisdiction. As such, it can take cognizance only of

RESOLUTION C.T.A. CASE NO. 5275 - 3- such matters as are clearly within its jurisdiction. This jurisdiction of the Court of Tax Appeals is defined in Section 7 of Republic Act 1125 which pertinently provides for its exercise of "exclusive appe I Iate jurisdiction to review by appeal xxx decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refund of internal revenue taxes , etc." The word "decisions" in paragraph 1, Section 7 of Republic Act 1125 has been interpreted to mean the decisions of the Commissioner of Internal Revenue on the protest of the taxpayer against the assessments. Definitely, said word does not signify the assessment itself {Commissioner of Internal Revenue vs. Vi I Ia, 22 SCRA 3). It is for this reason that the argument of petitioner that a mere assessment is appealable to this Court is patent Iy erroneous. WHEREFORE, in view of the foregoing, the Motion to Dismiss filed by the respondent is GRANTED. Accordingly, the petition for review filed on August 5, 1995 is hereby DISMISSED on the ground of lack of jurisdiction. SO ORDERED. {Dissenting) ERNESTO D. ACOSTAA Presiding Judge ,.._' ~ .� RAMON 0. D Associate

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY AIRPORT BUILDERS AND MANAGEMENT C.T.A. CASE NO. 5275 CORPORATION (ABMC) AND THE SPOUSES ROGELIO A. AND VIRGINIA S. DIO , Petitioners , - versus - THE HONORABLE LIWAYWAY VINZONS- CHATO IN HER CAPACITY AS THE -tf& Promulgated: COMMISSIONER OF INTERNAL _ FE_B_1_9 _199_8 REVENUE, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - X DISSENTING OP I NION The issue for resolution in the respondent's Motion to Dismiss is whether or not this Court has jurisdiction to take cognizance of the petition pursuant to Section 7(1) of Republic Act No. 1125. With due respect to the majority opinion, I am not inclined to grant respondent's Motion to Dismiss for the following reasons: 1) In our resolution entitled Pascor Realty and Development Corporation and The Spouses Rogelio A. and Virginia S . Dio vs. The Honorable Liwayway Vinzon s-C hato, CTA Case No . 5 2 71, dated J anu a ry 2 5, 1996, this Court categorically ruled that the criminal complaint for tax

DISSENTING OPINION - C.T.A. CASE NO. 5275 - 2- evasion is already an assessment. Quoted hereunder are portions of said resolution, thus: "It is the Court's honest belief, that the criminal complaint for tax evasion is already an assessment. The complaint, more particularly, the Joint Affidavit of Revenue Examiners Lagmay and Savellano attached thereto, contains the details of the assessment like the kind and amount of tax due, and the period covered. Petitioners are right, in claiming that the provisions of Republic Act No. 1125, relating to exclusive appellate jurisdiction of this Court, do not make any mention of "formal assessment". The law merely states, that this Court has exclusive appellate jurisdiction over decisions of the Commissioner of Internal Revenue on disputed assessments, and other matters arising under the National Internal Revenue Code, other law or part of law administered by the Bureau of Internal Revenue Code (sic). As far as this Court is concerned, the amount and kind of tax due, and the period covered, are sufficient details needed for an "assessment". These details are more than complete, compared to the following definitions of the term as quoted hereunder. Thus: "Assessment is laying a tax. Johnson City v. Clinchfield N. Co., 43 s.w. (2d) 386, 387, 163 Tenn. 3 3 2' (Words and Phrases, Permanent Edition, Vol. 4. p . 446)" "The word assessment when used in connection with taxation, may have mo r e t h a n o n e me a n i n g . .:.T.:.h.:.;e::.____;u::.:::.l..::t:..:i:.;m.:.:..=a.:.t=-e. purpose of an assessment in such a connection is to ascertain the amount that each taxpayer is to pay. More commonly, the word "assessment" means the official valuation of a taxpayer's property for purpose of

DISSENTING OPINION - C.T.A. CASE NO. 5275 3- taxation. State v. New York, N.H. and H.R. Co. 22 A. 765, 768, 60 Conn. 326, 335. (ibid. p. 445). From t h e a b ove, it can be gleaned that an assess ment si mp ly states how much tax is due from a taxpayer. Thus, based on these definitions, t h e details of t he tax as given in t he Joint Affidavit of respondent's examiners, which was attached to the tax evasion complaint, more than suffice to qualify as an assess ment. T h erefore, this assess ment h aving been disputed by petitioners, and there being a de n ial of their letter disputing such assessme n t, t his Court unquestionably acquired j u ris d iction over the instant petition for review." This aforequoted resolution was later affirmed by t h e Court of Ap p eals i n the decision e n titled Commissioner of Internal Revenue vs. Hon. Court of Tax Appeals, Pascor Realty and Development Corporation and Spouses Rogel i o A. Dio and Virginia S . Dio, CA G.R. SP No. 40853, dated October 30, 1996. Given that the facts a nd circumstances in the aforecited Pascor case are identical with the instant petition for review, I do not see any valid reason why we should deviate fro m t h e wisdo m of this ruling; 2) In a similar resolution entitled Adamson Management Corporation, Lucas Adamson , Theresa Adam s on and Sara de los Reyes vs. Commiss i oner of Internal Revenue. CTA Case No. 5075 , dated September 19, 1994, this Court denied respondent's Motion to Dismiss and rejected the argu ment of respondent that this Court has

DISSE NTI NG OPI NIO N - C.T.A. CASE NO. 5275 - 4- no jurisdiction to take cognizance of the instant petition because no formal assess ment was issued. The Co urt of Ap peals, in affir ming this Court's resol u tion r u led, thus: "This Court agrees with the r uling of the responde n t court that it has jurisdiction over the case a quo for the reason that there was dee med a f o r mal assess me n t of t h e private res p o nd ents' deficiency of tax liability. Sai d court correctly considered the tax liability i n dicated in the cri minal complaint of the petitioner with the Depart ment of Justice as an i mplied fo rm al assess ment and t h e subsequent filing of the cri minal infor mation wit h the Regional Trial Court as a denial of the protest. Be it stressed that the petitioner will not file a complaint before the Depart ment of Justice if she was not sure of the correctness of t h e said findi n gs. Where the private respondents asked f o r a reinvestigatio n and sub mitted t h eir counter affidavits, these are i n t he nature of protest against the tax liability me n tio n ed in t h e complaint. And t h e fili n g of the cri minal case for tax fraud in the Regio nal Trial Court constitutes a final decisio n by the Inter n al Revenue Co mm issioner of the private respondents ' protest, whish is appealable to the respondent court." ( Commissioner of Internal Revenue vs. Court of Tax Appeals, Adamson Management Corp .� Lucas G. Adamson, Theresa June B. Adamson and Sara delos Reyes, CA G.R. SP No. 35520, March 29, 1996 ) IN VIEW THEREOF, I register my dissent and recommend the denial of respo ndent's Motion to Dismiss. ~T~A Presiding Judge