ANSCOR LAND MANAGEMENT AND DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY AHSCOR LAND KANAGEKEKT AND C. T .A. CASE NO. 5463 DEVELOPKENT CORPORATION. Petitioner, - versus - COIIIIISSIOJIER OF IIITERNAL REVENUE ResJ�ondent. X- - - - - - RESOLUTION Respondent Cc�mmissioner o:f Inter�nal Revenue, through a motion :filed ctn April 10, 1997, seeks the d ismissal o :f petitioner's appeal on the ground o.f lack o:f jurisdiction. He contends that the action :filed by petitioner be:fore this Honorable Court is premature since the respondent has rendered no .final decision on the assessment made by BIR's Revenue Region No. 8, hence, this Court has no jurisdiction to take cognizance o.f said appeal. Pertinent to the issue at bar is Section 7 o:f Republic Act No. 1125 and Section 10 o:f Revenue Regulations No. 12-8~� . which st.ates: �SEC. 7. Jurisdiction. The Court o:f Tax Appeals shall exercise exclusive appellate jurisdiction t .c� review by appea l , as her�ein provided - ( 1) Decisions o:f the Com�issioner o:f Internal Revenue in cases involving disputed assessment, re.funds o:f internal revenue t .a!<es, :fees or other charges, penalties imposed in

RESOLUTION - C.T.A. CASE NO. 5463 -2- relation the-reto, or other aatters a:r�ising under the National Internal Re-venue Cc�de or ot.her law or part o:f law administered by the Bureau o:f Internal Revenue; <underscoring supplied) <R.A. No. 1125) XXX xxx." Section 10. .Appea.ls o:f Decis:ion o:f Co��issioner or Regiona.l Direct.or t.o t.be Court. of Tax AppPa.ls. Final decision issued by the Co mmissionPr or Regional Ihrector aay be appealed to the Court o:f Tax Appeals within thirty (30) days :from receipt thereo:f, otherwise the saae shall become :final and executory. <Revenue Regulations No. 12- 85> It is unmistakably clear and vivid :from the a:fo:rementioned provisions o:f law and regulations that what is reviewable by t .his Court on appeal, among others, are the decisions o:f the Commissioner o:f Internal Revenue and Regional Directors. It is the intention o:f the law to give the taxpayer an opportunity to exhaust all administrative remedies be:fore coming to this Court and em the other hand, {tive the Cc�mmissione:r or the Regional Director, as the case may bep an oppo:r�tuni ty t o correct the mistakes committed, i:f any, by his subordinates. Thus, a party dissat.is:fied wi t .h the decision o:f t .he Chie:f o:f Assessment Divisi on may aJ�peal to t .he Commissioner or Regional Directorp whose decisions are appealable to this Court in the manner and wi t .hin the period prPscribed by law and regulations. Since petitioner did not exhaust

RESOLUTION - C.T.A. CASE NO. 5463 - 3- his administrative remediesp his recourse to this Court is premature. Under the principles o� statutory constructionp i� a statute is clearp plain and �ree �rom ambiguityp i t Jnust be given its literal meaning and applied without attempted interpretation. This plain-�eaning rule or verba legis derived �rom the maxim index animi se:r-mo est (speech is the index o� intention> rests on the valid presumption that the words employed by the legislature in a statute correctly express its intent or will and preclude the court �rom construing it di��erently. The legislature is presumed to know the meaning o� the wordsp to have used words advisedly p and t .o have exJ:�ressed i t .s intent by the use o� such words as are �ound in the statutep Verba legis non est recedendump or �rom t .he words o� a statute there should be no departure (Globe- Mackay Cable and Radio Corporation vs. NLRC, G. R. No. 82511, March 3, 1992. 206 SCRA 701 >� It is also important to point out that it is the respondent Commissioner of Internal Revenue herself, who vehemently insists that there is as yet no final decision on the protest filed by the petitioner which is appealable to this Court. There is no better governaent official in this country other than the Commissioner of Internal Revenue who is in the beat position to declare whether a

RESOLUTION - C.T.A. CASE MO. 5463 -4- decision ctn a protest is :final or notp a:fter allp she is the head o:f the government agency responsible :for issuing tax assessments. Petitioner however continued to argue in its "Comment on Respondent. ~s Motion to Dismiss" ( pp. 81-83, CTA records) t .hat the decision o:f the Chie:f o:f the Assessment Division o:f a Revenue Region constitutes the :final decision appealable to this Court, pursuant to Revenue Administrative Order No. 10-95 i m:plementing Executive Order No. 132, which provides in part that the Assessment. Division o:f the Revenue Regional O:f:fice shall �review and act on all letter�s o:f prot.ests, requests :for reinvestigation and similar communications". We disagree with the interpretation made by the petitioner. There is nothing in the abovequoted :funQtion o:f the Revenue Regional O:f:fice that would make us think that said o:f:fice would have the :final say on the protests :filed by taxpayers. Neither does the respondent Commissioner o:f Internal Revenue interpret said Revenue Administrative Order in the same manner as the petitioner. However, ve commiserate with the petitioner because admittedly the so-called "devolut.ion" scheme o:f the Bureau o:f Internal Revenue embodied in large part in Revenue Memorandum Order No. 37-94, tends to con:fuse the taxpayersp particularly in the determination o:f the :finality o:f the decision appealable to the Court o:f Tax

RESOLUTION - C.T.A. CASE NO. 5463 -5- Appeals. Apparently, the respondent Commissioner of Internal Revenue, by virtue of her pronouncements in her Motion to Dismiss and subsequent Reply, pointed out that it is not only the tenor o1 1ina1ity embodied in a decisictn which is the key element. constitutive o1 its appealability to the Court o1 Tax Appeals but it is also important to cctnsider the government o11icial who renders such decision. In this case, it should be the final decision o1 the Commissioner o1 Internal Revenue or the Regional Di:r�ector, pursuant to Section 10 o1 Revenue Regulations No. 12-85 <supra>. This part.icular interpretation is in con1or�ity with Section 7 o1 Republic Act No. 1125 (supra). ACCORDIMGLY, 1inding merit with the respondent's proposition, the instant petition 1or review is hereby DISIIISSED, vi thout prejudice, 1or lack of jurisdict.ion. SO ORDERED. (Dissenting) ERMESTO D. AGOSTA Pt�esiding Judge I / I I

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ANSCOR LAND ftANAGEftENT AND OEVELOPftEKT CORPORATION. Petitioner, - versus - ~.T.A. CASE MO. 5463 COJOJISSIOJIER OF IMTERNAL REVENUE, Respcmdent. X- - - - - - - - - - -- - - -- - - - -X DISSENTING OPINION In resolving the instant motion to dismiss �iled by the respondent on April 10, 1997, t.he majority decided to grant. the same on the ground that only the decision o� the Commissioner or Regional Directors o� the Bureau o� Int.ernal Revenue <BIR> on disputed assessment is ap:.:�ealable t .o this Court pursuant to BIR Revenue Regulations No. 12-8~�� In �ine, a mere decision on a disputed assessment by the Chie� of the Assessment Division of Revenue Region No. 8 o� respondent's Bureau, which is the one presently appealed to this Court, has been held to be insufficient and not in accordance with law and regulations. With due respect, 1 beg to disagree vith my esteemed colleagues.

~��'~r-vv'-t, . ,.~. ~' ' � ,. OEG-I-5-ffiN '- 5463 C.T.A. CASE NO. -2- It is well established and recognized in a number o� cases that lower ranking o��icials o� the BIR, acting �or and in behal� o� the Commissioner, have the delegated authc�rity to act with �inality on matters involving request �or reinvestigation or reconsideration o� protested assessments. In the case o� Co��issioner o� Internal Revenue vs. Ayala Securities Corporation aDd the Honorable Court o� Tax Appeals, 70 SCRA 209, the High Court considered a plain letter o� the Chie� o1 Manila Examiners o1 the 011ice o� the Commissioner o� Internal Revenue, wholly reiterating the demand by the BIR 1or the settlement o� the assessment already made, as a clear indication o� the 1inal decision o1 the Commissioner against the reconsideration o1 the disputed assessment. In addition, this Court has had the opportunity to declare as respondent's �inal decision the acts and signatures o� the Acting Regional Director, Chie� o� the Assessment Depart�ent, and Chie� o� Accounts Receivable/ Billing Division, all o� the BIR. The Collector o1 Internal Revenue, CTA Case Ho. 258, Resolution, proaulgated on July 31, 1956, pp. 6-7; Philippine Rock Products, Inc. vs. The Collector o� Interaal Revenue, CTA Case Mo. 546, Resolution, proaulgated on December 22, 1958, p. 4; Cleo-.enes Fortaleza, Jr. vs � Collector, CTA Case Ho. 1527, ..

�.../��~!.i.~ ~,, 5463 DEe-rSI ON - 1 C.T.A. CASE NO. -3- Resolution, promulgated on December 22, 1964; Oceanic Wireless Hetwork, Inc. vs. Commissioner o~ Internal Revenue, CTA Case Ho. 4668, promulgated on Septeaber 16, 1994> The a1orecited cases prove the point that not only the decisions o1 the Com�issioner or the Regional Director o1 the BIR are appealable to this Court. Although Revenue Regulations No. 12-85 has speci1ied that the 1inal decisions o1 the latter tvo persons are the ones aJ:�J�ealable, it doesn't mean, hc�vever, that the sa�e is exclusive especially considering that in t .he particular case the incumbent Co�missioner hersel1 has delegated 1urther said authority to even lover o11icials o1 the BIR. I always adhere to the pronouncement enunciated by the Supreme Court in Advertising Associates vs. Co. .issioner o~ Internal Revenue, 133 SCRA 765, which prc�vides that. : "�The decision is in accordance with this Court's dictum that the Commissioner should al.wavs indicate to the taxpayer in clear and unequivocal language what constitutes his 1inal deter�ination of disputed aasess�ent. That procedure is de�anded by the pressing need ~or fair play. regularity and orderliness in ad�inistrative action. <Surigao Electric Co., Inc. vs. Court of Ta~ Appeals, L-25289, June 28, 1972, 57 SCRA 523 ) . ' (Emphasis provided)"

fi _If 5463 u ~�-�l� DE&i--s-reN I - C.T.A. CASE NO. - 4- This means that irregardless o:f the literal and exclusive mention o:f the Commissioner or the Regional Director in Revenue Regulations No. 12-85, the controlling :factor in the determination o:f a :final decision on a disput.ed assessaent is :founded on the Coamissioner"s clear and unequivocal language on what constitutes :final decision on the same. A review o:f paragraph II.D o:f Re-venue Memorandum Order <RMO> No. 37-94 duly issued by herein respondent Commissioner herself' clearly states: The Assis-tan-t Division Chief/Division Chief o:f Assess.en-t Divisions in -the Regiona.l O:f:Lices for regiona.l cases or the Assistant Commissioner, Intelligence and Investigation Service :for Tax Fr�aud Division cases sha.l.l decide whet~er or not. -the pro-test. -to an assess8P.D-t no-tice in accordance wi-th -the provisions o:f Sec-tion 229 and its i�p.le'IIE'n-ting regu.la-tions, shou.ld be given due cou:T'BE' and whether the protest involves a question o:f :fact or o:f law or both:"<Emphasis supplied) To my mind, the- abovecited excerpt on the respondent's RMO is a crystal clear delegation o:f authority to the Assistant Division Chie:f/Division Chie:f o:f Assessment Division in the various Regional O:f:fices to act :for and in behal:f o:f the Commissioner, in resolving protest cases. This view is expressly demonstrated in the :final decision issued by Ms. Virginia P. To�as, Chie:f

(1 ') - _/_}_._ !.- ~ION- C.T.A. CASE NO. 5463 - 5- o! Assessment Division ox Revenue Region No. 8 <Exh. "D">, thus: "Sir/Madam: Rexerring to your letter dated August 17, 1995 concerning your protest against. the de�iciency income tax, expanded withholding tax, excise tax and value added tax involving the amounts ox ?3,330,094.65, ?4,055.34, P914,903.15 and P2,251,239.31, under Assessment No. 001653-90-052 and Demand No. 01-134-90B-94- B2-052, the subject ox our� assessment notices and let.ter ox demands dat.ed December 9, 1994, p.lease be :i.nforwed t.hat. a:Lt.er eva.luat.:i.on of t.he fact.s :in re.lat.ion t.o ~ .la� and regu.lat.:i.ons app.l:i.cab.le on t.h:i.s case, t.h:i.s Office found no bas:i.s, .lega.l or fact.ua.l, t.o just.:i.fy t.he reversa.l or even any �od:i.f:i.cat.:i.on o:f t.he aforesaid deficiency t.ax assess�ent.s. In v:i.e� thereof, your request. for a re- considerat.:i.on is den:i.ed. You are requested to pay your axoresaid de�iciency tax liabilities to the ox�ice ox the Chie�, Assessment Division, 5th Flr. Atrium Bldg., Makati City, Metro Manila, on the appointed date shown below, inclusive ox 20% interest per annum xor late payment, which shall be computed �rom due date until date o� payment as shown in our assessment notice/demand letter, pursuant to Sec. 249(3 ) (c), NIRC, in order that this case may be considered clc�sed. Th:i.s is our :f:i.na.l decision. Very truly yours, <SGD> Virginia P. Tomas Chiex, Assessment Division Appointment date: January 8, 1997 <Emphasis supplied>

"\ I ~-8IdN- C.T.A. CASE NO. 5463 -6 - One thing is patently obvious in the abc�ve letter�, Ms. To�as is duly authorized to deny Ior and in behalf of her ofiice <Revenue Region No. 8) the said request for reconsideration, otherwise, she would not ofiicially have done it. Besides, if the authority of Ms. Tomas is merely recommendary, then she has no business sending a let.ter oi :f:ina.l decision on the denial oi said request fc�r reconsideration to the petitioner. The presumption o:f law is t .hat oificial duty has been regularly performed and, in this case, the presumption stands that ns. Tomas is so authorized to deny with finality letters of protest. As it is, the letter is too plain to be misconstrued. It. simply denied with Iinali ty t .he request for reconsideration and correspondingly set an appointment date, not for any possibility of Iurtber review, but for the payment of the alleged deiiciency tax liabilities therein. Furthermore, the questioned RMO did not provide any administrative remedy c�r procedure whereby a taxpayer aggrieved by the decision of the Chief Assessment Division would be able to obtain an equal and speedy remedy in the administrative level. So that in the case of ftunicipa1ity o:f Trinidad vs. CFI, L-33899r 3une 28r 1993r it was held that the rule of exhaustion oi administrative remedies is inapplicable to cases where

DEG:fs-fON - C.T.A. CASE NO. 5463 -7- the question involved is essentially judicial, the act is patently illegal or performed without. jurisdict.ion, or t .he respondent o:f:ficial acted in utter disregard o:f due process. In the absence of express administrative remedies, a recourse to such remedies become purely one o:f convenience or practicability and the rules on administrative due process o:f exhaustion o:f administrative remedies, as the case may be, would be inapplicable (Jose C. Vitug, Cowpendiu� o1 Tax Law and Jurisprudence. Third Ed�� pp. 43-44>. ACCORDIHGLY, I vc�te to DENY the inst.ant motion :for being untenable and without merit. SO ORDERED. G-Q.~ ERWESTO D. ACOSTA Presiding Judge