CTA Case No. 39 (Resolution)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS MANILA JAIME BAUTISTA, C.T.A. CASE NO. 39 Petitioner, - versus - THE COLLECTOR OF INTERNAL REVENUE, Respondent. x- - - - - - - - - - - - - - ~x RESOLUTION � This is in connection with the verbal motion to dismiss the above-entitled case for lack of jurisdiction submitted b,y respondent's counsel for resolution by this Court. Although no formal motion to dismiss was filed, a pre- liminary hearing was had thereon, the question of jurisdic- tion having been pleaded as an affirmative defense in res- pondent's answer (sec. 5, rule 8, Rules of Court). The petitioner herein, Jaime Bautista, is one of the heirs of the deceased Brigida Jacobo de Bautista who died on May 12, 1948. On May 9, 1953, the Collector of Internal Revenue wrote a letter to Mr. Vicente Bautista, Attorney for the estate of the deceased Brigida Jacobo de Bautista and one of the heirs of the latter, assessing and demanding from the said estate the amount of �8,768.40 as estate and inheritance taxes plus 1% interest as will have accrued thereon from January 1, 1952 to the date of payment. (pp. 85-88, B.I.R. record). As will be seen on page 1 of the duplicate copy of this letter, a co~y-thereof was received b,y Attorney Vicen\te Bau- tista on June 16;� 1953. (p. 88, B.I.R. record).

RESOLUTION - � C.T.A. CASE NO. 39 - 2- On October 301 19531 the Collector of Internal Revenue issued a warrant of distraint and levy on the personal and real properties of the heirs of the deceased Brigida Jacobo de Bautista to satisf.y the estate and inheritance tax, de- manded_which by then had increased to Pl01 491.31. (p. 941 B. I.R. record). As a follow up, on December 16, 1953, the Chief of the Assessment Department of the Bureau of Internal Revenue wrote a letter to the City Treasurer of Manila giving the names of the heirs of the deceased Brigida Jacobo de Bautista, their / respective addresses and the corresponding numbe~of the trans- ' fer certificates of title of real properties in the names of said heirs against which the collection of the estate and in- heritance taxes assessed and demanded could be enforced. (p. 96, B.I.R. record). In said letter, the name of the herein petitioner, Jaime Bautista, is listed among the seven heirs of the deceased Brigida Jacobo de Bautista with address at � 1338 Juan Luna, Manila� On May 21, 1954, the Deputy Collector of Internal Re- � venue wrote a letter to Mr. Vicente Bautista, Attorney for the estate of the deceased Brigida Jacobo de Bautista and one of the heirs of the latter, reiterating the demand for pay- ... ment of the estate and inheritance tax liability from the estate. (pp. 106-107, B.I.R. record). In said letter, the .Deputy Collector of Internal Revenue itemized the individual share of each heir in the estate and inheritance tax demanded. The petitioner herein Jaime Bautista, as one of the heirs of the deceased Brigida Jacobo de Bautista, was assessed the amonnt of fkl, 514.96. A copy of this letter of demand was

RESOLUTION - C.T.A. CASE NO. 39 - 3- served to Attorney Vicente Bautista on May 22, 1954. (p. 107, B.I.R. record). All the other heirs including the herein petitioner were likewise sent a copy of this letter (p. lo6, B.I.R. record). On. June 9, 1954, Mr. Vicente Bautista, as Attorney for the estate of the deceased Brigida Jacobo de Bautista and in his own right as heir, filed a bond in favor of the Republic of' the Philippines in the amount of' PB,ooo.oo, with the Luzon Surety Company, Inc. as surety , to guarantee the payment of' the tax demanded. (pp. 112-llJ, B.I.R. record). : On September 8, 1954, the City Treasurer of' Manila wrote a letter (Exhibit A, petition) to the herein petitioner notif'ying him that his share in the real property registered in his name and Angles Bautista bearing T.C.T. No � .3.3328 would be sold at public auction at 9:00 A.M. on November 5, 1954 to satisfY the estate and inheritance tax demanded in the amount On November 3, 1954, the petitioner Jaime Bautista filed a petition for review before this Court of' the decision of' the respondent Collector of' Internal Revenue assessing and demand- ing from him the amount of' Pl, 514.96 as his share in the estate and inheritance tax due from the estate of' the deceased Brigida Jacobo de Bautista. On November 4, 1954, the petitioner herein through his counsel, Attorney Jose Y. Garde, wrote a letter (Exhibit B, petition, pp. 123-124 BIR record) to the Collector of' Internal Revenue stating, among other things, that the petitioner was never informed prior to September 10, 1954 of' the decision of

RESOLUTION- .. C.T.A. CASE NO. 39 � -4- . the respondent Collector of Internal Revenue assessing and demanding from him the amount or 1=1, 514.96 and that the peti- tioner has been residing at No. 23 Sierra Madre, Quezon City, for the last five years and not at 1338 Juan Luna St., ~ila, where all the communication or the Bureau or Internal Revenue were sent. In his answer, respondent �s counsel alleges as special defense that this Court lacks jurisdiction to hear this ap- peal for failure on the part or the petitioner to file before ~@ Court his petition for review within the 30-day period fixed b,y section 11 of Republic Act No. 1125 which reads as follows: "SEC. 11. Who :m.ror appeal; effect of appeal. - Any person, association or corporation adversely affected by a decision or rtliing of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such deci- sion or ruling.u It appears from the record that the decision appealed from assessing and demanding from the estate or the deceased Brigida Jacobo de Bautista estate and inheritance taxes in the amount of �'8,768.40 was rendered b,y the respondent on ~~ 9, 1953. As stated above, the law.yer of the estate of the ~eceased Brigida Jacobo de Bautista received a copy of this decision on June 16, 1953. The law,yer of the estate did not ask for a re-consideration of this decision but instead wrote a letter to the Collector of Internal Revenue; dated July 14, 1953, declaring his intention to appeal said decision to the Board of Tax Appeals. (p. 89, B.I.R. record). On }~ 21, 1954, the Deputy Collector of Internal Revenue

RESOLUTION - C.T.A. CASE NO. 39 - 5- � wrote a letter to Y~. Vicente Bautista, Attorney for the ~. estate of the deceased Brigida Jacobo de Bautista and one of the heirs of the latter, reiterating the demand for pay- ment of the estate and inheritance tax liability from the estate (pp. 106-107, B.I.R. record). In said letter, the Deputy Collector of Internal Revenue itemized the individual share of each heir in the estate and inheritance tax demanded. The petitioner herein, Jaime Bautista, as one of the heirs of the deceased Brigida Jacobo de Bautista, was assessed the amount of Pl,514.96. A copy of this letter of demand was served to Attorney Vicente Bautista on ~~ 22, 1954. (p. 107, B.I.R. record). All the other heirs including the herein petitioner were likewise sent a copy of this letter (p. 106, B.I.R. record). The petitioner claims that he was not apprised of the letter of demand sent b,y the Collector of Internal Revenue to Attorney Vicente Bautista on }~y 9, 1953. He likeldse claims not to have received a copy of the letter of demand sent by the Collector of Internal Revenue on }~y 21, 1954, although on the left hand margin of page 2 of said letter there is an annotation to the effect that he was furnished a copy of the same at his known address at 1338 Juan Luna, Manila. Petitioner's counsel alleges that the letters con- taining the final assessment and demand for payment from the Collector of Internal Revenue dated May 9, 1953 and Yay 21, 1954 were never received by the petitioner the latter having resided for the last five years at 23 Sierra Madre, Quezon City and not at 1338 Juan Luna, Manila where said letters were addressed.

RESOLUTION - C. T.A. CASE NO . 39 - 6- We cannot be convinced b,y the allegation of the peti- tioner that it was only on September 10, 1954, that he came to kno'lf of the decision of the Collector of Internal Revenue dating as far back as May 9, 1953, that there was an assess- ment against him in the amount of f"l, 514.96 as one of the heirs of the deceased Brigida Jacobo de Bautista. Could it be possible for petitioner not to know of such assessment when Attorney Vicente Bautista, the law,yer of the e~tate , filed on June 9, 1954 a surety bond in the amount of re, ooo. oo for and in behalf of all the heirs in favor of the Republ ic of the Philippines to guarantee the payment of the t ax demanded? If it were true that the petitioner had been residing at 23 Sierra Madre, Quezon City, for the last five years , how come he re- ceived the notice of sale of the City Treasurer (Exhibit A, petition) on September 10, 1954, at 1338 Juan Luna, Manila, the address appearing on said exhibit? Under paragraph (v), section 69, rule 123 of the Rules of Court, a letter duly directed and mailed is presumed to have been received in the ordinary course of business. Assuming that the petitioner received the decision of the respondent Collector of Internal Revenue sometime in the later part of May 1954, e we believe he did in the ordinary course of business, what then was his remedy upon receipt of said decision if he was not agreeable to it? Since at that t ime this Court was not yet in existence, one of the remedies left to the petitioner was to pay the tax demanded and then file an action for its refund before the Court of First Inst- ance of Manila as it is his right under section 3o6 of the Na-

RESOLUTION - C.T.A. CASE NO. 39 - 7- tional Internal Revenue Code. This he failed to do before the creation of this Court, otherwise there would be no ques- tion as to the jurisdiction of this Court to try and decide the case under section 22 of Republic Act No. 1125 which reads as follows: "SEC. 22. Pending cases to be remanded to Court. - ffi~l cases involving disputed assessment of Internal Revenue taxes or customs duties pend- ing determination before the Court of First Inst- ance s~ be certified and remanded by the res- pective clerk of court to the Court of T�X Appeals for final disposition thereof." The petitioner was likevtise negligent in the protection of his interest by not appealing the decision. of the Collector of Internal Revenue dated May 21, 1954, to the Board of Tax Appeals as his lawyer had planned to do. Again, had he done so, we would have no difficulty in assuming jurisdiction over this case now under the last paragraph of section 21 of Re- public Act No. 1125 which reads as follows: "x x x x x. And m;:ovided, further, That all cases now pending in the said Board of Tax Appeals shall be transferred to the Court of Tax Appeals and shall be heard and decided b,y the latter to all intents and purposes as if they had been ori- ginally filed therein. 11 The law creating this Court (Republic Act No. 1125) was approved on June 16, 1954, and according to section 24 thereof, the Act shall take effect upon its approval. Undoubtedly, the failure on the part of the petitioner to file his action before the creation of this Court, before the defunct Board of Tax Appeals or before the Court of First instance of Manila, could have been cured had he within a rea- sonable time after the creation of this Court or at least within 30 days from June 16, 1954, filed his petition for review before

llESOLtm: ON - C.T.A. CASE NO. 39 - 8- this Court. The petitioner actually filed his petition for review before this Court on November 3, 1954, or a period of over four (4) months after the creation of this Court. The petitioner claims that he learned of the decision of the respondent Collector of Internal Revenue assessing and 'demanding from him the amount of fl'l,514.96 only on Sept- ember 10, 1954. Granting that this be so, then he should have filed his petition for review of said decision before this Court within thirty (30) days from September 11, 1954 or on or before October 10, 1954. So it is apparent that even . if we were to give the petitioner all the benefit of the doubt, still his 11Petition for Revie~r11 filed before this Court on Nov- ember 3, 1954 as well as his "Urgent Motion to Suspend Sale" filed on November 4, 1954 were filed beyond the 30-day period fixed in section 11 of Republic Act No. 1125. WHEREFORE, finding the motion to dismiss of respondent's counsel well-founded and meritorious, the same is hereb,y granted. Let this case be, as it is hereby dismissed, for lack of jurisdiction, with costs against petitioner. SO CRDERED. Manila, Philippines, June 20, 1955. \~