CTA Case No. 4072 (Decision)

RKPUBLJC OF THE PH I LIPPI NKB COU RT OF TAX APPEALS QUEZO N CI TY THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, Petitioner� ~ ver- s u s -- C .T .A. CASE NO. 4072 COMMISSIONER OF INTERNAL REVENUE, ne~;;pcmden t.. '"' ' >O M � _, o0MO oO� o ~MO >! DECI s 0N As s ailed by petitioner- Philippine Am e r-ican L i �f e In ~; ur�a nc:: E~ C()mpany i s t'"e~:;pon d <:>nt C o mm.i.::::.e.:; ionE~ t'� Inter.. nal l::;:e ven LH?.' ~:; r� :i.qht tCJ th e su m of P4 ~ 613 ~ 7 94. :.;-! 8 ''" ~=;s e !~~ sse c:l ,:;, ~:; d ~? �f i c i. r::-~ n c y documentar-y a n d sc i e nce stamp taxes on li fe in s ur-ance po licies i ss ued dur-ing the y ear- 1978~ co mput e d a s follow s : Pl ~ c:~-:'!'8, :?55 , 570 F2, 621. ~ ::?OB. 9.1 F? OO F�200 TfJH~.... fX.X:.U�1?.NTPFIY tf.)(:;:rEN~..'E ElTf~"P Tr~X Dl� �� F'4, 613' 494. :28 Pdd : Ccvnpn:mi s-,e Perv" 1 ty ������������� � �� TOTt0.i... Al't:LNT DLE {-1\lD CD...J...ECTI ELE ������� __.. ,.... . .. -.. ~-:;::~,:.~.;.l.J;~) f:~~~-'~J~:~:Z.~1'~"~~ th<?. mater" i i':\ l �facts are: 336

DECISION CTA CASE NO. 4 072 Petitioner is a c orporation organized and e>: isting und e r� the 1aws of the Repub 1 ic of the P h ilippine s , with pr-incipal of �f ice at the Phil a mlife Building~ United Nations Avenue, Er-mita, Manila. On Jun e 2 1, 1984~ petitioner received from r� e s ponden t no ticE~ fc:w unpaid docum en tar�y and s;c: ience stamp on lif e insut��ancE�~ pDl.i. c::iF~::. i ::sued dut��� inq til E? ye,::\r .19 7 B in the a mo unt of P4~613, 7 94.28. On June 26 , 1 984 petition er protested the pre- a ssessme nt on q,���ound~:; of pi���esc r� :i. pt.i.CJn and l. r.:1 c::k of �f ac: tu a 1 an d legal 1-1 i thd r� .:~W c:\ 1 and c::an ce 11. a tion of the assess mr:m t by r�esponden t.. Howe'IE-:' r� , on LJuly 1.8, 1984 p etiti oner� received a combination tax clearance- assessment letter f rom r es pondent informing pe t it ione r t hat due from petition e r, doc um e nta r y a nd science s tamp t.a:�:es in the a mo unt o f F'4, 6 .1. :3, 79 4. 2El wen? "found to be sti ll due and collectible from it. Again, petition er on .1.9E34 pr-otested thr.? afor� esaid on paymf.:mt, pr-escription and l ack of �fi:~ c tu;;\l r.~nd l ega l bas i s. Cln May 26, .1. 9 !36, howevet�� , pE!t .itio n e r� t�� e~c:eive d ,3

- DECISION CTA CASE NO. 4072 letter from respondent denying its protest or request for reconsideration an d reiterating that said a sse s sme nt be se ttled . Hen c e, thi s appea l. spt':~c i a 1 and c.~'f �firmative defenses, respondent in hi s answer to the petiti o n for review a 1J. eqes that: F'er .i.nvr,?~;t iq i::\t.: .i o n c: o ndu c tEed h y a qe n t s cd' th e and per- r-�e c: C>r-- ds by the petit.ion e F� , p E:> t ..i t. .i o n f.? r- i!:> li a ble in th e am o unt o �f P4,61 3 ,794.28 as d e ficien c y doc umentary a nd s cience stamps taxes on life in s urance policies issued during the ye a r 1978; During the investig a tion o'f this cas e by respondent' s e >~ a rnin f.? r s , p e ti t.ion e r� 'fai 1ed to !:;how of'fi c.i..=:-~1 I'' !!!C: t�::):.i. r.�t.::; uf clc.> cumr� n t . :~r- y .;, nc:l s<: i E? n C:E�~ f:; t ..:~mp tax es pur s u a n t to P . D. 10 4~} a pr.wo vP cl on 1\lov ernber- 5 ~ - 1I ) .1976 as implem !!~ nt e d by Ei:1~ve.u.ue---B.ggulations ND. 9 - 75 '-------- ~ ( 38- 76) dated November 25, 1976; A ~:; no ' ta >: retur-n .i!:> �filed 'for- documentar-y stamp tax purpo s e s, the cas e f a lls within the coverage of ex c eptions to the then 5-year period o'f 1 i mi tat icm o �f a s�:;es sm e n t under S e c: t. ion :.:..19 of the .197'7 Ta >: Cc<lf." (nc~ w Sec tion 269). Hence, re s pondent 33 8

DECISION CTA CASE NO. 4 072 �-- 4 --� hi::\ ~5 .1.0 ye.3. , fnJm c:l.i.s c:o v F.:~r-y o�f the orni~;sicm to a'f�fi.:�: t h e cloc:urnentar� y and science str:il.rnp ta:�:es on petitioner's insurance policies. In thi.s case, the omission was di scovered on March 12, examiner's report, conse qu ently~ respondent has up to M.?:l.rc: h 1994 within which to i . SSl..lf? the asses;smen t . A s the as~;es s rnent wa~; i.ssued em ,July .1.0, 1984 peti.ti.oner was a ssesse d wi.thi.n the period. (Commi ssion er vs. Ayala Securi tie s Corp. & The Honorable Court of Tax Appeal s, G.R. No. L-29 48 .5 , Novemb er 2 1, 1 ~8 0 , 101 S CRA 231-2 42) in qr...<f.?::; tion in a c cor" clan c E~ w i t h 1 .:1 1�\1 .::1 n d ,... E' v E-! n u E~ r. 12 <J'�.\ 1 ,,, t. i CJ n s ; All in o �f Cln thE~ qu<:?�:; t.:i.cJn o �f p1'" e~3 C:r.. :i.pt:..i.on~ th <�? r"ulr:~ no est:.abl ishec:l .i. r,; that .i'f no J. i:'~W 0 1~ r. e qu 1 '"' t.i.on r� equ.i. r- inq the f .i.l :i.nq of a r� etur�n, the r� ight o'f t.hf.0 t GcJver� nrnE~n to assess or c:ol l ect nat.i.cJnal intE~ I'" n a l l"ev<=.>nuf.'~ t.<:~>: clo E~f,; nDt. pr~:.!scr�.i.be. 1.... .i. m.i. t <:l t .ion~; u pDn Lhf�? r" .i q h t Cl f t 1�1<:-> q OVF'r�n rnPn t t .o the abc;:.;p n ce of c: l E'<':\ r � l E!<J.i �::; J. ;:,,t.i.nr\ to t .hE! c ontrary tllf.:> <JOVPF"f'lfTlE�I"l t nnt by 338

DECISION CTA CASE NO. 1072 - 5 ~- statutory provi s ion provid e d a limitat ion upon its right. to asse ~~s unpaid t," :-:es , s uch right is imp r� esc r��i p t i b 1 f? � ( Commis sio ner of Internal Revenue vs. Ayala Securities Corporation, L-29485, Nove mber 2 1 .� 1980, 101 SCRA 2.31. ) Si nce there is no law or regulation requiring the filing of a return for docu mentary s t a mp tax, a nd none ha s been pointed to by pet i t..i em e r. , anc::l naticmal internal revenue ta xes, the right o f the Government to .:~ sses~5 at"� c nl J.r.:�c:t thP docurnf? ntdry an d scie nc e s tamp invt:>lved i.n thi s case not therefore pre sc: rib ~ . Petitioner main tai n s howe ve r that it has f ully paid a ll docu mentary an d scie n ce stamp taxes due on the in s urance policies it issued in the year 1978. And th e evi denc e presente d by petitioner ~ which wa s n ot di s put e d or.. contr� ovf.:?rt.E�~d by res pondent, s h ows that pe t i t ion er ~ad e the f o llowi ng p a ym e nt s of 1. .1. 7526t:J.).) P.~~j:;�' ~.!'Q.,\D.t. 2. .1752661.1 3. J.C'f] 7C'f7 1_2 01 --{14-78 P40~000.00 4. J C:.'fi79701. 0 .1.-�{lf.l.-78 '-10 ~000.00 0 .1. -..Jb�-�E37 0 .1. --.16--Hl '-l(l ' 000 �(:(l 40,000 . 00 340

- DECISION CTA CASE NO. 4072 -�� 6 - 5" 200.10082 0.1 --::~4--8'7 40 ' (l(X) � 00 6. 2001007.1 l.](l ' 000. (l(l 7. z.?o:::?.t75 01.--24 -B7 40,000.00 B. z;:~o:~q 1 64 02-�-0 1--78 40 , 000 , (X) 9. Z)::Jt:ff:i> 11 02-..{ l.l --78 LJ(l , (X)) , 00 10 . 02-..{~3-78 40 ' (l(l(l � (l(l 11. Z~Clt:SCIOO 0~?-- L::::--78 90 , ( l(X) , ( X) .12. Z~1l.3792 02-�-1::!.-'78 90 , (l(K) , ( X) ;.:'.'2l.l.~f.l03 0 2-�- 1. 3-��7 8 .n. 2'.::>1:::~,vno 0 2-�-.16-�-78 40 ' cx:x) �(l(l Z-? 1~?442 1 !):2-�-16....7 8 .1.4 . ~.?Z7l4~i91. CC>..2 .1....7 E-l 40 , (l(X) , (X) 02..�:::'.1-..7 8 40 , (l(X) , (l(l 1~i. ?'.27.11.Jf:><)2 o ::::.-..o.t-�-78 40 , (l(X) � (X) 4 2 ~;�~::~;cy ~L~~:.7 03--(>.1-�-7 8 40 , (X)(l , ( X) .1.6. o:::.-- 07-..78 40 , (X:X:l , (X) .17 . ~:~:: :;.9~L3"75.3 o:::::-�-(J!-..78 4�0 , (l(X) � (X) 18. ::;:~4� 1 7:?4~22 !XT.-�-1.:3--78 LJ(l , 000 � (X) .19. 40 , 000 , (X) 2 4 1. 1':24:::::::-::. o:::;;.....l.::::.-. 7 8 -40, ( X)0, 00 ~)), 274FI4.1.55 I.J( l , (K)) � 00 ~.?7~'r84 .16.6 04-�-0 :':\-7f:1 40,000.(X) 21. ~z:?t.:><: H<J.c.~3 CC-�-2 .1. --7 8 40 , (l(X) , (X) ZJ'I.:><)B493 04-..05--78 40 , (l(l0 , (X) ',f"::Y..t.':'. .. '2961.... .-:.;820 04-�-<X5--78 40,000.00 ~,2:~:." 0 4-�-l B--78 40,000.00 '29f.x<::l.:~3.t 0 4-�- .1.E3--78 40, (XXl. 00 24. ::::::~',2f.:..C><)85 ().4-- Z'.'.''l-�78 /].(J , (l( X) , 00 40 , (l(X) �00 25. -::::s .?.t.:.&-)74 0 '1���-~.:~:"}-�7El 40 , 000. ( X) 40, (X)(l, 00 ~.?6 . ::::.::'!'401F.:l~52 o~::> �� .:. o-. ; EJ 40 ' (l(l(l �(l(l :~ :: ::::I.J(tlf.YJ.l 40 ' 000 . (l(l ?.7. :::; ~',I.Jf.(t::!-~~4 0 ~:.-�- l 0--7El 40,000.00 :.:?8. 0 5-�-16--78 ::::.Yl t (f J l 3 ~-z:r tt :::::~4�16 7 6 2 0 ~�- .16-�-78 ~~',() , ~::~4B6773 o:J-.... z.:~-78 ::::..t. 0!5..... ~.()--78 :::::2. T-351.316.3 34 1 ~- ~=~:;51. :$ 152 ~4 . ~:5. ::::6 .

-- DECISION CTA CASE NO. 4072 '37 . :?9244526 05- --::!~) - -78 4(> ~ (X)(l � (X) 40. :2:3547.113 05---X>--7B 40 ~ (X)!) � 00 41 . 28078971 06-�-16--78 42. :2807898:2 06��-16�-78 B) ~ (X)!) � ( X) 4 3. :s~:.s:s7440 06--2t}�-78 B) ~ (X)(l � ( X) 06���2t)��78 47. ~$4602024 06-:;:'..'2- 78 B) ~ CX:X) �00 48. 3ll602035 80 ~ !)(X) � ( X) 01.:,--22-- 78 40 ~ 000. (X) 40 ~ (X)!) � (X) 06--:L"'B-78 40 ~ 0(X) � (X) 07- 10-78 40 ~ (X)!) � (X) 07- 11- 78 40 ~ (X)(l � (X) 07-�-1.1.�--7 8 40 ~ (X)(l � 00 07--�1.1- 78 40 ~!)(X). (X) 07 -�-1f.:F78 07-��lG-�78 4~) ~ (X)!) � ( X) 90 ~ (X)!) � 00 ............. 9.9"_<:x;.~:l.<:~_:! ~: ~:". =~~:P.~;=~=~;~~'~'~'~ 1. 35'1,-Cili=f5l !:~~\;!;'?. ~ .u::!t. 2 . ~.::.:::-oLJ.(l1. 96::~ 3" :::;.5:574(X)cJ 0 7� - 24 ����"78 F90 ~ (X)(l � (l(l 4. 35.3740 .10 07�-24 ..�78 <J>(l ~ 000 .. 00 5. ~=:.:52~)7(!<10 6. ~:!".6U:>8941 0"7<:::.1.. ��78 90~000.00 7. 220B5.103 08....(~3..-78 90~000.00 8. ::=:.6.HU!365 OB�-�:.!..2-�-7 8 90 ~ (X)!) � (X) 9. ::!:6 .trr-:J><:x) :5 ()<1- { 15-�-7 8 90 ~ (X)!) � (X) 90 ~ (l(X) � (X) .10 . :::!~,2B 5421 CA� - (~�- 78 90 ~ !)(X) � (l(l ll. . ::~o~.:~:)~?49ci) or:?-..l U -7B 9(l ~ (X):) � (l( l .10�- 0 4�-7B 90 ~ (X)(l � ( X) 90 ~ (X)!) � 00 34 2

- DECISION CTA CASE NO. 4072 - E3 -- 1'.".:'.. ::!6-:::.:::!.5891 10�--06-78 90 ~ <X>O. 00 1.:3:" :::r.f.<'!'.64El23 1<)--1()--78 .14. .1.0--24�--7El 90~000.00 .15. ~"!.71.65284 1 (}--�3<}--78 16. ~~;7 L~5644(l .1.1 --{):J---78 90 ' (l(l(l � 00 .1'7. ~::.7'1- :'�7162 1.1-..1.<)-. 78 90 ' (l(l(l � 00 18. ::~:FU.40E~l::i 11.--�2 1 �--7 8 90,000.00 19. 11. - : ? 4 --78 ~T.t_i_t '77602 9() ~(X)(l,(l0 :2(). ::8177694 12- �{ l~'l-78 ::::.B454415 90 ~ (>(X) � <)(> 21. ::-r.f:l464:Z16 1.2�--07--78 90, ( XX >. <X> ~.22 .. 90, (X)(l � (X) ~8~.'(>9:354 1.2--- .t :,~-78 90 , (X)<) � (l(l :2::)" :::B~l55:':i54 90,<)(X).O(l ::::r1~:.1~5 ~5�77() .12-- 1.9- 7 8 90 , (l(X) , (X) :?4. l ~.?..-~;?-�-�7f3 oo S>t:> ,qcx~> � t;~:~,~J,&~=~:i,<;~,:;,x::,> ~ <:~? On the ba.s .i ~:; of thf.:? ev idenc<?. pr-e s ~:m t .ed, .it ~;ee ms p 1 a .in that peti t.ioner.. has paid documentar-y c:lnd science st:.:~ mp t.a :-:es due on in s ur� ance policies issued by it. dur� inq th!? year� .197 !::1 in the t.ot<al that is, P2,440,000.00 plus P2,160,000.00. Respondent's assessment for- deficiency rlocument. a r� y and science s tamp t:a:.:es in the yeal~ un ' er.. consider-c~tion, however-, i s in the sum of P4, 613,4-94.28, a discr-epancy of Pl3,494.28. We have car-efully examined the r-ecor-ds of this case, but we fai 1 to 'find any pr-oof which WOLtl d show the payrm~n t of this shor-tage of P13,494.28. And peti t.ioner� has not ac:coun ted for- 343

- DECISION CTA CASE NO. 4072 - 9- or� e :-: pla.ined thi s di s c re p a n c y 01'" shortage of the amount established by the evidence presented by it. All pres umptions are in favor of the correctnes s of res pond e nt' s a sse ssment and i t is incumb( ~ n t:. u p o n p f.:! t :i. t .i o n r:~r t o pr� o ve th~:: c:r.m tr�ary. (Commissioner of Ir;t-ernal Revenue vs. Antonio Tuason, In c., G. R. No. 85749, May 15, 1989, c itin g ffindana o Bus Company vs. Commissioner of Internal Revenue , 1 SCRA S.38.) Unfortunately, petitioner �failed to oven.: ome the pre s umption of c:orrectn r::~ ~:;~; o �f I'" E~~:; pondent ' s <~ '5S e ~:;s rn f.'-:> nt clr� e :-:plain the di s crepancy of P13,494.28. Accordingly~ petitioner Philippine American Life Insurance Company is h e n :? by or �dered to pay to respondent Commiss ioner of Internal Revenue the amount of P13,494.28 as deficiency documentary and science stamp taxes on insurance policies issued during the year 1978. The compromise penalty of P300.00 suggested by r�espondent in his assessment cannot be imposed as it does not appear that petitioner agree d to its imposition. The rule has been estabL.1 ;hed that compromise penalty cannot be imposed or collected without the agreement and conformity of the taxpayer. (Uonder Mechanical 34 4

-- -- DE C I S I O N CTA CASE NO . 4072 �-� lO ����� Engineer i n g r.:o rp o ra tion v s. Co urt o f Ta x Appeals , L- 2280 5 & 27658 , Jun e 30, 1975, 64 SCRA 555.) WHEREFORE, the dec is ion appealed from is modified as ind i c a t e d i n t he a bove o pin i on of the Court. No costs . SO ORDERED. Que z on City~ Metr o Manila~ July 7~ 1989 . ~t@/ WE CONCUR: ( on l eave) CONSTANTE C. ROAQUIN (~s s nc .i..:~ te ,Juclqe CR H . TIFICATION I hereby certify that thi s deci s ion r eac h ed afte r due c on s ul tation among t h e me mbers of t he Cou rt of Tax Appeal s in accordance wi t h Section 1 3~ Ar t i c l e VIII of t h e Con sti tution. AMANTE F ILLER f='r�esid .ng ,Judge Court of Tax Appeals 34 .3