5. Hambrecht & Quist, GR 169225, Nov 17, 2010. Reinvestigation.
Facts:
On November 4, 1993, Respondent received a letter from the BIR demanding it
to pay it alleged taxes for the year 1989. A month after, respondent sent a
protest letter against the assessment.
On November 7, 2001, nearly eight (8) years later, respondent’s external auditors
received a letter from petitioner CIR dated October 27, 2001. The letter advised
respondent that the Petitioner has made a final decision denying its protest
because it was allegedly filed beyond the 30-day period under sec. 229 of the
NIRC.
For this reason, Petitioner filed a petition for review. Although the CTA division
ruled that the assessment had become final and executory, the CTA still held that
the CIR failed to collect the assessed taxes within the prescriptive period and
directed the CIR to cancel the assessment. In this Petition, Petitioner argues that
the CTA has no jurisdiction over the case since the CTA itself had ruled that the
assessment had become final and unappealable. Moreover, the CIR argues that its
right to collect the tax deficiency it assessed on respondent is not barred by
prescription since the prescriptive period thereof was allegedly suspended by
respondent’s request for reinvestigation.
Issue:
1. Whether the CTA has jurisdiction over the case?
● Yes. According to Section 7 of Republic Act No. 1125, as amended, the
appellate jurisdiction of the CTA is not limited to cases which involve
decisions of the CIR on matters relating to assessments or refunds. The
second part of the provision covers other cases that arise out of the NIRC or
related laws administered by the BIR. In the case at bar, the issue at hand is
whether or not the BIR’s right to collect taxes had already prescribed and
that is a subject matter falling under Section 223(c) of the 1986 NIRC. It
must be taken to note that the validity of the assessment itself is a separate
and distinct issue from the issue of whether the right of the CIR to collect
the validly assessed tax has prescribed. This issue of prescription, being a
matter provided for by the NIRC, is well within the jurisdiction of the CTA to
decide.
2. Whether CIR's right to collect taxes is barred by prescription because the
protest letter of respondent was a request for reinvestigation?
● No. Under sec. 224 of the 1986 NIRC, there are two requisites that must
concur before the period to enforce collection may be suspended: (a) that
the taxpayer requests for reinvestigation, and (b) that petitioner grants
such request. In the case at bar, the records show that respondent filed a
request for reinvestigation on December 3, 1993, however, there is no
indication that petitioner acted upon respondent’s protest. Respondent
did not conduct a reinvestigation, the protest having been dismissed on the
ground that the assessment has become final and executory. There is
nothing in the record that would show what action was taken in connection
with the protest of the petitioner.
● In fact, petitioner did not hear anything from the respondent nor received
any communication from the respondent relative to its protest, not until
eight years later when the final decision of the Commissioner was issued
(TSN, March 7, 2002, p. 24). In other words, the request for
reinvestigation was not granted. x x x.10 (Emphasis supplied.)
