G.R. No. 75663 - Ambrosio vs. Intermediate Appellate Court

The case arose in the context of the probate of the will and settlement of the testate estate of the late Juliana Vda. de Gabriel in the Court of First Instance of Manila.

In the said proceedings, the Commissioner of Internal Revenue formally claimed against the estate an amount of P318,223.93 for deficiency income tax for the year 1978.

The Commissioner asserted that proper demand procedures had been followed by issuing a demand letter and an Assessment Notice (No. NARD-78-I-82-00501) to the decedent, relying on the fact that the taxpayer failed to contest the assessment within the period fixed by law.

The estate, through its representative Antonio G. Ambrosio—appointed as "Auditor-Tax Consultant"—contested the Commissioner’s claim. Ambrosio argued that:

There was no proper service of the assessment notice (the letter was sent nearly four years after the decedent’s death and addressed to an improper party, namely the Philippine Trust Company instead of the decedent).

The Commissioner, not content with the Probate Court’s resolution, timely filed a notice of appeal with the Probate Court within thirty (30) days from receipt of the judgment denying his claim.

He filed motions for an extension to file a petition for review with the Intermediate Appellate Court, the first two of which were granted, each for thirty (30) days.

A third extension was sought, but the Appellate Tribunal pointed out that his recourse should be an ordinary appeal rather than a petition for review.

Acting accordingly, on July 2, 1986, the Commissioner filed his petition for review, which the Court of Appeals subsequently treated as the record on appeal by virtue of its liberal interpretation of the procedural rules.

In its Resolution dated July 29, 1986, the Intermediate Appellate Court recognized the petition for review as equivalent to the record on appeal:

The Resolution emphasized that the petition for review contained a chronological compilation of all pertinent pleadings, motions, orders, and arguments needed for a full understanding of the issues raised.

The Resolution noted that the petitioner’s (Commissioner’s) misunderstanding of the proper mode of appeal did not preclude the filing from effectively serving as a record on appeal.

On July 9, 1986, Ambrosio, acting on behalf of the estate, filed a Motion to Dismiss the Commissioner’s appeal. His contention was that:

The Commissioner should have filed an ordinary appeal within the thirty (30) day period and submitted the corresponding record on appeal in proper form.

The Court of Appeals concluded that the technical defect was remedied by the substantial compliance presented in the petition for review.

Whether the petition for review filed by the Commissioner of Internal Revenue, despite not conforming strictly to the technical requirements as a record on appeal, can be considered as such for the purposes of the appeal.
Whether the misapprehension regarding the proper mode of appeal (ordinary appeal versus petition for review) and the subsequent extensions granted, affect the substantive rights of the parties.
Whether strict adherence to procedural technicalities should prevail over a liberal interpretation that emphasizes the preservation of the merits of the case.