Facts:

• The case involves the Collector of Internal Revenue (petitioner) and Manuel B. Pineda (respondent), an heir of Atanasio Pineda.
• Atanasio Pineda died on May 23, 1945, leaving a widow, Felicisima Bagtas, and fifteen children.
• Estate settlement proceedings began on August 30, 1945, in the Court of First Instance of Manila, with Mrs. Pineda as administratrix.
• The estate was managed until June 8, 1948, when the case was closed.
• In 1951, an investigation revealed no income tax returns were filed for 1945-1948.
• Internal Revenue examiner E.Z. Espinosa filed returns for the estate on January 29, 1951, after failing to locate Manuel B. Pineda.
• Assessment notices for income taxes due for 1945 and 1946 were sent to the estate, which Manuel received on September 8, 1951.
• Manuel contested the assessments, claiming the estate's income was included in returns filed by Mrs. Pineda.
• Further assessments included demands for real estate dealer's fixed tax and additional income tax for 1947.
• The case was appealed to the Court of Tax Appeals, which ruled in favor of Manuel, stating the Collector's right to assess and collect taxes had prescribed.

Issue:

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Ruling:

• The Court ruled that the Collector's right to assess and collect taxes for 1945 has prescribed.
• The validity of assessments for 1946 and 1947 was not addressed, as the first issue was resolved affirmatively.
• Assessments for 1945 and 1946 were barred by the statute of limit...(Unlock)

Ratio:

• The decision was based on the interpretation of the Tax Code, specifically Sections 331 and 332, regarding limitation periods for tax assessment and collection.
• The assessment for 1945 was void due to being made more than five years after the income tax return was filed.
• Assessments for 1946 were also barred as they were initiated after the five-year period.
• Although the original assessment for 1947 was timely, it was canceled and replaced b...continue reading