G.R. No. L-28896 - Commissioner of Internal Revenue vs. Algue, Inc.

Procedural History
On January 14, 1965, the Commissioner of Internal Revenue (CIR) issued a notice of assessment against Algue, Inc., for delinquent income taxes totaling ₱83,183.85 for taxable years 1958 and 1959.
On January 18, 1965, Algue, through counsel, filed a letter of protest/request for reconsideration, which was stamp-received by the CIR on the same day.
On March 12, 1965, the BIR attempted to serve a warrant of distraint and levy on Algue’s counsel; service was refused due to the pending protest, and the BIR could not locate the original protest in its files.
Counsel produced a photostat copy of the protest, whereupon the BIR deferred service.
On April 7, 1965, counsel was informed that the BIR would take no action on the protest (implying its denial), and he then accepted service of the warrant.
On April 23, 1965, within 30 days of April 7, Algue filed its petition for review with the Court of Tax Appeals (CTA).

Substantive Background
Algue, a domestic corporation engaged in engineering and construction, was appointed agent by the Philippine Sugar Estate Development Company (PSEDC) to sell its lands, factories, and oil-manufacturing process.
Pursuant to this agency, Algue earned a commission of ₱125,000 upon the sale of PSEDC’s properties to the newly formed Vegetable Oil Investment Corporation of the Philippines (VOIC).
From the ₱125,000 commission, Algue disbursed ₱75,000 as promotional fees to five individuals—Alberto Guevara, Jr., Eduardo Guevara, Isabel Guevara, Edith O’Farell, and Pablo Sanchez—for their work in promoting and organizing VOIC and inducing investors.
The five payees, who were not all regular employees nor controlling stockholders of Algue, each reported and paid income tax on their respective shares of the fees.
The CTA, after examining evidence and testimony, found (a) no dividend distribution was involved, (b) the promotional fees were paid periodically in varying amounts according to need, and (c) the payments were not excessive in light of services rendered.

Whether the ₱75,000 deduction for promotional fees was properly disallowed by the CIR as not an ordinary, necessary, and reasonable business expense.
Whether Algue’s petition for review was filed within the reglementary period prescribed by Republic Act No. 1125.