Case Digest (G.R. No. 104171)
Facts:
Commissioner of Internal Revenue v. B.F. Goodrich Phils., Inc., G.R. No. 104171, February 24, 1999, Supreme Court Third Division, Panganiban, J., writing for the Court. Petitioner is the Commissioner of Internal Revenue; private respondent is B.F. Goodrich Phils., Inc. (now Sime Darby International Tire Co., Inc.), and the Court of Appeals is respondent in its capacity as the reviewer of the Court of Tax Appeals' decision.The factual background is undisputed. Prior to July 3, 1974, private respondent, an American-owned corporation, acquired public agricultural parcels in Tumajubong, Basilan in 1961 and developed a rubber plantation in compliance with Central Bank conditions. Anticipating the expiration of the Parity Amendment, private respondent sold those Basilan landholdings to Siltown Realty Philippines, Inc. on January 21, 1974 for P500,000, payable in instalments, and thereafter leased the lands from Siltown for 25 years with an option to extend another 25 years.
On audit, the BIR examined private respondent's books and on April 23, 1975 assessed and collected deficiency income tax for 1974, which private respondent paid. Later, pursuant to Letters/Memorandum of Authority directed primarily at Siltown, the BIR issued an assessment against private respondent on October 10, 1980 for alleged deficiency donor’s tax of P1,020,850 (the BIR apparently treating the difference between declared sale price and the declared fair market value as a taxable donation). Private respondent protested in a November 24, 1980 letter; a subsequent assessment dated March 16, 1981 increased the demand to P1,092,949 (including surcharge, interest and compromise penalty).
Private respondent appealed these assessments to the Court of Tax Appeals (CTA). After trial, the CTA issued a March 29, 1991 decision modifying the assessment and ordering private respondent to pay P1,311,179.01 plus surcharge and interest (subject to statutory caps). Private respondent then appealed to the Court of Appeals (Special Eleventh Division, J. Nathanael P. de Pano, Jr., ponente), which, by its February 14, 1992 decision, reversed the CTA and held the BIR’s later assessments to be barred by the five-year period prescribed in Section 331 of the NIRC unless the BIR proved one of the Section 332 exceptions (fraud, irregularity, mistake), which it did not.
Petitioner sought review by ...(Subscriber-Only)
Issues:
- Whether petitioner’s right to assess the alleged deficiency donor’s tax has prescribed.
- Whether the deficiency donor’s tax assessment for 1974 is valid and in accordance ...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)