G.R. No. 134062 - Commissioner of Internal Revenue vs. Bank of the Philippine Islands

On October 28, 1988, the Commissioner of Internal Revenue (CIR) issued two notices of assessment against the Bank of the Philippine Islands (BPI) for 1986 deficiency taxes:

Percentage Tax Deficiency – Total amount due ₱12,319,441.13 (including surcharge, interest, compromise penalty)
Documentary Stamp Tax Deficiency – Total amount due ₱93,723,372.40 (plus compromise penalty ₱15,000)

Both notices used BIR Form No. 17.08 and contained only computations and demands for payment without statement of legal or factual basis.

December 10, 1988 – BPI, through counsel, challenged the notices as vague and requested the reasons and legal bases for the deficiency assessments.
May 8, 1991 – CIR replied that the December 10 letter failed to qualify as a valid protest under RR No. 12-85 but nonetheless explained the assessment basis and declared it his “final decision on the matter.”
July 6, 1991 – BPI requested reconsideration of the May 8 letter.
December 12, 1991 (received January 21, 1992) – CIR denied reconsideration.

February 18, 1992 – BPI filed a petition for review with the Court of Tax Appeals (CTA).
November 16, 1995 – CTA dismissed the petition for lack of jurisdiction, ruling assessments became final and unappealable for failure to protest within 30 days.
May 27, 1996 – CTA denied motion for reconsideration.
May 29, 1998 – Court of Appeals (CA) reversed CTA, ruling the October 1988 notices were invalid for lack of statement of basis and that the May 8, 1991 letter constituted the proper assessment, making BPI’s CTA petition timely.
April 17, 2007 – CIR appealed to the Supreme Court under Rule 45.

Whether the October 28, 1988 notices were valid assessments under former Section 270 of the NIRC.
Whether BPI’s failure to protest or to appeal rendered the assessments final and unappealable, thereby barring relief and fixing BPI’s liability.