Case Digest (G.R. No. 155541) Core Legal Reasoning Model
Facts:
The case involves the Estate of the Late Juliana Diez Vda. de Gabriel, petitioner, represented by Prudential Bank as its duly appointed and qualified administrator, versus the Commissioner of Internal Revenue (respondent). Juliana Diez Vda. de Gabriel passed away on April 3, 1979. During her lifetime, her business affairs were managed by the Philippine Trust Company (Philtrust), which filed her 1978 income tax return two days after her death without notifying the Bureau of Internal Revenue (BIR) of her demise. Subsequent to the death of the decedent, Philtrust filed a petition to be appointed Special Administrator of the Estate, which was denied by the Regional Trial Court (RTC) of Manila. The RTC instead appointed heirs and other persons as Special Administrators in succession.
The BIR conducted an investigation and found a deficiency income tax for 1977 amounting to ₱318,233.93. On November 18, 1982, the BIR sent a demand letter and assessment notice to the decedent through P
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Case Digest (G.R. No. 155541) Expanded Legal Reasoning Model
Facts:
- Parties and Litigation Background
- The case involves the Estate of the Late Juliana Diez Vda. De Gabriel as petitioner, represented by Prudential Bank as Administrator, and the Commissioner of Internal Revenue (CIR) as respondent.
- The petition filed is a petition for review on certiorari assailing the Court of Appeals decision dated September 30, 2002, which reversed a November 19, 1995 Order of the Regional Trial Court (RTC) of Manila Branch XXXVIII in the probate proceeding for the testate estate of Juliana Diez Vda. de Gabriel.
- Facts Leading to Dispute
- During Juliana Diez's lifetime, her business affairs were managed by Philippine Trust Company (Philtrust) as her agent.
- Juliana died on April 3, 1979. On April 5, 1979, Philtrust, through its Trust Officer, filed her 1978 Income Tax Return but did not indicate her death.
- On May 22, 1979, Philtrust filed a verified petition for appointment as Special Administrator of the estate before RTC Manila, Branch XXXVIII, but the court appointed one of the heirs instead. Philtrust’s motion for reconsideration was denied. Subsequent appointments of Special Administrators followed until Atty. Vicente Onosa was appointed.
- The Bureau of Internal Revenue (BIR) conducted an administrative investigation and found a deficiency income tax for 1977 amounting to ₱318,233.93.
- On November 18, 1982, BIR sent a demand letter and Assessment Notice to the decedent through Philtrust at the address stated in the 1978 Income Tax Return. Philtrust did not respond and did not inform BIR of the decedent’s death.
- On June 18, 1984, the Commissioner of Internal Revenue issued warrants of distraint and levy served on an heir, Francisco Gabriel. BIR also filed a Motion for Allowance of Claim and Order for Payment of Taxes on November 22, 1984.
- The estate, through the Special Administrator Antonio Ambrosio, protested and opposed the BIR’s claim on grounds of no proper service of tax assessment and that the filing of the claim had prescribed.
- The RTC, in an order dated November 19, 1985, denied BIR’s claim citing lack of notice to the proper party.
- BIR appealed to the Court of Appeals, which reversed the RTC ruling on September 30, 2002, holding that service on Philtrust was valid and that the assessment had become final, executory, and incontestable due to lack of timely protest.
- Arguments of Parties
- Petitioner Estate: Contended Philtrust had no legal personality to represent the decedent after death; thus, no proper notice of assessment was given and claim is barred by prescriptive period.
- Respondent CIR: Argued that Philtrust acted as de facto administrator by filing the return after death, service on Philtrust was sufficient, and that Philtrust should have informed BIR of the death pursuant to Section 104 of the NIRC. Failure of Philtrust to protest resulted in final and incontestable assessment.
Issues:
- Whether service of the deficiency tax assessment on the Philippine Trust Company was valid and binding on the Estate of Juliana Diez Vda. de Gabriel.
- Whether the deficiency tax assessment and final demand became final, executory, and incontestable due to failure to protest within the prescribed period.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)