Case Digest (G.R. No. L-19470)
Facts:
Gonzalo P. Nava filed his 1950 income tax return on May 15, 1951 and was originally assessed that same date; he paid half and left a balance of P2,491.00. After attempts to pay with a backpay certificate and requests to hold collection in abeyance were refused, the Commissioner of Internal Revenue issued a purported deficiency assessment dated March 30, 1955 demanding payment, which Nava claimed he first learned of on December 19, 1956; Nava filed a petition with the Court of Tax Appeals on August 8, 1958, which reduced the deficiency to P3,052.00 and cancelled the 50% surcharge. Nava appealed to the Supreme Court from the C.T.A. decision of September 25, 1961 and its denial of reconsideration.
Issues:
- Has the Government's right to assess and collect the deficiency income tax for 1950 against Petitioner prescribed?
- Did the respondent prove that the reassessment notice and subsequent demand letters were validly issued or mailed so as to interrupt or extend the period of prescription?
Ruling:
The Court reversed the decision of the Court of Tax Appeals and held that the action to collect the deficiency income tax had prescribed. The Court concluded that respondent failed to prove valid issuance or mailing of the reassessment and demand letters within the statutory period, and therefore could not rely on later dates to avoid prescription.
Ratio:
The Court found that the Bureau presented no substantial evidence that the reassessment dated March 30, 1955 or the later demand letters were actually issued or mailed to Petitioner, and the record lacked the prerequisites to invoke the presumption of receipt under Sec. 5(v), Rule 131, revised Rules of Court. Because the original assessment was made May 15, 1951 and no valid reassessment was shown within five years under Section 331 of the Tax Code, the period to bring judicial collection action expired on May 15, 1956; the earliest effective notice in the record was December 19, 1956, thus the collection suit was barred under Section 332(c). The Court distinguished prior rulings that allow an assessment mailed within the period to control by requiring clear proof of release or mailing.
Doctrine:
- The presumption that a letter duly directed and mailed was received in the regular course of mail under Sec. 5(v), Rule 131, revised Rules of Court arises only when proper addressing and mailing are proved.
- The period for reassessment under Section 331 begins from the date the original return was filed and cannot be extended absent proof of a valid reassessment within the statutory period.
- An action to collect deficiency income tax is barred by prescription under Section 332(c) if no valid reassessment or timely notice was issued within the statutory period.
- Where the Government relies on mailing or issuance of notices to toll prescription, the release or sending of such notices must be clearly and satisfactorily proved.