126

SUPREMECOURTREPORTSANNOTATED Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue G.R.No.157064.August7,2006.
*

BARCELON, ROXAS SECURITIES, INC. (now known as UBPSecurities,Inc.),petitioner, vs.COMMISSIONER OF INTERNALREVENUE,respondent.

Appeals; Factual findings of the Court of Appeals are binding on the Supreme Court; Exceptions.While the general rule is that factual findings of the Court of Appeals are binding on this Court, thereare,however,recognizedexceptionsthereto,suchaswhenthe findingsarecontrarytothoseofthetrialcourtor,inthiscase,the CTA. Instances when the findings of fact of the trial court and/or Court of Appeals may be reviewed by the Supreme Court are (1) when the conclusion is a finding grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken,absurdorimpossible;(3)wherethereisagraveabuseof discretion;(4)whenthejudgmentisbasedonamisapprehensionof facts; (5) when the findings of fact are conflicting; (6) when the CourtofAppeals,inmakingitsfindings,wentbeyondtheissuesof the case and the same is contrary to the admissions of both appellantandappellee;(7)thefindingsoftheCourtofAppealsare contrarytothoseofthetrialcourt;(8)whenthefindingsoffactare conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents;and(10)thefindingoffactoftheCourtofAppealsis premised on the supposed absence of evidence and is contradicted by the evidence on record. (Misa v. Court of Appeals, G.R. No. 97291,5August1992,212SCRA217,221222) Same; Court of Tax Appeals (CTA); The Supreme Court accords the findings of fact by the Court of Tax Appeals (CTA) with the highest respectthe absence of any clear and convincing proof to the contrary, the Supreme Court must presume that the CTA

rendered a decision which is valid in every respect.Jurisprudence has consistently shown that this Court accords the findings of fact by the CTA with the highest respect. In SeaLand Service Inc. v. Court of Appeals,357SCRA441(2001),thisCourtrecognizesthat theCourtof
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* FIRSTDIVISION.

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Tax Appeals, which by the very nature of its function is dedicated exclusively to the consideration of tax problems, has necessarily developedanexpertiseonthesubject,anditsconclusionswillnotbe overturnedunlesstherehasbeenanabuseorimprovidentexercise ofauthority.Suchfindingscanonlybedisturbedonappealifthey are not supported by substantial evidence or there is a showing of grosserrororabuseonthepartoftheTaxCourt.Intheabsenceof any clear and convincing proof to the contrary, this Court must presume that the CTA rendered a decision which is valid in every respect. Taxation; Assessment Notices; An assessment is made within the prescriptive period if notice to this effect is released, mailed or sent by the Commissioner of Internal Revenue to the taxpayer within said periodreceipt thereof by the taxpayer within the prescriptive period is not necessary but this rule does not dispense with the requirement that the taxpayer should actually receive, even beyond the prescriptive period, the assessment notice.UnderSection203of theNationalInternalRevenueCode(NIRC),respondenthadthree (3) years from the last day for the filing of the return to send an assessment notice to petitioner. In the case of Collector of Internal Revenue v. Bautista,105Phil.1326(1959),thisCourtheldthatan assessment is made within the prescriptive period if notice to this effectisreleased,mailedorsentbytheCIRtothetaxpayerwithin saidperiod.Receiptthereofbythetaxpayerwithintheprescriptive periodisnotnecessary.Atthispoint,itshouldbeclarifiedthatthe

rule does not dispense with the requirement that the taxpayer should actually receive, even beyond the prescriptive period, the assessmentnoticewhichwastimelyreleased,mailedandsent. Same; Presumptions; While a mailed letter is deemed received by the addressee in the ordinary course of mail, this is still merely a disputable presumption subject to contravention, and a direct denial of the receipt thereof shifts the burden upon the party favored by the presumption to prove that the mailed letter was indeed received by the addressee.In Protectors Services, Inc. v. Court of Appeals, 330 SCRA 404 (2000), this Court ruled that when a mail matter is sent by registered mail, there exists a presumption, set forthunderSection3(v),Rule131oftheRulesofCourt,thatitwas received in the regular course of mail. The facts to be proved in ordertoraisethispresumptionare:(a)thattheletterwasproperly addressedwith
128

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Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue postageprepaid;and(b)thatitwasmailed.Whileamailedletteris deemed received by the addressee in the ordinary course of mail, this is still merely a disputable presumption subject to contravention, and a direct denial of the receipt thereof shifts the burden upon the party favored by the presumption to prove that themailedletterwasindeedreceivedbytheaddressee. Evidence; Presumptions; Hearsay Evidence; The presumption that entries in official records made in the performance of his duty by a public officer or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated, must be read in accordance with the Courts pronouncement in Africa v. Caltex (Phil.), Inc., 16 SCRA 448 (1966), that an entrant must have personal knowledge of the facts stated by him or such facts were acquired by him from reports made by persons under a legal duty to submit the same.Respondent offered the entry in the BIR record book and the testimony of its record custodian as entries in official records in accordance with Section 44, Rule 130 of the Rules of Court, which states that: Section 44. Entries in official records.Entries in official records

made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoinedbylaw,areprima facieevidenceofthefactsthereinstated. The foregoing rule on evidence, however, must be read in accordance with this Courts pronouncement in Africa v. Caltex (Phil.), Inc., 16 SCRA 448 (1966), where it has been held that an entrantmusthavepersonalknowledgeofthefactsstatedbyhimor such facts were acquired by him from reports made by persons under a legal duty to submit the same. There are three requisites for admissibility under the rule just mentioned: (a) that the entry was made by a public officer, or by another person specially enjoinedbylawtodoso;(b)thatitwasmadebythepublicofficerin the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts byhimstated,whichmusthavebeenacquiredbyhimpersonallyor throughofficialinformationxxx.Inthiscase,theentriesmadeby IngridVersolawerenotbasedonherpersonalknowledgeasshedid not attest to the fact that she personally prepared and mailed the assessment notice. Nor was it stated in the transcript of stenographicnoteshowandfromwhomsheobtainedthepertinent information. Moreover, she did not attest to the fact that she acquiredthereportsfrom
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persons under a legal duty to submit the same. Hence, Rule 130, Section 44 finds no application in the present case. Thus, the evidence offered by respondent does not qualify as an exception to theruleagainsthearsayevidence. Assessment Notices; While an assessment is made when sent within the prescribed period, even if received by the taxpayer after its expiration, this rule makes it more imperative that the release, mailing, or sending of the notice be clearly and satisfactorily proved mere notations made without the taxpayers intervention, notice, or control, without adequate supporting evidence, cannot suffice; otherwise, the taxpayer would be at the mercy of the revenue offices, without adequate protection or defense.Independent evidence,

such as the registry receipt of the assessment notice, or a certification from the Bureau of Posts, could have easily been obtained. Yet respondent failed to present such evidence. In the case of Nava v. Commissioner of Internal Revenue, 13 SCRA 104 (1965),thisCourtstressedontheimportanceofprovingtherelease, mailing or sending of the notice. While we have held that an assessmentismadewhensentwithintheprescribedperiod,evenif received by the taxpayer after its expiration (Coll. of Int. Rev. vs. Bautista,L12250andL12259,May27,1959),thisrulingmakesit the more imperative that the release, mailing, or sending of the notice be clearly and satisfactorily proved. Mere notations made without the taxpayers intervention, notice, or control, without adequate supporting evidence, cannot suffice; otherwise, the taxpayer would be at the mercy of the revenue offices, without adequateprotectionordefense.

PETITIONforreviewoncertiorariofadecisionoftheCourt ofAppeals. ThefactsarestatedintheopinionoftheCourt. Macalino & Associatesforpetitioner. Pablo M. Bastes, Jr.forrespondent. CHICONAZARIO,J.: ThisisaPetitionforReviewonCertiorari,underRule45of theRulesofCourt,seekingtosetasidetheDecisionofthe CourtofAppealsinCAG.R.SPNo.60209dated11July
130

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SUPREMECOURTREPORTSANNOTATED Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue

2002, ordering the petitioner to pay the Government the amountofP826,698.31asdeficiencyincometaxfortheyear 1987plus25%surchargeand20%interest per annum.The Court of Appeals, in its assailed Decision, reversed the Decision of the Court of Tax Appeals (CTA) dated 17 May 2 2000 inC.T.A.CaseNo.5662. PetitionerBarcelon,RoxasSecuritiesInc.(nowknownas UBP Securities, Inc.) is a corporation engaged in the trading of securities. On 14 April 1988, petitioner filed its AnnualIncomeTaxReturnfortaxableyear1987.Afteran audit investigation conducted by the Bureau of Internal

Revenue (BIR), respondent Commissioner of Internal Revenue (CIR) issued an assessment for deficiency income tax in the amount of P826,698.31 arising from the disallowanceoftheitemonsalaries,bonusesandallowances in the amount of P1,219,093,93 as part of the deductible business expense since petitioner failed to subject the salaries,bonusesandallowancestowithholdingtaxes.This assessment was covered by Formal Assessment Notice No. FAN18791000649 dated 1 February 1991, which, respondent alleges, was sent to petitioner through registered mail on 6 February 1991. However, petitioner 3 deniesreceivingtheformalassessmentnotice. On17March1992,petitionerwasservedwithaWarrant of Distraint and/or Levy to enforce collection of the deficiency income tax for the year 1987. Petitioner filed a formalprotest,dated25March1992,againsttheWarrantof Distraintand/orLevy,requestingforitscancellation.On3 July1998,petitionerreceivedaletterdated30April1998 4 fromtherespondentdenyingtheprotestwithfinality.
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1

Penned by Associate Justice Delilah VidallonMagtolis with

AssociateJusticeCandidoRiveraandAssociateJusticeSergioPestao, concurring.Rollo ,pp.1217.

2 Id. ,atpp.1828. 3 Id. ,atp.18. 4 Id. ,atpp.1819.

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On31July1998,petitionerfiledapetitionforreviewwith theCTA.Afterduenoticeandhearing,theCTArendereda decision in favor of petitioner on 17 May 2000. The CTA ruled on the primary issue of prescription and found it unnecessary to decide the issues on the validity and propriety of the assessment. It maintained that while a mailed letter is deemed received by the addressee in the course of mail, this is merely a disputable presumption. It reasoned that the direct denial of the petitioner shifts the burdenofprooftotherespondentthatthemailedletterwas

actuallyreceivedbythepetitioner.TheCTAfoundtheBIR records submitted by the respondent immaterial, self serving, and therefore insufficient to prove that the assessment notice was mailed and duly received by the 5 petitioner. Thedispositiveportionofthisdecisionreads:
WHEREFORE, in view of the foregoing, the 1988 deficiency tax assessment against petitioner is hereby CANCELLED. Respondent is hereby ORDERED TO DESIST from collecting said deficiency 6 tax.Nopronouncementastocosts.

On 6 June 2000, respondent moved for reconsideration of the aforesaid decision but was denied by the CTA in a Resolution dated 25 July 2000. Thereafter, respondent appealed to the Court of Appeals on 31 August 2001. In reversingtheCTAdecision,theCourtofAppealsfoundthe evidencepresentedbytherespondenttobesufficientproof thatthetaxassessmentnoticewasmailedtothepetitioner, thereforethelegalpresumptionthatitwasreceivedshould 7 apply. Thus,theCourtofAppealsruledthat:
WHEREFORE, the petition is hereby GRANTED. The decision dated May 17, 2000 as well as the Resolution dated July 25, 2000 are hereby REVERSED and SET ASIDE, and a new on entered orderingtherespondenttopaytheamountofP826,698.31asdefi
_______________
5Id.,atpp.2227. 6Id.,atp.27. 7Id.,atpp.1617.

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Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue ciency income tax for the year 1987 plus 25% surcharge and 20% interestper annumfromFebruary6,1991untilfullypaidpursuant 8 toSections248and249oftheTaxCode.

Petitionermovedforreconsiderationofthesaiddecisionbut thesamewasdeniedbytheCourtofAppealsinitsassailed 9 Resolutiondated30January2003. Hence,thisPetitionforReviewon Certiorariraisingthe followingissues:

I WHETHERORNOTLEGALBASESEXISTFORTHECOURTOF APPEALS FINDING THAT THE COURT OF TAX APPEALS COMMITTED GROSS ERROR IN THE APPRECIATION OF FACTS. II WHETHER OR NOT THE COURT OF APPEALS WAS CORRECT IN REVERSING THE SUBJECT DECISION OF THE COURTOFTAXAPPEALS. III WHETHER OR NOT THE RIGHT OF THE BUREAU OF INTERNALREVENUETOASSESSPETITIONERFORALLEGED DEFICIENCYINCOMETAXFOR1987HASPRESCRIBED. IV WHETHER OR NOT THE RIGHT OF THE BUREAU OF INTERNAL REVENUE TO COLLECT THE SUBJECT ALLEGED DEFICIENCYINCOMETAXFOR1987HASPRESCRIBED. V WHETHER OR NOT PETITIONER IS LIABLE FOR THE ALLEGEDDEFICIENCYINCOMETAXASSESSMENTFOR1987.
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8 Id. ,atp.17. 9CA Rollo ,p.147.

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WHETHER OR NOT THE SUBJECT ASSESSMENT IS VIOLATIVE OF THE RIGHT OF PETITIONER TO DUE 10 PROCESS.

ThisCourtfindstheinstantPetitionmeritorious.

Thecoreissueinthiscaseiswhetherornotrespondents right to assess petitioners alleged deficiency income tax is barred by prescription, the resolution of which depends on reviewing the findings of fact of the Court of Appeals and theCTA. While the general rule is that factual findings of the Court of Appeals are binding on this Court, there are, 11 however,recognizedexceptions thereto,suchaswhenthe findings are contrary to those of the trial court or, in this 12 case,theCTA. InitsDecision,theCTAresolvedtheissuesraisedbythe partiesthus:
_______________
10 Rollo ,pp.5556. 11 Instances when the findings of fact of the trial court and/or Court

of Appeals may be reviewed by the Supreme Court are (1) when the conclusion is a finding grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurdorimpossible;(3)wherethereisagraveabuseofdiscretion;(4) whenthejudgmentisbasedonamisapprehensionoffacts;(5)whenthe findingsoffactareconflicting;(6)whentheCourtofAppeals,inmaking itsfindings,wentbeyondtheissuesofthecaseandthesameiscontrary to the admissions of both appellant and appellee; (7) the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on whichtheyarebased;(9)whenthefactssetforthinthepetitionaswell as in the petitioners main and reply briefs are not disputed by the respondents; and (10) the finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by the evidence on record. (Misa v. Court of Appeals, G.R. No. 97291, 5 August1992,212SCRA217,221222)
12

Metro Construction, Inc. v. Chatham Properties, Inc., 418 Phil.

176,206;365SCRA697,726(2001). 134

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SUPREMECOURTREPORTSANNOTATED Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue

Jurisprudence is replete with cases holding that if the taxpayer denies ever having received an assessment from the BIR, it is incumbentuponthelattertoprovebycompetentevidencethatsuch

notice was indeed received by the addressee. The onus probandi was shifted to respondent to prove by contrary evidence that the Petitioner received the assessment in the due course of mail. The Supreme Court has consistently held that while a mailed letter is deemed received by the addressee in the course of mail, this is merely a disputable presumption subject to contravention and a direct denial thereof shifts the burden to the party favored by the presumptiontoprovethatthemailedletterwasindeedreceivedby theaddressee(Republic vs. Court of Appeals,149SCRA351).Thus asheldbytheSupremeCourtinGonzalo P. Nava vs. Commissioner of Internal Revenue,13SCRA104,January30,1965:
Thefactstobeprovedtoraisethispresumptionare(a)thattheletter wasproperlyaddressedwithpostageprepaid,and(b)thatitwasmailed. Once these facts are proved, the presumption is that the letter was received by the addressee as soon as it could have been transmitted to himintheordinarycourseofthemail.Butifoneofthesaidfactsfails to appear, the presumption does not lie. (VI, Moran, Comments on the Rules of Court , 1963 ed, 5657 citing Enriquez vs. Sunlife Assurance of Canada,41Phil269).

In the instant case, Respondent utterly failed to discharge this duty.Nosubstantialevidencewaseverpresentedtoprovethatthe assessment notice No. FAN18791000649 or other supposed notices subsequent thereto were in fact issued or sent to the taxpayer.Asamatteroffact,itonlysubmittedtheBIRrecordbook whichallegedlycontainsthelistoftaxpayersnames,thereference number, the year, the nature of tax, the city/municipality and the amount (see Exh. 5a for the Respondent). Purportedly, Respondent intended to show to this Court that all assessments madeareenteredintoarecordbookinchronologicalorderoutlining the details of the assessment and the taxpayer liable thereon. However,ascanbegleanedfromthefaceoftheexhibit,allentries thereon appears to be immaterial and impertinent in proving that the assessment notice was mailed and duly received by Petitioner. Nothing indicates therein all essential facts that could sustain the burden of proof being shifted to the Respondent. What is essential to prove the fact of mailing is the registry receipt issued by the BureauofPostsorthe
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Registry return card which would have been signed by the Petitioner or its authorized representative. And if said documents cannot be located, Respondent at the very least, should have submittedtotheCourtacertificationissuedbytheBureauofPosts and any other pertinent document which is executed with the intervention of the Bureau of Posts. This Court does not put much credence to the self serving documentations made by the BIR personnelespeciallyiftheyareunsupportedbysubstantialevidence establishingthefactofmailing.Thus:
Whilewehaveheldthatanassessmentismadewhensentwithinthe prescribed period, even if received by the taxpayer after its expiration (Coll. of Int. Rev. vs. Bautista,L12250andL12259,May27,1959),this ruling makes it the more imperative that the release, mailing or sending of the notice be clearly and satisfactorily proved. Mere notations made without the taxpayers intervention, notice or control, without adequate supporting evidence cannot suffice; otherwise, the taxpayerwouldbeatthemercyoftherevenueoffices,withoutadequate protectionordefense.(Nava vs. CIR,13SCRA104,January30,1965).

xxxx The failure of the respondent to prove receipt of the assessment by the Petitioner leads to the conclusion that no assessment was issued.Consequently,thegovernmentsrighttoissueanassessment for the said period has already prescribed. (Industrial Textile Manufacturing Co. of the Phils., Inc. vs. CIR CTA Case 4885, 13 August22,1996).

Jurisprudence has consistently shown that this Court accords the findings of fact by the CTA with the highest 14 respect.In SeaLand Service Inc. v. Court of Appeals this Court recognizes that the Court of Tax Appeals, which by theverynatureofitsfunctionisdedicatedexclusivelytothe considerationoftaxproblems,hasnecessarilydevelopedan expertise on the subject, and its conclusions will not be overturnedunlesstherehasbeenanabuseorimprovident exerciseof
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13 Rollo ,pp.2427. 14G.R.No.122605,30April2001,357SCRA441,445446.

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Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue authority.Suchfindingscanonlybedisturbedonappealif theyarenotsupportedbysubstantialevidenceorthereisa showing of gross error or abuse on the part of the Tax 15 Court. Intheabsenceofanyclearandconvincingproofto the contrary, this Court must presume that the CTA renderedadecisionwhichisvalidineveryrespect. 16 Under Section 203 of the National Internal Revenue Code(NIRC),respondenthadthree(3)yearsfromthelast dayforthefilingofthereturntosendanassessmentnotice topetitioner.Inthecaseof Collector of Internal Revenue v. 17 Bautista, this Court held that an assessment is made within the prescriptive period if notice to this effect is released,mailedorsentbytheCIRtothetaxpayerwithin said period. Receipt thereof by the taxpayer within the prescriptiveperiodisnotnecessary.Atthispoint,itshould be clarified that the rule does not dispense with the requirementthatthetaxpayershouldactuallyreceive,even beyondtheprescriptiveperiod,theassessmentnoticewhich wastimelyreleased,mailedandsent. Inthepresentcase,recordsshowthatpetitionerfiledits Annual Income Tax Return for taxable year 1987 on 14 18 April 1988. The last day for filing by petitioner of its returnwas
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15 Commissioner

of Internal Revenue v. Mitsubishi Metal Corp., G.R. of Limitation Upon Assessment and Collection.

Nos.54908and80041,22January1990,181SCRA214,220.
16Section203. Period

ExceptasprovidedintheSection222,internalrevenuetaxesshallbe assessed within three (3) years after the last day prescribed by law for thefilingofthereturn,andnoproceedingincourtwithoutassessment for the collection of such taxes shall be begun after expiration of such period: Provided, that in a case where a return is filed beyond the periodprescribedbylaw,thethree(3)yearperiodshallbecountedfrom thedaythereturnwasfiled.ForpurposesofthisSection,areturnfiled before the last day prescribed by law for the filing thereof shall be consideredasfiledonsuchlastday.
17105Phil.1326,1327(1959). 18 Rollo ,pp.14and24.

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on 15 April 1988, thus, giving respondent until 15 April 1991 within which to send an assessment notice. While respondentaversthatitsenttheassessmentnoticedated1 February 1991 on 6 February 1991, within the three (3) year period prescribed by law, petitioner denies having received an assessment notice from respondent. Petitioner allegesthatitcametoknowofthedeficiencytaxassessment only on 17 March 1992 when it was served with the 20 WarrantofDistraintandLevy. 21 In Protectors Services, Inc. v. Court of Appeals, this Court ruled that when a mail matter is sent by registered mail, there exists a presumption, 22 set forth under Section 3(v),Rule131oftheRulesofCourt, thatitwasreceivedin theregularcourseofmail.Thefactstobeprovedinorderto raisethispresumptionare:(a)thattheletterwasproperly addressedwithpostageprepaid;and(b)thatitwasmailed. Whileamailedletterisdeemedreceivedbytheaddresseein theordinarycourseofmail,thisisstillmerelyadisputable presumptionsubjecttocontroversion,andadirectdenialof thereceipt
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19Section77(B)oftheNIRCstatesthat:

19

(B)Time of Filing the Income Tax Return.Thecorporatequarterlydeclaration shallbefiledwithinsixty(60)daysfollowingthecloseofeachofthefirstthree (3)quartersofthetaxableyear.Thefinaladjustmentreturnshallbefiledonor beforethefifteenth(15th)dayofApril,oronorbeforethefifteenth(15th)dayof thefourth(4th)monthfollowingthecloseofthefiscalyear,asthecasemaybe.
20 Rollo ,pp.5354. 21386Phil.611,623;330SCRA404,414415(2000). 22Section3(v),Rule131,ofthe1997RulesofCourtprovides:

Sec.3. Disputable presumptions.The following presumptions are satisfactory ifuncontradicted,butmaybecontradictedandovercomebyotherevidence: xxxx (v)Thataletterdulydirectedandmailedwasreceivedintheregularcourse ofthemail;

138

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SUPREMECOURTREPORTSANNOTATED Barcelon, Roxas Securities, Inc. vs. Commissioner of Internal Revenue

thereof shifts the burden upon the party favored by the presumption to prove that the mailed letter was indeed 23 receivedbytheaddressee. In the present case, petitioner denies receiving the assessment notice, and the respondent was unable to present substantial evidence that such notice was, indeed, mailed or sent by the respondent before the BIRs right to assesshadprescribedandthatsaidnoticewasreceivedby the petitioner. The respondent presented the BIR record book where the name of the taxpayer, the kind of tax assessed, the registry receipt number and the date of mailing were noted. The BIR records custodian, Ingrid Versola, also testified that she made the entries therein. Respondent offered the entry in the BIR record book and the testimony of its record custodian as entries in official recordsinaccordancewithSection44,Rule130oftheRules 24 ofCourt, whichstatesthat:
Section 44. Entries in official records.Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoinedbylaw,areprima facieevidenceofthefactsthereinstated.

The foregoing rule on evidence, however, must be read in accordance with this Courts pronouncement in Africa v. 25 Caltex (Phil.), Inc., whereithasbeenheldthatanentrant musthavepersonalknowledgeofthefactsstatedbyhimor such facts were acquired by him from reports made by personsunderalegaldutytosubmitthesame.
There are three requisites for admissibility under the rule just mentioned: (a) that the entry was made by a public officer, or by another person specially enjoined by law to do so; (b) that it was madebythepublicofficerintheperformanceofhisduties,orby
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23Republic

v. Court of Appeals,G.R.No.L38540,30April1987,149SCRA

351,355.
24Rollo,p.56. 25123Phil.272,277;16SCRA448,452(1966).

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suchotherpersonintheperformanceofadutyspeciallyenjoinedby law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquiredbyhimpersonallyorthroughofficialinformationxxx.

In this case, the entries made by Ingrid Versola were not basedonherpersonalknowledgeasshedidnotattesttothe fact that she personally prepared and mailed the assessment notice. Nor was it stated in the transcript of 26 stenographicnotes how and from whom she obtained the pertinent information. Moreover, she did not attest to the factthatsheacquiredthereportsfrompersonsunderalegal dutytosubmitthesame.Hence,Rule130,Section44finds no application in the present case. Thus, the evidence offeredbyrespondentdoesnotqualifyasanexceptiontothe ruleagainsthearsayevidence. Furthermore,independentevidence,suchastheregistry receiptoftheassessmentnotice,oracertificationfromthe Bureau of Posts, could have easily been obtained. Yet respondentfailedtopresentsuchevidence. In the case of Nava v. Commissioner of Internal 27 Revenue, thisCourtstressedontheimportanceofproving therelease,mailingorsendingofthenotice.
Whilewehaveheldthatanassessmentismadewhensentwithin the prescribed period, even if received by the taxpayer after its expiration (Coll. of Int. Rev. vs. Bautista, L12250 and L12259, May 27, 1959), this ruling makes it the more imperative that the release,mailing,orsendingofthenoticebeclearlyandsatisfactorily proved. Mere notations made without the taxpayers intervention, notice, or control, without adequate supporting evidence, cannot suffice; otherwise, the taxpayer would be at the mercy of the revenueoffices,withoutadequateprotectionordefense.
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26TranscriptofStenographicNotes, Barcelon,

Roxas Securities, Inc.

v. Commissioner of Internal Revenue, CTA Case No. 5662, 25 August 1998,pp.113.

27121Phil.117,123124;13SCRA104,110(1965).

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Inthepresentcase,theevidenceofferedbytherespondent failstoconvincethisCourtthatFormalAssessmentNotice No. FAN18791000649 was released, mailed, or sent before 15 April 1991, or before the lapse of the period of limitation upon assessment and collection prescribed by Section 203 of the NIRC. Such evidence, therefore, is insufficient to give rise to the presumption that the assessment notice was received in the regular course of mail. Consequently, the right of the government to assess and collect the alleged deficiency tax is barred by prescription. INVIEWOFTHEFOREGOING,theinstantPetitionis GRANTED.TheassailedDecisionoftheCourtofAppealsin CAG.R. SP No. 60209 dated 11 July 2002, is hereby REVERSEDandSETASIDE,andtheDecisionoftheCourt ofTaxAppealsinC.T.A.CaseNo.5662,dated17May2000, cancelling the 1988 Deficiency Tax Assessment against Barcelon, Roxas Securitites, Inc. (now known as UPB Securities, Inc.) for being barred by prescription, is hereby REINSTATED.Nocosts. SOORDERED. Panganiban (C.J., Chairman), YnaresSantiago, AustriaMartinezandCallejo, Sr., JJ.,concur. Petition granted, assailed decision reversed and set aside. Notes.Almostinvariablyinan ad valoremtax,aswell asinincometax,estateandgifttaxes,andthevalueadded tax, the tax paid or withheld is not deducted from the tax base.(Bank of America NT & SA vs. Court of Appeals,234 SCRA302[1994]) WheretheSecretaryofJusticereviews,pursuanttolaw, a tax measure enacted by a local government unit to determine if the officials performed their functions in accordancewithlaw,thatis,withtheprescribedprocedure fortheenactmentoftaxordinancesandthegrantofpowers undertheLocal

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Government Code, the same is an act of mere supervision, notcontrol.(Drilon vs. Lim,235SCRA135[1994]) o0o

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