Lascona vs CIR

Case Digest GR 171251 March 5 2012

Facts:

On March 27 1998, the CIR issued an assessment notice against Lascona Land Co., Inc informing the
latter of its deficiency income tax for the year 1993. On March 27 1998, Lascona filed a letter protest. In
its letter dated March 3, 1999, which was received by Lascona on March 12, 1999, the Commissioner
denied the protest on the ground that the assessment has become final and executory when Lascona
did not appeal before the CTA within 30 days after the lapse of 180-day period as mandated by Sec 228
of the NIRC.

On April 12 1999, Lascona appealed the Commissioners decision before the CTA. Lascona averred that
the Commissioner erred in ruling that failure to file a timely appeal before the CTA resulted to the
finality of the assessment.

Issue: W/N the taxpayers failure to appeal before the CTA within 30 days after the lapse of the 180-day
reglementary period pursuant to Sec 228 resulted to the finality of the assessment

No. First, it must be clarified that the word decision does not signify the assessment itself. It is well-
established in jurisprudence that the word decision in the CTA Charter has been interpreted to mean
the decisions of the Commissioner on the protest of the taxpayer against the assessments.

Second, the filing of an appeal within 30 days after the lapse of 180-day period is not the only remedy
available in case of inaction by the CIR on the protested assessment. It is a well-settled rule in
jurisprudence, which is consistent with the Revised Rules of the CTA, that the taxpayer may also opt to
await the final decision of the Commissioner on the disputed assessment and appeal such decision to
the CTA within 30 days after the receipt of a copy of such decision. These options are mutually exclusive
and resort to one bars the application of the other.

Here, considering that Lascona opted to await the final decision of the Commissioner on the protested
assessment, it then has the right to appeal such final decision to the CTA by filing a petition for review
within 30 days after receipt of copy of such decision or ruling, even after the expiration of the 180-day
period fixed by law for the CIR to act on the disputed assessments. Thus, Lascona, when it filed an
appeal on April 12 1999 before the CTA, after its receipt of the Letter dated March 3 1999 on March 12
1999, the appeal was timely made as it was filed within 30 days after receipt of copy of the decision. #
Note ***RMC 54-2014

In the filing of administrative claims for refund or tax credit of input taxes, the option for the taxpayer to
wait for the Commissioners decision on its claim before filing an appeal may not be available.

Under the new rule promulgated by the BIR in 2014, if the claim for VAT refund or credit is not acted
upon by the Commissioner within the 120-day period as required by law, such inaction shall be deemed
a denial of the application for tax refund or credit. Further, the new regulation provides that the
taxpayer can appeal in one of the two ways: (1) File the judicial claim within 30 days after the
Commissioner denies the claim within the 120-day period, or (2) File the judicial claim within 30 days
after the expiration of the 120-day period if the Commissioner did not act on the claim.

This will have to mean that, unlike in the case of appealing before the CTA for disputed assessments, the
remedy of the taxpayer to wait for the Commissioners decision even after the 120-day period is not
available when it comes to claiming refund or tax credit of VAT input taxes.Thus, if the taxpayer failed to
file an appeal or judicial claim within 30 days after the lapse of the 120-day period of the
Commissioners inaction, the taxpayer loses its right to appeal to the CTA.