TAX12.18 Tupaz v.

Ulep

Facts: June 8, 1990, an information against accused Petronila C. Tupaz and her late husband Jose J. Tupaz, Jr.,
as corporate officers of El Oro Engravers Corp., was field for non-payment of deficiency corporate in come tax
for the year 1979 in violation of Sec. 51(b) in relation to Sec. 73 of the 1977 Tax Code. The information was
dismissed for the lack of jurisdiction by the MeTC of Q.C.

January 10, 1991, 2 information were filed before the RTC of Q.C. against spouses for the same alleged non-
payment of deficiency corporate income tax for the year 1979.

Prior to this, petitioner was charged with nonpayment of deficiency corporate income tax for the year 1979, which
tax return was filed in April 1980. On July 16, 1984, the BIR issued a notice of assessment. Petitioner contends
that the July 16, 1984 assessment was made out of time.

Petitioner avers that while Sec. 318 and 319 of the 1977 NIRC provide a 5-year period of limitation for the
assessment and collection of internal revenue taxes, BP700, enacted on February 22, 1984, amended the 2 sections
and reduced the period to 3 years to assess the tax liability, counted from the last day of filing the return or from
the date the return is filed, whichever comes later. Since the tax return was filed in April 1980, the assessment
made on July 16, 1984 was beyond the 3-year prescriptive period.

Issue: Whether the government’s right to assess has prescribed.

Ruling: The shortened period of 3 years prescribed under BP700 is not applicable to petitioner. BP700, effective
April 5, 1984, specifically states that the shortened period of 3 years shall apply to assessments and collections
of internal revenue taxes beginning taxable year 1984. Assessments made on or after April 5, 1984 are governed
by the 5-year period if the taxes assessed cover taxable years prior to January 1, 1984. The deficiency income tax
under consideration is for taxable year 1979. Thus, the period of assessment is still 5 years, under the old law.
The income tax return was filed in April 1980. Hence, the July 16, 1984 tax assessment was issued within the
prescribed period of 5 years, from the last day of filing the return, or from the date the return is filed, whichever
comes later.

Book’s MP: An assessment contains not only a computation of tax liabilities, but also a demand for payment
within a prescribed period. The ultimate purpose of assessment is to ascertain the amount that each taxpayer is to
pay. An assessment is a notice to the effect that the amount therein stated is due as tax and a demand for payment
thereof. Assessments made beyond the prescribed period would not be binding on the taxpayer.

TAX12.19 BASF Coatings + Inks Phil v. Commisioner

FACTS: Taxpayer had its BIR-registered address at Barrio Talon, Las Piñas City. Following the resolution of
the stockholders and directors to shorten its corporate life, taxpayer moved its office to Calamba, Laguna.
Following the change in address, taxpayer sent two letters to the Revenue District Office in Alabang, Muntinlupa
City, which has jurisdiction over the taxpayer’s address in Las Pinas. The first letter was a notice of taxpayer’s
dissolution and the second letter was a manifestation indicating the submission of various documents supporting
the taxpayer’s dissolution, among which was BIR Form No. 1905, which refers to an update of information
contained in taxpayer’s tax registration. Thereafter, a Formal Assessment Notice was sent by the BIR through
registered mail on January 24, 2003 at the taxpayer’s former address in Las Piñas City, assessing the taxpayer of
various deficiency taxes for the year 1999. On March 4, 2004, a First Notice Before Issuance of Warrant of
Distraint and Levy was sent to the residence of one of the taxpayer’s directors. On March 19, 2004, taxpayer filed
a protest letter citing lack of due process and prescription as grounds. For lack of action by the BIR on the
taxpayer’s protest, the latter filed a Petition for Review with the CTA.
Issue: Whether there is lack of notice due to failure to send the FAN on the petitioners current address?

Ruling: YES. To proceed heedlessly with tax collection without first establishing a valid assessment is evidently
violative of the cardinal principle in administrative investigations: that taxpayers should be able to present their
case and adduce supporting evidence.

BOOK’s MP: As there are no notices sent to the petitioner BASF, the assessment are void. In CIR vs REYES,
the valid notice sent the assessment is void. The reason for this is that “the law imposes as substantive, not merely
a formal requirement. The proceed heedlessly with tax collection without first establishing a valid assessment is
evidently violate of the cardinal principle in administrative investigations that taxpayer should be able to present
their case and adduce supporting evidence. A void assessment cannot give rise to obligation to pay deficiency
taxes, and it divests the taxing authority of the right to collect them.

TAX12.20 Republic v. Limaco & De Guzmans Commercial Co.

FACTS: In 1946, Limaco & De Guzman Co. was engaged in the importation of cigarettes. To guarantee payment
of revenue taxes, the company and the Visayan Surety and Insurance Corp.. as surety, executed 2 importer bonds.
On 27 June 1946, the company filed with the Bureau of Customs entry papers covering shipment of 2 million
“Spud” cigarettes it had imported from New York. the specific tax due thereon amounted to P6,000. The company,
through its agent/broker J. O. Hiponia, paid the Bureau of Customs the tax with P1000 in cash and P5,000 in a
PNB Check on 15 July 1946. The cigarettes were released to the company but the check bounced. On 17 June
1948, the Collector of Internal Revenue demanded the payment of the deficiency specific tax. The amount
remained unpaid. On 15 April 1951, the company requested that action be deferred as it intends to settle the matter
amicably with the BIR. The Republic filed a complaint for the forfeiture of the bonds, and the payment of the
sum of P5,000 plus interest. The company invoked the defense of estoppel and prescription.

ISSUE: Whether the action has prescribed

RULING: Under Section 332 (c) of the Tax Code, the collection of the tax by summary method or by judicial
action shall be effected within 5 years after the assessment of the tax. To assess means to impose a tax; to charge
with a tax; to declare a tax to be payable; to apportion a tax to be paid or contributed; to fix a rate, to fix or settle
a sum to be paid by way of tax; to set, fix or charge a certain sum to each taxpayer; to settle, determine or fix the
amount of tax to be paid. Herein, the assessment was made on 17 June 1948 (when a letter of demand for the
amount of the rubber check was sent to the company) and not on 15 Jne 1946 (the date of payment). Even
assuming that the latter date is the date of assessment, the action is still not barred by the statute of limitations as
teh statute was suspended when the company acknowledged the debt in writing in April 1951, and requested the
deferment of the judicial action to be taken by the Government towards the collection of the obligation, so that
the company could make representations with the COllector to settle the matter amicably. Prescription has not set
in.

BOOK’S MP: it is not the issue date of the DL and/or notice of assessment that is reckoning point in prescription
but rather, the date when said demand letter or notice of assessment is released, mailed or sent to the taxpayer that
constitute actual assessment.

TAX12.21 Commissioner v. B.F. Goodrich Phils

FACTS: Private respondent BF Goodrich Philippines Inc. was an American corporation prior to July 3, 1974. As
a condition for approving the manufacture of tires and other rubber products, private respondent was required by
the Central Bank to develop a rubber plantation. In compliance therewith, private respondent bought from the
government certain parcels of land in Tumajubong Basilan, in 1961 under the Public Land Act and the Parity
Amendment to the 1935 constitution, and there developed a rubber plantation. On August 2, 1973, the Justice
Secretary rendered an opinion that ownership rights of Americans over Public agricultural lands, including the
right to dispose or sell their real estate, would be lost upon expiration on July 3, 1974 of the Parity Amendment.
Thus, private respondent sold its Basilan land holding to Siltown Realty Phil. Inc., (Siltown) for P500,000 on
January 21, 1974. Under the terms of the sale, Siltown would lease the property to private respondent for 25 years
with an extension of 25 years at the option of private respondent.

Private respondent books of accounts were examined by BIR for purposes of determining its tax liability for 1974.
This examination resulted in the April 23, 1975 assessment of private respondent for deficiency income tax which
it duly paid. Siltown’s books of accounts were also examined, and on the basis thereof, on October 10, 1980, the
Collector of Internal Revenue assessed deficiency donor’s tax of P1,020,850 in relation to said sale of the Basilan
landholdings. Private respondent contested this assessment on November 24, 1980. Another assessment dated
March 16, 1981, increasing the amount demanded for the alleged deficiency donor’s tax, surcharge, interest and
compromise penalty and was received by private respondent on April 9, 1981. On appeal, CTA upheld the
assessment. On review, CA reversed the decision of the court finding that the assessment was made beyond the
5-year prescriptive.

ISSUE: Whether the filing of the assessment has reached the 5 year prescriptive period?

RULING: YES. For the purpose of safeguarding taxpayers from any unreasonable examination, investigation or
assessment, our tax law provides a statute of limitations in the collection of taxes. Thus, the law on prescription,
being a remedial measure, should be liberally construed in order to afford such protection. As a corollary, the
exceptions to the law on prescription should perforce be strictly construed. ection 15 of the NIRC, on the other
hand, provides that “[w]hen a report required by law as a basis for the assessment of any national internal revenue
tax shall not be forthcoming within the time fixed by law or regulation, or when there is reason to believe that
any such report is false, incomplete, or erroneous, the Commissioner of Internal Revenue shall assess the proper
tax on the best evidence obtainable.” Clearly, Section 15 does not provide an exception to the statute of limitations
on the issuance of an assessment, by allowing the initial assessment to be made on the basis of the best evidence
available. Having made its initial assessment in the manner prescribed, the commissioner could not have been
authorized to issue, beyond the five-year prescriptive period, the second and the third assessments under
consideration before us.

TAX12.22 Royal Bank of Scotland v. CIR

FACTS: Petitioner Royal Bank of Scotland (Philippines), Inc. is a domestic corporation duly registered with the
Securities and Exchange Commission, and duly authorized by the Bangko Sentral ng Pilipinas (BSP) to engage
in commercial banking, with principal business address at 18/F LKG Tower, 6801 Ayala Avenue, Makati City.
On December 30, 2003, petitioner received a Formal Assessment Notice (FAN) for alleged deficiency
documentary stamp tax (DST) for taxable year 1999 in the amount of P167,886,906.79, inclusive of penalties. In
the said FAN, respondent CIR claimed that the reverse repurchase agreements with the BSP are considered as
"deposit substitutes", under Section 22 of the National Internal Revenue code (NIRC) of 1997, as amended, and
are subject to DST under Section 180 of the same Code. As the protest was not acted upon by the respondent, on
October 25, 2004, petitioner filed a Petition for Review with this Court, docketed as C.T.A. Case No. 7089. On
September 10, 2008, the First Division rendered the assailed Decision dismissing the petition for lack of
jurisdiction. On September 30, 2008, petitioner field a "Motion for Reconsideration" of said decision, which was
denied for lack of merit by the First Division in a Resolution dated November 27, 2008.
ISSUE: WHETHER THE HONORABLE COURT OF TAX APPEALS HAS JURISDICTION TO HEAR AND
ADJUDICATE THE PETITIONER'S PETITION FOR REVIEW?

Ruling: YES. Pursuant to NIRC, the assessment may be protested administratively by filing a request for
reconsideration or reinvestigation, within 30 days from receipt of the assessment. Petitioner has sixty (60) days
therefrom to submit relevant documents. Thereafter, respondent is given a period of 180 days within which to
decide the protest. Upon denial of the protest or the lapse of the 180-day period, the petitioner may appeal the
decision or inaction to the Court of Tax Appeals, within 30 days from receipt of the said decision or from the
lapse of the 180-day period. Corollary thereto, Section 6 of Revenue Regulations No. 12-85, which classifies
protest into two kinds, namely: (1) request for reconsideration, and (2) request for reinvestigation, provides: "SEC.
6. Protest.- The taxpayer may protest administratively an assessment by filing a written request for reconsideration
or reinvestigation specifying the following particulars: XXX XXX (a) Request for Reconsideration - refers to a
plea of reevaluation of the assessment on the basis of existing records without need of additional evidence. It may
involve both question of fact or of law or both. (b) Request for reinvestigation - refers to a plea of reevaluation
of an assessment on the basis of newly discovered or additional evidence that a taxpayer intends to present in the
reinvestigation. It may also involve a question of fact or law or both." 10 The main difference between these two
types of protest lies in the records or evidence to be examined by internal revenue officers, whether there are
existing records or newly discovered or additional evidence (CIR vs. Philippine Global Communication, Inc. 506
SCRA 427). Thus, applying both Section 228 of the NJRC of 1997, as amended, and Revenue Regulations No.
12-85, if the protest is a request for reconsideration, the submission of additional or supporting documentary
evidence is not required. Thus, in case of inaction of the CIR, the 180-day period for the BIR to resolve the
protest shall be counted from the filing of the protest. On the other hand, if the protest is a request for
reinvestigation, the taxpayer is required to submit additional or supporting documents. Thus, in case of inaction
of the CIR, the 180-day period shall be counted from the date of the submission of the supporting documents. In
case the taxpayer fails to submit said documents, within sixty (60) days from the filing of the protest, the
assessment shall become final, executory and demandable, pursuant to Section 3.1.5 of Revenue Regulations No.
12- 99.

TAX12.23 Pirovano v. CIR

FACTS: Enrico Pirovano was the President and General Manager of Dela Rama Steamship Co. During his
lifetime, he made significant contributions to the success of the corporation. His life was then insured by the
corporation which paid the premiums and is the beneficiary under the insurance policy. When Enrico Pirovano
died, the corporation donated the proceeds of the life insurance policy to his 4 minor children. The CIR then
assessed donor and donee’s tax against the corporation and the Pirovano children. The children contested the
imposition of the donee’s tax arguing that the donation was a remuneratory one, made in consideration of the
services rendered by their father. The Pirovano heirs then contested the CIR’s assessment and imposition of the
donees' gift taxes and donor's gift tax and also made a claim for refund of the donor's gift tax so collected.
Commissioner ruled in favour of cir.

Issue: W/N an appeal to CTA will suspend tax liability?

Ruling : NO. An appeal to CTA shall not suspend the enforcement of tax liability unless a motion to that effect
shall have been presented in court and granted by it on the basis that such collection will jeopardize the interest
of the taxpayer or the government.

TAX12.24 Republic v. Razon and Jai-Alali Corp

FACTS: Haig Assadourian was an Egyptian citizen who was admitted to the Philippines. From October 1940-
January 1945, he was the general manager of the Jai-Alai Corporation, a duly organized entity under the laws of
the Philippines engaged during all that time, under the name of Jai-Alai Stadium, in a form of legalized gambling,
in which corporation Assadourian and his wife owned 200 shares of stock. He appointed Jose Razon as his
attorney-in-fact or agent for the purpose of filing his tax returns, paying, and compromising the taxes which may
be assessed against him during his absence. And after securing a tax clearance upon the guaranty of one Jack
George, Assadorian left the Philippines for the US. Since then he had been residing in Los Angeles, California.
His re-entry permit expired. On August 5, 1947, in the US, the Jai-Alai, represented by its Vice President Jose
Razon, entered into a contract with Assadourian, whereby in consideration of the sum of P200,000, the later
acknowledged full payment of all his claim for percentages earned by the Jai-Alai Stadium for the years 1940 to
1945, and to be earned during the years 1946 to 1950. It was shown that in 1947, the amount of 40,000 was paid
directly by the Jai-Alai by a telegraphic transfer. Also in the same year,four different amounts of 20,000 cash
were paid, the first two by Jai-Alai Corp. and the remaining two by Madrigal and Company, Inc. to Jose Razon.
The latter remitted all said amounts to Assadourian. In the year 1948, they paid the remaining 80,000. Unsatisfied
with the findings of the CTA, both the Republic and Jose Razon, Jai-Alai Corp. made two appeals to the SC. As
the two appeals were interrelated and involve common issues, the SC considered the jointly in the decision.

ISSUES: Whether or not the cause of action of the Republic to recover the withholding taxes had already
prescribed.

RULING: NO. In connection with the defense of defendant Jai-Alai Corporation that the right to collect the tax
has already prescribed, the record shows that it failed to file a withholding tax return for the amount of P80,000.00
paid to Haig Assadourian in 1947. For its omission to file a withholding tax return, Section 332 (c) of the Tax
Code, which provides that 'a proceeding in court for the collection of such tax may be begun without assessment,
at any time within ten years after the discovery of the . . . omission,' should be applied. The failure to file a return
was discovered in 1949, during the investigation conducted by BIR examiner Narciso Rosales. The judicial suit
was initiated on January 16, 1953 when the Jai-Alai Corporation was included as party defendant in the amended
complaint. Only four (4) years elapsed from the time of the discovery of the omission to file a return to the filing
of a judicial action against the Jai-Alai Corporation consequently, the right to judicially collect the withholding
tax has not prescribed.

TAX12.25 Commissioner v. B.F. Goodrich Phils.

FACTS: Private respondent BF Goodrich Philippines Inc. was an American corporation prior to July 3, 1974. As
a condition for approving the manufacture of tires and other rubber products, private respondent was required by
the Central Bank to develop a rubber plantation. In compliance therewith, private respondent bought from the
government certain parcels of land in Tumajubong Basilan, in 1961 under the Public Land Act and the Parity
Amendment to the 1935 constitution, and there developed a rubber plantation. On August 2, 1973, the Justice
Secretary rendered an opinion that ownership rights of Americans over Public agricultural lands, including the
right to dispose or sell their real estate, would be lost upon expiration on July 3, 1974 of the Parity Amendment.
Thus, private respondent sold its Basilan land holding to Siltown Realty Phil. Inc., (Siltown) for P500,000 on
January 21, 1974. Under the terms of the sale, Siltown would lease the property to private respondent for 25 years
with an extension of 25 years at the option of private respondent.

Private respondent books of accounts were examined by BIR for purposes of determining its tax liability for 1974.
This examination resulted in the April 23, 1975 assessment of private respondent for deficiency income tax which
it duly paid. Siltown’s books of accounts were also examined, and on the basis thereof, on October 10, 1980, the
Collector of Internal Revenue assessed deficiency donor’s tax of P1,020,850 in relation to said sale of the Basilan
landholdings.

ISSUE: Whether the fact that a taxpayer sells its real property for a price less than its declared fair market value
by itself justify a finding of false return.

RULING: NO. The fact that private respondent sold its real property for a price less than its declared fair market
value did not by itself justify a finding of false return. Indeed, private respondent declared the sale in its 1974
return submitted to the BIR. Within the five-year prescriptive period, the BIR could have issued the questioned
assessment, because the declared fair market value of said property was of public record. This it did not do,
however, during all those five years. Moreover, the BIR failed to prove that respondent’s 1974 return had been
filed fraudulently. Equally significant was its failure to prove respondent’s intent to evade the payment of the
correct amount of tax.

TAX12.26 Sambrano v. CTA

FACTS: On February 23, 1950, Santiago Sambrano, the owner and operator of a fleet of passenger and freight
trucks with lines between Manila and the northern provinces of Luzon, received from the Collector of Internal
Revenue a demand for the payment of his income tax liabilities. As early as January 29, 1951, petitioner already
signified his intention to file a surety bond to guarantee the payment of his tax liability and on May 3,
1951, executed a chattel mortgage on 67 of his TPU buses in favor of the Government. The records show that
petitioner was able to pay only the amount of P17,929.40 on different dates, and as it was disclosed in a report of
an examiner of the Bureau of Internal Revenue dated May 31, 1952, that of the 67 auto buses mortgaged, only 47
units were in actual operation, a supplementary chattel mortgage covering 20 buses more was executed by
petitioner on July 12, 1952, but same was disapproved by the Public Service Commission and the Collector of
Internal Revenue. n account of petitioner's failure to comply with the terms and conditions of the mortgage, the
respondent Collector of Internal Revenue issued on September 27, 1952, warrants of distraint and levy covering
the taxpayer's properties in Aparri, Cagayan; Bangued, Abra; San Fernando, La Union; and Vigan, Ilocos Sur,
and on January 26, 1953, another warrant was issued by respondent but was not executed because no property
belonging to petitioner could be found in Manila.

ISSUE: Whether the taxpayer is estopped from questioning the issue of prescription?

RULING: YES. By virtue of the chattel mortgage executed by the petitioner in favor of the Government to
guarantee the payment of the tax liabilities itemized in the assessment, petitioner in fact acknowledged the
existence of the tax liabilities and assumed the obligation to settle the same. Although the percentage taxes
assessed may have been extinguished by prescription on account of the mandate of sections 331 and 332 of the
Tax Code, yet petitioner's obligation to pay the same, as well as other tax deficiencies, was acknowledged by
means of the chattel mortgage, an act which amounts to a .renewal of the obligation or a waiver of the benefit
granted him by law, and he is estopped from raising the question of prescription after having waived such defense
by the execution of said mortgage.

TAX12.27 Sambrano v. CTA

FACTS: On February 23, 1950, Santiago Sambrano, the owner and operator of a fleet of passenger and freight
trucks with lines between Manila and the northern provinces of Luzon, received from the Collector of Internal
Revenue a demand for the payment of his income tax liabilities. As early as January 29, 1951, petitioner already
signified his intention to file a surety bond to guarantee the payment of his tax liability and on May 3,
1951, executed a chattel mortgage on 67 of his TPU buses in favor of the Government. The records show that
petitioner was able to pay only the amount of P17,929.40 on different dates, and as it was disclosed in a report of
an examiner of the Bureau of Internal Revenue dated May 31, 1952, that of the 67 auto buses mortgaged, only 47
units were in actual operation, a supplementary chattel mortgage covering 20 buses more was executed by
petitioner on July 12, 1952, but same was disapproved by the Public Service Commission and the Collector of
Internal Revenue. n account of petitioner's failure to comply with the terms and conditions of the mortgage, the
respondent Collector of Internal Revenue issued on September 27, 1952, warrants of distraint and levy covering
the taxpayer's properties in Aparri, Cagayan; Bangued, Abra; San Fernando, La Union; and Vigan, Ilocos Sur,
and on January 26, 1953, another warrant was issued by respondent but was not executed because no property
belonging to petitioner could be found in Manila.

ISSUE: Whether the taxpayer is estopped from questioning the issue of prescription?

RULING: YES. By virtue of the chattel mortgage executed by the petitioner in favor of the Government to
guarantee the payment of the tax liabilities itemized in the assessment, petitioner in fact acknowledged the
existence of the tax liabilities and assumed the obligation to settle the same. Although the percentage taxes
assessed may have been extinguished by prescription on account of the mandate of sections 331 and 332 of the
Tax Code, yet petitioner's obligation to pay the same, as well as other tax deficiencies, was acknowledged by
means of the chattel mortgage, an act which amounts to a .renewal of the obligation or a waiver of the benefit
granted him by law, and he is estopped from raising the question of prescription after having waived such defense
by the execution of said mortgage.

TAX12.28 Commissioner v. Wyeth Suaco Laboratories

] FACTS: Private respondent Wyeth Suaco Laboratories, Inc. (Wyeth Suaco for brevity) is a domestic corporation
engaged in the manufacture and sale of assorted pharmaceutical and nutritional products. By virtue of Letter of
Authority No. 52415 dated June 17, 1974 issued by then Commissioner of Internal Revenue Misael P. Vera,
Revenue Examiner Dante Kabigting conducted an investigation and examination of the books of accounts of
Wyeth Suaco. The report concluded that Wyeth allegedly failed to remit withholding tax. Consequently, the
Bureau of Internal Revenue assessed Wyeth Suaco on the aforesaid tax liabilities in two (2) notices dated
December 16, 1974 and December 17, 1974. These assessment notices were both received by Wyeth Suaco on
December 19, 1974. 4

Thereafter, Wyeth protested the assessments and requesting their cancellation or withdrawal on the ground that
said assessments lacked factual or legal basis. Wyeth Suaco argued that it was not liable to pay withholding tax
at source on the accrued royalties and dividends because they have yet to be remitted or paid abroad. It claimed
that it was not able to remit the balance of fifty percent (50%) of the accrued royalties to its foreign licensors
because of Central Bank Circular No. 289 allowing remittance of royalties up to fifty percent (50%) only. Thus,
Wyeth Suaco's contention was that a withholding tax at source on royalties and dividends becomes due and
payable only upon their actual payment or remittance.

the Commissioner of Internal Revenue asked Wyeth Suaco to avail itself of the compromise settlement under LOI
308. In its answer, Wyeth Suaco manifested its conformity to a 10% compromise provided it be applied only to
the basic sales tax, excluding surcharge and interest. As to the deficiency withholding tax at source, Wyeth took
exception on the ground that it involves purely a legal question and some of the amounts included in the
assessment have already bee paid. petitioner, thru then acting Commissioner of Internal Revenue rendered a
decision reducing the assessment of the withholding tax at source for 1973 to P1,973,112.86.
Thereafter, Wyeth Suaco filed a petition for review in Court of Tax Appeals on January 18, 1980, praying that
petitioner be enjoined from enforcing the assessments by reason of prescription and that the assessments be
declared null for lack of legal and factual basis.

The Court of Tax Appeals rendered a decision enjoining the CIR from collecting the deficiency taxes, the
dispositive portion as statin that while the assessments for the deficiency taxes were made within the five-year
period of limitation, the right of petitioner to collect the same has already prescribed, in accordance with Section
319 (c) of the Tax Code of 1977. The said law provides that an assessment of any internal revenue tax within the
five-year period of limitation may be collected by distraint or levy or by a proceeding in court, but only if begun
within five (5) years after the assessment of the tax.

ISSUE: Is the Petitioner enjoined from collecting the deficiency tax by virtue of the five year prescription stated
by law?

RULING: Settled is the rule that the prescriptive period provided by law to make a collection by distraint or levy
or by a proceeding in court is interrupted once a taxpayer requests for reinvestigation or reconsideration of the
assessment. Next question to consider is, did wyeth suaco ask for a reconsideration or reinvestigation of the
assessment? Although the protest letters prepared by SGV & Co. in behalf of private respondent did not
categorically state or use the words "reinvestigation" and "reconsideration," the same are to be treated as letters
of reinvestigation and reconsideration. These letters of Wyeth Suaco interrupted the running of the five-year
prescriptive period to collect the deficiency taxes. Upon receiving these letters CIR reinvestigated the assessments
made. This period started to run again when the Bureau of Internal Revenue served the final assessment to Wyeth
Suaco on January 2, 1980 then, only about four (4) months of the five-year prescriptive period was used.