Sunday, February 19, 2012

Dayrit vs. Cruz

Facts: Petitioners are the children of the deceased Spouses Teodoro. Thereafter, the heirs filed separate estate and inheritance tax returns for the estates of the late spouses with the BIR. In 1972, the CIR issued the deficiency estate and inheritance tax assessments. The notice of deficiency assessments was received by Dayrit and she thereafter asked for a reconsideration of the said assessments alleging that the same are contrary to law and not supported by sufficient evidence. 

CIR filed a motion for Allowance of Claim against the estates of spouses Teodoro and for an order of payment of taxes with the CFI praying that petitioner Dayrit be ordered to pay the BIR the sum of 6M. Petitioners filed 2 separate oppositions alleging that the assessments have not become final and executory. 

Respondent Judge issued an order approving the claim of respondent Commissioner and directing the payment of the estate and inheritance taxes. Dissatisfied, petitioners filed an MR, denied. Hence this petition. 

Petitioners contend that CFI Judge acted with GADLEJ in granting the Commissioner's claim for estate and inheritance taxes against the estates of the Teodoro spouses on the ground that due to the pendency of their motion for reconsideration of the deficiency assessments, said tax assessments are not yet final and executory. Petitioners stressed that the absence of a decision on the disputed assessments was a bar against collection of taxes. 

1) Whether or not BIR can claim the deficiency taxes despite pendency of MR. 

2) Whether or not CFI has jurisdiction to grant the claim for estate and inheritance taxes. 

1) Yes. Anent petitioners' claim that the tax assessments against the estates are not yet final, the court finds the claim untenable. In petitioners' MR, they requested the Commissioner for thirty (30) days within which to submit a position paper that would embody their grounds for reconsideration. However, no position paper was ever filed. Such failure to file a position paper may be construed as abandonment of the petitioners' request for reconsideration. 

Petitioners' contention that the absence of a decision on their request for reconsideration of the assessments is a bar to granting the claim for collection is likewise without merit. This Court had occasion to rule that a decision on a request for reinvestigation is not a condition precedent to the filing of an action for collection of taxes already assessed. This Court ruled that "nowhere in the Tax Code is the Collector of Internal Revenue required to rule first on a taxpayer's request for reconsideration before he can go to court for the purpose of collecting the tax assessed. 

From the date of receipt of the copy of the Commissioner's letter for collection, petitioners must contest or dispute the same and, upon a denial thereof, the petitioners have a period of thirty (30) days within which to appeal the case to the Court of Tax Appeals. This they failed to avail of. 

2) Yes. The petitioners' allegation that the CFI lacks jurisdiction over the subject of the case is likewise untenable. The assessments having become final and executory, the CFI properly acquired jurisdiction. Neither is there merit in petitioners' claim that the exclusive jurisdiction of the CTA applies in the case. The aforesaid exclusive jurisdiction of the CTA arises only in cases of disputed tax assessments. As noted earlier, petitioners' letter asking for reconsideration of the questioned assessments cannot be considered as one disputing the assessments because petitioners failed to substantiate their claim that the deficiency assessments are contrary to law. Petitioners asked for a period of thirty (30) days within which to submit their position paper but they failed to submit the same nonetheless. Hence, petitioners' letter for a reconsideration of the assessments is nothing but a mere scrap of paper. 

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