Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-12996            December 28, 1961

REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,
vs.
ANTONIO ALBERT, defendant-appellant.

Leido, Andrada, Perez and Associates for defend-appellant.
Office of the Solicitor General for plaintiff-appellee.


DIZON, J.:

This is an appeal taken by Antonio Albert from the decision of the Court of First Instance of Manila sentencing him to pay the Republic of the Philippines the sum of P6,889.00 as deficiency income tax for the year 1951, with 5% surcharge, and 1% monthly interest thereon from October 16, 1953 until full payment, plus costs.

On February 28, 1952, appellant filed his income tax return for the calendar year 1951. After examination and audit thereof by the personnel of the Bureau of Internal Revenue, a deficiency tax for said year was found due from appellant in the amount of P6,889.00 computed as follows:

1951Amount
Net Income per ReturnP32,247.23
Add:
Undeclared dividends — Atok453.60
Education trip expense disallowed18,852.24
Disallowance of excess of contribution per
Office Audit ............................................ P5,118.92
Adjustment .............................................. 1,158.333,960.58
Net Income per investigation
P55,513.65
Less: Personal & Additional exemptions6,600.00
Net Taxable Income
P48,913.65
Tax due thereonP13,785.46
Less: Tax already paid6,896.00
Deficiency tax
P6,889.46

On August 31, 1953, the Bureau of Internal Revenue issued and caused to be served on appellant the corresponding Income Tax Assessment Notice No. 43-AR-4429-53/51 (Exhibit C) requiring him to pay the sum aforesaid on or before October 15, 1953. Thereupon appellant, through his counsel, filed a letter of protest (Exhibit D) with the Bureau, but the same was overruled on June 21, 1955 (Exhibit E).

The above-mentioned income tax deficiency was due to: (1) the inclusion — as taxable income — of the sum of P453.60 received as dividend from the Atok-Goldfield Mining Co. for the year 1951, which appellant failed to include in his return; (2) the disallowance of the amount of P18,552.24 claimed by appellant as a deductible item because it was spent in attending technical international conferences abroad in representation of the Government and of the University of the Philippines; and (3) the reduction of the charitable contributions claimed by him as a deductible item from P7,500.00 to P3,960.58. Of these disallowed items appellant disputed only the second.

On February 4, 1957, an action to recover the deficiency tax above mentioned, with 5% surcharge, and 1% monthly interest thereon from October 16, 1953 to the date of full payment, was filed by the Republic of the Philippines against appellant.

In his answer to the complaint, appellant alleged that the disallowance by the Bureau of Internal Revenue of the amount of P18,852.24, which he had claimed as a deduction in his income tax return for the year 1951, was wrong because said amount was a legitimate and deductible business expense, the same having been incurred by him in 1951 in attending technical international conferences held abroad as a duly appointed representative of the Republic of the Philippines and of the University of the Philippines.lawphil.net

After due trial the lower court tendered the appealed decision on the ground principally that appellant was already estopped from questioning the assessment which had become final and executory because he did not appeal therefrom to the Court of Tax Appeals.

The facts involved in the present case are very similar to, if not on all fours with those involved in the case of Republic of the Philippines vs. Enrique Magalona, Jr., et al., G.R. No. L-15802, promulgated on September 30, 1960, where we held that upon the facts before the Court, the income tax assessment in question therein was a final assessment of the income tax liability of the Magalonas for the calendar year 1950; that they had 30 days to dispute said assessment by appealing to the Court of Tax Appeals in accordance with the provisions of Section 11, Republic Act No. 1125; that having failed to do so, the assessment became final, executory and demandable.

In the present case, therefore, after receiving the denial of his protest (Exhibit D) against the deficiency tax assessment made against him, appellant should have appealed therefrom within 30 days from June 21, 1955, his failure to do so having caused said assessment to become final, executory and demandable. Therefore, when on February 4, 1957 the action for collection was commenced, appellant was already barred from invoking any defense that would reopen the question of his tax liability on the merits. In this connection we quote with approval the pertinent portion of the decision of the lower court:

As it is really true that any person who is aggrieved by an assessment issued by the Collector of Internal Revenue is given only 30 days to appeal therefrom to the Court of Tax Appeals, the only effect should be that after that period should have expired that assessment can no longer be questioned by the taxpayer; and if this is the case as a necessary corollary, if afterwards the Government comes in and presents an action for the collection of the tax under the assessment, to permit the taxpayer in the case presented by the Government to question the assessment would have no other effect than to nullify the finality of the assessment made by the Bureau of Internal Revenue, notwithstanding that it had already become final under the provisions of Act 1125 in its sec. 11; and the Court cannot construe the law to result in that absurdity.

In view of the conclusion we have reached, we deem it unnecessary to decide the other questions raised in appellant's brief.

WHEREFORE, the appealed decision is hereby affirmed, with costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and De Leon, JJ., concur.


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