G.R. No. L-43690. January 29, 1937.

In re Intestate estate of the deceased Pedro Lim. THE COLLECTOR OF INTERNAL REVENUE, plaintiff-appellee, vs. PATROCINIO LIM DE BAUTISTA, administratrix-appellant.

FACTS

Pedro Lim died intestate on October 6, 1927. Intestate proceedings were instituted on June 5, 1929, and Patrocinio Lim de Bautista was appointed administratrix. Commissioners of claims and appraisal were appointed and, after their six-month commission expired, they belatedly submitted a report on June 16, 1932, appraising the estate’s real properties at P131,400. The court approved this report on June 21, 1932. The administratrix filed the inheritance tax return on July 5, 1932. The Collector of Internal Revenue assessed the tax based on the P131,400 valuation, plus 12% annual interest from April 7, 1928 (six months after death), and a surcharge. The administratrix contested, arguing the valuation was excessive and that interest should not run from 1928.

ISSUE

Whether the lower court correctly: (1) fixed the estate’s value for inheritance tax purposes at P131,400; and (2) charged interest on the tax from April 7, 1928.

RULING

Yes. The Supreme Court affirmed the lower court’s resolution.
(1) On valuation, the court’s order approving the commissioners’ report at P131,400 had become final and res judicata, as it was not appealed. The law (Section 1542, Revised Administrative Code) only provides the assessed value as the minimum for tax purposes, not the mandatory basis.
(2) On interest, under Section 1544 of the Revised Administrative Code, as amended, the tax should have been paid within six months of death (by April 6, 1928). Since the intestate proceeding was instituted only in June 1929, well after this period, delinquency began on April 7, 1928. The administratrix is therefore liable for 12% annual interest from that date until payment.

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