G.R. No. L-21483 April 28, 1969
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. THE COURT OF TAX APPEALS, HON. MARIANO NABLE, Presiding Judge, HON. AUGUSTO M. LUCIANO, HON. ROMAN M. UMALI, Associate Judges and VICENTE KHO alias TAN SE CHIONG, respondents.

FACTS

On October 20, 1952, the Commissioner of Internal Revenue (then Collector) sent a letter of demand to respondent Vicente Kho for deficiency income tax for 1951 amounting to P1,128,444.00, with an accompanying assessment notice dated November 5, 1952. These were not effectively served initially as Kho had moved without the BIR’s knowledge. However, Kho obtained personal knowledge of the assessment, as evidenced by his retention of tax consultant Juan G. Maniego in January 1953, who wrote the BIR disputing the assessment and requesting an amicable settlement. Through counsel, Kho requested and was granted extensions of time to reply to the assessment. On March 28, 1953, his counsel sent a reply stating the seized books and records did not belong to Kho. On April 29, 1953, the Deputy Commissioner wrote Kho’s counsel advising that without documentary proof, the BIR could not reconsider its decision holding Kho liable. On July 7, 1953, Kho’s counsel reiterated the same contention. Kho personally received the letter of demand and assessment notice on January 25, 1954. Subsequently, through various lawyers, Kho made offers to compromise and requests for reinvestigation, which were denied. On August 25, 1962, Kho filed a petition for review with the Court of Tax Appeals (CTA) seeking reversal of the deficiency assessment. The Commissioner moved to dismiss the case on the ground that the appeal was filed out of time. The CTA denied the motion to dismiss, stating the records were not clear on timeliness. The Commissioner’s motion for reconsideration was also denied.

ISSUE

Whether or not the respondent Court of Tax Appeals gravely abused its discretion in not dismissing CTA Case No. 1264 for having been filed out of time.

RULING

Yes, the Court of Tax Appeals gravely abused its discretion. The Supreme Court granted the petition, set aside the CTA’s orders, and enjoined the CTA from taking cognizance of the case. The letter of the BIR Commissioner dated October 20, 1952 constituted the appealable decision. The 30-day period to appeal commenced from Kho’s receipt of this decision on January 25, 1954. The letter of the Deputy Commissioner dated April 29, 1953, which stated the BIR could not reconsider its decision due to lack of documentary proof, constituted the order denying Kho’s motion for reconsideration. With the enactment of Republic Act No. 1125 creating the CTA, which took effect on June 16, 1954, and was formally organized on July 21, 1954, Kho had until August 21, 1954, to perfect his appeal. Kho filed his petition only on August 25, 1962, which was clearly filed out of time. Consequently, the CTA had no jurisdiction to try and decide the case.