GR L 16705; (October, 1962) (Digest)
G.R. No. L-16705; October 30, 1962
ANTONIO E. QUEROL, petitioner, vs. COLLECTOR OF INTERNAL REVENUE, respondent.
FACTS
Petitioner Antonio Querol filed his income tax return for 1947 on February 28, 1948. In 1951, the Collector of Internal Revenue issued an assessment notice disallowing P9,004.22 claimed by Querol as a deductible repair expense for his house. Querol requested reconsideration via letters dated December 14, 1951 and May 25, 1953, arguing the expenses did not increase the property’s value. Following a reinvestigation, the Collector issued a revised assessment on February 9, 1955, computing a deficiency tax of P753.51 for 1947. After subsequent collection attempts, including a warrant of distraint and levy declared void by the Court of Tax Appeals (CTA) due to prescription of summary collection, Querol filed an amended petition. The CTA ultimately upheld the revised assessment’s validity, leading Querol to appeal to the Supreme Court.
ISSUE
Whether the right of the Collector to collect the deficiency income tax for the year 1947 had prescribed.
RULING
The Supreme Court affirmed the CTA decision, ruling that the action for collection had not prescribed. The legal logic centers on the interruption and computation of the prescriptive period. The Court found that an initial, timely assessment was made in 1951, as evidenced by Querol’s own December 1951 letter referencing “income tax assessment notice No. 24-A-36-51/47” and requesting its reconsideration. This initial assessment was issued within the five-year prescriptive period from the filing of the 1947 return.
Crucially, Querol’s requests for reconsideration suspended the running of the prescriptive period. The period from his first request in December 1951 until the issuance of the revised assessment in February 1955 is excluded from the total prescriptive count. The revised assessment was a direct result of the reinvestigation undertaken at the taxpayer’s instance. Following jurisprudence, the five-year period for filing a judicial action for collection commences anew from the date of such revised assessment. The judicial action in this case is deemed to have been initiated when the Collector, in his April 1959 answer to the amended petition, sought payment of the tax. This was within five years from the February 1955 revised assessment. The Court emphasized that prescription is an affirmative defense, and the burden lies with the taxpayer to prove its completion, which Querol failed to do.