GR L 20477; (March, 1968) (Digest)
G.R. No. L-20477 March 29, 1968
Republic of the Philippines, plaintiff-appellant, vs. Felix B. Acebedo, defendant-appellee.
FACTS
This is a suit for collection of a deficiency income tax for the year 1948 in the amount of P5,962.83. The corresponding notice of assessment was issued on September 24, 1949. The complaint was filed on December 27, 1961. The defendant moved to dismiss on the ground of prescription. The trial court dismissed the complaint, and the plaintiff appealed.
ISSUE
Whether the action for collection of the deficiency income tax had already prescribed.
RULING
Yes, the action had prescribed. The governing statute is Section 332(c) of the National Internal Revenue Code, which provides that after an assessment, the tax may be collected by a court proceeding only if begun within five years after the assessment, or prior to the expiration of any written collection period agreed upon before the expiration of that five-year period. The assessment was made in 1949, but the suit was filed only in 1961, well beyond the five-year period. The only written waiver (Exhibit U) was executed by the defendant on December 17, 1959, which was ineffective because it was executed beyond the original five-year limitation period. The plaintiff contended that the defendant’s various requests for reinvestigation suspended the prescription. The Court ruled that a mere request for reinvestigation or reconsideration does not suspend the running of the period; such suspension requires a written agreement within the original period. While estoppel may sometimes prevent a taxpayer from claiming prescription due to repeated requests or acts that persuaded the government to postpone collection, in this case, the defendant’s initial requests (October 11, 1949, and October 6, 1951) were unheeded, and the Collector did not act until October 4, 1955—a date already beyond the five-year period from the 1949 assessment. By then, prescription had already set in, making subsequent events, including the 1959 waiver, immaterial. The order of dismissal was affirmed.