BPI vs. CIR

G.R. No. 174942             March 7, 2008

BANK OF THE PHILIPPINE ISLANDS (Formerly: Far East Bank and Trust Company), petitioner,

vs.

COMMISSIONER OF INTERNAL REVENUE, respondent.

FACTS:

Respondent thru then Revenue Service Chief Valdez, issued to the petitioner a pre-assessment notice (PAN). Petitioner, in a letter requested for the details of the amounts alleged as deficiency taxes mentioned in the PAN.

Respondent issued to the petitioner, assessment/demand notices for deficiency withholding tax at source (Swap Transactions) and DST involving the for the years 1982 to 1986.

The etitioner filed a protest on the demand/assessment notices. Thereafter petitioner filed a supplemental protest. Also, petitioner requested for an opportunity to present or submit additional documentation in connection with the reinvestigation of the abovementioned assessment, petitioner submitted to the BIR, Swap Contracts with the Central Bank.

Petitioner executed several Waivers of the Statutes of Limitations, the last of which was effective until December 31, 1994.

Then, respondent issued a final decision on petitioner’s protest, the deficiency DST assessment was reiterated and the petitioner was ordered to pay the said amount within thirty (30) days from receipt of such order. 

Thereafter, petitioner filed a Petition for Review before the Court. The Court rendered a Decision denying the petitioner’s Petition for Review.

ISSUE:

Whether the prescriptive period for collecting the tax deficiency was effectively tolled by BPI’s filing of the protest letters. (request for reinvestigation).

RULING:

NO.

Sec. 320. Suspension of running of statute. xxx. One of which is when the taxpayer requests for a re-investigation which is granted by the Commissioner; 

The above section is plainly worded. In order to suspend the running of the prescriptive periods for assessment and collection, the request for reinvestigation must be granted by the CIR.

The act of requesting a reinvestigation alone does not suspend the period. The request should first be granted, in order to effect suspension.

Such grant may be expressed in its communications with the taxpayer or implied from the action of the CIR or his authorized representative in response to the request for reinvestigation.

In the case at bar, there is nothing in the records of this case which indicates, expressly or impliedly, that the CIR had granted the request for reinvestigation filed by BPI. What is reflected in the records is the piercing silence and inaction of the CIR on the request for reinvestigation, as he considered BPI’s letters of protest to be.