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Philippine Journalists Inc. v CIR

G.R No. 162852 December 15, 2004

Facts

:The Revenue District Office of the BIR issued a letter of authority forthe examination of petitioner

Philippine Journalists books of accounts. From theexamination, the petitioner was told that there were

deficiency taxes, inclusiveof surcharges, interest and compromise penalty. Then, petitioner, through

itsComptroller, Lorenza Tolentino, executed a waiver of statute of limitationspursuant to Sec.223 and

Sec.224 and consented to the assessment andcollection of taxes which may be found due after the

examination at any timeafter the lapse of the period of limitations fixed by said Sections 223 and

224and other relevant provisions of the NIRC, until the completion of theinvestigation.Petitioner had a

deficiency of P136,952,408.97. On October 5, 1998, theAssessment Division of the BIR issued Pre-

Assessment Notices which informedpetitioner of the results of the investigation. A Final Notice Before

Seizure wassent to the petitioner but the latter merely questioned the amount of thedeficiency and how

the same was arrived.A Warrant of Distraint/Levy was received by petitioner for the

deficiency.Petitioner filed a Petition for Review with the CTA, contending that noassessment was

received by him; that the warrant of distraint/levy was issuedprematurely; and that the assessment was

made beyond the 3-year period.Regarding the assessment, the CTA ruled that the assessment was

sufficientlyproven by the receipts of the Post Master. As to the premature distraint/levy andthe

assessment made beyond the 3-year period, the CTA ruled in favor of thepetitioner. The waiver of

statute of limitations by the petitioner was invalidwhich resulted in the lapse of the 3 year period for

assessment. Consequently,the petition was granted, declaring the order for payment of deficiency tax

nulland void. The CIR filed a motion for reconsideration but the same was denied.Undaunted, the CIR

filed an appeal with the CA. The CA reversed the ruling of the CTA, stating that the waiver of limitations

was valid and that the assessmentnotices was final and executory. Hence, this appeal.

Issue

: Whether or not the waiver of limitations was invalid, making theassessment beyond the 3 year period?

Held:

Yes, the court ruled that the waiver of limitation was invalid, makingthe assessment beyond the

allowable period of 3 years.

The waiver of thestatute of limitations is not a waiver of the right to invoke the defense of prescription

as erroneously held by the Court of Appeals. It is an agreementbetween the taxpayer and the BIR that

the period to issue an assessment andcollect the taxes due is extended to a date certain. The waiver

does not meanthat the taxpayer relinquishes the right to invoke prescription unequivocallyparticularly

where the language of the document is equivocal. For the purposeof safeguarding taxpayers from any

unreasonable examination, investigation orassessment, our tax law provides a statute of limitations in

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the collection of taxes. Thus, the law on prescription, being a remedial measure, should beliberally

construed in order to afford such protection. As a corollary, theexceptions to the law on prescription

should perforce be strictly construed.