BPI vs.
CIR invalidated because of the statute of limitations on the collection
which has already expired pursuant to Sec. 1, Rule 9 of the Rules of
G.R. No. 181836. July 9, 2014 Court and BPI vs. CIR (510 Phil. 1; 473 SCRA 205 (2005)).
Ponente: Carpio, J. Issue(s): WON action of CIR has already prescribed
Facts: Held: YES.
Petitioner (BPI) is a commercial banking corporation organized and Ratio:
existing under Philippine laws.
On May 19, 1989, respondent CIR issued an assessment to BPI Sec. 1, Rule 9 of the Rules of Court
finding the latter liable for deficiency DST on its sales of foreign bills Section 1. Defenses and objections not pleaded. - Defenses and
of exchange to the Central Bank totaling Php1.2 million. objections not pleaded either in a motion to dismiss or in the
On June 16, 1989, BPI received such assessment notice and demand answer are deemed waived. However, when it appears from the
letter. pleadings or the evidence on record that the court has no
On June 23, 1989, BPI filed a protest requesting for the jurisdiction over the subject matter, that there is another action
reinvestigation or reconsideration of the assessment for lack of legal pending between the same parties for the same cause, or that the
and factual bases. It alleged that it shouldn’t be liable because: action is barred by prior judgment or by the statute of limitations,
a. Based on recognized business practice incorporated in the the court shall dismiss the claim.
Bankers Association of the Philippines Foreign Exchange Trading To determine prescription, what is essential only is that the facts
Center Rule 2€, DST was for the account of the buyer; demonstrating the lapse of the prescriptive period were sufficiently
b. BIR Ruling No. 135-87 stated that neither the tax-exempt entity and satisfactorily apparent on the record either in the allegations of
nor the other party shall be liable for the payment of DST before BPI’s complaint, or otherwise established by the evidence. Under
PD1994; the then applicable Section 319(c) [now, 222(c)] of the 1977 NIRC,
c. Since the then law left the tax to be paid indifferently by either any internal revenue tax which has been assessed within the period
party and the party liable was exempt, the document was of limitation may be collected by distraint or levy, and/or court
exempt from DST; and proceeding within three years following the assessment of the tax.
d. The assessed DST was the same assessment made by the BIR for The assessment of the tax is deemed made and the three-year
DST swap transaction covering the taxable years 1982-1986. period for collection of the assessed tax begins to run on the date
On Aug. 4, 1998, CIR Beethoven L. Rualo denied the request of BPI. the assessment notice had been released, mailed or sent by the BIR
It held that BPI’s arguments were untenable. It cited BIR to the taxpayer.
Unnumbered ruling dated May 30, 1977 and BIR Ruling no. 144-84 In this case, although there was no allegation as to when the
dated Sept. 3, 1984, where liability to pay DST was shifted to the assessment notice had been released, mailed or sent to BPI, still,
other party, who was not exempt from the tax. the latest date that the BIR could have released, mailed or sent the
CTA reverses, thus, rules in favor of BPI. It ordered the cancellation assessment notice was on the date BPI received the same on June
of the assessed DST as neither BPI nor Central Bank could be liable. 16, 1989. Counting the 3-year prescriptive period from June 16,
PD 1994 took effect in 1986, there was no law that shifted the 1989, the BIR had until June 15, 1992 to collect the assessed DST.
liability to the other party, in case the party liable to pay was tax But despite the expiration, there was no warrant of distraint or levy
exempt. served on BPI’s properties, or any judicial proceedings initiated by
CA reverses CTA ruling, rules in favor of the CIR. However, the CA the BIR.
3rd Division found that the assailed assessment DST may be
BIR’s earliest attempt to collect was when it filed its answer in the Even if there is this distinction, Article 224 of the 1977 NIRC requires
CTA on Feb. 23, 1999, which was several years beyond the 3-year that the request for reinvestigation has first to be been granted by
prescriptive period. However, the BIR’s answer in the CTA was not the CIR to suspend the running of the prescriptive periods for
the collection case contemplated by the law. Before 2004 or the assessment and collection. In this case, no showing CIR granted such
year R.A. 9282 took effect, the judicial action to collect internal request. CIR only even responded to BPI on Aug. 4, 1998 or after 9
revenue taxes fell under the jurisdiction of the RTCs, and not the years from the protest of BPI.
CTA. Thus, action has already prescribed.
However, BPI argued that the running of the prescriptive period to
collect the tax was suspended by BPI’s filing of a request for the
reinvestigation or reconsideration on June 23, 1989.
The Supreme Court countered it by giving out the distinction
between a request for reconsideration and for reinvestigation. R.R.
No. 12-85, issued on Nov. 27, 1985:
a. Request for reconsideration – refers to a plea for a re-
evaluation of an assessment on the basis of existing records
without need of additional evidence. It may involve both a
question of fact or of law or both;
b. Request for reinvestigation – refers to a plea for re-evaluation
of an assessment on the basis of newly-discovered or additional
evidence that a taxpayer intends to present in the
reinvestigation. It may also involve a question of fact or law or
both.
In this case, the protested Assessment was based on a question of
law, whether or not petitioner BPI was liable for DST on its sales of
foreign currency to the Central Bank in taxable year 1985. The same
protest letter did not raise any question of fact; neither did it offer
to present any new evidence. In its own letter to BPI, the BIR itself
referred to the protest of BPI as a request for reconsideration.
These considerations would lead to mean that the protest of BPI
was in the nature of a request for reconsideration, and
consequently, Sec. 224 of the 1977 NIRC, on the suspension of the
running of the statute of limitations should not apply.
