BIR Ruling

August 12, 1975 11th Indorsement Returned to the Regional Director, Revenue Region No. 1, Baguio City, the within papers bearing on the forfeited properties of the late Lazaro Bugtong which properties are to be disposed of by private sale in favor of Mr. Resurrecsion Pataray of Banglas, Abra, pursuant to Section 329 of the Tax Code, which provides: "SEC. 329. Resale of real estate taken for taxes . The Commissioner of Internal Revenue shall have charge of any real estate obtained by the Government of the Philippines in payment or satisfaction of taxes, penalties, or costs arising under this Code or in compromise of adjustment of any claim therefor; and said Commissioner may upon the giving of not less than twenty days notice sell and dispose of the same at public auction, or, with the prior approval of the Department Head, may dispose of the same of private sale. In either case the proceeds of the sale shall be deposited in the National Treasury, and in account of the same shall be rendered to the Auditor General." Section 14 of Revenue Regulation No. 3-69 dated April 21, 1969, implementing the foregoing provisions of the Tax Code, provides: "Section 14. Custody and disposal of forfeited properties . The Revenue Regional Director under whose jurisdiction the real property absolutely forfeited is located shall have charge thereof and shall administer the same, gather its civil fruits and remit the proceeds thereof to the National Treasury, and account the same to the Commissioner of Internal Revenue in a monthly report which should be submitted by him not latter than the fifth day following the close of the month. "Upon giving not less than twenty (20) day's notice, the Revenue Regional Director MAY SELL AND DISPOSE any real estate absolutely FORFEITED UNDER HIS CUSTODY AT PUBLIC auction, or, with the prior approval of the Secretary of Finance, may dispose of the same at private sale . The proceeds of the sale shall be deposited with the National Treasury and an accounting of the same shall be rendered to the Commissioner of Internal Revenue and the Auditor General. (Emphasis our) In the instant, case, it appears that, upon prior recommendation of this Office, the proposed disposition by private sale in favor of Mr. Pataray has already been approved by the Secretary of Finance, in his 5th Indorsement dated October 23, 1974. Such being the case, in line with the foregoing provisions of law and regulations, he (the Regional Director) may dispose of the forfeited property in question at private sale, by executing the corresponding Deed of Sale in favor of the prospective buyers, without any need for prior approval of this Office and the Department of Finance, as manifested in the attached Deed of Sale executed by the Assistant Regional Director of that Office. However, said Deed of Sale should provide that "This conveyance has been approved by the Secretary of Finance, pursuant to Section 329 of the National Internal Revenue Code." As to whether the Assistant Regional Director of that Office can execute the Deed of Sale, attention is invited to the fact that under the above-quoted provisions of the regulations, the Commissioner has delegated to the Regional Director his authority under Section 329 of the Tax Code to resell forfeited properties. The latter, therefore, cannot delegate said authority without being authorized to do so. Of course, in urgent cases and only in the absence of the Regional Director, the Assistant Regional Director may execute the Deed of Sale. (See Revenue Administrative Order No. 1-65). In such case, the latter executed the document, in the absence of the Regional Director, and not in his capacity as Chairman, Regional Committee on Forfeited Properties. Finally, the Deed of Sale should be acknowledged before a Notary Public and not before the Chief, Legal Branch of that Office, unless he is also a Notary Public. casia Be guided accordingly. (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN 1182-568-4