BIR Ruling

September 4, 1996 Angara, Abello, Concepcion Regala & Cruz Law Offices 5th Floor, ACCRA Building 122 Gamboa St. Legaspi Village Makati, Metro Manila Attention: Justice Efren I . Plana This refers to your protest filed on behalf of your client, Atty. Armando Q. Ongsioco, against the 1981 deficiency income tax assessment involving the amount of P244,933.31 inclusive of surcharges and interest covered by Assessment No. 34-01-45-052365-81 dated August 15, 1986. In reply, please be informed that after a careful review of the facts of the case and the laws applicable thereto, this Office is of the opinion that the Tax Amnesty Availment of your client under E.O. 41 is valid. Accordingly, the said deficiency income tax assessment is hereby cancelled, and this case considered closed and terminated. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue September 4, 1996 MEMORANDUM FOR: The Commissioner This refers to the revenue tax case of Atty. Armando Q. Ongsioco, involving the amount of P244,933.31 as deficiency income tax assessment for the year 1981 inclusive of surcharges and interest under Assessment No. 34-01-45-052365-81 dated August 15, 1986. cdt STATEMENT OF FACTS Records disclosed that on August 15, 1986, this Office issued against Atty. Ongsioco a deficiency income tax assessment under Assessment No. 34-01-45-052365-81 dated August 15, 1986, that on November 4, 1986, Atty. Ongsioco availed of the income tax amnesty for the years 1981 to 1985 under E.O. 41 as extended by E.O. 54; that on November 3, 1987, this Office, thru the Assistant Commissioner for Collection, informed Atty. Ongsioco that his availment of the said amnesty did not relieve him of his tax liabilities, pursuant to RMC No. 31-86 and RMO 4-87 which both provided that only assessments issued after August 21, 1986 may be abated by amnesty under E.O. 41. DISCUSSION The issue of Tax Amnesty availment under E.O. 41 has been settled by the Supreme Court with finality in the case of Commissioner of Internal Revenue vs. Court of Appeals, R.O.H. Auto Products, Inc., and CTA GR. No. 108358, dated January 20, 1995. It ruled that the BIR cannot vary or override the clear mandate of E.O. 41 in the guise of issuing administrative rules and regulations. In very clear terms, the Supreme Court ruled in favor of the taxpayer R.O.H. Auto Products, Inc.. Thus: "The authority of the Minister of Finance (now the Secretary of Finance), in conjunction with the Commissioner of Internal Revenue, to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be controverted. Neither can it be disputed that such rules and regulations, as well as administrative opinions and rulings, ordinarily should deserve weight and respect by the courts. Much more fundamental than either of the above, however, is that all such issuances must not override, but must remain consistent and in harmony with, the law they seek to apply and implement. Administrative rules and regulation are intended to carry out, neither to supplant nor to modify, the law. xxx xxx xxx If, as the Commissioner argues, Executive Order No. 41 had not been intended to include 1981 to 1985 tax liabilities already assessed (administratively) prior to 22 August 1986, the law could have simply so provided in its exclusionary clauses. It did not The conclusion is unavoidable, and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it . CONCLUSION AND RECOMMENDATION In view of the foregoing, since Atty. Ongsioco availed of the income tax amnesty under E.O. 41, as evidenced by Payment Order No. B9213566 and Confirmation Receipt No. B10143761, and is not one among those listed as disqualified to avail of the said amnesty, it is respectfully recommended that the above deficiency income tax be cancelled and this case be considered closed and terminated. LLjur Respectfully Submitted: (SGD.) RODULFO L. SALAZAR Chief, Appellate Division I CONCUR: (SGD.) ALICIA P. CLEMENO Assistant Commissioner Legal Service Recommendation-APPROVED: (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue