BIR Ruling

July 17, 1975 Ist Indorsement Returned to the Regional Director, Revenue Region No. 4-B, Quezon City, the within docket bearing on the internal revenue case of the estate of the deceased BERNARDO S. ROJAS, who died on August 5, 1968, involving the total amount of P671,792.87 as deficiency estate and inheritance taxes due on the transmission of the said estate. The case is now the subject of Special Proceedings No. N-1190, Court of First Instance of Cavite, Branch 11. cdta The records of this case show that on May 18, 1972, assessment were issued by this Office demanding payment of the amounts of P570,063.94 and P585,431.82 as deficiency estate and inheritance taxes, respectively, or a total of P1,155,495.76. Subsequently, on August 5, 1974, a proof of claim was filed by this Office in the aforesaid special proceedings. Thereafter, after further investigation, this Office issued amended assessments of January 16, 1975 demanding payment of the amounts of P411,657.02 and P260,135.85 as deficiency estate and inheritance taxes, respectively, or a total of P671,792.87. Said amended assessment superseded the original assessment issued by this Office on May 18, 1972. It appears also that as certified to by the Tax Amnesty Implementation Officer, the estate of the deceased availed of the tax amnesty under Presidential Decree No. 631 (File No. 32-1-0600143-631). The issue to be resolved is whether the foregoing amended assessment issued on January 16, 1975 still subsists despite the availment of the amnesty under Presidential Decree No. 631 which took effect on January 6, 1975. The resolution of this issue revolves on the interpretation of the pertinent provisions of Presidential Decree No. 631 quoted as: "Section 2. The provisions of this Decree shall apply to untaxed income and/or wealth, received, or acquired in 1973 and prior years, except the following: "xxx xxx xxx "b. Tax Liabilities with assessment notices issued on or before the effectivity of this Decree. "xxx xxx xxx" The pertinent provisions of Revenue Regulations No. 1-75 dated January 9, 1975 implementing Section 2(b) of Presidential Decree No. 631 provides: "SEC. 4. Cases not covered by amnesty . The following cases are not covered by the amnesty, subject of these regulations: "xxx xxx xxx b. Tax liabilities with assessment notices issued on or before January 6, 1975: "xxx xxx xxx. As heretofore stated, the original assessment in this case were issued on May 18, 1972. Such being the case, under the foregoing provisions of Presidential Decree No. 631 and its implementing regulations, it is clear that the instant case is not covered by the amnesty provided therein, since this case involves "tax liabilities with assessment notices issued . . . before January 6, 1975." In other words, the original assessment were the same assessment existing as of January 6, 1975 and, therefore, the case is not covered by amnesty. The fact that the assessment were reduced by the issuance of amended assessment on January 16, 1975, or after the effectivity of Presidential Decree No. 631 on January 6, 1975, did not change the result in the sense that the case should now be covered by the amnesty prescribed therein. This is so far the reason that, if the assessments were not reduced and the original assessments were reiterated, there would have been no room for doubt that the case is not covered by the amnesty. Consequently, if the assessments were reduced which is favorable to the taxpayer, that would not have any effect of the amnesty availed of by the taxpayer. In view thereof, this Office is of the opinion, as it hereby holds, that the assessment issued on January 16, 1975 against the estate of the deceased Bernardo S. Rojas in the total amount of P671,792.87 as deficiency estate and inheritance taxes still subsists despite the availment of the amnesty under Presidential Decree No. 631. cdaisa Be guided accordingly. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5