BIR Ruling [DA-125-05]

April 6, 2005 BIR RULING [DA-125-05] Sec. 53; DA-282-2004 Juan M. Keyser Corporation 1625 Oroquieta Street Sta. Cruz, Manila Attention: Ms. Ma. Luisa K. Posadas President Gentlemen : This refers to your letter dated December 1, 2004 requesting for extension of time to file your corporate income tax return for taxable year 2003. Documents submitted to this Office disclosed that some responsible officers of the corporation are withholding some information needed for the preparation of the audited financial statement and it is impossible on your part to file the said income tax return on April 15, 2004; that on May 24, 2004, BIR Ruling No. DA-282-2004 was issued in your favor granting your request for extension of time to file your corporate income tax return; that your case is set for another hearing on February 10, 2005; that a Certification has been issued by Branch 5, First Judicial Region, Regional Trial Court, Baguio City, certifying that Civil Case No. 5793-R is still pending before said Court; and that as a consequence thereof, you are again requesting for extension of time to file the subject corporate income tax return for taxable year 2003. In reply, please be informed that your request for another extension of three (3) months which would be until May 10, 2005 is hereby granted pursuant to Section 53 of the Tax Code and Section 188 of Revenue Regulations No. 2 (BIR Ruling No. 099-87 dated April 7, 1987). However, it should be understood that the interest of 20% per annum imposed under the Tax Code should be added to the total tax due computed from April 15, 2004 until the actual payment is made. The imposition of interest is but a compensation for the delay in paying the tax and the concomitant use by the taxpayer of funds that rightfully should be in the government's hand. The fact that the interest to be charged is made proportionate to the period of delay constitutes the best evidence that such interest is not penal but compensatory. cHSIDa It should be understood, however, that if you fail to comply or file the 2004 income tax return and pay the corresponding tax plus interest due thereon within the extended period, this Office would be constrained to impose interest, surcharge and penalty for the late payment, which is considered, as a rule, mandatory. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group