BIR Ruling [DA-201-05]

April 21, 2005 BIR RULING [DA-201-05] Mr. Ricardo B. Espiritu Bureau of Internal Revenue Revenue District Officer Revenue District No. 74 Iloilo City S i r : This refers to your report dated October 21, 2004 requesting an opinion of this Office as to whether or not a Certificate Authorizing Registration (CAR) be validated with respect to the capital gains tax liability of Mr. Mario B. Banat. The facts represented are as follows 1. Mario B. Banat sold a parcel of land in favor of Evangeline P. Justalero and paid the amount of P49,201.20 for capital gains tax and documentary stamp tax of P12,315.00 and presented to your office the Official Receipt Nos. 01305870 and 01305869, respectively, dated November 10, 2000 as proof thereof duly issued by Collection Officer Jolynda Frio who was then assigned as Collection Officer of Sta. Barbara, Iloilo; 2. Mr. Mario B. Banat also paid a deficiency capital gains tax of P2,476.00 and deficiency documentary stamp tax of P615.00 with Official Receipt Nos. 01305456 and 01305457, respectively, dated January 8, 2001 to Nilma Peaflorida, Collection Officer of Cabatuan, Iloilo; and 3. CAR No. 00286482 dated January 16, 2001 was subsequently issued, but taxpayer failed to register said sale with the Register of Deeds immediately, hence this request for revalidation. In reply thereto, please be informed that pursuant to Section 4 of Revenue Regulations No. 24-2002 and Revenue Memorandum Order No. 15-2003, to wit: "Sec. 4. ISSUANCE OF CERTIFICATE AUTHORIZING REGISTRATION (CAR). xxx xxx xxx "The CAR as issued by the Revenue District Officer shall have a validity period of one (1) year for purposes of presenting the same to the Register of Deeds. In case of failure to present the same to the Register of Deeds within the one-year validity period, the same may still be revalidated, but the total period of validity cannot exceed two years counted from the date of issuance of the CAR. . . . Thus, given the set herein, the CAR, upon issuance, shall have to be presented to the Register of Deeds within a maximum period of not more than two (2) year otherwise, the CAR shall be deemed permanently expired and therefore of no effect. New returns and proof of tax payments shall be needed to produce a new CAR. In no instance shall the Register of Deeds honor a CAR with erasures or alterations." Revenue Memorandum Order No. 15-2003, to wit "CARs shall now have a validity of one (1) year from date of issue. In case of failure to present the same to the Register of Deeds (RD) within one (1) year period, the same shall be presented for revalidation to the district office where the CAR was issued following the procedures herein prescribed. The revalidation, evidenced by stamping the phrase "revalidated on ___________ to expire on _______________" in a conspicuous space in the CAR, shall be good for another one-year period after which the CAR losses its validity." The CAR's validity period for purposes of presentation to the Register of Deeds is limited only to one (1) year with an allowance for "revalidation" in case of failure to present the same to the Register of Deeds for a period not exceeding the total validity period of two (2) years counted from the date of issuance of the CAR. The CAR is deemed to have permanently expired on the date following the two (2) years total validity period. Therefore, revalidation is not the proper recourse if CAR is presented beyond the two (2) years period of limitation. Henceforth, to effect transfer of property, a new CAR is necessary and for purposes thereof, new returns and proof of payments shall have to be filed with the concerned Revenue District Office. In fine, since the CAR was issued to Mr. Mario B. Banat on January 16, 2001, its period of validity had already lapsed. Based on the aforequoted Revenue Regulations No. 24-2002, said CAR had permanently lost its validity. Accordingly, to issue a new CAR, Mr. Banat is required to file new returns and proof of tax payments. IDTSaC This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group