Prescription of the Right of the Government to Assess and Collect Deficiency Income Tax Due from Merck, Sharp & Dohme (Phil.) Inc.

January 3, 1966 BIR RULING NO. 001-66 3rd Indorsement Returned to the Revenue Operations Head (Assessment), B.I.R. Manila, the entire docket bearing on the internal revenue tax case for the fiscal year ending November 30, 1959 of Merck, Sharp & Dohme (Philippines) Inc., 1133 United Nations Avenue, Manila, involving the amount of P87,088.72 as deficiency income tax (Assessment No. ACR-300352-59). cdtech This case was referred to the Law Division for resolution of the question of whether or not the right of the government to assess and collect the aforesaid tax had already prescribed. The records show that Merck, Sharp & Dohme (Philippines) Inc., (hereinafter referred to as the corporation) is a domestic corporation engaged in the importation and manufacture of drugs; that its income tax return for the fiscal year ending November 30, 1959 was filed on March 14, 1960; that after disallowing certain deductions claimed by the corporation in the said return, this Bureau issued deficiency assessment against the latter; that a demand letter dated March 12, 1965 calling for the payment of the aforementioned assessment was delivered by an office messenger to the address of the corporation but the taxpayer twice refused to accept the same; and that the same assessment notice and demand letter were eventually sent to the taxpayer by Registered-Special Delivery mail with return card on March 15, 1965. From the above-stated facts, the taxpayer's defense of prescription is untenable. The fact remains that the assessment notice and demand for payment were tendered to the taxpayer before March 15, 1965 but the latter refused to accept the same. In accordance with Section 4, Rule 13 of the New Rules of Court, service of the papers like the assessment notice and the demand letter in this case may be made by delivering personally a copy to the taxpayer or his attorney, or by leaving it in his office with his clerk or with a person having charge thereof; if no person is found in his office, or his office is not known, then by leaving the copy, between the hours of eight in the morning and six in the evening, at the taxpayer's or his attorney's residence, if known, with a person of sufficient discretion to receive the same. While the tender of the assessment notice and demand for payment was not accomplished in accordance with the foregoing rule, nevertheless this Office believes that the failure is not fatal under the circumstances. In view of all the foregoing, this Office is of the opinion and so holds that the right of the government to assess and collect the deficiency income tax due from Merck, Sharp & Dohme (Philippines) Inc. has not yet prescribed. aisadc (SGD.) MISAEL P. VERA Acting Commissioner of Internal Revenue