Request for Waiver of Surcharge and Penalties Attendant to the Late Remittance of Withholding Tax

February 14, 1991 BIR RULING NO. 025-91 50 (b) 000-00 025-91 Gentlemen : This refers to your letter dated August 31, 1990 requesting that this Office waive the surcharge and penalties attendant to the late remittance of withholding tax. cdt It appears from the documents submitted that the Estate of Milagros P. Reyes is a pro-indiviso co-owner of a parcel of land situated at the corner of Remedios and M.H. del Pilar Sts., Malate, Manila, presently registered under the Estate of Conrado Potenciano and covered by TCT Nos. 49318 and 49319; that said property is on lease to Mr. Marcelo S. Medina who, from what could be deduced from said documents submitted, sublet the same to you; that when you tried to pay the rent due on said premises to the lessor, Estate of Milagros P. Reyes, you were advised in a letter dated March 31, 1990, by its administratrix, Ms. Ma. Teresa P. Reyes, that she (they) cannot accept your payment since the property is on lease to Mr. Marcelo S. Medina who has no right to assign or sublease the property to you without their written consent; that on June 14, 1990, Judge Clemente M. Soriano of Br. 3 RTC, National Capital Judicial Region, Manila, issued the following orders, among others, pursuant to the final compromise agreement concluded and granted in Civil Case No. 90-51757 entitled M.D. Food Corp., et al., Plaintiffs, versus Erlinda Perez, Defendant; 1) The Plaintiff shall secure the consent of Ms. Tessie Reyes for the transfer of the Contract of Lease to the defendant with Ms. Reyes, as lessor and defendant Erlinda Perez as lessee; 2) Defendant, in turn shall, first pay and update the rentals due on the premises with Ms. Reyes and second, to pay the balance of about P300,000.00 to the plaintiff; and that in compliance with the said order the lessor on June 26, 1990 acknowledge receipt of payments of rentals on said property from Ms. Erlinda V. Perez covering the period from February 1, 1990 to June 30, 1990 amounting to P46,431.25 net of the 5% expanded withholding tax amounting to P488.75 and executed on July 12, 1990, a Contract of Lease on the said property with Ms. Ma. Teresa P. Reyes in her capacity as Administratrix of the Estate of Milagros P. Reyes as lessor and Ms. Erlinda V. Perez, as lessee. In reply, please be informed that under Section 5 of Revenue Regulations No. 6-85, as amended, otherwise known as the Consolidated Expanded Withholding Tax Regulations implementing Section 50(b) of the Tax Code, as amended, the taxes deducted and withheld shall be paid upon filing a return in duplicate under BIR Form _______ with the Revenue District Officer of the Collection Agent of the City or duly authorized Treasurer of the Municipality where the withholding agent has his legal residence or principal place of business except in cases where the Commissioner of Internal Revenue allows otherwise. The required return shall be filed within ten (10) days after the end of each month. Such being the case, and because of the unusual circumstances of this case, this Office hereby allows remittance of the 5% withholding tax withheld on your rental payment covering the period from February 1, 1990 to June 30, 1990 and on the payment of the balance of about P300,000.00 to be extended for a period of ten (10) days from your payment thereof without being assessed the corresponding civil penalties for late remittance of taxes withheld on said payments. It is however, understood that your failure to remit the taxes withheld on said payments within the ten (10) days period of extension would render you liable for the corresponding civil penalties arising from your late remittance to this Office of the taxes withheld on your said rental payments. Very truly yours, (SGD.) JOSE U. ONG Commissioner