BIR Ruling No. 085-65

August 12, 1965 BIR RULING NO. 085-65 2nd Indorsement Returned to the Chief, Income Tax Division, thru the Revenue Operations Head (Assessment), B.I.R., Manila, the entire docket bearing on the transfer tax case of the Estate of the late WILLIAM PARSONS, c/o Mr. Ulpiano Sarmiento, Executor, No. 440 Pina Ave., Sta. Mesa, Manila, with the following information: cdt The records show that William Parsons, a resident of Manila, died testate on May 14, 1961. He was survived by his spouse and three legitimate children. On July 14, 1961, Denis Parsons, one of the heirs of the late William Parsons, filed a written notice of death to the Commissioner of Internal Revenue. On November 10, 1961, or four (4) days before the due date for the filing of the estate and inheritance tax return covering the estate of the deceased, the Attorney-in-fact for the heirs of the late William Parsons, Mr. A. M. Balangue, requested an extension of thirty (30) days within which to file the said return. On the same date (Nov. 10, 1961), this Office, considering the reasons stated in the letter of Mr. Balangue that the heirs are all non-resident aliens and that the inventory of the estate could not be completed on time for filing within the period prescribed by law, and considering further that the decedent's estate is not the subject of any judicial proceedings for the settlement of his estate, granted an extension of 30 days without penalty within which to file the transfer tax return. However, prior to the expiration of said period of extension, or on November 25, 1961, the Executor of the estate instituted judicial testamentary proceedings for the settlement of the decedent's estate. In a letter dated December 14, 1961, the Executor requested that, in view of the filing of judicial testamentary proceedings, the estate be given until May 13, 1962, within which to file the corresponding Estate and Inheritance tax return. This Office did not grant the aforesaid request, the reason being that judicial testamentary proceedings were instituted beyond the 6-months period after the decedent's death. Notwithstanding our letters dated November 10, 1961, December 15, 1961, January 18, 1962 and March 7, 1962, advising the Executor of the estate to file the return in question, no return has been filed with this Office. It was only on May 14, 1962 or twelve (12) months after the decedent's death, that the estate and inheritance tax return was filed. On March 5, 1965, this Office, after crediting the sums of P25,673.80 and P17,162.60 which were previously paid by the Executor of the estate, issued a tax assessment notice for the amount of P18,713.10, inclusively of surcharges and penalties for late filing and late payment of the estate and inheritance taxes. The legality of the imposition of the surcharges and penalties is now being contested by the taxpayer on the ground that, since the judicial testamentary proceedings were instituted prior to the expiration of the period of extension granted by the Commissioner of Internal Revenue to file the return in question, the return should be filed within twelve (12) months after the decedent's death pursuant to Section 93(b) of the National Internal Revenue Code; and that, since the transfer tax return was filed on May 14, 1962 or within the said period of 12 months after the decedent's death, the same is deemed filed on time, hence, the illegality of the imposition of the surcharges and penalties incident to late filing. The question to be resolved in this case is whether or not the institution of judicial testamentary proceedings within the period of such extensions, gives the executor, administrator, or the heirs, as the case may be, the right to file the return within 12 months after the decedent's death. Sections 93, paragraph (b) and 95, paragraphs (1) and (2), of the National Internal Revenue Code, provide, among other things, that the inheritance tax return must be filed within six months after the death of the predecessor in interest and the estate and inheritance taxes paid within nine months and twelve months, respectively, after the decedent's death, except when testamentary or intestate proceedings have been instituted prior to the expiration of said period (emphasis supplied), in which case the return must be filed by the executor or administrator within twelve months after the decedent's death and the estate and inheritance taxes paid within twenty-one months and twenty-four months, respectively, after the decedent's death. The law is clear and unambiguous. An extension of time for filing the return does not in itself operate to extend the time for the institution of judicial testamentary proceedings which is to be filed within six (6) months after the decedent's death. The phrase "said period", if construed to include the extension provided for by section 93(c) of the Tax Code, would be against the law and would not accordingly be valid. The tax statute should not be extended by construction beyond the clear meaning of its language (Crooks vs. Harrelson, 282 U.S. 55), to include, as in the instant case, extension not expressly embraced. It is a well established rule in statutory construction that, in the interpretation of statutes, the mention of one thing implies the exclusion of another thing (Expressio Unius Est Exlusio Alterius). Consequently, it may be said that where a statute directs that certain acts shall be done in a specified period, their performance in any other period, is impliedly prohibited. It is important to note that in the case of "Jamora v. Meer" (74 Phil. 22), the Court stated: "Tax laws imposing penalties for delinquencies are clearly intended to hasten tax payments or to punish evasions or neglect of duty in respect thereof. If delays in tax payments are to be condoned for light reasons, the law imposing penalties for delinquencies would be rendered nugatory, and the maintenance of the government and its multifarious activities would be as precarious as taxpayers are willing or unwilling to pay their obligations to the state in time. The imperatives of public welfare will not approve of this result." In view thereof, and inasmuch as the return in question was filed beyond the period of extension granted by this Office, the imposition of surcharges and penalties for late filing and late payment is warranted and legal. cdtech (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue