Interpretation of Section 248 of the Tax Code

July 2, 1991 BIR RULING NO. 129-91 28 (b) 074-91 128-91 Gentlemen : This refers to your letter dated July 3, 1990 requesting in behalf of your client, Isabela Cultural Corporation, sole heir of the estate of the late Fr. Samuel F. Escano, S.J., for a ruling on the interpretation of Section 248 (a) of the Tax Code, as amended by P.D. No. 1994. cdtech It is represented that the late Fr. Samuel F. Escano died testate on April 14, 1988; that because of the difficulty in assembling and making an inventory of his estate, and the judicial proceedings for the probate of his will, the estate tax return was filed only on April 30, 1990 with the Revenue District Office No. 25, Revenue Region No. 4-A, Manila; that since the return was filed late (beyond ninety (90) days from the death of the testator, as provided in Section 83 (b) of the Tax Code), the taxpayer added to its basic estate tax payable of P608,582.72, a 25% surcharge for late filing in the amount of P152,145.68 and 20% interest in the cumulative amount of P304,291.36; thus, the total amount paid by the estate is P1,065,019.76 under Confirmation Receipt No. B-19508428 dated April 30, 1990; and that upon review of the estate tax return by the Assessment Branch, same region, an additional 25% surcharge for late payment was imposed; thus, effectively raising the surcharge of 50%; i.e., 25% for late filing plus another 25% for late payment . The question posed for our resolution is whether under Section 248 (a) of the Tax Code, late filing of tax return and late payment of tax due thereon constitute separate counts of violation warranting the imposition of 25% surcharge for each violation or a cumulative surcharge of 50%. In reply, please be informed that pursuant to Section 248 (a) of the Tax Code reading: "SEC. 248. Civil Penalties. (a) There shall be imposed, in addition to the tax required to be paid, penalty equivalent to twenty-five percent (25%) of the amount due, in the following cases: (1) Failure to file any return required under the provisions of this Code or regulations on the date prescribed; or (2) Filing a return with an internal revenue officer other than those with whom the return is required to be filed; or (3) Failure to pay the full amount of tax shown on any return required to be filed under the provisions of this Code or regulations, or the full amount of tax due for which no return is required to be filed, on or before the date prescribed for its payment. the presence of any, or all the acts in the aforequoted section will give rise to the imposition of the 5% surcharge for each of the violation enumerated therein. The law uses the conjunction "or" which thereby excludes the idea of the imposition of the 25% penalty on the aggregate of the violations. cdti Very truly yours, (SGD.) JOSE U. ONG Commissioner