Acceptance of PNB Check in Payment of Income Tax Liability

May 14, 1958 BIR RULING NO. 266-58 Mr. Nicanor S. Sison Attorney-at-law Rooms 202-203 Capt. Pepe Bldg. (Central Hotel) Manila S i r : In reply to your letter dated May 12, 1958, tendering, for and in behalf of your clients, Negotiable Land Certificates Nos. C-515, C-1035, C-1036, C-1037, C-2001, C-5004 and C-5006, issued under Republic Act No. 1400, otherwise known as the "Land Reform Act of 1955", with a total face value of P87,000.00, and PNB Check No. 636132 F, dated May 9, 1958, in the amount of P133.40, which was drawn by Mrs. Narcisa B. de Leon against the Philippine National Bank and in favor of the Commissioner of Internal Revenue, in payment of the income taxes for 1957 due from your clients, Mrs. Narcisa B. de Leon, Mrs. Amada de Leon (jointly with her husband Dr. Bienvenido B. Eraa), Mr. Manuel de Leon and Miss Encarnacion de Leon, in the total amount of P87,133.40, I have the honor to inform you that the aforesaid negotiable land certificates cannot be accepted by this Office in payment of the aforesaid tax for the reason that, contrary to the express provision of Section 9 of Republic Act No. 1400, they cannot be encashed until after five (5) years from the date of execution of the Deed of Sale of Hacienda de Leon and, therefore, are not payable to bearer upon demand and presentation at the Central Bank during the aforesaid period . To accept negotiable land certificates with provision on non-encashment within a certain period would be tantamount to considering the same as deposit which cannot be encashed during the non-encashment period. Such action is also tantamount to considering the same as deferred payment and will place the cash position of the Government in a precarious condition. It would also run counter to the policy of the present Administration to intensify collection. The PNB Check No. 636132 F in the amount of P133.40 will be accepted in payment of the tax and will be applied against the income tax liability of Mrs. Narcisa B. de Leon. An official receipt will be issued in due course for part payment of the tax due from Mrs. Narcisa B. de Leon. It is requested that your clients be advised to settle their income tax liabilities for the year 1957 not later than May 15, 1958, in order to avoid the imposition of the surcharge and interest for late payment. Please inform Messrs. Sevilla & Aquino, Rooms 202-203 Capitan Pepe Building (Central Hotel), Azcarraga corner Rizal Avenue, Manila, of this decision of this Office and to consider it in answer to their letter dated May 8, 1958, on the same subject matter in connection with the income tax liabilities for 1957 of Mr. Manuel de Leon and Miss Encarnacion de Leon. There are returned herewith the aforesaid negotiable land certificates. LLpr Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue