BIR Ruling [UN-370-95]

October 11, 1995 BIR RULING [UN-370-95] Benjamin Abalos Law Office Suite 8, Second Floor Facilities Center Building 548 Shaw Boulevard Mandaluyong City Metro Manila Attention: Atty . Jaime Paz Gentlemen : This refers to your letter dated March 1, 1994, requesting reconsideration of the decision of this Office setting aside the proposed assessments against AA Commercial, Inc. in the amounts of P6,830,950.97 and P10,197,737.71 as deficiency income and business taxes inclusive of increments for the year 1987, respectively. In reply, please be informed that this Office finds no justifiable reason to reverse its decision cancelling the proposed assessments against AA Commercial, Inc. Contrary to your allegations, our decision dismissing the case of subject-taxpayer was arrived at after evaluating the facts of the case as well as the reports of investigation submitted by the Economic Intelligence & Investigation Board and by our own Intelligence & Investigation Office (now Tax Fraud Division). The conclusion reached by the two (2) reviewers of this Office who conducted a careful and thorough study of the case revealed that there was no fraud and/or underdeclaration of income committed by the taxpayer which would warrant a reinvestigation thereof. Finding their conclusion well-taken, we decided not to pursue the proposed deficiency assessments in question since our right to assess is already barred by prescription this being a 1987 case. In the case of Meralco Securities Corporation vs. Savellano, et. al. and Commissioner of Internal Revenue vs. Savellano, et. al., 117 SCRA 804, the issue on which is analogous to the instant case, the Supreme Court ruled that courts may not compel by mandamus the Commissioner of Internal Revenue to impose a tax assessment not found by him to be due and proper for that would be tantamount to a usurpation of executive functions. The Court further stated that "xxx xxx xxx" "Thus, after the Commissioner who is specifically charged by law with the task of enforcing and implementing the tax laws and the collection of taxes has after a mature and thorough study rendered his decision or ruling that no tax is due or collectible, and his decision is sustained by the Secretary of Finance (whose act is that of the President unless reprobated), such decision or ruling is a valid exercise of discretion in the performance of official duty and cannot be controlled much less reversed by mandamus. A contrary view, whereby any stranger or informer would be allowed to usurp and control the official functions of the Commissioner of Internal Revenue would create disorder and confusion, if not chaos and total disruption of the operations of the government . (Emphasis supplied) "xxx xxx xxx" In the light of the above pronouncement of the Supreme Court upholding the discretionary power of this Office on matters regarding the issuance or non-issuance of deficiency assessment/s, our decision to cancel the proposed deficiency assessments against AA Commercial, Inc. is proper. Accordingly, your request to set aside our said decision and to effect the issuance of the proposed assessments is hereby denied. This constitutes our final decision on the matter. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue