Boast, Inc. v. Commissioner of Internal Revenue

FIRST DIVISION [C.T.A. CASE NO. 10484. May 26, 2023.] BOAST, INC. , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION REYES-FAJARDO , J p : This Petition for Review dated March 8, 2021, 1 seeks to lift the notices of tax lien and levy (NOTL), registered by the Bureau of Internal Revenue (BIR) on the real properties bought by Boast, Inc. from S.S. Ventures International, Inc. (SSVI), on the ground of prescription of collection of taxes against the latter. FACTS Petitioner Boast, Inc. is a corporation duly organized and existing under the laws of the Republic of the Philippines, with principal place of business at Phase I Second Avenue, Bataan Freeport Authority, Mariveles, Bataan 2106. 2 Respondent Commissioner of Internal Revenue is the duly appointed Commissioner of Internal Revenue vested under the appropriate laws with the authority to carry out the functions, duties, and responsibilities of said office including, inter alia , the power to decide disputed assessments and to cancel and abate tax liabilities, pursuant to the pertinent provisions of the National Internal Revenue Code of 1997, as amended (NIRC, as amended), and other tax laws, rules and regulations. He may be served summons, pleadings, and other processes, through his counsel at Litigation Division, Room 703, BIR National Office Building, BIR Road, Diliman, Quezon City. 3 ATICcS On July 21, 2011, the BIR caused the annotation of NOTL on the tax declarations of real property, then owned by SSVI, detailed below: Tax Declaration No. Location of Property Amount 30127 4 BEZ, Mariveles, Bataan P4,160,521.00 30128 5 BEZ, Mariveles, Bataan P4,160,521.00 30129 6 BEZ, Mariveles, Bataan P4,160,521.00 On March 12, 2013, a deed of absolute sale 7 was executed by and between SSVI, and petitioner, whereby the former conveyed to the latter, real properties covered by tax declaration nos. 30127, 30128, and 30129, in consideration for US$900,000.00 plus P16,127,047.63. By reason thereof, said tax declarations were replaced by another set of tax declarations, 8 the particulars of which are as follows: Tax Declaration No. Location of Property Amount 41392 9 BEZ, Mariveles, Bataan P4,160,521.00 41393 10 BEZ, Mariveles, Bataan P4,160,521.00 41394 11 BEZ, Mariveles, Bataan P4,160,521.00 In a Letter dated October 19, 2020, petitioner requested the BIR Office of the Deputy Commissioner-Operations Group, for the issuance of authority to cancel assessment, and lifting of notice of levy. 12 In a Letter dated October 19, 2020, Regional Director Edgar B. Tolentino (RD Tolentino) denied petitioner's request for issuance of authority to cancel assessment, and lifting of notice of levy. 13 In a Letter dated November 13, 2020, petitioner requested from the BIR Legal Division in San Fernando City, Pampanga, the lifting of notices of tax lien on the real properties covered by tax declaration nos. 30127, 30128, and 30129, on the ground of prescription of collection of taxes against SSVI. 14 On March 3, 2021, petitioner received from RD Tolentino, a Letter dated January 27, 2021, denying its request to lift NOTL with finality. 15 On March 11, 2021, petitioner filed a Petition for Review dated March 8, 2021, docketed as CTA Case No. 10484, 16 to which respondent filed an Answer 17 on October 25, 2021. On February 7, and 14, 2022, petitioner filed its Motion for Summary Judgment, through electronic mail 18 and personal filing, 19 respectively. In the Hearing held on March 3, 2022, the Court: one , granted petitioner's Motion for Summary Judgment; two , noted discrepancies in the documents appended to the Petition for Review, i.e. , Deed of Absolute Sale and the Letter to the BIR dated July 22, 2020, with respect to the identification of the tax declarations mentioned therein. Petitioner was allowed to clarify said noted discrepancies in its Memorandum; and three , defined the issues advanced by the parties, among others. 20 Through Resolution dated May 30, 2022, 21 this case was submitted for decision, taking into account Memorandum for Petitioner Boast, Inc., filed through e-mail 22 and personal filing, 23 on May 5 and 6, 2022, respectively, and respondent's Answer, adopted as his Memorandum, 24 filed on October 25, 2021. ISSUES 25 For petitioner: 1) Whether respondent found the real properties of SSVI; 2) Whether the applicable prescriptive period to collect is five (5) years; and 3) Whether the applicable prescriptive period begins to run when respondent located the subject properties. For respondent: 1) Whether the Court has jurisdiction over this case; and 2) Whether petitioner is the real party in interest in this case. ARGUMENTS Petitioner argues that the BIR's prescriptive period to collect internal revenue taxes against SSVI for TY 2007 is barred by prescription. It explains that the BIR had five (5) years from the date of assessment, to collect internal revenue taxes subject thereof. Since the BIR failed to sell on public auction, the real properties subject of the tax liens within such period prescribed by law, the BIR forfeited its right to collect internal revenue taxes against SSVI. Thus, the lifting of the NOTL on said real properties it bought from SSVI is warranted. Petitioner concedes that the BIR served the WDL to SSVI on May 26, 2011. It nonetheless claims that service alone does not suspend the prescriptive period to collect internal revenue taxes. Under Section 223 of the NIRC, as amended, suspension of prescriptive period to collect taxes would arise if service of the WDL was made to the delinquent taxpayer and no property could not be located by the BIR. As the latter knew of then SSVI's real properties, through the NOTL thereon, the running of the prescriptive period to collect internal revenue taxes was not halted, despite the service of the WDL to SSVI on May 26, 2011. To punctuate its arguments, petitioner declares that it is entitled to the lifting of NOTL on the real properties it bought from SSVI. On the other hand, respondent counters that the Court lacks jurisdiction over this case, because the taxpayer failed to validly file an administrative protest to the final assessment, as required by Section 228 of the NIRC, as amended. Assuming, the Court has jurisdiction over this case, respondent retorts that petitioner is not a real party in interest. According to him, the proper party to initiate the suit is SSVI, being the owner of the real properties covered by the notice of levy and tax lien. As such, petitioner's case must be dismissed for failure to state a cause of action. Besides, even if petitioner is a real party in interest, respondent points out that the timely service of the WDL to SSVI on May 26, 2011 indefinitely suspends the prescriptive period to collect taxes. Hence, it may enforce the lien and apply the proceeds of the levied real properties to the internal revenue tax liabilities of SSVI for TY 2007. RULING The Petition is granted. We first address our jurisdiction over this case. Petitioner argues that we have jurisdiction over other matters arising from the NIRC, as amended such as the propriety of the lifting of the NOTL. Respondent says otherwise, because SSVI failed to validly file an administrative protest to the BIR's final assessment, issued against it. We find for petitioner. Our jurisdiction is not only confined on respondent's decision over disputed assessments. Section 7 (a) (1), in relation to Section 11 of Republic Act (RA) No. 1125, 26 as amended by RA No. 9282 also endows us with jurisdiction over respondent's action over other matters arising from the NIRC, as amended. 27 In addition, an appeal must be taken from said action, within thirty (30) days from receipt thereof. These provisions respectively read: Sec. 7. Jurisdiction. The CTA shall exercise: a. Exclusive appellate jurisdiction to review by appeal, as herein provided: 1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; xxx xxx xxx SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, . . . may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A Division of the CTA shall hear the appeal: . . . 28 Among the matters covered by the NIRC, as amended, are the provisions on levy and tax liens respectively found in Sections 207 (B) 29 and 219 30 thereof. On March 3, 2021, 31 petitioner received the BIR's Letter dated January 27, 2021, denying with finality, its plea to lift NOTL on the real properties covered by tax declaration nos. 30127, 30128, and 30129 (now tax declaration nos. 41392, 41393, and 41394), all issued by the Provincial Assessor of Bataan. Counting thirty (30) days from March 3, 2021, petitioner had until April 2, 2021 to seek judicial recourse. Thus, the timely filing of its Petition for Review on March 11, 2021, 32 clothed us with jurisdiction over this case. Next, we resolve the procedural matter posed by the parties. Petitioner contends that it is a real party in interest, being the transferee of the real properties conveyed by SSVI. Respondent counters that this case must be dismissed because it is SSVI who is the real party in interest. We agree with petitioner. ETHIDa Section 2, Rule 3 of the Rules of Court, as amended 33 defines a real party in interest, as follows: Section 2. Parties in interest . A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. To be a real party in interest, one "should appear to be the present real owner of the right sought to be enforced, that is, his [or her] interest must be a present substantial interest, not a mere expectancy, or a future, contingent, subordinate, or consequential interest." 34 Contrariwise, one having no material interest to protect cannot invoke the jurisdiction of the court as the plaintiff in an action. 35 Mutilan, et al. v. Mutilan, et al. , 36 explained the rationale for said rule, in the following fashion: The purposes of the requirement for the real party in interest prosecuting or defending an action at law are: (a) to prevent the prosecution of actions by persons without any right, title or interest in the case; (b) to require that the actual party entitled to legal relief be the one to prosecute the action; (c) to avoid a multiplicity of suits; and (d) to discourage litigation and keep it within certain bounds, pursuant to sound public policy. Indeed, considering that all civil actions must be based on a cause of action, defined as the act or omission by which a party violates the right of another, the former as the defendant must be allowed to insist upon being opposed by the real party in interest so that he is protected from further suits regarding the same claim. Under this rationale, the requirement benefits the defendant because "the defendant can insist upon a plaintiff who will afford him a setup providing good res judicata protection if the struggle is carried through on the merits to the end.'' The rule on real party in interest ensures, therefore, that the party with the legal right to sue brings the action, and this interest ends when a judgment involving the nominal plaintiff will protect the defendant from a subsequent identical action. Such a rule is intended to bring before the court the party rightfully interested in the litigation so that only real controversies will be presented and the judgment, when entered, will be binding and conclusive and the defendant will be saved from further harassment and vexation at the hands of other claimants to the same demand. Petitioner is a real party in interest in this case. To recall, a deed of absolute sale dated March 12, 2013, was executed by and between SSVI, and petitioner, whereby the former conveyed to the latter certain real properties, in consideration for US$900,000.00 plus P16,127,047.63. 37 The real properties referred to in said deed were covered by then tax declaration nos. 30127, 30128, and 30129 (now tax declaration nos. 41392, 41393, and 41394), on which the BIR registered its tax liens. 38 Development Bank of the Philippines v. Clarges Realty Corporation (Clarges) , 39 elucidated on the effect of a tax lien on a property, as follows: . . . A lien is a "legal claim or charge on property, either real or personal, as a collateral or security for the payment of some debt or obligation." A lien, until discharged, follows the property. Hence, when petitioner acquired the property, the [latter] also acquired the liabilities attached to it, among them being the tax liability to the Bureau of Internal Revenue. That the unpaid taxes were incurred by the defunct Marinduque Industrial and Mining Corporation is immaterial. In acquiring the property, petitioner assumed the obligation to pay for the unpaid taxes. xxx xxx xxx In line with Clarges , when SSVI transferred to petitioner real properties under tax declaration nos. 30127, 30128, and 30129 (now tax declaration nos. 41392, 41393, and 41394), the BIR's NOTL, along with SSVI's obligation to pay its unpaid taxes for TY 2007, were assumed by petitioner. Indeed, as transferee of said real properties, petitioner has substantial and material interest in seeking to lift said NOTL. For this reason, petitioner is a real party in interest. Finally, we determine the merits of this case. Petitioner's appeal came into the fore because respondent denied its prayer to lift the NOTL on the real properties it bought from SSVI, covered by tax declaration nos. 30127, 30128, and 30129 (now tax declaration nos. 41392, 41393, and 41394), on the ground of prescription of collection of taxes. Said ground is found on item III (3.1) (e) of RMO No. 41-2019, 40 which states: III. GENERAL PROVISIONS 3.1 The issued WG, NTL, NOL and NOE may be extinguished under any of the following instances: xxx xxx xxx e. Prescription of the Bureau's right to assess and/or collect the unpaid tax liabilities under the Statute of Limitations. Evidently, the lifting of the NOTL is warranted when the government's right to collect unpaid taxes is barred by prescription. This necessitates elaboration on: first , the proper prescriptive period to collect internal revenue taxes; and second , the collection process. Period of Prescription to Collect Internal Revenue Taxes, Fees, and Charges The parties are at odds with one another as to the prescriptive period for collection of taxes. For petitioner, it is five (5) years from the time the assessment was made. For respondent, it is imprescriptible because the present NIRC is silent on the prescriptive period for collection, when the assessment was not attended by intentional falsity, fraud, or omission to file a tax return. The parties are mistaken. Petitioner is incorrect since the five (5)-year prescriptive period to collect assessed taxes applies when a final assessment was made, and there was intentional falsity, or fraud in the filing of the taxpayer's tax returns, or there was omission to file tax returns. 41 Section 222 (c), in relation to Section 222 (a) of the NIRC, as amended, is clear on this point: SEC. 222. Exceptions as to Period of Limitation of Assessment anid Collection of Taxes. (a) In the case of a false or fraudulent return with intent to evade tax or of failure to file a return , the tax may be assessed, or a proceeding in court for the collection of such tax may be filed without assessment, at any time within ten (10) years after the discovery of the falsity, fraud or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof. xxx xxx xxx (c) Any internal revenue tax which has been assessed within the period of limitation as prescribed in paragraph ( a ) hereof may be collected by distraint or levy or by a proceeding in court within five (5) years following the assessment of the tax. 42 Respondent, too, is in error. True, our present NIRC is silent on the prescriptive period for collection of tax, when a tax assessment was not attended by intentional falsity, or fraud in the filing of tax returns, or omission to file tax returns on the part of the taxpayer. Yet, Section 291 of the NIRC, as amended, 43 only repealed, among others, laws which are contrary or inconsistent with said Code. Conversely, laws which are in conformity, or consistent with the present NIRC still stands. Among these laws effective to date is a fragment of Batas Pambansa Blg. 700, 44 whereby the prescriptive period to collect the assessed taxes, sans the presence of intentional falsity, fraud, or omission to file tax returns is three (3) years, counted from the date when assessment was made. 45 Commissioner of Internal Revenue v. Court of Tax Appeals and QL Development, Inc. (QLDI) 46 confirmed: The statute of limitations on assessment and collection of national internal revenue taxes was shortened from five (5) years to three (3) years by virtue of Batas Pambansa Blg. 700. Thus, petitioner has three (3) years from the date of actual filing of the tax return to assess a national internal revenue tax or to commence court proceedings for the collection thereof without an assessment. However, when it validly issues an assessment within the three (3)-year period, it has another three (3) years within which to collect the tax due by distraint, levy, or court proceeding. The assessment of the tax is deemed made and the three (3)-year period for collection of the assessed tax begins to run on the date the assessment notice had been released, mailed or sent to the taxpayer. Thus, the prescriptive period to collect the assessed internal revenue taxes, fees, and charges, without the presence of intentional falsity, or fraud in the filing of tax returns, or omission to file tax returns, is three (3) years, reckoned from the time the tax assessment was made. Collection Process The parties also differ with one another as to when the collection process is complete. For petitioner, it is the service of the WDL and sale of properties subject thereof by the BIR. For respondent, it is the service of the WDL upon the delinquent taxpayer. We find for petitioner. Section 2 of the NIRC, as amended, confers upon the BIR the authority to collect internal revenue taxes, fees, and charges. 47 In pursuit of this mandate, Section 205 (a) 48 of the same Code permits the BIR to resort to the administrative remedy of distraint and/or levy against the delinquent taxpayer's properties. In particular, the remedy of levy of real property is found Section 207 (B) thereof, which reads: SEC. 207. Summary Remedies. xxx xxx xxx (B) Levy on Real Property. After the expiration of the time required to pay the delinquent tax or delinquent revenue as prescribed in this Section, real property may be levied upon, before simultaneously or after the distraint of personal property belonging to the delinquent. To this end, any internal revenue officer designated by the Commissioner or his duly authorized representative shall prepare a duly authenticated certificate showing the name of the taxpayer and the amounts of the tax and penalty due from him. Said certificate shall operate with the force of a legal execution throughout the Philippines. xxx xxx xxx Section 213 of the NIRC, as amended, additionally commands that the levied real properties must be advertised and sold for the satisfaction of the delinquent taxpayer's tax liabilities: SEC. 213. Advertisement and Sale. Within twenty (20) days after levy, the officer conducting the proceedings shall proceed to advertise the property or a usable portion thereof as may be necessary to satisfy the claim and cost of sale; and such advertisement shall cover a period of at least thirty (30) days. It shall be effectuated by posting a notice at the main entrance of the municipal building or city hall and in public and conspicuous place in the barrio or district in which the real estate lies and by publication once a week for three (3) weeks in a newspaper of general circulation in the municipality or city where the property is located. The advertisement shall contain a statement of the amount of taxes and penalties so due and the time and place of sale, the name of the taxpayer against whom taxes are levied, and a short description of the property to be sold. At any time before the day fixed for the sale, the taxpayer may discontinue all proceedings by paying the taxes, penalties and interest. If he does not do so, the sale shall proceed and shall be held either at the main entrance of the municipal building or city hall, or on the premises to be sold, as the officer conducting the proceedings shall determine and as the notice of sale shall specify. xxx xxx xxx Hence, the collection process contemplated by the NIRC, as amended, in relation to real properties, encompasses the issuance and service of the warrant of levy upon the delinquent taxpayer, along with the proper advertisement and sale thereof to satisfy the latter's tax liabilities. Summing up our observations: first , the BIR has three (3) years, counted from the time the assessment was made to collect the taxes subject thereof; and second , collection of taxes comprehends the issuance and service of the WDL, along with the advertisement and sale of the real properties subject of such levy, for satisfaction of the delinquent taxpayer's tax liabilities. Taking our cue from these points, the BIR's right to collect on the assessed taxes against SSVI for TY 2007 is barred by prescription. TIADCc Allow us to explain. The NOTL on petitioner's real properties bought from SSVI, stemmed from the deficiency tax assessments, issued against SSVI covering TY 2007. 49 Particularly, the tax assessments issued against SSVI were embodied in the Formal Letter of Demand, Final Assessment Notices, with Details of Discrepancies (FLD/FAN), all dated September 29, 2010. 50 The earliest date that the FLD/FAN may be mailed, served, or released to SVVI would be on September 29, 2010. Counting three (3) years from September 29, 2010, the BIR had until September 29, 2013, to collect taxes under said tax assessments. Thus, the WDL served upon SSVI on May 26, 2011, or more than eight (8) months from said assessment, was timely made by the BIR, thereby tolling the prescriptive period to collect internal revenue taxes against SSVI. Notably, the remaining prescriptive period to collect said assessed taxes is two (2) years and a little less than four (4) months. Petitioner asserts that despite the timely service of the WDL upon SSVI, the prescriptive period to collect was not suspended because the BIR knew of the location of SSVI's (now petitioner's) real properties. Respondent ripostes that the service of said WDL on May 26, 2011 indefinitely tolls the running of the prescriptive period for collection of internal revenue taxes, citing Bank of the Philippine Islands v. Commissioner of Internal Revenue (BPI) , 51 and Republic of the Philippines v. Hizon (Hizon) , 52 as authorities. We ultimately rule for petitioner. True, in BPI and Hizon , it was held that the service of the WDL upon the delinquent taxpayer interrupts the running of the prescriptive period on collection of taxes under the law. We quote the pertinent portion of the ruling in Hizon : Petitioner's reliance on the Court's ruling in Advertising Associates, Inc. v. Court of Appeals is misplaced. What the Court stated in that case and, indeed, in the earlier case of Palanca v. Commissioner of Internal Revenue , is that the timely service of a warrant of distraint or levy suspends the running of the period to collect the tax deficiency in the sense that the disposition of the attached properties might well take time to accomplish, extending even after the lapse of the statutory period for collection. . . . Yet, Hizon quickly pointed out that in certain situations, the running of prescriptive period for the collection of taxes may resume, despite the timely service of the WDL against the delinquent taxpayer: Moreover, if , as petitioner in effect says, the prescriptive period was suspended twice , i.e. , when the warrants of distraint and levy were served on respondent on January 12, 1989 and then when respondent made her request for reinvestigation of the tax deficiency assessment on November 3, 1992, the three-year prescriptive period must have commenced running again sometime after the service of the warrants of distraint and levy . . . . 53 To determine the situations referred to in Hizon , Section 223 of the NIRC, as amended is the key: SEC. 223. Suspension of Running of Statute of Limitations. The running of the Statute of Limitations provided in Sections 203 and 222 on the making of assessment and the beginning of distraint or levy a proceeding in court for collection, in respect of any deficiency, shall be suspended for the period during which the Commissioner is prohibited from making the assessment or beginning distraint or levy or a proceeding in court and for sixty (60) days thereafter ; when the taxpayer requests for a reinvestigation which is granted by the Commissioner; when the taxpayer cannot be located in the address given by him in the return filed upon which a tax is being assessed or collected: Provided, that, if the taxpayer informs the Commissioner of any change in address, the running of the Statute of Limitations will not be suspended; when the warrant of distraint or levy is duly served upon the taxpayer, his authorized representative, or a member of his household with sufficient discretion, and no property could be located ; and when the taxpayer is out of the Philippines. 54 Indeed, among the situations where the prescriptive period for collection of taxes would be suspended are: first , beginning distraint or levy and for sixty (60) days thereafter. Distraint and levy proceedings are validly begun or commenced by the issuance of the warrant of distraint and levy and service thereof to the taxpayer; 55 and second , service of a warrant of distraint and levy upon the taxpayer, or member of his [or her] household with sufficient discretion, and no property could be located. In reverse, the situations referred to in Hizon , whereby the prescriptive period to collect internal revenue taxes would resume , despite service of WDL upon the taxpayer are: first , lapse of said sixty (60)-day period after service thereof; and second , the delinquent taxpayer's properties were located by the BIR. Looking back, respondent's WDL was timely served upon SSVI on May 26, 2011, or more than eight (8) months from the time the final assessment was issued on September 29, 2010. Counting sixty (60) days from May 26, 2011, the prescriptive period to collect internal revenue taxes was suspended until July 25, 2011. From July 26, 2011, the prescriptive period to collect internal revenue taxes begun to run again. No subsequent suspension thereof occurred. To be precise, the BIR's annotation of the corresponding tax liens on the real properties of SSVI (now petitioner), demonstrates knowledge of the location of such properties. 56 Most telling is respondent's admission in open court admitting such fact: ATTY. ZORILLA We have three (3) enumerated issues, your Honors. Number one, whether or not respondent found properties of taxpayer S.S. Ventures International, Inc. JUSTICE DEL ROSARIO Which is admitted alright Atty. Bayona? ATTY. BAYONA Yes, your Honors. xxx xxx xxx 57 Upon resumption of the running of the prescriptive period to collect taxes on July 26, 2011, the BIR has two (2) years and a little less than four (4) months therefrom, to complete the collection process. As no advertisement and sale of then SSVI's (now petitioner's) levied real properties were made by the BIR within said period, its right to collect taxes against SSVI for TY 2007 was lost because of prescription. Besides, to subscribe with respondent's reasoning that the timely service of the WDL upon SSVI perpetually halted the prescriptive period to collect internal revenue taxes against SSVI would defeat the very purpose for which the laws on prescription were enacted The law prescribing a limitation of actions for the collection of the income tax is beneficial both to the Government and to its citizens; to the Government because tax officers would be obliged to act promptly in the making of assessment, and to citizens because after the lapse of the period of prescription citizens would have a feeling of security against unscrupulous tax agents who will always find an excuse to inspect the books of taxpayers, not to determine the latter's real liability, but to take advantage of every opportunity to molest peaceful, law-abiding citizens. Without such legal defense taxpayers would furthermore be under obligation to always keep their books and keep them open for inspection subject to harassment by unscrupulous tax agents. The law on prescription being a remedial measure should be interpreted in a way conducive to bringing about the beneficent purpose of affording protection to the taxpayer within the contemplation of the Commission which recommend the approval of the law. 58 In fine, the BIR forfeited its right to collect taxes against SSVI for TY 2007. Being so, the lifting of the BIR's NOTL on the real properties bought by petitioner from SSVI is in order. cSEDTC WHEREFORE , the Petition for Review dated March 8, 2021, filed by Boast, Inc., is GRANTED . Accordingly, respondent is DIRECTED to lift the notices of levy and tax lien on tax declaration nos. 41392, 41393, and 41394, all issued by the Provincial Assessor of Bataan. SO ORDERED. (SGD.) MARIAN IVY F. REYES-FAJARDO Associate Justice Catherine T. Manahan, J. , concurs. Roman G. del Rosario, P.J ., with due respect, see dissenting opinion. Separate Opinions DEL ROSARIO , P.J., dissenting opinion: With due respect, I am constrained to withhold my assent on the ponencia which grants the present Petition for Review and directs the lifting of the notices of levy and tax lien on Tax Declaration Nos. 41392, 41393 and 41394 issued by the Provincial Assessor of Bataan. Records reveal that respondent issued the Formal Letter of Demand and Final Assessment Notices (FLD/FAN), with Details of Discrepancies, all dated September 29, 2010 , 1 against S.S. Ventures International, Inc. (SSVI) assessing it for deficiency taxes for fiscal year (FY) ending June 30, 2007. In Commissioner of Internal Revenue vs. United Salvage and Towage (Phils.), Inc. , the Supreme Court clarified that when the Bureau of Internal Revenue (BIR) issues the assessment within the three (3)-year period, it has another three (3) years, counted from the date the assessment notice had been released, mailed or sent to the taxpayer , within which to collect the tax due by distraint, levy or court proceeding, viz .: "The statute of limitations on assessment and collection of national internal revenue taxes was shortened from five (5) years to three (3) years by virtue of Batas Pambansa Blg. 700. Thus, petitioner has three (3) years from the date of actual filing of the tax return to assess a national internal revenue tax or to commence court proceedings for the collection thereof without an assessment. However, when it validly issues an assessment within the three (3)-year period, it has another three (3) years within which to collect the tax due by distraint, levy, or court proceeding . The assessment of the tax is deemed made and the three (3)-year period for collection of the assessed tax begins to run on the date the assessment notice had been released, mailed or sent to the taxpayer." 2 (Boldfacing supplied) A perusal of the BIR Records showed that the FLD/FAN were sent via licensed courier (LBC), albeit the date of their mailing was not indicated therein. On the assumption that the FLD/FAN were mailed on September 29, 2010, and counting three (3) years therefrom, respondent had until September 29, 2013 within which to collect SSVI's deficiency taxes for FY ending June 30, 2007. The Warrant of Distraint and Levy (WDL) was served on SSVI on May 26, 2011 , and the Notice of Tax Lien (NOTL) was annotated on July 21, 2011 on Tax Declaration Nos. 41392, 41393 and 41394, covering the buildings owned by SSVI's. The service of WDL and annotation of the tax lien were done within the three (3)-year period to collect. Now, may the NOTL on the subject tax declarations be lifted as respondent has not caused the enforcement or execution thereof by selling the buildings through public auction within the three (3)-year prescriptive period to collect? I submit that the answer is in the negative. The summary remedy of levy on real property was timely initiated within the three (3)-year period to collect which resulted in the annotation of tax lien on the subject tax declarations. There is nothing in the National Internal Revenue Code (NIRC) of 1997, as amended, which requires that the actual disposition of the buildings subject of tax lien should occur within the three (3)-year period to collect. This is so because the tax lien on the subject tax declarations is sufficient to protect the interest of the government, as it is superior to the claim of any private litigant predicated on a judgment. 3 Said tax lien, as annotated in the tax declarations, is valid against any mortgagee, purchaser or judgment creditor. 4 Republic of the Philippines vs. Salud V. Hizon 5 indeed made a declaration that the action for collection, as filed in court, has prescribed for reasons stated therein. Yet, it made a categorical pronouncement that collection through administrative remedy, i.e. , via WDL, may still be effected, saying that the disposition of properties covered by WDL is a mere continuation of a summary remedy that had timely begun, viz .: "Nonetheless, it is contended that the running of the prescriptive period under 223(c) was suspended when the BIR timely served the warrants of distraint and levy on respondent on January 12, 1989. Petitioner cites for this purpose our ruling in Advertising Associates, Inc. v. Court of Appeals . Because of the suspension, it is argued that the BIR could still avail of the other remedy under 223(c) of filing a case in court for collection of the tax deficiency , as the BIR in fact did on January 1, 1997. Petitioner's reliance on the Court's ruling in Advertising Associates, Inc. v. Court of Appeals is misplaced. What the Court stated in that case and, indeed, in the earlier case of Palanca v. Commissioner of Internal Revenue , is that the timely service of a warrant of distraint or levy suspends the running of the period to collect the tax deficiency in the sense that the disposition of the attached properties might well take time to accomplish, extending even after the lapse of the statutory period for collection . In those cases, the BIR did not file any collection case but merely relied on the summary remedy of distraint and levy to collect the tax deficiency . The importance of this fact was not lost on the Court. Thus, in Advertising Associates, it was held: 'It should be noted that the Commissioner did not institute any judicial proceeding to collect the tax. He relied on the warrants of distraint and levy to interrupt the running of the statute of limitations.' Moreover, if, as petitioner in effect says, the prescriptive period was suspended twice, i.e. , when the warrants of distraint and levy were served on respondent on January 12, 1989 and then when respondent made her request for reinvestigation of the tax deficiency assessment on November 3, 1992, the three-year prescriptive period must have commenced running again sometime after the service of the warrants of distraint and levy. Petitioner, however, does not state when or why this took place and, indeed, there appears to be no reason for such. It is noteworthy that petitioner raised this point before the lower court apparently as an alternative theory, which, however, is untenable. For the foregoing reasons, we hold that petitioner's contention that the action in this case had not prescribed when filed has no merit. Our holding, however, is without prejudice to the disposition of the properties covered by the warrants of distraint and levy which petitioner served on respondent, as such would be a mere continuation of the summary remedy it had timely begun . Although considerable time has passed since then, as held in Advertising Associates, Inc. v. Court of Appeals and Palanca v. Commissioner of Internal Revenue , the enforcement of tax collection through summary proceedings may be carried out beyond the statutory period considering that such remedy was seasonably availed of ." (Boldfacing and underscoring supplied) The ponencia holds that Hizon points out that in certain situations, the running of prescriptive period for the collection of taxes may resume after the service of the WDL against the delinquent taxpayer. With due respect, the pronouncement in Hizon anent the resumption of the running of the prescriptive period after the service of the WDL pertains to the institution of judicial proceedings to collect the tax . As provided in Section 205 of the NIRC of 1997, as amended, the summary remedies (distraint of personal property and levy on real property) and the judicial proceedings (civil or criminal action) may be pursued simultaneously at the discretion of the BIR. The service of the WDL to the delinquent taxpayer does not suspend the running of the prescriptive period to institute judicial proceedings (civil or criminal action) for the collection of the delinquent taxes. Notably, in Hizon , the BIR failed to institute the judicial proceedings for the collection of delinquent taxes within the prescribed period; thus, the Supreme Court ruled that the action filed before the Regional Trial Court for collection of taxes has prescribed . Nonetheless, as aforequoted in Hizon , supra ,: " the enforcement of tax collection through summary proceedings may be carried out beyond the statutory period considering that such remedy was seasonably availed of ." In Revenue Memorandum Order No. 41-2019 dated June 4, 2019, the instances when NOTL may be extinguished are enumerated. After careful perusal thereof, and sadly for petitioner, none of the grounds enumerated therein are present in this case. AIDSTE All told, I VOTE to DENY the Petition for Review for lack of merit. Footnotes 1. Docket, pp. 6-18. 2. Exhibit "P-1." Id. at p. 354. 3. See Par. 4, Petition for Review dated March 8, 2021, id. at p. 7. Admitted by respondent in par. 1 of her Answer, id. at p. 90. 4. Annex C of Exhibit "P-7." Id. at p. 369. 5. Annex D of Exhibit "P-7." Id. at pp. 370-371. 6. Annex E of Exhibit "P-7." Id. at p. 372. 7. Exhibit "P-7." Id. at pp. 365-367. 8. In the hearing held on March 3, 2022, the Court allowed petitioner to explain the discrepancies in the tax declarations covered by the Deed of Absolute Sale vis--vis letter to the BIR dated July 22, 2020, infra note 20. Said explanation was embodied in p. 2 of Memorandum for Petitioner Boast, Inc. dated April 29, 2022, id. at p. 343. 9. Exhibits "P-4" and "P-4-1." Id. at pp. 359-360. 10. Exhibits "P-5" and "P-5-1." Id. at pp. 361-362. 11. Exhibits "P-6" and "P-6-1." Id. at pp. 363-364. 12. Exhibit "P-8." Id. at pp. 373-374. 13. Exhibit "P-10." Id. at p. 376. 14. Exhibit "P-11." Id. at pp. 377-382. 15. Exhibit "P-12." Id. at pp. 383-386. 16. Supra note 1. 17. Docket, pp. 90-103. 18. Id. at pp. 121-131. 19. Id. at pp. 195-204. 20. Order dated March 3, 2022. Id. unpaged. 21. Id . at p. 404. 22. Id . at pp. 342-352. 23. Ibid . 24. Respondent's Manifestation dated May 6, 2022. Id . at pp. 399-401. 25. Supra note 20. 26. An Act Creating the Court of Tax Appeals. 27. See Commissioner of Internal Revenue v. Lancaster Philippines, Inc. , G.R. No, 183408, July 12, 2017. 28. Boldfacing supplied. 29. The provision is cited in page 13 of this Decision. 30. SEC. 219. Nature and Extent of Tax Lien . If any person, corporation, partnership, joint-account (cuentas en participacion) , association or insurance company liable to pay an internal revenue tax, neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the Government of the Philippines from the time when the assessment was made by the Commissioner until paid, with interests, penalties, and costs that may accrue in addition thereto upon all property and rights to property belonging to the taxpayer: Provided, That this lien shall not be valid against any mortgagee, purchaser or judgment creditor until notice of such lien shall be filed by the Commissioner in the office of the Register of Deeds of the province or city where the property of the taxpayer is situated or located. 31. Supra note 15. 32. Supra note 16. 33. A.M. No. 19-10-20-SC. 34. Ignacio v. Reyes , G.R. No. 213192, July 12, 2017. 35. Philippine Numismatic Antiquarian Society v. Aquino , G.R. No. 206617, January 30, 2017. 36. G.R. No. 216109, February 5, 2020. 37. Supra note 7. 38. Supra notes 8-10, respectively. 39. G.R. No. 170060, August 17, 2016. 40. SUBJECT: Prescribing the Required Documents in the Processing of the Request for the Lifting of Warrant of Garnishment, Notice of Tax Lien, Notice of Levy and Notice of Encumbrance. 41. Commissioner of Internal Revenue v. Court of Tax Appeals and QL Development, Inc. , infra note 46. 42. Boldfacing supplied. 43. Section 291. In General. All laws, decrees, executive orders, rules and regulations or parts thereof which are contrary to or inconsistent with this Code are hereby repealed, amended or modified accordingly. 44. An Act Amending Sections 318 and 319 of the National Internal Revenue Code, as Amended, So as to Reduce the Period of Limitation for Assessment of Internal Revenue Taxes from Five (5) to Three (3) Years. 45. Section 1. Section 318 of the National Internal Revenue Code, as amended, is hereby amended to read as follows: Sec. 318. Period of limitation upon assessment and collection. Except as provided in the succeeding section, internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided , That in a case where a return is filed beyond the period prescribed by law, the three-year period shall be counted from the day the return was filed. For the purposes of this section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day. Section 2. Section 319 of the same Code is hereby amended to read as follows: Sec. 319. Exceptions as to period of limitation of assessment and collection of taxes. (a) In the case of a false or fraudulent return with intent to evade tax or a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten years after the discovery of the falsity, fraud, or omission: Provided , That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof. xxx xxx xxx (c) Any internal revenue tax which has been assessed within the period of limitation above-prescribed may be collected within three years following the assessment of the tax. 46. G.R. No. 258947, March 29, 2022. 47. SEC. 2. Powers and Duties of the Bureau of Internal Revenue. The Bureau of Internal Revenue shall be under the supervision and control of the Department of Finance and its powers and duties shall comprehend the assessment and collection of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and fines connected therewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. . . . 48. SEC. 205. Remedies for the Collection of Delinquent Taxes. The civil remedies for the collection of internal revenue taxes, fees or charges, and any increment thereto resulting from delinquency shall be: (a) By distraint of goods, chattels, or effects, and other personal property of whatever character, including stocks and other securities, debts, credits, bank accounts and interest in and rights to personal property, and by levy upon real property and interest in rights to real property; . . . 49. Par. 18, respondent's Answer. Docket, p. 94. 50. BIR Records, pp. 237-256. 51. G.R. No. 139736, October 17, 2005. 52. G.R. No. 130430, December 13, 1999. 53. Boldfacing supplied. 54. Boldfacing supplied. 55. Commissioner of Internal Revenue v. Court of Tax Appeals Second Division and QL Development, Inc. , supra note 46. 56. Supra notes 9-11. 57. Transcript of Stenographic Notes of Hearing held on March 3, 2022, p. 17. Boldfacing supplied. 58. Republic of the Philippines v. Ablaza , G.R. No. L-14519, July 26, 1960. Boldfacing supplied. DEL ROSARIO, P.J., dissenting opinion: 1. Paragraph 18, respondent's Answer, Docket, p. 94. 2. G.R. No. 197515, July 2, 2014. 3. Republic of the Philippines vs. Ramon G. Enriquez , G.R. No. 78391, October 21, 1988. 4. See Section 219 of the NIRC of 1997, as amended. 5. G.R. No. 130430, December 13, 1999.