Commissioner of Internal Revenue v. Diaz

SIXTH DIVISION [CA-G.R. SP No. 32459. December 9, 1997.] COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . FR. JESUS DIAZ, in his capacity as Executor of the Estate of Fr. Samuel F. Escao, S.J., and COURT OF TAX APPEALS , respondents . D E C I S I O N ELBINIAS , J p : Petition for Review over the decision of the Court of Tax Appeals in C.T.A. Case No. 4722, setting aside the ruling of the Commissioner of Internal Revenue. Fr. Samuel F. Escao, S.J. died testate with private respondent Fr. Jesus Diaz as executor of the estate of the decedent. Fr. Jesus Diaz filed the corresponding estate tax return paying P1,065,019.76 representing the estate tax due, surcharge for late filing of return and 20% interest. The Bureau of Internal Revenue imposed an additional 25% surcharge for late payment thereof amounting to P218,322.48. The Isabela Cultural Corporation, sole heir of the estate, sought a ruling from petitioner Commissioner of Internal Revenue (CIR) on the interpretation of Section 248(a) of the Tax Code, which reads: "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 with whom the return is required to be filed; or (3) Failure to pay the tax within the time prescribed for its payment; or (4) 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 petitioner issued BIR Ruling No. 129-91 holding that the presence of any or all of the acts mentioned in the aforequoted section would give rise to the imposition of the 25% surcharge for each violation enumerated therein, noting the conjunction "or" used in every violation stated. llcd The private respondent paid the 25% surcharge under protest of P218,322.48, but later on filed with the Court of Tax Appeals a petition seeking its refund. The CTA ordered the Commissioner of Internal Revenue to refund the amount. We find no error in the CTA decision ordering the refund. Taxes may not be imposed by implication; and a tax statute is to be construed strictly and against the subjection to a tax liability, especially where it carries penal provisions (Marinduque Iron Mines Agents, Inc. vs. Municipal Council of the Municipality of Hinabangan, Samar, No. L-18924, 11 SCRA 416 [1964]) and that in case of doubt, tax statutes are to be construed strictly against the Government and liberally in favor of the taxpayer; for taxes, being burdens, are not to be presumed beyond what the applicable statute expressly and clearly declares (Republic vs. Intermediate Appellate Court, G.R. No. 69344, 196 SCRA 335 [1991] citing Commissioner of Internal Revenue vs. La Tondea, Inc. and CTA, 5 SCRA 665 [1962]). Indeed, we cannot uphold petitioner's submission that the 25% surcharge is imposable on each of the four (4) violations under Sec. 248 of the Tax Code in addition to the tax required. Each of those four (4) cases or acts excludes the others. For instance, if the taxpayer filed a return with the wrong internal revenue officer, that means that he had filed the return only at the wrong place; if he failed to pay the tax within the time prescribed, that means that he had filed his return and paid the tax although belatedly; and if he failed to pay the tax in full, that means he had filed his return and paid the tax although not in full. Since each of those cases excludes the others, the taxpayer cannot be possibly liable for more than one violation, as in the case at bar. At any rate, as ruled by respondent court: "Nowhere in Sec. 248(a) of the Tax Code can we clearly infer that the 25% surtax or surcharge is imposable on each of the enumerated acts therein. In the absence of an express provision to that effect, We could not give the said law an interpretation which will impose a heavier burden on the taxpayers." WHEREFORE, the decision appealed from is AFFIRMED in toto. No costs. SO ORDERED. Hofilea and Amin JJ ., concur.