GR No: L-13453Date: February 21, 1960

GIBBS v CIR

Petitioners: Allison and Esther GibbsRespondent: Commissioner of Internal Revenue

Facts: On Mar. 14, 1956, petitioners protested the deficiency income tax assessment in the amount of P12,284.00, that said

deficiency assessment was based on a disallowance of bad debts and losses claimed in their income tax return for 1950. On Oct. 3, 1956, petitioners sent a check in the amount of P12,284.00 to CIR as payment of said deficiency assessment,

at the same time demanding the immediate refund of the amount paid. On Oct. 26, 1956, respondent Collector denied the request for refund. Notice of said denial was received by petitioners on November 14, 1956. On Sept. 27, 1957, petitioners filed with the CTA a petition for review and refund, with a motion for suspension of

collection of penalties. On Oct. 7, 1957, CIR filed a motion to dismiss, on the ground that the petition was filed beyond the 30-day period

provided under Section 11, in relation to Section 7, of RA 1125. On Dec. 2, 1957, CTA dismissed the petition for having filed out of time. Petitioners, however, contend that although their appeal was filed beyond said 30-day period, CTA still had jurisdiction

over the same, by virtue of the provision of Section 306 of the NIRC. Issue:W/N the petitioners' appeal from the decision of CIR, was filed with the CTA within the statutory period. NO.

Rationale:

Sec. 11 RA 1125

SEC. 11. Who may appeal; effect of appeal.—Any person, association or corporation adversely affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such decision or ruling. . . .

It is not disputed that petitioners received on Nov. 14, 1956, notice of respondent Collector's decision denying their request for a refund of the deficiency assessment paid by them. Pursuant to the above-quoted provision of Sec 11 of RA 1125, they had 30 days from said date within which to file their appeal with respondent court. However, they filed said appeal only on Sept. 27, 1957, or more than ten (10) months thereafter, much beyond the aforementioned 30-day period within which to file the same. Consequently, respondent court had acquired no jurisdiction to entertain said appeal and the dismissal of the same was proper.

As to the claim that the CTA has jurisdiction despite that it is beyond the 30 day period, the contention is devoid of any merit. In the case of Johnston Lumber Co., Inc. vs. Court of Tax Appeals, et al. 101 Phil., 654; 54 Off. Gaz. [16] 5226, the Court held:

It is the contention of petitioner that the aforequoted provisions cannot stand side by side because, whereas Section 306 of the Tax Code required the filing of a claim before an action in court may be maintained, Republic Act No. 1125 which confers jurisdiction upon the Court of Tax Appeals to take cognizance of appeals from the decisions of the Collector of Internal Revenue does not require any more the filing of said claim but merely provides that said appeal may be filed within 30 days from receipt of such decision or ruling.

The Court said that Sec 306 of the NIRC should be construed together with Sec 11 of RA 1125. In fine, a taxpayer who has paid the tax, whether under protest or not, and who is claiming a refund of the same, must comply with the requirements of both sections, that is, he must file a claim for refund with the Collector of Internal Revenue within 2 years from the date of his payment of the tax, as required by said Sec 306, and appeal to the CTA within 30 days from receipt of the Collector's decision or ruling denying his claim for refund, as required by said Sec 11 of RA 1125. If, however, the Collector takes time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the Court of Tax Appeals before the end of the two-year period without awaiting the decision of the Collector. This is so because of the positive requirement of Section 306 and the doctrine that delay of the Collector in rendering decision does not extend the peremptory period fixed by the statute.

In the case of a taxpayer who has not yet paid the tax and who is protesting the assessment made by the Collector of Internal Revenue, he must file his appeal with the Court of Tax Appeals within 30 days from his receipt of the Collector's assessment, as required by said Sec 11 of RA 1125. Otherwise, his failure to comply with said statutory requirement would bar his appeal and deprive the Court of Tax Appeals of its jurisdiction to entertain or determine the same.