Scribd
Upload
652 views1 page

CIR vs. FMF Development Corporation 167765

The Supreme Court denied the petition of the Commissioner of Internal Revenue regarding tax assessments against FMF Development Corporation. The Court found that the waiver signed by FMF to extend the 3-year period for the Bureau of Internal Revenue to assess taxes was invalid. Specifically, the waiver was not signed by the Commissioner as required, did not contain the date of acceptance, and FMF was not furnished a copy. As such, the 3-year prescriptive period was not tolled and had lapsed, making the tax assessments time-barred. The Court of Tax Appeals and Court of Appeals decisions cancelling the assessments were affirmed.

Uploaded by

magen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
652 views1 page

CIR vs. FMF Development Corporation 167765

The Supreme Court denied the petition of the Commissioner of Internal Revenue regarding tax assessments against FMF Development Corporation. The Court found that the waiver signed by FMF to extend the 3-year period for the Bureau of Internal Revenue to assess taxes was invalid. Specifically, the waiver was not signed by the Commissioner as required, did not contain the date of acceptance, and FMF was not furnished a copy. As such, the 3-year prescriptive period was not tolled and had lapsed, making the tax assessments time-barred. The Court of Tax Appeals and Court of Appeals decisions cancelling the assessments were affirmed.

Uploaded by

magen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Commissioner of Internal Revenue versus

FMF Development Corporation


G.R. No. 167765, June 30, 2008
Second Division, Quisimbing, J.

Facts: FMF Development Corporation (FMF) is a registered domestic


corporation who received pre-assessment notices regarding the returns it filed
for yr. 1995, FMF filed protest, and requested for a reconsideration. January
1999, FMF President Fernandez later executed a waiver of the 3-yr-period for
the BIR to assess internal revenue taxes, thus extending the assessment period
till October 31, 1999. The waiver was accepted and signed by Revenue District
Officer Zambrano. FMF received amended pre-assessment notices from the
BIR, the former field a protest but received a demand letter and assessment
notice alleging deficiency in taxes and accrued interests. FMF points that the
waiver was invalid, and invokes prescription. FMF filed a petition for review with
the Court of Tax Appeals (CTA.) Petition was granted and the assessments,
cancelled. The Court of Appeals (CA.) affirmed and denied the Motion for
reconsideration, hence a petition for review on certiorari to the Supreme Court.

Issue(s): (1) Whether the waiver was validly executed (2) Whether the period
to assess had prescribed.

Decision: No and No, petition denied for lack of merit. Pursuant to Section 203
and Section 222 of the Tax Code, an extension of the original three-year period
is allowed by the execution of a valid waiver which is an agreement—made
before the expiration of the original period—between the BIR and the taxpayer
in writing to an extension for a specified period. RMO No. 20-90 implements
Sections 203 and 222 (b and prescribes the procedures in executing a valid
waiver. The Court found that the waiver failed to satisfy the mentioned when;
firstly, it was not proven that respondent was furnished a copy of the BIR-
accepted waiver. Secondly, the waiver was signed only by a revenue district
officer, when it should have been signed by the Commissioner as mandated
by the NIRC and RMO No. 20-90, considering that the case involves an amount
of more than P1 million, and the period to assess is not yet about to prescribe.
Lastly, it did not contain the date of acceptance by the Commissioner of
Internal Revenue, a requisite necessary to determine whether the waiver was
validly accepted before the expiration of the original three-year period. Bear
in mind that the waiver in question is a bilateral agreement, thus necessitating
the very signatures of both the Commissioner and the taxpayer to give birth to
a valid agreement. RMO No. 20-90 is not directory, but mandatory. (Ph
Journalists v. CIR) the law on prescription 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
recommended the approval of the law. The prescription thus, was not tolled
so continued till April 15, 1999, assuming the amended return was substantially
different from the original return, a case which affects the reckoning point of
the prescriptive period, still assessment was time barred.

Page 9 of 30

You might also like