CIR v Ayala Securities
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-29485 November 21, 1980
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. AYALA SECURITIES CORPORATION and THE HONORABLE COURT OF TAX APPEALS, respondents. TEEHANKEE, J.:
Before the Court is petitioner Commissioner of Internal Revenue's motion for reconsideration of the Court's decision of April 8, 1976 wherein the Court affirmed in toto the appealed decision of respondent Court of Tax Appeals, the dispositive portion of which provides as follows:
WHEREFORE, the decision of the respondent Commissioner of Internal Revenue assessing petitioner the amount of P758,687.04 as 25% surtax and interest is reversed. Accordingly, said assessment of respondent for 1955 is hereby cancelled and declared of no force and effect, Without pronouncement as to costs.
This Court's decision under reconsideration held that the assessment made on February 21, 1961 by petitioner against respondent corporation (and received by the latter on March 22, 1961) in the sum of P758,687.04 on its surplus of P2,758,442.37 for its fiscal year ending September 30, 1955 fell under the five-year prescriptive period provided in section 331 of the National Internal Revenue Code and that the assessment had, therefore, been made after the expiration of the said five-year prescriptive period and was of no binding force and effect .
Petitioner has urged that
A perusal of Sections 331 and 332(a) will reveal that they refer to a tax, the basis of which is required by law to be reported in a return such as for example, income tax or sales tax. However, the surtax imposed by Section 25 of the Tax Code is not one such tax. Accumulated surplus are never returned for tax purposes, as there is no law requiring that such surplus be reported in a return for purposes of the 25% surtax. In fact, taxpayers resort to all means and devices to cover up the fact that they have unreasonably accumulated surplus.
Petitioner, therefore, submits that
As
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-29485 November 21, 1980
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. AYALA SECURITIES CORPORATION and THE HONORABLE COURT OF TAX APPEALS, respondents. TEEHANKEE, J.:
Before the Court is petitioner Commissioner of Internal Revenue's motion for reconsideration of the Court's decision of April 8, 1976 wherein the Court affirmed in toto the appealed decision of respondent Court of Tax Appeals, the dispositive portion of which provides as follows:
WHEREFORE, the decision of the respondent Commissioner of Internal Revenue assessing petitioner the amount of P758,687.04 as 25% surtax and interest is reversed. Accordingly, said assessment of respondent for 1955 is hereby cancelled and declared of no force and effect, Without pronouncement as to costs.
This Court's decision under reconsideration held that the assessment made on February 21, 1961 by petitioner against respondent corporation (and received by the latter on March 22, 1961) in the sum of P758,687.04 on its surplus of P2,758,442.37 for its fiscal year ending September 30, 1955 fell under the five-year prescriptive period provided in section 331 of the National Internal Revenue Code and that the assessment had, therefore, been made after the expiration of the said five-year prescriptive period and was of no binding force and effect .
Petitioner has urged that
A perusal of Sections 331 and 332(a) will reveal that they refer to a tax, the basis of which is required by law to be reported in a return such as for example, income tax or sales tax. However, the surtax imposed by Section 25 of the Tax Code is not one such tax. Accumulated surplus are never returned for tax purposes, as there is no law requiring that such surplus be reported in a return for purposes of the 25% surtax. In fact, taxpayers resort to all means and devices to cover up the fact that they have unreasonably accumulated surplus.
Petitioner, therefore, submits that
As