Roman Catholic Archbishop of Cebu vs. Collector of Internal Revenue (GR L-16683, 31 January 1962)
En Banc, Reyes JBL (J): 8 concur, 1 took no part

Facts: On 21 February 1956, the Roman Catholic Archbishop of Cebu, in behalf of the Roman Catholic Church of Cebu, filed an income tax return for 1955, reporting a gross income of P10,356.90 from sales or exchanges of capital assets,  from rentals and royalties, and from dividends received. The Archbishop claimed deductions from depreciation of the Archbishop’s Palace Building, Major Seminary, Minor Seminary, and Furniture and Fixture in the total value of P19,898.09. On 18 February 1957, the Archbishop, in behalf of the Roman Catholic Church in Cebu, filed an income tax return for 1956, showing a gross income of P18,856.42. The Archbishop claimed deductions from depreciation in the total value of P20,226.15. On the theory that the gross incomes in 1955 and 1956 were realized independently of the use of the building, furniture and fixtures, the Collector of Internal Revenue totally disallowed the deductions for depreciation, thereby determining against the Archbishop, on 15 July 1956 and 30 March 1957, income tax liabilities for 1955 and 1956 in the respective amounts of P1,825.00 and P2,493.00. On May 10 and 14, 1957, the Archbishop requested for the reconsideration of the determinations, which requests were denied by the Collector in a letter dated 13 July 1957, wherein he demanded the payment of P1,825.00 and P2,493.00, including 5% surcharge and 1% legal interest on the latter amount. On 28 August 1957, the Archbishop requested for the reconsideration of the denial and the cancellation of the assessments. On 5 November 1957, the Collector denied this request for reconsideration and demanded the payment of P4,318.00, plus delinquency penalties incident to late payment. Again, on 23 November 1957, the Archbishop requested for the reconsideration and cancellation of the assessments, which request was denied on 20 January 1958, with a demand “for the last time to pay the total sum of P4,318.00 plus delinquency penalties incident to late payment immediately upon receipt hereof in order that no drastic action may be taken by this office on the matter.” Meanwhile, on 4 December 4, 1957, the Collector issued a warrant of distraint and levy against the properties of the Roman Catholic Church of D. Jakosalem St., Cebu City, to satisfy the sums of P1,916.25 and P2,617.65 as defficiency income tax and surcharge due for 1955 and 1956. On 7 February 1958, the Archbishop paid under protest the total amount of P5,201.52 as income tax for the years 1955 and 1956, including surcharge and interests.

On 1 February 1958, the Archbishop filed before the Court of Tax Appeals his petition for review. The Tax Court, convinced that the lack of a claim for refund was fatal to the Archbishop’s appeal, dismissed the same for lack of jurisdiction to take cognizance thereof. From this ruling, the Archbishop appealed to the Supreme Court.

The Supreme Court affirmed the dismissal of the Archbishop’s appeal by the Court of Tax Appeals, with costs against the Archbishop.

1.    Section 7 of Republic Act 1125
Section 7 of Republic Act 1125, provides in part that “(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of the law administered by the Bureau of Internal Revenue;”

2.    RA 1125 allows appeal from decision of Collector in cases involving “disputed assessments” as distinguished from cases involving “refunds of internal revenue taxes, fees or other charges “
Section 7 of Republic Act No. 1125, creating the Court of Tax Appeals, allows an appeal from a decision of the Collector in cases involving “disputed assessments” as distinguished from cases involving “refunds of internal revenue taxes, fees or other charges.” To hold that the taxpayer has now lost the right to appeal from the ruling on the disputed assessment but must prosecute his appeal under section 306 of the Tax Code, which requires a taxpayer to file a claim for refund of the taxes paid as a condition precedent to his right to appeal, would in effect require of him to go through a useless and needless ceremony that would only delay the disposition of the case, for the Collector (now Commissioner) would certainly disallow the claim for refund in the same way as he disallowed the protest against the assessment. The law should not be interpreted as to result in absurdities.

3.    Dismissal of appeal correct for being filed out of time
The dismissal of the Archbishop’s appeal is substantially correct, for the reason that said appeal was not taken within the 30 day period prescribed by section 11 of Republic Act 1125. The Archbishop has submitted not less than 3 motions or requests for the reconsideration of his Tax Assessments. All motions for reconsideration were premised on the same grounds, deduction of the depreciation of the buildings in question. The appeal to the Tax Court was filed only on 19 February 1958. By these successive motions for reconsideration, the Archbishop managed to delay the review of his case by the Tax Court for nearly two years. Such delays are plainly inimical to the general interest, ascertainment and collection of taxes being essential to the maintenance of the State. The decision by the Collector dated 5 November 1957, denying the second request for reconsideration of the assessment, was certainly reviewable by the Court of Tax Appeals. Hence, the 30-day appeal period should be counted from 21 November 1957, when the taxpayer received copy of the Collector’s ruling. The running of the period was not interrupted by the filing of the third request for reconsideration, because the latter did not advance new grounds not previously alleged, and was, therefore, merely pro forma. Therefore, the Archbishop’s petition for review should have been lodged with the Tax Court not later than 21 December 1957, but it was actually filed only on 1 February 1958.

4.    Doctrine in North Camarines Lumber Co. vs. Collector of Internal Revenue, (109 Phil., 511)
The Supreme Court cannot countenance the theory that would make the commencement of the statutory 30-day period solely dependent on the will of the taxpayer and place the latter in a position to put off indefinitely and at his convenience the finality of a tax assessment. Such an absurd procedure would be detrimental to the interest of the Government, for ‘taxes are the lifeblood of the government, and their prompt and certain availability an imperious need.’ (Bull vs. U. S. 295, U. S. 247).”