CIR vs Philippine Global communications Inc

Facts:

1. Respondent, a corporation engaged in telecommunications, filed its Annual Income Tax Return for taxable year 1990 on 15 April 1991.

2. On 22 April 1992, the BIR sent a letter to respondent requesting the latter to present for examination certain records and documents, but respondent failed to present any document.

3. On 22 April 1994, respondent received a Formal Assessment Notice dated 14 April 1994, for deficiency income tax in the total amount of P118,271,672.00. 3

4. Respondent filed 2 formal protest letters against Assessment Notice letter and requested for the cancellation of the tax assessment, which they alleged was invalid for lack of factual and legal basis. 4

5. CIR denied.6. On 15 November 2002, respondent filed a Petition for Review with the CTA. After

due notice and hearing, the CTA rendered a Decision in favor of respondent on 9 June 2004. 6 The CTA ruled on the primary issue of prescription and found it unnecessary to decide the issues on the validity and propriety of the assessment. It decided that the protest letters filed by the respondent cannot constitute a request for reinvestigation, hence, they cannot toll the running of the prescriptive period to collect the assessed deficiency income tax. 7 Thus, since more than three years had lapsed from the time was issued in 1994, the CIR's right to collect the same has prescribed in conformity with Section 269 of the National Internal Revenue Code of 1977 8 (Tax Code of 1977).

Issue:1. WON the right to collect of the deficiency tax by the CIR has already prescribed2. What is the purpose of statue of limitation

Held:

1. Yes, The law prescribed a period of three years from the date the return was actually filed or from the last date prescribed by law for the filing of such return, whichever came later, within which the BIR may assess a national internal revenue tax. 13 However, the law increased the prescriptive period to assess or to begin a court proceeding for the collection without an assessment to ten years when a false or fraudulent return was filed with the intent of evading the tax or when no return was filed at all. 14 In such cases, the ten-year period began to run only from the date of discovery by the BIR of the falsity, fraud or omission.

If the BIR issued this assessment within the three-year period or the ten-year period, whichever was applicable, the law provided another three years after the assessment for the collection of the tax due thereon through the administrative process of distraint and/or levy or through judicial proceedings. 15 The three-year period for collection of the assessed tax began to run on the date the assessment notice had been released, mailed or sent by the BIR. 16

The assessment, in this case, was presumably issued on 14 April 1994 since the respondent did not dispute the CIR's claim. Therefore, the BIR had until 13 April 1997. However, as there was no Warrant of Distraint and/or Levy served on the respondents nor any judicial proceedings initiated by the BIR, the earliest attempt of the BIR to collect the tax due based on this assessment was when it filed its Answer in CTA Case No. 6568 on 9 January 2003, which was several years beyond the three-year prescriptive period. Thus, the CIR is now prescribed from collecting the assessed tax.

The provisions on prescription in the assessment and collection of national internal revenue taxes became law upon the recommendation of the tax commissioner of the Philippines. The report submitted by the tax commission clearly states that these provisions on prescription should be enacted to benefit and protect taxpayers:Under the former law, the right of the Government to collect the tax does not prescribe. However, in fairness to the taxpayer, the Government should be estopped from collecting the tax where it failed to make the necessary investigation and assessment within 5 years after the filing of the return and where it failed to collect the tax within 5 years from the date of assessment thereof. Just as the government is interested in the stability of its collections, so also are the taxpayers entitled to an assurance that they will not be subjected to further investigation for tax purposes after the expiration of a reasonable period of time. (Vol. II, Report of the Tax Commission of the Philippines, pp. 321-322). 17

2. Purpose of the statute of Limitation

1. Prescription in the assessment and in the collection of taxes is provided by the Legislature for the benefit of both the Government and the taxpayer; for the Government for the purpose of expediting the collection of taxes, so that the agency charged with the assessment and collection may not tarry too long or indefinitely to the prejudice of the interests of the Government, which needs taxes to run it; and for the taxpayer so that within a reasonable time after filing his return, he may know the amount of the assessment he is required to pay, whether or not such assessment is well founded and reasonable so that he may either pay the amount of the assessment or contest its validity in court . . . . It would surely be prejudicial to the interest of the taxpayer for the Government collecting agency to unduly delay the assessment and the collection because by the time the collecting agency finally gets around to making the assessment or making the collection, the taxpayer may then have lost his papers and books to support his claim and contest that of the Government, and what is more, the tax is in the meantime accumulating interest which the taxpayer eventually has to pay. SIcEHD

2. In Republic of the Philippines v. Ablaza, 19 this Court emphatically explained that the statute of limitations of actions for the collection of taxes is justified by the need to protect law-abiding citizens from possible harassment:The law prescribing a limitation of actions for the collection of the income tax is beneficial both to the Government and to its citizens; to the Government because tax officers would be obliged to act promptly in the making of assessment, and to

citizens because after the lapse of the period of prescription citizens would have a feeling of security against unscrupulous tax agents who will always find an excuse to inspect the books of taxpayers, not to determine the latter's real liability, but to take advantage of every opportunity to molest, peaceful, law-abiding citizens. Without such legal defense taxpayers would furthermore be under obligation to always keep their books and keep them open for inspection subject to harassment by unscrupulous tax agents. The law on prescription being a remedial measure should be interpreted in a way conducive to bringing about the beneficient purpose of affording protection to the taxpayer within the contemplation of the Commission which recommended the approval of the law.

And again in the recent case Bank of the Philippine Islands v. Commissioner of Internal Revenue, 20 this Court, in confirming these earlier rulings, pronounced that:

3. Though the statute of limitations on assessment and collection of national internal revenue taxes benefits both the Government and the taxpayer, it principally intends to afford protection to the taxpayer against unreasonable investigation. The indefinite extension of the period for assessment is unreasonable because it deprives the said taxpayer of the assurance that he will no longer be subjected to further investigation for taxes after the expiration of a reasonable period of time.

Tan Guan vs NABLE

Facts:

1. Manufacturing Co. — a duly registered manufacturer of cigarettes — asked the Commissioner's permission to sell 800 bobbins of cigarette paper to Imperial. The permit was forthwith granted.

2. On July 23, 1952, in the course of a routine investigation conducted by the Bureau of Internal Revenue — a representative of Imperial denied that the latter had received said 800 bobbins of cigarette paper. Thereupon, the Commissioner assessed against the Manufacturing Co. the sum of P128,800 one for P72,450 and the other for P128,800, with costs.

3. The first represents specific taxes allegedly due for the quantity of cigarettes that could have been produced out of 300 bobbins of cigarette paper disposed of by Imperial Tobacco Company — hereinafter referred to as Imperial — of which Tan Guan is one of the principal partners, whereas the second constitutes the specific taxes allegedly due on the cigarettes that could have been manufactured out of the 800 bobbins of cigarette paper said to have been purchased by Imperial from the Philippine Cigarette Manufacturing Co., Inc., hereinafter referred to as the Manufacturing Co.

4. On February 9, 1953, Padua conveyed to the Commissioner his (Padua's) intention to appeal to the conference staff. The appeal was given due course on

February 10, 1953, and was set for the hearing before said conference staff on March 3 and 31, 1953. Padua took part at the hearing on March 3, but, nobody appeared on behalf of Imperial at the hearing on March 31 ,1953, despite the promise made by Padua to then produce some documents.

5. Tan Guan could not be located, however, until April 30, 1958, when the corresponding assessment notice was delivered to him. On May 6, 1958, the Commissioner issued a warrant of distraint against the properties of Tan Guan

6. On May 7, 1958, Civil Case of the Court of First Instance of Rizal was filed by the Government to recover from Tan Guan the aforementioned sums of P72,450 and P128,800, as specific taxes on cigarettes. About a week later, or on May 15, 1958, Imperial asked the Commissioner a rehearing, but, before this request could be acted upon, Tan Guan filed a petition for review with the Court of Tax Appeals which, in due course, rendered the appealed decision in favor of the Government. Hence, this appeal.

7. The main defense set up by Tan Guan is that of prescription of action. With respect to the assessment for P72,450, he maintains that the same was made on January 21, 1953, whereas, the aforementioned civil action for the recovery of said sum and that of P128,800 was filed on May 7, 1958, or beyond the prescriptive period of five (5) years which, Tan Guan maintains, is applicable thereto.

Issue:WON the right to collect of the aforementioned amount by the CIR has already prescribed

Held:

No, It should be noted, however that the running of said period was interrupted on February 9, 1953, when Imperial, appealed the disputed assessment to the conference staff and that, on May 8, 1953, the Commissioner reiterated the demand for the payment of said sum of P72,450 (less P1,000 paid on February 20, 1953) in addition to P10,000 as compromise penalty. Accordingly, from May 8, 1953 to May 7, 1958, when the civil action was commenced, less than five (5) years had elapsed.Moreover, the prescriptive period of five (5) years applies only when a return is filed. 3 However,"In the case of a false of fraudulent return with intent to evade tax or of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten years after the discovery of the falsity, fraud, or omission." In Bisaya Land Transportation Co. v. Collector of Internal Revenue and Collector of Internal Revenue v. Bisaya Land Transportation Co., 5 we held that this provision applies whenever a return is not filed, whether it is required or not. Since, the civil action for the recovery of P72,450 and P128,800 was commenced on May 7, 1959, or long before the expiration of the aforementioned period of ten (10) years, it is clear that the plea of prescription cannot be sustained.

Republic vs Lim de Yu

Facts:1. Appellee Rita Lim de Yu filed her yearly income tax returns from 1948 through

1953. The Bureau of Internal Revenue assessed the taxes due on each return, and appellee paid them accordingly.

2. On July 17, 1956 the Bureau issued to appellee deficiency income tax assessments for the years 1945 to 1953 in the total amount of P22,450.50. She protested the assessments and requested a reinvestigation.

3. On August 30, 1956 she signed a "waiver" of the statute of limitations under the Tax Code as a condition to the reinvestigation requested. Thereafter, or on July 18, 1958, the Bureau issued to her income tax assessment notices for the years 1948 to 1953, totalling P35,379.63. This last assessment, like the one issued in 1956, covered not only the basic deficiency income taxes, but also 50% thereof as surcharge. Upon appellee's failure to pay, an action for collection was filed against her in the Court of First Instance of Cotabato on May 11, 1959.

4. Appeals, which forwarded the case to this Court, the issues involved being purely legal.

5. Appellant claims that the lower court erred (1) in ruling that the deficiency income taxes due from appellee for the years 1948, 1949 and 1950 were not assessed on time; and (2) in dismissing the case on the ground that the right of appellant to collect the deficiency income tax assessments had already prescribed.

Issue:WON the CIR’s right to collect has alreathe prescription of 10 years

Held:

No, TAXATION; PRESCRIPTION; TEN YEAR PERIOD TO COLLECT TAX IN CASES OF FRAUDULENT RETURN; FRAUD MUST BE PROVEN. — For the ten year period of limitation of assessment and collection of taxes under Section 332 of the tax code to apply it is not enough that fraud is alleged in the complaint; it must be established. Fraud not having been proven in the case at bar, the period of limitation was five years from the filing of the return, according to Section 331 of the tax code.

The first issue raised by appellant is whether or not the returns filed by appellee for the years 1948 to 1953 are false and fraudulent. Appellant maintains they are because the yearly net incomes reported in her returns are much less than as computed by the Bureau, and consequently, under par (a), Section 332 of the Tax Code, it has ten years from the date of the discovery of the fraud or falsity, i.e., May 25, 1955, within which to assess the taxes or to file a suit for collection without assessment. And since, it is further contended, appellee can no longer question the correctness of the assessment in view of her failure to ask the Court of Tax Appeals to review the same, she should be ordered to pay the amounts being collected.But while fraud is alleged in the complaint, the same has not been established. It is one thing to say that the correctness of the last assessment made by appellant, on July 18, 1958, may no

longer be challenged on the technical ground just stated and quite another thing to say that appellee committed a deliberate fraud in declaring smaller incomes for the years in which she filed her returns. Indeed the Bureau itself appears none too sure as to the real amounts of her net incomes for those years. On three different occasions it arrived at three highly different computation. First, it accepted appellee's yearly statements of income from 1945 to 1953 and assessed her a total tax of P2,732.37, which she paid. Then in 1956 the Bureau came up with a different set of figures for the same period, considerably higher than those stated in the returns, and using such figures as a basis assessed her deficiency taxes in the total amount of P22,450.50.

Finally, in 1958 the Bureau made another computation of appellee's net income for the years 1948 to 1953, and assessed her deficiency taxes in the sum of P35,379.63. Note that the disparity between the 1956 and the 1958 assessments is really much greater than what appears at first glance, as the latter do not include the taxes corresponding to the years 1945, 1946 and 1947.

Attention may likewise be drawn to the fact that in paragraph 3 of the complaint appellant seeks to collect from appellee the sum of P28.53, plus a surcharge of 50%, as unpaid tax for the year 1948, notwithstanding the fact admitted in the stipulation, that appellee filed her return for that year and duly paid the said amount.

Fraud not having been proven, the period of limitation for assessment or collection was five years from the filing of the return, according to Section 331 of the tax code. The right to assess or collect the income taxes for the years 1948 to 1950 had already prescribed, therefore, when the Bureau of Internal Revenue issued the deficiency income tax assessments on July 17, 1956.

ID.; ID.; TAXPAYER'S WAIVER OF STATUTE OF LIMITATIONS DOES NOT COVER TAXES ALREADY PRESCRIBED. — The waiver of the statute of limitations executed by the taxpayer cannot be deemed to include taxes already prescribed. Such agreement under Section 332 (b) of the Tax Code must be made before, not after, the expiration of the original period. It does not authorize extension once prescription has attached.3. ID.; ID.; PERIOD FOR COLLECTION OF TAXES AFTER ASSESSMENT. — Assessment and collection are two different processes. Collection may be effected within five years after assessment or within the period for collection agreed upon in writing by the Commission of Internal Revenue and the taxpayer before the expiration of such five year period.

Republic vs Razon

Facts:

CIR vs CA and Carnation Phils.

Facts:

1. On January 15, 1982, Carnation Phils. Inc. (Carnation), filed its Corporation Annual Income Tax Return for taxable year ending September 30, 1981; and its Manufacturers/Producers Percentage Tax Return for the quarter ending September 30, 1981.

2. On October 13, 1986, March 16, 1987 and May 18, 1987, Carnation, through its Senior Vice President Jaime O. Lardizabal, signed three separate 'waivers of the Statute of Limitations Under the National Internal Revenue Code' wherein it:

3. '. . . waives the running of the prescriptive period provided for in sections 318 and 319 and other related provisions of the National Internal Revenue Code and consents to the assessment and collection of the taxes which may be found due after reinvestigation and reconsideration at any time before or after the lapse of the period of limitations fixed by said sections 318 and 319 and other relevant provisions of the National Internal Revenue Code, but not after (13 April 1987 for the earlier-executed waiver, or June 14, 1987 for the later waiver, or July 30, 1987 for the subsequent waiver, as the case may be). However, the taxpayer (petitioner herein) does not waive any prescription already accrued in its favor.'

4. "The waivers were not signed by the BIR Commissioner or any of his agents.5. On August 5, 1987, Carnation received BIR's letter of demand dated July 29, 1987

asking the said corporation to pay P1,442,586.56 as deficiency income tax, P14,152,683.85 as deficiency sales tax and P3,939,913.03 as deficiency sales tax on undeclared sales, all for the year 1981. This demand letter was accompanied by assessment Notices

6. Carnation filed a protest7.

Issue:The pivot of inquiry here is whether or not the three (3) waivers signed by the private respondent are valid and binding 6 as to toll the running of the prescriptive period for assessment and not bar the Government from issuing subject deficiency tax assessments.

Held:

No,The decision of the Court of Appeals affirming what the Court of Tax Appeals decided, established that subject assessments of July 29, 1987 were issued outside the statutory prescriptive period.

Carnation filed its annual income tax and percentage tax returns for the fiscal year ending September 30, 1981 on January 15, 1982 8 and November 20, 1981, 9 respectively. In accordance with the above-quoted provision of law, private respondent's 1981 income and sales taxes could have been validly assessed only until January 14, 1987 and November 19, 1986, respectively. 10 However, Carnation's income and sales taxes were assessed only on July 29, 1987, beyond the five-year prescriptive period. 11

Petitioner BIR Commissioner contends that the waivers signed by Carnation were valid although not signed by the BIR Commissioner because (a) when the BIR agents/examiners extended the period to audit and investigate Carnation's tax returns, the BIR gave its implied consent to such waivers; (b) the signature of the Commissioner is a mere formality and the lack of it does not vitiate the binding effect of the waivers; and (c) that a waiver is not a contract but a unilateral act of renouncing one's right to avail of the defense of

prescription and remains binding in accordance with the terms and conditions set forth in the waiver. 12 Petitioner's submission is inaccurate. The same tax code is clear on the matterWe agree with the CTA in holding "these 'waivers' to be invalid and without any binding effect on petitioner (Carnation) for the reason that there was no consent by the respondent (Commissioner of Internal Revenue).""The ruling of the Supreme Court in Collector of Internal Revenue vs. Solano 13 is in point, thus:". . . The only agreement that could have suspended the running of the prescriptive period for the collection of the tax in question is, as correctly pointed out by the Court of Tax Appeals, a written agreement between Solano and the Collector, entered into before the expiration of the five-year prescriptive period, extending the limitation prescribed by law.""For sure, no such written agreement concerning the said three waivers exists between the petitioner and private respondent Carnation." 14

CIR vs Suyoc

Facts:

1. Suyoc Consolidated Mining Company, a mining corporation operating before the war, was unable to file in 1942 its income tax return for the year 1941 due to the last war. After liberation, Congress enacted Commonwealth Act No. 722 which extended the filing of tax returns for 1941 up to December 31, 1945.

2. Its records having been lost or destroyed, the company requested the Collector of Internal Revenue to grant it an extension of time to file its return, which was granted until February 15, 1946, and the company was authorized to file its return for 1941 on the basis of the best evidence obtainable.

3. The company filed three income tax returns for the calendar year ending December 31, 1941. On February 12, 1946, it filed a tentative return as it had not yet completely reconstructed its records.

4. On November 28, 1946, it filed a second final return on the basis of the records it has been able to reconstruct at that time. On February 6, 1947, it filed its third amended final return on the basis of the available records which to that date it had been able to reconstruct.

5. On the basis of the second final return filed by the company on November 28, 1946, the Collector assessed against it the sum of P28,289.96 as income tax for 1941, plus P1,414.50 as 5 per cent surcharge and P3,394.80 as 1 per cent monthly interest from March 1, 1946 to February 28, 1947, or a total of P33,099.26.

6. The assessment was made on February 11, 1947. On February 21, 1947, the company asked for an extension of at least one year from February 28, 1947 within which to pay the amount assessed, reserving its right to question the correctness of the assessment. The Collector granted an extension of only three months from March 20, 1947

7. The company failed to pay the tax within the period granted to it and so the Collector sent to it a letter on November 28, 1950 demanding payment of the tax due as assessed, plus surcharge and interest up to December 31, 1950. On April 6, 1951,

the company asked for a reconsideration and reinvestigation of the assessment, which was granted, the case being assigned to another examiner, but the Collector made another assessment against the company in the sum of P33,829.66. This new assessment was made on March 7, 1952. On April 18, 1952, the Collector revised this last assessment and required the company to pay the sum of P28,289.96 as income tax, P1,414.50 as surcharge, P20,934.57 as interest up to April 30, 1952 and P40 as compromise.

8. Within the reglementary period, the company filed with the Court of Tax Appeals a petition for review of this assessment made on July 26, 1955 on the main ground that the right of the Government to collect the tax has already prescribed. After the case was heard, the court rendered its decision upholding this defense and, accordingly, it set aside the ruling of the Collector of Internal Revenue. The Collector interposed the present petition for review.

Issue:WON the right to collect has already prescribed

Held:Yes, 1. INCOME TAX; COLLECTION; PERIOD OF LIMITATION; REEXAMINATION OR REINVESTIGATION OF ASSESSMENT DOES NOT SUSPEND PERIOD OF LIMITATION; EXCEPTIONS. — A mere request for reexamination or reinvestigation of assessment may not suspend the running of the period of limitation for in such a case there is need of a written agreement to extend the period between the Collector and the taxpayer. There are cases, however, where a taxpayer may be prevented from setting up the defense of prescription even if he has not previously waived it in writing as when by his repeated requests or positive acts the Government has been, for good reasons, persuaded to postpone collection to make himself feel that the demand was not unreasonable or that no harassment or injustice is meant by the Government. And when such situation comes to pass there are authorities that hold, based on weighty reasons, that such an attitude or behavior should not be countenanced if only to protect the interest of the Government.2. ID.; ID.; ID.; GOVERNMENT'S ACTION WITHHELD AT TAXPAYER'S REQUEST; ESTOPPEL. — He who prevents a thing from being done may not avail himself of the non-performance which he has himself occasioned, for the law says to him in effect "this is your own act and therefore you are not damnified." (R.H. Stearns Co. vs. U.S. 78 L Ed. 6647). Or, as was aptly said, "The tax could have been collected, but the government withheld action at the specific request of the plaintiff. The plaintiff is now estopped and should not be permitted to raise the defense of the statute of limitations." (Newpoint Co. vs. U.S. (Dc-wis), 34 Off. Supp. 588.)

CIR vs Wyeth

Facts:

1. Private respondent Wyeth Suaco Laboratories, Inc. (Wyeth Suaco for brevity) is a domestic corporation engaged in the manufacture and sale of assorted pharmaceutical and nutritional products.

2. By virtue of Letter of Authority dated June 17, 1974 issued by then Commissioner of Internal Revenue Misael P. Vera, Revenue Examiner Dante Kabigting conducted an investigation and examination of the books of accounts of Wyeth Suaco.

3. The report disclosed that Wyeth Suaco was paying royalties to its foreign licensors as well as remuneration for technical services to Wyeth International Laboratories of London. Wyeth Suaco was also found to have declared cash dividends on September 27, 1973 and these were paid on October 31, 1973. However, it allegedly failed to remit withholding tax at source for the fourth (4th) quarter of 1973 on accrued royalties, remuneration for technical services and cash dividends, resulting in a deficiency withholding tax at source in the aggregate amount of P3,178,994.15.

4. All these resulted in a deficiency sales tax in the amount of P60,855.21 and compromise penalty in the amount of P300.00 or a total amount of P61,155.21. 3

5. Consequently, the Bureau of Internal Revenue assessed Wyeth Suaco on the aforesaid tax liabilities in two (2) notices dated December 16, 1974 and December 17, 1974. These assessment notices were both received by Wyeth Suaco on December 19, 1974. 4

6. Thereafter, Wyeth Suaco through its tax consultant SGV & Co., sent the Bureau of Internal Revenue two (2) letters dated January 17, 1975 and February 8, 1975, protesting the assessments and requesting their cancellation or withdrawal on the ground that said assessments lacked factual or legal basis.

7. Thereafter, Wyeth Suaco filed a petition for review in the Court of Tax Appeals on January 18, 1980, praying that petitioner be enjoined from enforcing the assessments by reason of prescription and that the assessments be declared null and void for lack of legal and factual basis.

8. On February 7, 1980, petitioner issued a warrant of distraint of personal property and warrant of levy of real property against private respondent to enforce collection of the deficiency taxes.

9. On August 29, 1986, the Court of Tax Appeals rendered a decision enjoining the Commissioner of Internal Revenue from collecting the deficiency taxes

10. The basis of the above decision was the finding of the Tax Court that while the assessments for the deficiency taxes were made within the five-year period of limitation, the right of petitioner to collect the same has already prescribed, in accordance with Section 319 (c) of the Tax Code of 1977. The said law provides that an assessment of any internal revenue tax within the five-year period of limitation may be collected by distraint or levy or by a proceeding in court, but only if begun within five (5) years after the assessment of the tax.

Issue:WON the right to collect by the CIR of the deficient tax has already prescribed

Held:

No, The main thrust of petitioner for the allowance of this petition is that the five-year prescriptive period provided by law to make a collection by distraint or levy or by a proceeding

in court has not yet prescribed. Although he admits that more than five (5) years have already lapsed from the time the assessment notices were received by private respondent on December 19, 1974 up to the time the warrants of distraint and levy were served on March 12, 1980, he avers that the running of the prescriptive period was stayed or interrupted when Wyeth Suaco protested the assessments. Petitioner argues that the protest letters sent by SGV & Co. in behalf of Wyeth Suaco dated January 17, 1975 and February 8, 1975, requesting for withdrawal and cancellation of the assessments were actually requests for reinvestigation or reconsideration, which could interrupt the running of the five-year prescriptive period.Wyeth Suaco, on the other hand, maintains the position that it never asked for a reinvestigation nor reconsideration of the assessments. What it requested was the cancellation and withdrawal of the assessments for lack of legal and factual basis. Thus, its protest letters dated January 17, 1975 and February 8, 1975 did not suspend or interrupt the running of the five-year prescriptive period.

Thus, the pivotal issue in this case is whether or not Wyeth Suaco sought reinvestigation or reconsideration of the deficiency tax assessments issued by the Bureau of Internal Revenue.After carefully examining the records of the case, we find that Wyeth Suaco admitted that it was seeking reconsideration of the tax assessments as shown in a letter of James A. Gump, its President and General Manager, dated April 28, 1975.

Furthermore, when Wyeth Suaco thru its tax consultant SGV & Co. sent the letters protesting the assessments, the Bureau of Internal Revenue, Manufacturing Audit Division, conducted a review and reinvestigation of the assessments. This fact was admitted by Wyeth Suaco thru its Finance Manager in a letter dated July 1, 1975 addressed to the Chief, Tax Accounts Division.

These letters of Wyeth Suaco interrupted the running of the five-year prescriptive period to collect the deficiency taxes. The Bureau of Internal Revenue, after having reviewed the records of Wyeth Suaco, in accordance with its request for reinvestigation, rendered a final assessment. This final assessment issued by then Acting Commissioner Ruben B. Ancheta was dated December 10, 1979 and received by private respondent on January 2, 1980, fixed its tax liability at P1,973,112.86 as deficiency withholding tax at source and P61,155.21 as deficiency sales tax. It was only upon receipt by Wyeth Suaco of this final assessment that the five-year prescriptive period started to run again.