CIR Vs Pineda
CIR Vs Pineda
CIR Vs Pineda
DOCTRINE:
The BIR should be giventhe necessary discretion to avail itself of the most expeditious way to collect
the tax as may be envisioned in the particular provision of the Tax Code above quoted, because taxes
are the lifeblood of government and their prompt and certain availability is an imperious need. That’s
why this case talks about 2 ways of collecting taxes. See discussion.
ACTION SEQUENCE:
Termination of estate proceedings in CFI Manila – BIR found that income tax returns are not filed
– CIR made an assessment – Pineda appealed – CTA reversed CIR – CIR appealed – Herein
SC’s decision
FACTS
In 1945, Atanasio died, survived by his wife and 15 children, the eldest of whom is Manuel
Pineda, a lawyer (petitioner)
Estate proceedings terminated in 1948 and Pineda’s share amounted to P2,500. Later,
BIR found that the income tax returns of the estate for the years 1945 to 1948 were not
filed, thus the CIR issued an assessment. Pineda appealed the assessment only to that
proportionate to him.
CTA held that held that the CIR’s right to collect taxes for 1947 has prescribed, but not for
1945 and 1946.
CIR appealed that Pineda is liable for the payment of all taxes due from the estate as
computed by CTA and not only that of his corresponding share in the estate
Pineda argues that as an heir, he is liable for unpaid income tax due the estate only up to
the extent of and in proportion to any share he received
ISSUE/S
RULING
YES. This is a valid tax collecting scheme. The taxes Pineda will pay is subject to right of
contribution from co-heirs.
As a holder of property belonging to the estate, Pineda is liable for the tax up to the amount of the
property in his possession. The reason is that the Government has a lien on the P2,500.00 received
by him from the estate as his share in the inheritance, for unpaid income taxes for which said estate
is liable.
By virtue of such lien, the Government has the right to subject the property in Pineda's possession,
i.e., the P2,500.00, to satisfy the income tax assessment in the sum of P760.28. After such payment,
Pineda will have a right of contribution from his co-heirs because his liability cannot exceed the amount
of his share.
1. by going after all the heirs and collecting from each one of them the amount of the tax proportionate
to the inheritance received.
the Government filed an action against all the heirs for the collection of the tax. This action
rests on the concept that hereditary property consists only of that part which remains after
the settlement of all lawful claims against the estate, for the settlement of which the entire
estate is first liable
2. by subjecting said property of the estate which is in the hands of an heir or transferee to the payment
of the tax due, the estate (*As in this case)
DISPOSITIVE PORTION
Manuel B. Pineda is hereby ordered to pay to the Commissioner of Internal Revenue the sum of
P760.28 as deficiency income tax for 1945 and 1946, and real estate dealer's fixed tax for the fourth
quarter of 1946 and for the whole year 1947, without prejudice to his right of contribution for his co-
heirs.
NOTES
Digest by [Cadiz]
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