142.CIR Vs FMF Development
142.CIR Vs FMF Development
142.CIR Vs FMF Development
DECISION
QUISUMBING, J.:
On April 15, 1996, FMF filed its Corporate Annual Income Tax
Return for taxable year 1995 and declared a loss of P3,348,932. On
May 8, 1996, however, it filed an amended return and declared a
loss of P2,826,541. The BIR then sent FMF pre-assessment notices,
all dated October 6, 1998, informing it of its alleged tax
liabilities.4 FMF filed a protest against these notices with the BIR and
requested for a reconsideration/reinvestigation.
TOTAL P2,053,698.256
On March 20, 2003, the CTA granted the petition and cancelled
Assessment Notice No. 33-1-00487-95 because it was already time-
barred. The CTA ruled that the waiver did not extend the three-year
prescriptive period within which the BIR can make a valid
assessment because it did not comply with the procedures laid down
in Revenue Memorandum Order (RMO) No. 20-90.8 First, the waiver
did not state the dates of execution and acceptance of the waiver,
by the taxpayer and the BIR, respectively; thus, it cannot be
determined with certainty if the waiver was executed and accepted
within the prescribed period. Second, the CTA also found that FMF
was not furnished a copy of the waiver signed by RDO
Zambarrano. Third, the CTA pointed out that since the case involves
an amount of more than P1 million, and the period to assess is not
yet about to prescribe, the waiver should have been signed by the
Commissioner of Internal Revenue, and not a mere RDO.9 The
Commissioner of Internal Revenue filed a motion for
reconsideration, but it was denied.
SO ORDERED.10
I.
II.
III.
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(b) If before the expiration of the time prescribed in Section 203 for
the assessment of the tax, both the Commissioner and the taxpayer
have agreed in writing to its assessment after such time, the tax
may be assessed within the period agreed upon. The period so
agreed upon may be extended by subsequent written agreement
made before the expiration of the period previously agreed upon.
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xxx
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SO ORDERED.