ROMAN CATHOLIC ARCHBISHOP OF CEBU, PETITIONER, VS. THE COLLECTOR OF INTERNAL REVENUE, RESPONDENT.

This petition was filed by the Roman Catholic Archbishop of Cebu to obtain
review of a decision of the Court of Tax Appeals dismissing his appeal from the
ruling of the Collector (now Commissioner) of Internal Revenue of February 1,
1958, for lack of jurisdiction, and affirming Income Tax Assessments Nos.
17-EC-00301-55 and 17-AC-600107-56 against said petitioner.

The facts are summarized in the decision appealed from as follows:

“The records show that on February 21, 1956, petitioner, in behalf of the
Roman Catholic Church of Cebu, filed an income tax return for 1955, reporting a
gross income of:

From sales or exchanges of capital assets	P465.00
From rentals and royalties	8,969.90
From dividends received	922.00
	—————
TOTAL GROSS INCOME	P10,356.90

Petitioner claimed deductions for depreciation of the following:

Archbishop’s Palace Building	P4,477.65
Major Seminary	10,451.55
Minor Seminary	3,963.33
Furniture and Fixture	1,032.56
	—————
TOTAL	P19,898.09

On February 18, 1957, petitioner, in behalf of the Roman Catholic Church in
Cebu, filed an income tax return for 1956, showing the following gross
income:

From sales or exchanges of capital assets	P2,090.00
From rentals and royalties	11,954.84
From dividends received	4311.58
	—————
TOTAL	P18,356.42

Petitioner claimed deductions for depreciation of the following
properties:

Archbishop’s Palace Building	P4,477.65
Major Seminary	10,451.55
Minor Seminary	3,936.33
Furniture & Fixtures	1,360.62
	—————
TOTAL	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, respondent
totally disallowed the deductions for depreciation, thereby determining against
petitioner, on July 15, 1956 and March 30, 1957, income tax liabilities for 1955
and 1956 in the respective amounts of P1,825.00 and P2,493.00 (Exhibits “1-B”
& “2-B”, pp. 17 & 3, BIR rec.). On May 10 and 14, 1957, petitioner
requested for the reconsideration of the determinations (Exhibits “G” & “H”,
pp. 15-16 & 12-13, BIR re.), which request were denied by respondent in a
letter dated July 18, 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
(Exhibit “3”, pp. 18-23, BIR rec.). On August 28, 1957, petitioner requested for
the reconsideration of the denial and the cancellation of the assessments
(Exhibits “J”, pp. 24-30, BIR rec.). On November 5, 1957, respondent denied this
request for reconsideration and demanded the payment of P4,318.00, plus
delinquency penalties incident to late payment (Exhibit “4”, pp. 36-37, BIR
rec.). Again, on November 23, 1957, petitioner requested for the reconsideration
and cancellation of the assessments (Exhibit “K”, pp. 38-44, BIR rec.), which
request was denied on January 20, 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” (Exhibit “5”, pp. 45-46, BIR rec.).

Meanwhile, on December 4, 1957, respondent 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 deficiency income
tax and surcharge due for 1955 and 1956.

On February 7, 1958, petitioner paid under protest the total amount of
P5,201.52 as income tax for the years 1955 and 1956, including surcharge and
interests. And on February 1, 1958, he filed before this Court his petition for
review.” (Annex “E”, Petition, pp. 1-3)

The respondent Collector (now Commissioner) of Internal Revenue set up
several defenses, one of which is that petitioner failed to file a claim for
refund of the taxes paid as required by Section 306 of the Tax Code, which claim
for refund is allegedly mandatory and a condition precedent to an action for the
recovery of the taxes paid; and the Tax Court, convinced that the lack of a
claim for refund was fatal to petitioner’s appeal, dismissed the same for lack
of jurisdiction to take cognizance thereof. From this ruling, the petitioner
appealed to this Court.

We agree with petitioner that Section 7 of Republic Act No. 1125, creating
the Court of Tax Appeals, in providing for appeals from—

“(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;”,

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, * * *”; that the present
action involves a “disputed assessment”, because from the time petitioner
received Assessments Nos. 17-EC-00301-55 and 17-AC-600107-56 disallowing certain
deductions claimed by him in his income tax returns for the years 1955 and 1956,
he already protested and refused to pay the same, questioning the correctness
and legality of such assessments; and that the petitioner paid the disputed
assessments under protest before filing his petition for review with the Court
a quo, only to forestall the sale of his properties that had been placed
under distraint by the respondent Collector since December 4, 1957. 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.

Nevertheless, we find the dismissal of petitioner’s appeal to be
substantially correct, for the reason that said appeal was not taken within the
thirty (30) day period prescribed by section 11 of Republic Act No. 1125. The
petitioner has submitted not less than three (3) motions or requests for the
reconsideration of his Tax Assessments Nos. 17-EC-00301-55 and 17-AC-600107-56.
The first he submitted to the Regional Director, and it was denied on July 18,
1957; the second was on August 18, 1957, addressed to the Collector of Internal
Revenue, and was denied by the latter on November 5, 1957, in a letter received
by petitioner on November 21, 1957; and the third request was made on November
23, 1957, and again denied on January 20, 1958, notified to petitioner on
February 1, 1958. 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 February 19, 1958.

By these successive motions for reconsideration, the petitioner 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 of Internal Revenue dated November 5, 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 November
21, 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, petitioner’s petition
for review should have been lodged with the Tax Court not later than December
21, 1957, but it was actually filed only on February 1, 1958.

Our ruling here is in line with the doctrine laid down by us in North
Camarines Lumber Co. vs. Collector of Internal Revenue, (109 Phil., 511),
wherein we held:

“As the petitioner had consumed thirty-three days, its appeal was clearly
filed out of time. It is argued, however, that in computing the 30-day period
fixed in Section 11 of Republic Act No. 1125, the letter of the respondent
Collector dated January 30, 1956, denying the second request for
reconsideration, should be considered as the final decision contemplated in
Section 7, and not the letter of demand dated August 30, 1955.

This contention is untenable. We 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).”

In view of the foregoing, the dismissal of the petitioner’s appeal by the
Court of Tax Appeals is hereby affirmed. Costs against the petitioner.

Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Barrera, Paredes,
Dizon, and De Leon, JJ., concur.