G.R. No. L-23123. September 30, 1969
HEALD LUMBER COMPANY, PETITIONER, VS. BENJAMIN N. TABIOS, IN HIS CAPACITY AS COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
MAKALINTAL, J.:
This is a petition for review of the decision of the Court of Tax
Appeals in CTA Case No. 1222 and of the resolution of said court denying
petitioner’s motion for reconsideration.
The appealed decision – affirming respondent’s assessment – held
petitioner liable for the payment of the sum of P2,362.57 as 1/2% monthly
interest from June 20, 1959 to November 24, 1961 on the amount of P16,219.00,
the deficiency income tax for 1953 admittedly due from petitioner.
The material facts are not controverted. On February
25, 1959 respondent originally assessed against petitioner the sum
of P41,040.00 as deficiency income tax for 1953. Upon petitioner’s request for
reconsideration, respondent issued on November
24, 1961 a revised assessment in the reduced amount of P16,219.00,
plus the aforementioned interest of P2,362.57.
Although petitioner paid the principal amount as thus revised, it
refused to pay the interest thereon, claiming that the same was without legal
basis. Respondent maintained that the
1/2% monthly interest was imposed pursuant to section 51(d) of the National
Internal Revenue Code, as amended by Republic Act No. 2343,+ which took effect on June 20, 1959. Petitioner elevated the case to the Court of
Tax Appeals, which on March 23, 1964
rendered the decision now subject of review.
The issue presented is not a novel one. In an earlier case decided by this Court
where the same question was raised (Central Azucarera
de San Pedro vs. Court of Tax Appeals and Commissioner of Internal Revenue, G.
R. Nos. L-23236 and 23254, May 31,
1967; 20 SCRA 344) this Court, speaking through Mr. Justice J. B.
L. Reyes, stated:
“The common issue posed in both cases is: whether or not the
interest of six per centum (67) per annum (or 1/2% monthly interest), provided
for in Section 51(d) of the National Internal Revenue Code, as amended by
Republic Act No. 2343 (effective June 20, 1959) is imposable on deficiency income
tax due on income earned prior to the effectivity of
said Republic Act No. 2343, but assessed after it.”
x x x x x x x x x
“From a perusal and comparison of the abovequoted
sections of the Tax Code, before and after its amendment, it till be observed
that, although the Commissioner (formerly Collector) of Internal Revenue, under
the old Section 51 (a) was required to assess the tax due, based on the
taxpayer’s return and notify the taxpayer of said assessment, still, under
subsection (b) of the same old Section 51, the time prescribed for the payment
of tax was fixed, whether or not a notice of the assessment was given to the
taxpayer. Under the new provision, the
time of payment is also fixed and pre-determined (usually coinciding with the
filing of the return) without the necessity of giving notification of the
assessment to the taxpayer by the Commissioner.
“It should further be observed that, under the old Section
51(e), the interest on deficiency was imposed from the time the tax became due;
while under the new Section 51(d), said interest is imposed on the deficiency
from the date prescribed for the payment of the tax.
“It is thus evident that petitioner’s contention that
‘interest on such deficiency accrued only when the taxpayer failed to pay the
tax within the period prescribed therefor by
respondent (Commissioner of Internal Revenue)’ is not correct; said interest
was imposable in case of non-payment on time, not only on the basic income tax,
but also on the deficiency tax, since the deficiency was part and parcel of
petitioner’s income tax liability.
“It appearing that the new Section 51(d) under Republic Act
2343 expressly provides that the interest on deficiency shall be assessed at
the same time as the deficiency income tax; and that respondent
Commissioner of Internal Revenue imposed and sought to collect the interest
only from June 20, 1959, which was the date of effectivity
of said Republic Act No. 2343; that the deficiency income taxes in question
were assessed and unpaid when said Act was already in force, the Tax Court
correctly held that said Section 51(d), as amended, is not being applied
retroactively as contended by petitioner herein.
“Moreover, the application of said Section 51(d), as amended,
in the cases at bar, operated and worked in favor of petitioner-appellant,
since instead of imposing the rate of one per centum (1%) monthly
interest prescribed in the old Section (51)6) from ‘the time the tax became
due, (1953, 1954, 1955, 1956, 1957, 1958 in the instant case) respondent
Commissioner merely imposed the new ½% monthly interest from January 20, 1959,
which interests, as computed are less than what would be due under the old
law.”
The foregoing decision in the Central Azucarera case is squarely applicable in the
one at bar, the material facts and legal issues being similar.
WHEREFORE, the decision is hereby affirmed. Costs against petitioner.
Concepcion, C.J., Dizon,
Zaldivar, Ruiz Castro, Fernando, Capistrano, Teehankee, and Barredo, JJ., concur.
+
Section 51(d) as amended by Republic Act No. 2343 reads:
“SEC. 51. Payment and assessment of income tax. x x x (d) Interest on deficiency. – Interest upon the
amount determined as a deficiency shall be assessed at the same time as the
deficiency and shall be paid upon notice and demand from the Comissioner of Internal Revenue; and shall be collected as
part of the tax, at the rate of six per centum per annum from the date
prescribed for the payment of the tax (or, if the tax is paid in installments,
from the date prescribed for the payment of the first installment) to the date
the deficiency is assessed: Provided,
That the maximum amount that may be collected as interest on deficiency shall
in no case exceed the amount corresponding to a period of three years, the
present provisions regarding prescription to the contrary
notwithstanding.”