REPUBLIC OF THE PHILIPPINES, PLAINTIFF-APPELLANT, VS. FELIX B. ACEBEDO, DEFENDANT-APPELLEE.

This is a suit for
collection of deficiency income tax for the year 1948 in the amount of P5,962.83.  The corresponding notice of assessment was issued on September 24,
1949.  The complaint was filed on
December 27, 1961.  After the defendant
filed his answer but before trial started he moved to dismiss on the ground of
prescription.  The court received
evidence on the motion, and on September 1, 1962 issued an order finding the
same meritorious and hence dismissing the complaint.  The case is before us on appeal by the
plaintiff from the order of dismissal.

The statute of
limitations which governs this case is Section 332, subsection (c), of the
National Internal Revenue Code, which reads:

“SEC. 332. Exemptions as to period of limitation of assessment
and collection of taxes. –

“xxx                                       xxx                                 xxx

“xxx                                       xxx                                 xxx

“(c) Where
the assessment of any internal-revenue tax has been made with the period of
limitation above prescribed such tax may be collected by distraint or levy or
by a proceed­ing in court, but only if begun (1) within five years after the
assessment of the tax, or (2) prior to the expira­tion of any period for
collection agreed upon in writing by the Collector of In­ternal Revenue and the
taxpayer before the expiration of such five-year period.  The period so agreed upon may be extended by
subsequent agreements in writing made before the expiration of the period pre­viously
agreed upon.”

The present suit was not
begun within five years after the assessment of the tax, which was in
1949.  Was it, however, begun prior to
the expiration of any period for collection agreed upon in writing by the
Commissioner of internal Revenue and the defendant before the expiration of
such five-year period?  The only evidence
of such written agreement, in the form of a, “waiver of the statute of
limita­tions” signed by the defendant, is Exhibit U (also Exh. 4), dated
December 17, 1959.  But this waver was,
ineffective be­cause it was executed beyond the original five-year limitation.

The plaintiff contends
that the period of prescription was suspended by the defendant’s various
requests for reinvesti­gation or reconsideration of the tax assessment.  The trial court rejected this contention
saying that a mere request for reinvestigation or reconsideration of an
assessment does not have the effect of such suspension.  The ruling is logical, otherwise there would
be no point to the legal requirement that the extension of the original period
be agreed upon in writing.

To be sure, this legal
provision, according to some decisions of this Court, does not rule out a
situation where the taxpayer may be in estoppel to claim prescription.  Thus we said in Commissioner of Internal
Revenue vs. Consolidated Mining Co., L-11527, Nov. 25, 1958:

“ x x x 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 him feel that the demand
was not un­reasonable or that no harassment or injustice is meant by the
Government.”  (underscoring
supplied).

Likewise, when a taxpayer asks for a reinvestigation of the tax
assessment issued to him and such reinvestigation is made, on the basis of
which the Government makes another assessment, the five-year period within
which an action for collection may be commenced should be counted from this
last assessment.  (Republic vs. Lopez,
L-18007, March 30, 1963; Commissioner v. Sison, et al., L-13739, April 30,
1963.)

In the case at bar the defendant, after receiving the assessment
notice of September 24, 1949, asked for a rein­vestigation thereof on October
11, 1949 (Exh. A).  There is no evidence
that this request was considered or acted upon. 
In fact, on October 23, 1950 the then Collector of Internal Revenue
issued a warrant of distraint and levy for the full amount of the assessment (Exh. D), but there was no follow-up
of this warrant.  Consequently, the
request for rein­vestigation did not suspend the running of the period for
filing an action for collection.

The next communication of record is a letter signed for the
defendant by one Troadio Concha and dated October 6, 1951, again requesting a
reinvestigation of his tax liability (Exh. 1). 
Nothing come of this request either. 
Then on February 9, 1954, the defendant’s lawyers wrote the Collector of Internal Revenue informing him
that the books of their client were ready at their office for examination (Exh. C). 
The reply was dated more than a year later, or on October 4,
1955, when the Collector bestirred himself far the first time in connection
with the reinvestigation sought, and required that the defendant specify his
objections to the assessment and execute “the enclosed forms for waiver of
the statute of limitations.”  (Exh. E). 
The last part of the letter was a warning that unless the waiver
“was accomplished and sub­mitted within 10 days the collection of the
deficiency taxes would be enforced by means of the remedies provided for by
law.”

It will be noted that up to October 4, 1955 the delay in
collection could not be attributed to the defendant at all.  His requests in fact
had been unheeded until then, and there was nothing to impede enforcement of
the tax liability by any of the means provided by law.  By October 4, 1955, more than five years had
elapsed since the assessment in ques­tion was made, and hence prescription had
already set in, making subsequent events in connection with the said assessment
entirely immaterial.  Even the written
waiver of the statute signed by the defendant on December 17, 1959 could no
longer revive the right of action, for under the law such waiver must be
executed within the original five-year period within which suit could be
commenced.

The order appealed from is affirmed, without pro­nouncement as to
costs.

Reyes, Acting C.J., Dizon, Bengzon, Zaldivar, Sanchez, Angeles, and Fernando, JJ., concur.

Ruiz Castro, J., did not take
part.