In case of the inaction by the Commissioner of Internal Revenue on a protested assessment, the taxpayer has two options, either: (1) file a petition for review with the Court of Tax Appeals within 30 days after the expiration of the 180-day period; or (2) await the final decision of the Commissioner on the disputed assessment and appeal such final decision to the CTA within 30 days after the receipt of a copy of such decision, these options are mutually exclusive and resort to one bars the application of the other. This rule was reiterated in Rizal Commercial Bank Corporation vs.CIR (G.R. No. 168498, April 24, 2007).
However, in the recent case of Lascona Land Co, Inc. vs. Commissioner of Internal Revenue (G.R. No. 171251, March 5, 2012), the High Court clarified that it is the final decision of the CIR on the protest of the taxpayer against the assessment that is appealed to the CTA within 30 days after the receipt of a copy of such decision.
Lascona Land Co., Inc. (Lascona) received an assessment notice from the CIR on its alleged deficiency income tax. Lascona filed a letter protest, but the CIR subsequently denied it in a Letter dated March 3, 1999. Lascona then appealed the decision to the CTA on April 12, 1999. The CTA nullified the subject assessment, but on appeal, the Court of Appeals reversed the decision and declared the assessment as final, executory and demandable due to the failure of Lascona to file an appeal before the CTA within 30 days from the lapse of the 180-day period.
In reversing the decision of the appellate court, the Supreme Court declared that Lascona’s appeal was timely filed on April 12, 1999 before the CTA. The appeal was made within 30 days after receipt of the copy of the decision, reckoned from March 12, 1999 when Lascona received the Letter dated March 3, 1999.
The Lascona case follows the discussion on the meaning of “decisions” as regards the filing of an appeal with the CTA. In Commissioner of Internal Revenue vs. Villa (G.R. No. L-23988, January 2, 1968), the High Court held that the word “decisions” in paragraph 1, Section 7 of Republic Act No. 1125 has been interpreted to mean the decisions of the CIR on the protest of the taxpayer against the assessments, and not the assessment itself.
(May 31, 2012)