Facts: Matias Aznar died on May 15, 1958. His income tax returns from 1945 to 1951 were examined by the BIR. Doubting the truth of the income that he had reported, the Commissioner ordered the investigation of the case on the basis of the net worth method. Substantial under-declarations of income were discovered. On November 28, 1952, the BIR notified AZNAR of a tax delinquency of P723,032.66 which was later reduced to P381,096.07 upon reinvestigation.
On February 20, 1953, AZNAR’s properties were placed under distraint and levy. On April 1, 1955, AZNAR appealed to the CTA. The CTA found that AZNAR made substantial under-declarations of his income as follows: he under-declared his income for 1946 by 227%; 564% for 1947; 95% for 1948; 486% for 1949; 946% 1950; 490% 1951.
Issue: Whether or not the right of the Commissioner to assess AZNAR’s deficiency income taxes for 1946, 1947 and 1948 had prescribed at the time the assessment was made.
Held: On the issue of prescription the count applied the 10-year prescriptive period and ruled that prescription had not set in. the court opined that AZNAR’s returns were false because the under-declaration of income constituted a deviation from the truth. The court stated that the ordinary prescriptive period of 5 years (now 3 years) would apply under normal circumstances but whenever the government is placed at a disadvantage as to prevent its lawful agent from making a proper assessment of tax liabilities due to false or fraudulent returns intended to evade payment of taxes or failure to the returns, the period of 10 years provided for in the law from the discovery of the falsity, fraud or omission even seems to be inadequate and should be the one enforced.
0 comments:
Post a Comment