Republic of the Philippines In view of the foregoing, please advise your client to pay its 1993 deficiency Thus,

pay its 1993 deficiency Thus, the instant petition, raising the following issues:
SUPREME COURT income tax liability in the amount of P753,266.56.
Manila
I
x x x x (Emphasis ours)
THIRD DIVISION
THE HONORABLE COURT HAS, IN THE REVISED RULES OF
On April 12, 1999, Lascona appealed the decision before the CTA and was COURT OF TAX APPEALS WHICH IT RECENTLY
G.R. No. 171251               March 5, 2012 docketed as C.T.A. Case No. 5777. Lascona alleged that the Regional Director PROMULGATED, RULED THAT AN APPEAL FROM THE
erred in ruling that the failure to appeal to the CTA within thirty (30) days from INACTION OF RESPONDENT COMMISSIONER IS NOT
the lapse of the 180-day period rendered the assessment final and executory. MANDATORY.
LASCONA LAND CO., INC., Petitioner, 
vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent. The CIR, however, maintained that Lascona's failure to timely file an appeal with II
the CTA after the lapse of the 180-day reglementary period provided under
Section 228 of the National Internal Revenue Code (NIRC) resulted to the finality
DECISION THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT HELD
of the assessment.
THAT THE ASSESSMENT HAS BECOME FINAL AND
DEMANDABLE BECAUSE, ALLEGEDLY, THE WORD
PERALTA, J.:
On January 4, 2000, the CTA, in its Decision,7 nullified the subject assessment. It "DECISION" IN THE LAST PARAGRAPH OF SECTION 228
held that in cases of inaction by the CIR on the protested assessment, Section 228 CANNOT BE STRICTLY CONSTRUED AS REFERRING ONLY
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of the NIRC provided two options for the taxpayer: (1) appeal to the CTA within TO THE DECISION PER SE  OF THE COMMISSIONER, BUT
of Court seeking the reversal of the Decision1 dated October 25, 2005 and thirty (30) days from the lapse of the one hundred eighty (180)-day period, or (2) SHOULD ALSO BE CONSIDERED SYNONYMOUS WITH AN
Resolution2 dated January 20, 2006 of the Court of Appeals (CA) in CA-G.R. SP wait until the Commissioner decides on his protest before he elevates the case. ASSESSMENT WHICH HAS BEEN PROTESTED, BUT THE
No. 58061 which set aside the Decision3 dated January 4, 2000 and PROTEST ON WHICH HAS NOT BEEN ACTED UPON BY THE
Resolution4 dated March 3, 2000 of the Court of Tax Appeals (CTA) in C.T.A. COMMISSIONER.10
The CIR moved for reconsideration. It argued that in declaring the subject
Case No. 5777 and declared Assessment Notice No. 0000047-93-407 dated March
assessment as final, executory and demandable, it did so pursuant to Section 3
27, 1998 to be final, executory and demandable.
(3.1.5) of Revenue Regulations No. 12-99 dated September 6, 1999 which reads, In a nutshell, the core issue to be resolved is: Whether the subject assessment has
thus: become final, executory and demandable due to the failure of petitioner to file an
The facts, as culled from the records, are as follows: appeal before the CTA within thirty (30) days from the lapse of the One Hundred
Eighty (180)-day period pursuant to Section 228 of the NIRC.
If the Commissioner or his duly authorized representative fails to act on the
On March 27, 1998, the Commissioner of Internal Revenue (CIR) issued taxpayer's protest within one hundred eighty (180) days from date of submission,
Assessment Notice No. 0000047-93-4075 against Lascona Land Co., Inc. by the taxpayer, of the required documents in support of his protest, the taxpayer Petitioner Lascona, invoking Section 3,11 Rule 4 of the Revised Rules of the Court
(Lascona) informing the latter of its alleged deficiency income tax for the year may appeal to the Court of Tax Appeals within thirty (30) days from the lapse of of Tax Appeals, maintains that in case of inaction by the CIR on the protested
1993 in the amount of P753,266.56. the said 180-day period; otherwise, the assessment shall become final, executory assessment, it has the option to either: (1) appeal to the CTA within 30 days from
and demandable. the lapse of the 180-day period; or (2) await the final decision of the
Commissioner on the disputed assessment even beyond the 180-day period − in
Consequently, on April 20, 1998, Lascona filed a letter protest, but was denied by which case, the taxpayer may appeal such final decision within 30 days from the
Norberto R. Odulio, Officer-in-Charge (OIC), Regional Director, Bureau of On March 3, 2000, the CTA denied the CIR's motion for reconsideration for lack
receipt of the said decision. Corollarily, petitioner posits that when the
Internal Revenue, Revenue Region No. 8, Makati City, in his Letter6dated March of merit.8 The CTA held that Revenue Regulations No. 12-99 must conform to
Commissioner failed to act on its protest within the 180-day period, it had the
3, 1999, which reads, thus: Section 228 of the NIRC. It pointed out that the former spoke of an assessment
option to await for the final decision of the Commissioner on the protest, which it
becoming final, executory and demandable by reason of the inaction by the
did.
Commissioner, while the latter referred to decisions becoming final, executory
xxxx and demandable should the taxpayer adversely affected by the decision fail to
appeal before the CTA within the prescribed period. Finally, it emphasized that in The petition is meritorious.
Subject: LASCONA LAND CO., INC. cases of discrepancy, Section 228 of the NIRC must prevail over the revenue
regulations.
Section 228 of the NIRC is instructional as to the remedies of a taxpayer in case
1993 Deficiency Income Tax of the inaction of the Commissioner on the protested assessment, to wit:
Dissatisfied, the CIR filed an appeal before the CA.9
Madam, SEC. 228. Protesting of Assessment. − x x x
In the disputed Decision dated October 25, 2005, the Court of Appeals granted the
CIR's petition and set aside the Decision dated January 4, 2000 of the CTA and its
Anent the 1993 tax case of subject taxpayer, please be informed that while we xxxx
Resolution dated March 3, 2000. It further declared that the subject Assessment
agree with the arguments advanced in your letter protest, we regret, however, that Notice No. 0000047-93-407 dated March 27, 1998 as final, executory and
we cannot give due course to your request to cancel or set aside the assessment demandable. Within a period to be prescribed by implementing rules and regulations, the
notice issued to your client for the reason that the case was not elevated to the taxpayer shall be required to respond to said notice. If the taxpayer fails to
Court of Tax Appeals as mandated by the provisions of the last paragraph of respond, the Commissioner or his duly authorized representative shall issue an
Section 228 of the Tax Code. By virtue thereof, the said assessment notice has Lascona moved for reconsideration, but was denied for lack of merit.
assessment based on his findings.
become final, executory and demandable.
Such assessment may be protested administratively by filing a request for the Commissioner of Internal Revenue within the one hundred eighty disputed assessment and appeal such final decision to the CTA within 30 days
reconsideration or reinvestigation within thirty (30) days from receipt of the day-period under Section 228 of the National Internal revenue Code after the receipt of a copy of such decision, these options are mutually exclusive
assessment in such form and manner as may be prescribed by implementing rules shall be deemed a denial for purposes of allowing the taxpayer to and resort to one bars the application of the other.
and regulations. appeal his case to the Court and does not necessarily constitute a
formal decision of the Commissioner of Internal Revenue on the tax
Accordingly, considering that Lascona opted to await the final decision of the
case; Provided, further, that should the taxpayer opt to await the final
Within sixty (60) days from filing of the protest, all relevant supporting Commissioner on the protested assessment, it then has the right to appeal such
decision of the Commissioner of Internal Revenue on the disputed
documents shall have been submitted; otherwise, the assessment shall become final decision to the Court by filing a petition for review within thirty days after
assessments beyond the one hundred eighty day-period
final. receipt of a copy of such decision or ruling, even after the expiration of the 180-
abovementioned, the taxpayer may appeal such final decision to the
day period fixed by law for the Commissioner of Internal Revenue to act on the
Court under Section 3(a), Rule 8 of these Rules; and Provided, still
disputed assessments.17 Thus, Lascona, when it filed an appeal on April 12, 1999
If the protest is denied in whole or in part, or is not acted upon within one hundred further, that in the case of claims for refund of taxes erroneously or
before the CTA, after its receipt of the Letter18 dated March 3, 1999 on March 12,
eighty (180) days from submission of documents, the taxpayer adversely affected illegally collected, the taxpayer must file a petition for review with the
1999, the appeal was timely made as it was filed within 30 days after receipt of
by the decision or inaction may appeal to the Court of Tax Appeals within (30) Court prior to the expiration of the two-year period under Section 229
the copy of the decision.1âwphi1
days from receipt of the said decision, or from the lapse of the one hundred eighty of the National Internal Revenue Code;
(180)-day period; otherwise the decision shall become final, executory and
demandable. (Emphasis supplied). Finally, the CIR should be reminded that taxpayers cannot be left in quandary by
(Emphasis ours)
its inaction on the protested assessment. It is imperative that the taxpayers are
informed of its action in order that the taxpayer should then at least be able to take
Respondent, however, insists that in case of the inaction by the Commissioner on
In arguing that the assessment became final and executory by the sole reason that recourse to the tax court at the opportune time. As correctly pointed out by the tax
the protested assessment within the 180-day reglementary period, petitioner
petitioner failed to appeal the inaction of the Commissioner within 30 days after court:
should have appealed the inaction to the CTA. Respondent maintains that due to
the 180-day reglementary period, respondent, in effect, limited the remedy of
Lascona's failure to file an appeal with the CTA after the lapse of the 180-day
Lascona, as a taxpayer, under Section 228 of the NIRC to just one, that is - to
period, the assessment became final and executory. x x x to adopt the interpretation of the respondent will not only sanction
appeal the inaction of the Commissioner on its protested assessment after the
inefficiency, but will likewise condone the Bureau's inaction. This is especially
lapse of the 180-day period. This is incorrect.
true in the instant case when despite the fact that respondent found petitioner's
We do not agree.
arguments to be in order, the assessment will become final, executory and
As early as the case of CIR v. Villa,15 it was already established that the word demandable for petitioner's failure to appeal before us within the thirty (30) day
12
In RCBC v. CIR,  the Court has held that in case the Commissioner failed to act "decisions" in paragraph 1, Section 7 of Republic Act No. 1125, quoted above, period.19
on the disputed assessment within the 180-day period from date of submission of has been interpreted to mean the decisions of the Commissioner of Internal
documents, a taxpayer can either: (1) file a petition for review with the Court of Revenue on the protest of the taxpayer against the assessments. Definitely, said
Taxes are the lifeblood of the government and so should be collected without
Tax Appeals within 30 days after the expiration of the 180-day period; or (2) word does not signify the assessment itself. We quote what this Court said aptly in
unnecessary hindrance. On the other hand, such collection should be made in
await the final decision of the Commissioner on the disputed assessments and a previous case:
accordance with law as any arbitrariness will negate the very reason for
appeal such final decision to the Court of Tax Appeals within 30 days after receipt
government itself. It is therefore necessary to reconcile the apparently conflicting
of a copy of such decision.13
In the first place, we believe the respondent court erred in holding that the interests of the authorities and the taxpayers so that the real purpose of taxation,
assessment in question is the respondent Collector's decision or ruling appealable which is the promotion of the common good, may be achieved.20 Thus, even as we
This is consistent with Section 3 A (2), Rule 4 of the Revised Rules of the Court to it, and that consequently, the period of thirty days prescribed by section 11 of concede the inevitability and indispensability of taxation, it is a requirement in all
of Tax Appeals,14 to wit: Republic Act No. 1125 within which petitioner should have appealed to the democratic regimes that it be exercised reasonably and in accordance with the
respondent court must be counted from its receipt of said assessment. Where a prescribed procedure.21
taxpayer questions an assessment and asks the Collector to reconsider or cancel
SEC. 3. Cases within the jurisdiction of the Court in Divisions. – The Court in the same because he (the taxpayer) believes he is not liable therefor, the
Divisions shall exercise: WHEREFORE, the petition is GRANTED. The Decision dated October 25, 2005
assessment becomes a "disputed assessment" that the Collector must decide, and
and the Resolution dated January 20, 2006 of the Court of Appeals in CA-G.R. SP
the taxpayer can appeal to the Court of Tax Appeals only upon receipt of the
No. 58061 are REVERSED and SET ASIDE. Accordingly, the Decision dated
(a) Exclusive original or appellate jurisdiction to review by appeal the following: decision of the Collector on the disputed assessment, . . . 16
January 4, 2000 of the Court of Tax Appeals in C.T.A. Case No. 5777 and its
Resolution dated March 3, 2000 are REINSTATED.
(1) Decisions of the Commissioner of Internal Revenue in cases Therefore, as in Section 228, when the law provided for the remedy to appeal the
involving disputed assessments, refunds of internal revenue taxes, fees inaction of the CIR, it did not intend to limit it to a single remedy of filing of an
SO ORDERED.
or other charges, penalties in relation thereto, or other matters arising appeal after the lapse of the 180-day prescribed period. Precisely, when a taxpayer
under the National Internal Revenue Code or other laws administered protested an assessment, he naturally expects the CIR to decide either positively
by the Bureau of Internal Revenue; or negatively. A taxpayer cannot be prejudiced if he chooses to wait for the final DIOSDADO M. PERALTA
decision of the CIR on the protested assessment. More so, because the law and Associate Justice
jurisprudence have always contemplated a scenario where the CIR will decide on
(2) Inaction by the Commissioner of Internal Revenue in cases the protested assessment.
involving disputed assessments, refunds of internal revenue taxes, fees
or other charges, penalties in relation thereto, or other matters arising
under the National Internal Revenue Code or other laws administered It must be emphasized, however, that in case of the inaction of the CIR on the
by the Bureau of Internal Revenue, where the National Internal protested assessment, while we reiterate − the taxpayer has two options, either: (1)
Revenue Code or other applicable law provides a specific period for file a petition for review with the CTA within 30 days after the expiration of the
action: Provided, that in case of disputed assessments, the inaction of 180-day period; or (2) await the final decision of the Commissioner on the