CIR vs Algue1

G.R. No. L-28896 February 17, 1988

Facts:
Algue was asking for a reconsideration of the decision of the CIR disallowing a
deduction of the P75,000 as business expense. Anent the issue of the deduction, the
court ruled it was proper.  

Issue:
Whether Or Not the Appeal of Algue from the CIR was made on time and in accordance
with the law.

Held: Yes. The filing of the protest of the respondent which was not pro forma had the
effect of tolling the prescriptive period.  

The general rule that as a rule the warrant of distraint and levy is proof of the finality of
the assessment and renders hopeless the request for reconsideration being
"tantamount to an outright denial thereof and makes the said request deemed rejected"
finds an exception in this case wherein it was shown that the taxpayer made a timely
protest of the assessment and such protest was not pro-forma, but due to
circumstances peculiar to this case such protest was not taken into consideration.  

The antecedent facts showed that on January 14, 1985 the assessment for P83,183.85
delinquency income taxes for the years 1958 and 1959 was received by respondent.
This assessment was duly protested in a letter for reconsideration dated and stamped
received on January 18, 1965.  On March 12, 1965 a warrant of distraint and levy was
presented to Algue through Atty Guevarra who refused to receive it citing as reason the
pendency of the protest.  It wasn't shown that any positive act was made on the protest,
a copy of it could not even be found on the dockets.  After producing his photostat Atty.
Guevara was finally informed on April 7, 1965 that the BIR is not taking any action on
the protest. On April 23, 1965 Algue filed a petition for review. 

In this case, the court considered the period from January 18 (the date of protest) to
April 7 (the date when Guevarra received CIR's decision) as excluded from the 30-day
period to file.  Thus, the petition was held timely since at the time it was filed only 20
days has elapsed (4 days from January 14 t0 18 then 16 days from April 7 to April 23).

1
This Case was previously discussed under deduction s from Gross Estate.