Bank of the Philippine Islands v. Commissioner of Internal Revenue G.R. No. 139736 !

"to#er 17 $%%& 'a"ts( The Bank of the Philippine Islands (BPI) sold foreign bills of exchange to the Central Bank of the Philippines and based on such transactions, the BIR issued an assessment finding BPI liable for deficiency documentary stamps tax The Bank protested to such assessment through a letter stating that it is not liable for !"T as such is paid by the buyer and it is already incorporated #ithin the price of the foreign exchange $urthermore, it contends that it is not liable for !"T because Central Bank is exempt from such tax BPI did not recei%e any reply to its protest letter, ho#e%er, a &arrant of !istraint and'or (e%y #as issued by the BIR for the assessed deficiency !"T "ubse)uently, the BIR informed the bank, through a letter, of its denial of the re)uest for reconsideration sent by the latter through the protest letter It anchored its denial on the pro%isions of "ec *** of the Tax Code and by BIR rulings #hich pro%ided that #hene%er one of the party to a transaction is exempt from !"T, the other party #ho is not exempt should be made liable for the payment +pon receipt of the denial, BPI filed a petition for re%ie# #ith the CT, alleging that the right to enforce collection of the assessed amount has already prescribed The CT,, ho#e%er, ruled that the period to collect had not yet prescribed as the running of the period #as tolled by the filing of the protest #hich is to be considered as a re)uest for rein%estigation -e%ertheless, the CT, ruled that although the period had not yet prescribed, the bank is not liable for deficiency !"T for the sale of foreign currency to the Central Bank is exempted from tax

.n appeal, the C, re%ersed the decision of the CT, in relation to the liability for the payment of the !"T for its sole foreign exchange to the Central Bank Issue( &hether or not the period to enforce collection of assessed deficiency documentary stamps tax had already prescribed Rulin)( /es, the collection of the assessed deficiency !"T is already barred by prescription The period for the BIR to assess and collect an internal re%enue tax is limited to 0 years as pro%ided by "ec *10 of the Tax Code ,s a general rule, the period cannot be effected, ad2usted or suspended except for instance pro%ided in "ecs **0 and **3 of the Tax Code $urthermore, the "upreme Court held that there is no %alid ground to suspend the running of the prescripti%e period as the protest letter of BPI did not specifically re)uest for either a reconsideration offer to or rein%estigation any ne# The letter to be protested a re)uest the for assessment issued based on a )uestion of la# and did not e%en present e%idences reconsideration and the suspension of the running of the statute of limitations should not apply