Takasago Import-Export Co.

v CIR
CA GR SP No. 78777

FACTS:

Petitioner was assessed deficiency income taxes for the period covering
January 1, 1996 to December 31, 1996 in the amount of P1,026,354.66.  The
Preliminary Assessment Notice for such deficiency was received by Takasago
on June 14, 2001.  

Prior to the assessment notice of June 14, 2001 it was shown that in June 8,
1998 petitioner received letter of authority for the examination of its books and
other accounting records for internal revenue taxes covering the taxable year
1996. A second letter, for the same purpose, was revalidated and Petitioner
submitted its books and other accounting records to the BIR on August and
September, 1999.  On October 1999, a BIR Revenue Examiner Carmela G.
Hitosis presented to Marvic Gatan, an administrative assistant of Takasago, a
Waiver of the Defense of Prescription under the Statute of Limitations, six
months after the the informal conference conducted and five months after the
expiration of the first waiver the BIR, now through its Revenue Officer Vidal B.
Ratuita, presented again to Ms Gatan another waiver which the latter signed
again on the same representation to her that it would not do any harm to her
or the company.

On October 11 2001, received October 12, a Collection letter was sent to

Takasago and a final notice before seizure was sent to it November 8th.  On
February 4, petitioner filed a letter to the CIR questioning the assessmen.  It
was only on March 13, 2002 did the Petitioner file the Petition for Review and
Annulment of Warrant of Distraint and/or Levy on the ground that the
assessment was made beyond the three-year prescriptive period.

ISSUE:  Whether or not the failure of petitioner to question the assessment

which was made by the CIR after the 3 year prescriptive period within 30 days
rendered it final executory and demandable?

Held: No, the assessment made by BIR is null and void for having been
issued beyond the prescriptive period, notwithstanding the taxpayer's failure to
file a protest within the aforementioned thirty-day period. 
Neither can it be argued by the BIR that the two waivers signed by the
employee of Takasago was valid.  It was shown that the BIR officer then failed
to sign the same.  Since waivers must be signed by BOTH the taxpayer and
the BIR officer in order to be valid, the first waiver was of no effect in tolling
the period of prescription. As to the second waiver, aside from failure (again)
of the BIR officer to sign the same, the waiver was executed beyong the July
31, 2000 expiration period of the first waiver hence it is likewise of no moment
nor did it toll the prescriptive period.

Our tax law mandates a statute of limitations in the collection of taxes for the
purpose of safeguarding taxpayers from any unreasonable examination,
investigation or assessment. Thus, the law on prescription, being a remedial
measure, should be liberally construed in order to afford such protection. As a
corollary, the exceptions to the law on prescription should perforce be strictly
construed.