Title: Gonzalo P. Nava, Petitioner, vs.

Commissioner of Internal Revenue, Respondent

Nava vs. CIR G.R. No. L-19470 January 30, 1965
Facts of the Case.
1. Gonzalo P. Nava filed his Income Tax Return (ITR) for the year 1950 on May 15,
1951 and was assessed based on the filed ITR by the respondent on the same
date to be in the sum of Php4,952.00;
2. Nava paid half of the tax due, leaving him a balance of Php2,491.00;
3. Nava offered his backpay certificate as payment for the aforementioned balance
but the respondent denied Nava’s proposal;
4. Having been denied of his proposal, Nava requested on July 28, 1953 that the
respondent delay the collection of the remaining balance until the question of
whether or not he may pay the same through his backpay is decided;
5. Respondent likewise denied the abovementioned request through a letter dated
January 05, 1954;
6. The letter was followed by two more notices demanding the payment of the
balance, the last of which was dated February 22, 1955;
7. Subsequent to the investigation of Nava’s 1950 ITR, the respondent issued a
deficiency income tax assessment notice (Exh. “4”) compelling Nava to pay a total
of Php9,421.50 not later than April 30, 1955. This amount includes the unpaid
balance of Php2,491.00 plus a 50% surcharge;
8. Despite the allegation that several notices of this revised assessment were issued
to Nava, the petitioner claimed that he only learned of the same for the first time
on December 19, 1956;
9. Nava, in a letter dated January 10, 1957, pointed out that more than six years has
elapsed since the original tax return was filed, meanwhile protesting the
assessment, and contending the case as a closed issue;
10. Through a registered letter dated March 25, 1957 (Exh. ”5”), the Director
demanded that the new assessment be paid;
11. Subsequent to this, Nava requested a reconsideration, and was informed on June
16, 1958 that a reinvestigation would be granted provided he waived the statute
of limitations (Exh. “7”), of which was rejected;
12. Consequently, the reconsideration of the assessment was denied by the Collector
through a letter dated July 22, 1958 (Exh. “9”); and
13. Nava then filed a petition for review with the Court of Tax Appeals on August 08,
1958; with the latter reducing the deficiency to Php3,052.00 and cancelling the
50% surcharge.
Issues:
1. Whether the enforcement of the tax assessment has prescribed?
Ruling:
The tax assessment has already prescribed, since the respondent failed to provide
substantial evidence that there was a valid and effective issuance or release of said
deficiency income tax assessment notice dated March 30, 1955 and the other supposed
demand letters or notices thereafter. Given this and the original assessment on May 15,
1951 of Nava’s 1950 ITR being indisputable, it is plain that the period within which to
make a re-assessment has lapsed on May 15, 1956 as provided under Section 331 of the
Tax Code. The judicial action to collect any deficiency tax on Nava’s 1950 ITR has already
prescribed under Section 332 of the Tax Code, since the Notice of Deficiency Income Tax
was effectually made on December 19, 1956 at the earliest.