The Bureau of Internal Revenue (BIR) issued a Notice of Assessment against a taxpayer informing him of his alleged deficiency income tax. The latter timely filed a protest questioning the said Assessment. Eleven months thereafter, or after more or less 330 days, the BIR denied the taxpayer’s protest based on the ground that under Section 228 of the National Internal Revenue Code (NIRC), when the taxpayer failed to appeal the case to the Court of Tax Appeals within thirty (30) days from the lapse of the One Hundred Eighty (180)-day period from submission of the protest, the assessment shall became final and executor.

Is the BIR correct?

No.

The law says:

“Section 228-xxx

If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise the decision shall become final, executory and demandable.”

The law is instructive. A taxpayer has two options in case it filed a protest against an assessment issued against him by the BIR, either:

(1) file a petition for review with the CTA within 30 days after the expiration of the 180-day period; or

(2) await the final decision of the BIR on the disputed assessment and appeal such final decision to the CTA within 30 days after the receipt of a copy of such decision.

Accordingly, considering that the taxpayer opted to await the final decision of the BIR on the protested assessment, said assessment has not yet become final and executory.

To conform to the argument of the BIR, will, in effect, limit the remedy of the taxpayer to just one, that is, to appeal to the CTA after the lapse of 180 days of inaction by the BIR. This should not be the case, as it will deprive the vested right of the taxpayer to wait for the decision of the BIR before it will elevate it to the CTA, if he desires.

See also: LASCONA LAND CO., INC., vs COMMISSIONER OF INTERNAL REVENUE