CIR V. BF GOODRICH PHILS. INC. G.R. NO. 104171. February 24, 1999 Fact! Private respondent BF Goodrich Philippines Inc. was an American corporation prior to July 3, Fact! Private 19!. As a condition "or approvin# the manu"acture o" tires and other ru$$er products, private respondent was wa s re% re%uir uired ed $y the &en &entra trall Ban Ban' ' to dev develo elop p a ru ru$$e $$err pla planta ntati tion. on. In com compli plianc ance e the therew rewith ith,, pri privat vate e respondent $ou#ht "rom the #overnment certain parcels o" land in (uma)u$on# Basilan, Basilan, in 19*1 under the Pu$lic +and Act and the Parity Amendment to the 193 constitution, and there developed a ru$$er plantation. -n Au#ust , 193, the Justice /ecretary rendered an opinion that ownership ri#hts o" Americans over Pu$li Pu$ lic c a#r a#ricu icultu ltural ral lan lands, ds, inc inclu ludin din# # the ri ri#ht #ht to dis dispos pose e or sel selll the their ir rea reall est estate, ate, would $e los lostt upo upon n e0piration on July 3, 19! o" the Parity Amendment. (hus, private respondent sold its Basilan land holdin# to /iltown ealty Phil. Inc., 2/iltown "or P44,444 on January 1, 19!. 5nder the terms o" the sale, /iltown would lease the property to private respondent "or years with an e0tension o" years at the option o" private respondent. Private respondent $oo's o" accounts were e0amined $y BI "or purposes o" determinin# its ta0 lia$ility "or 19!. (his e0amination resulted in the April 3, 19 assessment o" private respondent "or de"iciency income ta0 which it duly paid. /iltown6s $oo's o" accounts were also e0amined, and on the $asis thereo", on -cto$er 14, 1974, the &ollector o" Internal evenue assessed de"iciency donor6s ta0 o" P1,44,74 in relation to said sale o" the Basilan landholdin#s. Private respondent contested this assessment on 8ovem$er !, 1974. Another assessment dated arch 1*, 1971, increasin# the amount demanded "or the alle#ed de"iciency donor6s ta0, surchar#e, interest and compromise penalty and was received $y private respondent on April 9, 1971. -n appeal, &(A upheld the assessment asses sment.. -n review, review, &A reversed reversed the decision o" the court "ind "indin# in# that the assessment assessment was made $eyond the :year prescriptive period in /ection 331 o" the (a0 &ode.
Iue! ;hether Iue! ;hether or not petitioner6s ri#ht to assess has prescri$ed. He"#! Applyin# then /ec. 331, 8I& 2now /ec. 43, 199 8I& which provides a 3:year prescriptive He"#! Applyin# period "or ma'in# assessments, it is clean that the -cto$er 1*, 1974 and arch 1*, 1971 assessments were issued $y the BI $eyond the :year statute o" limitations. (he court thorou#hly studied the records o" this case and "ound no $asis to disre#ard the :year period o" prescription, e0pressly set under /ec. 331 o" the (a0 &ode, the law then in "orce. For the pur purpos pose e o" sa" sa"e#u e#uard ardin# in# ta0 ta0pay payers ers "ro "rom m any unr unreas easona ona$le $le e0a e0amin minati ation, on, inv invest esti#a i#atio tion n or assessment asses sment,, our ta0 law provides a stat statute ute o" limi limitati tations ons in the collection collection o" ta0e ta0es. s. (hus, the law or prescription, $ein# a remedial measure, should $e li$erally construed in order to a""ord such protection. As a corollary, corollary, the e0ceptions e0ceptions to the law on prescription should should per"orce $e strictly strictly construed.
