Escolar Documentos
Profissional Documentos
Cultura Documentos
In this case, respondent's Stockholders' Equity A. This amount of P800 thousand represents
section of its Balance Sheet as of 31 December the case given by the stockholders to
1998 45 shows: the company but does not necessarily
made (sic) payment to subscribed
STOCKHOLDERS' EQUITY 1998 1997 portion.
Authorized Capital Stock P2,000,000.00 P2,000,000.00
Atty. Napiza
Q. What is (sic) that payment stands for? Atty. Napiza
Mr. Rosario Jr. Q. Are (sic) all those figures appear in the
balance sheet?
A. This payment stands as (sic) for the
deposit for future subscription. Mr. Rosario Jr.
(c) When a taxpayer who opted to claim a If the protest is denied in whole or in part, or
refund or tax credit of excess creditable is not acted upon within one hundred eighty
withholding tax for a taxable period was (180) days from submission of documents,
determined to have carried over and the taxpayer adversely affected by the
automatically applied the same amount decision or inaction may appeal to the Court
claimed against the estimated tax liabilities of Tax Appeals within thirty (30) days from
for the taxable quarter or quarters of the receipt of the said decision, or from the lapse
succeeding taxable year; or of the one hundred eighty (180)-day period;
otherwise, the decision shall become final,
(d) When the excise tax due on excisable
executory and demandable. (Boldfacing
articles has not been paid; or
supplied)
Section 228 of the Tax Code 49 provides the because when respondent submitted its protest,
remedy to dispute a tax assessment within a certain respondent attached the GIS and Balance Sheet. Further,
period of time. It states that an assessment may be petitioner cannot insist on the submission of proof of DST
protested by filing a request for reconsideration or payment because such document does not exist as
reinvestigation within 30 days from receipt of the respondent claims that it is not liable to pay, and has not
assessment by the taxpayer. Within 60 days from filing of paid, the DST on the deposit on subscription.
the protest, all relevant supporting documents shall have
The term "relevant supporting documents" should
been submitted; otherwise, the assessment shall become
be understood as those documents necessary to support
final.
the legal basis in disputing a tax assessment as
In this case, respondent received the tax determined by the taxpayer. The BIR can only inform the
assessment on 3 January 2002 and it had until 2 February taxpayer to submit additional documents. The BIR cannot
2002 to submit its protest. On 1 February 2002, demand what type of supporting documents should be
respondent submitted its protest and attached the GIS submitted. Otherwise, a taxpayer will be at the mercy of
and Balance Sheet as of 31 December 1998. Respondent the BIR, which may require the production of documents
explained that it received P800,000 as a deposit with the that a taxpayer cannot submit.
possibility of applying the same as payment for the future
After respondent submitted its letter-reply stating
issuance of capital stock.
that it could not comply with the presentation of the proof
Within 60 days from the filing of protest or until 2 of DST payment, no reply was received from petitioner.
April 2002, respondent should submit relevant supporting
Section 228 states that if the protest is not acted
documents. Respondent, having submitted the supporting
upon within 180 days from submission of documents, the
documents together with its protest, did not present
taxpayer adversely affected by the inaction may appeal to
additional documents anymore.
the CTA within 30 days from the lapse of the 180-day
In a letter dated 12 March 2002, petitioner period. Respondent, having submitted its supporting
requested respondent to present proof of payment of DST documents on the same day the protest was filed, had
on subscription. In a letter-reply, respondent stated that it until 31 July 2002 to wait for petitioner's reply to its
could not produce any proof of DST payment because it protest. On 28 August 2002 or within 30 days after the
was not required to pay DST under the law considering lapse of the 180-day period counted from the filing of the
that the deposit on subscription was an advance made by protest as the supporting documents were simultaneously
its stockholders for future subscription, and no stock filed, respondent filed a petition before the CTA.
certificates were issued.
Respondent has complied with the requisites in
Since respondent has not allegedly submitted any disputing an assessment pursuant to Section 228 of
relevant supporting documents, petitioner now claims the Tax Code.Hence, the tax assessment cannot be
that the assessment has become final, executory and considered as final, executory and demandable. Further,
demandable, hence, unappealable. respondent's deposit on subscription is not subject to the
payment of DST. Consequently, respondent is not liable to
We reject petitioner's view that the assessment
pay the deficiency DST of P12,328.45. cTECHI
has become final and unappealable. It cannot be said that
respondent failed to submit relevant supporting WHEREFORE, we DENY the petition.
documents that would render the assessment final We AFFIRM the Court of Tax Appeals' Decision dated 24
March 2006 in the consolidated cases of C.T.A. EB Nos. 60 Issues:
and 62.
Whether or not the criminal complaint for tax evasion
||| can be construed as an assessment.
HELD
REMEDIAL LAW; EVIDENCE; PRESUMPTION THAT OFFICIAL having paid income tax only on 25 percent of the dividends it
DUTIES ARE REGULARLY PERFORMED; APPLIED IN CASE AT received from the Manila Electric Company for the years
BAR. — It is not the Department of Justice which is the 1962-1966, thereby allegedly shortchanging the government
of income tax due from 75 percent of said dividends. The
government agency tasked to determine the amount of taxes
Commissioner of Internal Revenue caused the investigation of
due upon the subject estate, but the Bureau of Internal
the denunciation after which he found and held that no
Revenue, whose determinations and assessments are deficiency corporate income tax was due from
presumed correct and made in good faith. The taxpayer has the Meralco Securities Corporation on the dividends it
the duty of proving otherwise. In the absence of proof of any received from the Manila Electric Company. Consequently,
irregularities in the performance of official duties, an the Commissioner denied the claim for informer's reward.
assessment will not be disturbed. Even an assessment based This action of the Commissioner was sustained by the
Secretary of Finance. On mandamus, respondent judge,
on estimates is prima facie valid and lawful where it does not
however, rendered judgment granting the writ prayed for and
appear to have been arrived at arbitrarily or capriciously. The ordered the Commissioner of Internal Revenue to assess and
burden of proof is upon the complaining party to show clearly collect from the Meralco Securities Corporation the sum of
that the assessment is erroneous. Failure to present proof of P51,840,612.00 as deficiency corporate income tax for the
error in the assessment will justify the judicial affirmance of period 1962 to 1969 plus interest and surcharges due thereon
said assessment. In this instance, petitioner has not pointed and to pay 25 percent thereof to Maniago as informer's
out one single provision in the Memorandum of the Special reward. Hence these petitions.
Audit Team which gave rise to the questioned assessment, The Supreme Court granted the petitions and reversed and
which bears a trace of falsity. Indeed the petitioner's attack set aside the questioned decision and order of respondent
on the assessment bears mainly on the alleged improbable judge, holding that (a) the decision or ruling of the
Commissioner of Internal Revenue that no tax is due or
and unconscionable amount of the taxes charged. But mere
collectible is a valid exercise of discretion in the performance
rhetoric cannot supply the basis for the charge of impropriety
of official duty and cannot be controlled much less reversed
of the assessment made. by mandamus; (b) considering that respondent judge may not
order by mandamus the Commissioner to issue the
assessment against Meralco Securities Corporation when no
such assessment has been found to be due, no deficiency
Meralco Securities Corp. v. Savellano, G.R. No. L-36181, L- taxes may therefore be assessed and collected against the
36748, October 23, 1982], 203 PHIL 173-184 said corporation; and (c) since no taxes are to be collected,
no informer's reward is due to private respondents as the
informer's heirs.
FACTS
HELD
Juan Maniago, who after his death was substituted in these
proceedings by his wife and children, submitted to the ADMINISTRATIVE LAW; COMMISSIONER OF INTERNAL
Commissioner of Internal Revenue confidential information REVENUE; EXCLUSIVE APPELLATE JURISDICTION OF COURT
against the MeralcoSecurities Corporation for tax evasion for OF TAX APPEALS OVER DECISIONS THEREOF. — Section 7
of Republic Act No. 1125, enacted on June 16, 1954, granted
to the Court of Tax Appeals exclusive appellate jurisdiction to
review by appeal, among others, decisions of the FACTS
Commissioner of Internal Revenue in cases involving disputed
assessments, refunds of internal revenue taxes, fees or other Due to the erroneous naming of the consignee in
charges, penalties imposed in relation thereto, or other the bill of lading of a shipment of bales of textile cloth,
matters arising under the National Internal Revenue Code or the Bureau of Customs denied the release of the goods,
other law or part of law administered by the Bureau of finding fraud on the part of private respondent AGFHA,
Internal Revenue. The law transferred to the Court of Appeals Inc., the true consignee. Private respondents, however,
jurisdiction over all cases involving said assessments maintained that there was only an honest mistake and not
previously cognizable by courts of first instance, and even an intentional wrongful declaration by the shipper to
those already pending in said courts. (Ledesma vs. Court of evade payment of any tax due. The Collector of
Tax Appeals. 102 Phil. 931.) Customs, Court of Tax Appeals and the Court of Appeals
unanimously concluded that no fraud had been committed
2. ID.; ID.; ID.; CASE AT BAR. — The question of whether or not
by the private respondent in the importation of the bales
to impose a deficiency tax assessment
of cloth.
on Meralco Securities Corporation undoubtedly comes within
the purview of the words "disputed assessments" or "other On appeal, the Supreme Court affirmed the
matters arising under the National Internal Revenue decision of the Court of Appeals, ruling: that findings of
Code . . ." Hence, the Court of First Instance has no the appellate court are generally binding on appeal; that
jurisdiction to take cognizance of the case because the they carry even more weight when they are consistent
subject matter thereof clearly falls within the scope of cases with that of the trial court; that the factual determination
now exclusively within the jurisdiction of the Court of Tax of the Court of Tax Appeals, when supported by
Appeals. cdasia substantial evidence as in this case, will not be reversed
on appeal; and that to justify forfeiture, actual fraud with
3. ID.; ID.; ID.; FAILURE TO TAKE AN APPEAL THEREIN BARS a clear purpose of avoiding the tax must be proved.
REVIEW BY THE COURTS; CASE AT BAR. — Even assuming
that the right granted the taxpayers affected to question and
appeal disputed assessments, under Section 7 of Republic HELD
Act No. 1125, may be availed of by strangers or informers like
the late Maniago, the most that he could have done was to TAXATION; TARIFF AND CUSTOMS CODE; FORFEITURE OF
appeal to the Court of Tax Appeals the ruling of petitioner GOODS; FRAUD COMMITTED MUST BE ACTUAL AND WITH
Commissioner of Internal Revenue within thirty (30) days from
INTENT TO AVOID THE TAX; CASE AT BAR. — Fraud must be
receipt thereof pursuant to Section 11 of Republic Act No.
proved to justify forfeiture. It must be actual, amounting to
1125. He failed to take such an appeal to the tax court. The
ruling is clearly final and no longer subject to review by the intentional wrong-doing with the clear purpose of avoiding the
courts. tax. Forfeiture is not favored in law nor in equity. Mere
negligence is not equivalent to the fraud contemplated by
|
law. What is here involved is an honest mistake, not even
(Republic v. Court of Tax Appeals, G.R. No. 139050, [October 2, directly attributable to private respondent, which will not
2001], 418 PHIL 758-767) deprive the government of its right to collect the proper tax.
The conclusion of the appellate court, being consistent with assessment, at any time within ten years after the discovery
the evidence on record and not contrary to law and of the falsity, fraud or omission". Petitioner argues said
jurisprudence, hardly can be overturned by this Court.||| provision does not apply because the taxpayer did not file
false and fraudulent returns with intent to evade tax.
HELD
March 2, 1989: Cibeles Insurance Corp. (CIC) authorized Tax avoidance and tax evasion are the two most common
Benigno P. Toda Jr., President and Owner of 99.991% of ways used by taxpayers in escaping from taxation. ax
outstanding capital stock, to sell the Cibeles Building and 2 avoidance is the tax saving device within the means
parcels of land which he sold to Rafael A. Altonaga on August sanctioned by law. This method should be used by the
30, 1987 for P 100M who then sold it on the same day to Royal taxpayer in good faith and at arms length. Tax evasion, on
Match Inc. for P 200M. the other hand, is a scheme used outside of those lawful
means and when availed of, it usually subjects the
CIC included gains from sale of real property of P 75,728.021 taxpayer to further or additional civil or criminal liabilities.
in its annual income tax return while Altonaga paid a 5%
capital gains tax of P 10M Tax evasion connotes the integration of three factors:
July 12, 1990: Toda sold his shares to Le Hun T. Choa for P (1) the end to be achieved, i.e., the payment of less
12.5M evidenced by a deed of ale of shares of stock which than that known by the taxpayer to be legally due,
provides that the buyer is free from all income tax liabilities or the non-payment of tax when it is shown that a
for 1987, 1988 and 1989. tax is due
(2) an accompanying state of mind which is
Toda Jr. died 3 years later. described as being evil, in bad faith, willfull,or
deliberate and not accidental; and
March 29, 1994: BIR sent an assessment notice and demand (3) a course of action or failure of action which is
letter to CIC for deficiency of income tax of P 79,099, 999.22 unlawful.
All are present in this case. The trial balance
January 27, 1995: BIR sent the same to the estate of Toda Jr. showed that RMI debited P 40M as "other-inv.
Estate filed a protest which was dismissed - fraudulent sale Cibeles Building" that indicates RMI Paid CIC (NOT
to evade the 35% corporate income tax for the additional gain Altonaga)
of P 100M and that there is in fact only 1 sale.
Fraud in its general sense, is deemed to comprise
Since it is falsity or fraud, the prescription period is 10 years anything calculated to deceive, including all acts,
from the discovery of the falsity or fraud as prescribed under omissions, and concealment involving a breach of legal or
Sec. 223 (a) of the NIRC equitable duty, trust or confidence justly reposed,
CTA: No proof of fraudulent transaction so the applicable resulting in the damage to another, or by which an undue
period is 3 years after the last day prescribed by law for filing and unconscionable advantage is taken of another.
the return
Here, it is obvious that the objective of the sale to
CA: affirmed Altonaga was to reduce the amount of tax to be paid
CIR appealed especially that the transfer from him to RMI would then
subject the income to only 5% individual capital gains tax, Finance Cesar Virata directed the Finance-
and not the 35% corporate income tax. BIR-NBI team constituted under Finance
Generally, a sale of or exchange of assets will have an Department Order No. 13-70 dated February
income tax incidence only when it is consummated but 19, 1971 (Exh. 3, pp. 532-533, Folder II, BIR
such tax incidence depends upon the substance of the rec.) to conduct the corresponding
transaction rather them mere formalities. investigation in a memorandum dated April 2,
1971 (p. 528, Folder II, BIR rec.). Accordingly,
a letter and a subpoena duces tecum dated
April 13, 1971 and May 3, 1971, respectively,
were issued against Silver Cup requesting
production of the accounting records and
other related documents for the examination
Po v. Court of Tax Appeals, G.R. No. 81446, [August 18, 1988], of the team. (Exh. 11, pp. 525-526, Folder II,
247 PHIL 487-495) BIR rec.). Mr. Po Bien Sing did not produce
his books of accounts as requested (Affidavit
This is an appeal from the decision 1 of the dated December 24, 1971 of Mr. Generoso
respondent Court of Tax Appeals, dated September 30, Quinain of the team, p. 525, Folder II, BIR
1987, which affirmed an earlier decision of the rec.). This prompted the team with the
correspondent Commissioner of Internal Revenue in assistance of the PC Company, Cebu City, to
assessment letters dated August 16, 1972 and September enter the factory bodega of Silver Cup and
26, 1972, which ordered the payment by the petitioner of seized different brands, consisting of 1,555
deficiency income tax for 1966 to 1970 in the amount of cases of alcohol products. (Exh. 22,
P7,154,685.16 and deficiency specific tax for January 2, Memorandum Report of the Team dated June
1964 January 19, 1972, in the amount of 5, 1971, pp. 491-492, Folder II, BIR rec.). The
P5,595,003.68. LLpr inventory lists of the seized alcohol products
are contained in Volumes I, II, III, IV and V
We adopt the respondent court's finding of facts,
(Exhibits 14, 15, 16, 17 and 18, respectively,
to wit:
BIR rec.). On the basis of the team's report of
Petitioner is the widow of the late Mr. Po Bien investigation, the respondent Commissioner
Sing who died on September 7, 1980. In the of Internal Revenue assessed Mr. Po Bien
taxable years 1964 to 1972, the Sing deficiency income tax for 1966 to 1970
deceased Po Bien Sing was the sole in the amount of P7,154, 685.16 (Exh. 6 pp. 17-
proprietor of Silver Cup Wine Factory (Silver 19, Folder I, BIR rec.) and for deficiency
Cup for brevity), Talisay, Cebu. He was specific tax for January 2, 1964 to January
engaged in the business of manufacture and 19, 1972 in the amount of P5,595,003.68 (Exh.
sale of compounded liquors, using alcohol 8, p. 107, Folder I, BIR rec.).
and other ingredients as raw materials.
Petitioner protested the deficiency
On the basis of a denunciation against Silver assessments through letters dated October 9
Cup allegedly "for tax evasion amounting to and October 30, 1972 (Exhs. 7 and 9, pp. 27-
millions of pesos" the then Secretary of 28; pp. 152-159, respectively, BIR rec.), which
protests were referred for reinvestigation. TO HAVE INCURRED THE ALLEGED
The corresponding report dated August 13, DEFICIENCY TAXES IN QUESTION. 3
1981 (Exh. 10, pp. 355, Folder I, BIR rec.).
We affirm.
recommended the reiterating of the
assessments in view of the taxpayer's Settled is the rule that the factual findings of the
persistent failure to present the books of Court of Tax Appeals are binding upon this Honorable
accounts for examination (Exh. 8, p. 107, Court and can only be disturbed on appeal if not
Folder I, BIR, rec.), compelling respondent to supported by substantial evidence.4
issue warrants of distraint and levy on
The assignments of errors boils down to a single
September 10, 1981 (Exh. 11, p. 361, Folder I,
issue previously raised before the respondent Court, i.e.,
BIR rec.).
whether or not the assessments have valid and legal
The warrants were admittedly received by bases. cdphil
petitioner on October 14, 1981 (Par. IX,
The applicable legal provision is Section 16(b) of
Petition; admitted par. 2, Answer), which
the National Internal Revenue Code of 1977 as amended.
petitioner deemed respondent's decision
It reads:
denying her protest on the subject
assessments. Hence, petitioner's appeal on Sec. 16. Power of the Commissioner of
October 29, 1981. 2 Internal Revenue to make assessments. —
The petitioner assigns the following errors: xxx xxx xxx
I (b) Failure to submit required returns,
statements, reports and other documents. —
RESPONDENT INTENTIONALLY ERRED IN
When a report required by law as a basis for
HOLDING THAT PETITIONER HAS NOT
the assessment of any national internal
PRESENTED ANY EVIDENCE OF RELEVANCE
revenue tax shall not be forthcoming within
AND COMPETENCE REQUIRED TO BASH THE
the time fixed by law or regulation or when
TROUBLING DISCREPANCIES AND SQUARE
there is reason to believe that any such
THE ISSUE ILLEGALITY POSITED ON THE
report is false, incomplete, or erroneous, the
SUBJECT ASSESSMENTS.
Commissioner of Internal Revenue shall
II assess the proper tax on the best evidence
obtainable.
RESPONDENT COURT OF TAX APPEALS
PALPABLY ERRED IN DECIDING THE CASE IN In case a person fails to file a required return
WAY CONTRARY TO THE DOCTRINES or other document at the time prescribed by
ALREADY LAID DOWN BY THIS COURT. law, or willfully or otherwise, files a false or
fraudulent return or other documents, the
III
Commissioner shall make or amend the
RESPONDENT COURT OF TAX APPEALS return from his own knowledge and from his
GRAVELY ERRED IN FINDING PO BIEN SING own knowledge and from such information as
he can obtain through testimony or
otherwise, which shall be prima facie correct 1967 — 645,335.04
and sufficient for all legal purposes. 1968 — 1,683,588.48
1969 — 1,589,622.48
The law is specific and clear. The rule on the "best
1970 — 3,028,502.92
evidence obtainable" applies when a tax report required
——————
by law for the purpose of assessment is not available or
Total amount due
when the tax report is incomplete or fraudulent.
and collectible P7,154,685.16
In the instant case, the persistent failure of the
The 50% surcharge has been imposed, pursuant
late Po Bien Sing and the herein petitioner to present their
to Section 72 * of the Tax Code and tax 1/2% monthly
books of accounts for examination for the taxable years
interest has likewise been imposed pursuant to the
involved left the Commissioner of Internal Revenue no
provision of Section 51(d) ** of theTax Code (Exh. O,
other legal option except to report to the power conferred
petition). 5
upon him under Section 16 of the Tax Code.
The petitioner assails these assessments as
The tax figures arrived at by the Commissioner of
wrong. LibLex
Internal Revenue are by no means arbitrary. We reproduce
the respondent court's findings, to wit: In the case of Collector of Internal Revenue vs.
Reyes, 6 we ruled:
As thus shown, on the basis of the quantity of
bottles of wines seized during the raid and Where the taxpayer is appealing to the tax
the sworn statements of former employees court on the ground that the Collector's
Messrs. Nelson S. Po and Alfonso Po taken on assessment is erroneous, it is incumbent
May 26, and 27, 1971, respectively, by the upon him to prove there what is the correct
investigating team in Cebu City (Exhs. 4 and and just liability by a full and fair disclosure
5, pp. 514-517, pp. 511-513, Folder II, BIR rec.), of all pertinent data in his possession.
it was ascertained that the Silver Cup for the Otherwise, if the taxpayer confines himself
years 1964 to 1970, inclusive, utilized and to proving that the tax assessment is wrong,
consumed in the manufacture of the tax court proceedings would settle
compounded liquors and other products nothing, and the way would be left open for
20,105 drums of alcohol as raw materials subsequent assessments and appeals in
81,288,787 proof liters of alcohol. As interminable succession.
determined, the total specific tax liability of
Tax assessments by tax examiners are presumed
the taxpayer for 1964 to 1971 amounted to
correct and made in good faith. The taxpayer has the duty
P5,593,003.68 ((Exh. E, petition, p. 10, CTA
to prove otherwise. 7 In the absence of proof of any
rec.)
irregularities in the performance of duties, an assessment
Likewise, the team found due from Silver Cup duly made by a Bureau of Internal Revenue examiner and
deficiency income taxes for the years 1966 to approved by his superior officers will not be
1970 inclusive in the aggregate sum of disturbed. 8 All presumptions are in favor of the
P7,154,685.16, as follows: correctness of tax assessments. 9
1966 — P 207,636.24
On the whole, we find that the fraudulent acts A — As factory personnel manager and all-
detailed in the decision under review had not been around handy man of Po Bien Sing, owner of
satisfactorily rebutted by the petitioner. There are indeed Silver Cup, these labels were entrusted to
clear indications on the part of the taxpayer to deprive me to make the false entries in the official
the Government of the taxes due. The Assistant Factory register book of Silver Cup, which I did under
Superintendent of Silver Cup, Nelson Po gave the the direction of Po Bien Sing. (Sworn
following testimony: statement, p. 512, Folder II, BIR
rec.) 10 (Emphasis ours)
Annexes "A", "A-1" to "A-17" show that from
January to December 1970, Silver Cup has The existence of fraud as found by the
used in production 189 drums of untaxed respondents can not be lightly set aside absent
distilled alcohol and 3,722 drums of untaxed substantial evidence presented by the petitioner to
distilled alcohol. Can you tell us how could counteract such finding. The findings of fact of the
this be possible with the presence of a respondent Court of Tax Appeals are entitled to the
revenue inspector in the premises of Silver highest respect. 11 We do not find anything in the
Cup during working hours? questioned decision that should disturb this long-
established doctrine.
Actually, the revenue inspector or
storekeeper comes around once a week on |||
the average. Sometimes, when the
storekeeper is around in the morning CIR vs. HANTEX TRADING INC
and Po Bien Sing wants to operate with
untaxed alcohol as raw materials, Po Bien
Sing tells the storekeeper to go home
because the factory is not going to operate FACTS
for the day. After the storekeeper leaves, the
illegal operation then begins. Untaxed Hantex Trading Co is a company organized under the
alcohol is brought in from Cebu Alcohol Plant Philippines. It is engaged in the sale of plastic products, it
into the compound of Silver Cup sometimes imports synthetic resin and other chemicals for the
at about 6:00 A.M. or at 12:00 noon or in the manufacture of its products. For this purpose, it is required to
evening or even at mid-night when the file an Import Entry and Internal Revenue Declaration
storekeeper is not around. When the (Consumption Entry) with the Bureau of Customs under
storekeeper comes, he sees nothing because Section 1301 of the Tariff and Customs Code. Sometime in
untaxed alcohol is brought directly to, and October 1989, Lt. Vicente Amoto, Acting Chief of Counter-
stored at, a secret tunnel within the bodega Intelligence Division of the Economic Intelligence and
itself inside the compound of Silver Cup. Investigation Bureau (EIIB), received confidential information
that the respondent had imported synthetic resin amounting
In the same vein, the factory personnel
to P115,599,018.00 but only declared P45,538,694.57. Thus,
manager testified that false entries were
Hentex receive a subpoena to present its books of account
entered in the official register book: thus,
which it failed to do. The bureau cannot find any original
copies of the products Hentex imported since the originals
were eaten by termites. Thus, the Bureau relied on the amended, includes the corporate and accounting records of
certified copies of the respondent’s Profit and Loss the taxpayer who is the subject of the assessment process,
Statement for 1987 and 1988 on file with the SEC, the the accounting records of other taxpayers engaged in the
machine copies of the Consumption Entries, Series of 1987, same line of business, including their gross profit and net
submitted by the informer, as well as excerpts from the profit sales. Such evidence also includes data, record, paper,
entries certified by Tomas and Danganan. The case was document or any evidence gathered by internal revenue
submitted to the CTA which ruled that Hentex have tax officers from other taxpayers who had personal transactions
deficiency and is ordered to pay, per investigation of the or from whom the subject taxpayer received any income; and
Bureau. The CA ruled that the income and sales tax record, data, document and information secured from
deficiency assessments issued by the petitioner were government offices or agencies, such as the SEC, the Central
unlawful and baseless since the copies of the import entries Bank of the Philippines, the Bureau of Customs, and the Tariff
relied upon in computing the deficiency tax of the respondent and Customs Commission. However, the best evidence
were not duly authenticated by the public officer charged obtainable under Section 16 of the 1977 NIRC, as amended,
with their custody, nor verified under oath by the EIIB and the does not include mere photocopies of records/documents.
BIR investigators. The petitioner, in making a preliminary and final tax
HELD deficiency assessment against a taxpayer, cannot anchor the
said assessment on mere machine copies of
Issue: Whether or not the final assessment of the petitioner records/documents. Mere photocopies of the Consumption
against the respondent for deficiency income tax and sales Entries have no probative weight if offered as proof of the
tax for the latter’s 1987 importation of resins and calcium contents thereof. The reason for this is that such copies are
bicarbonate is based on competent evidence and the law. mere scraps of paper and are of no probative value as basis
for any deficiency income or business taxes against a
Held: Central to the second issue is Section 16 of the NIRC of taxpayer.
1977, as amended which provides that the Commissioner of
Internal Revenue has the power to make assessments and Companies exempt from zero-rate tax
prescribe additional requirements for tax administration and
enforcement. Among such powers are those provided in
paragraph (b), which provides that “Failure to submit required ||| (Collector of Internal Revenue v. Reyes, G.R. No. L-8685,
returns, statements, reports and other documents. – When a [January 31, 1957], 100 PHIL 822-831)
report required by law as a basis for the assessment of any
national internal revenue tax shall not be forthcoming within
the time fixed by law or regulation or when there is reason to
believe that any such report is false, incomplete or erroneous, FACTS
the Commissioner shall assess the proper tax on the best
evidence obtainable.” This provision applies when the In a letter dated October 13, 1954, petitioner, the
Commissioner of Internal Revenue undertakes to perform her Collector of Internal demanded from Aurelio P. Reyes
administrative duty of assessing the proper tax against a payment of his alleged deficiency income taxes,
taxpayer, to make a return in case of a taxpayer’s failure to surcharges, interest and penalties for the tax years 1946
file one, or to amend a return already filed in the BIR. The to 1950 amounting to P641,470.04 as of October 31, 1954,
“best evidence” envisaged in Section 16 of the 1977 NIRC, as with the suggestion that the aforesaid tax liabilities be
paid either to the Bureau of Internal Revenue or the City collection of the latter's deficiency income taxes; that
Treasurer of Manila. Together with said letter of said taxpayer has an adequate remedy in law by paying
assessment, respondent Aurelio P. Reyes received a first and then seek for the recovery thereof; and that
warrant of distraint and levy on his properties in the event section 51(d) does not preclude distraint and levy. By
that he should fail to pay the alleged deficiency income resolution of January 8, 1955, the Court of Tax Appeals
taxes on or before October 31, 1954. Being informed by upheld the stand of Aurelio P. Reyes and ordered the
the City Treasurer of Manila by a letter dated November 4, Collector of Internal Revenue to desist from collecting by
1954, that said Treasurer was instructed by petitioner to administrative method the taxes allegedly due from Reyes
execute the warrant of distraint and levy in the amount pending the outcome of his appeal, without prejudice to
demanded is not settled on or before November 10, 1954, other judicial remedy or remedies which the Collector
Aurelio P. Reyes filed with the Court of Tax Appeals on may desire to pursue for the protection of the interest of
November 15, 1954, a petition for review of the Collector's the Government, pending the final decision of the case on
assessment of his alleged deficiency income tax the merits. On January 21, 1955, the Solicitor General
liabilities. This was followed by an urgent petition, filed on filed a notice of appeal from said Resolution and
November 16, 1954, to restrain the Collector of Internal instituted in this Court the instant certiorari case on
Revenue from executing the warrant of distraint and levy January 22, 1955.
on his properties, alleging among others, that the right of
It is not disputed that respondent Reyes filed his
respondent to collect by summary proceedings the tax
income tax returns for the years 1946 to 1950, and that
demanded had already prescribed in accordance with
the warrant of distraint and levy against the properties of
section 51(d) of the National Internal Revenue Code, as
said respondent was issued only on October 13, 1954, or 3
his income tax return for the tax years 1946 to 1950 had
years, 5 months and 16 days after the respondent
been filed more than three years ago, the last one being
taxpayer had filed his returns for the tax year 1950, which
on April 27, 1951; that a distraint and levy on his
he made on April 27, 1951
properties would work injustice or irreparable injury to
him and would tend to render any judgment of the Court in
the main case meaningless and ineffectual; that the HELD
requisite of Section 11 of Republic Act No. 1125 for the
filing of a bond or deposit before a writ of distraint and TAXATION; INCOME TAX; COLLECTION BY
levy may be suspended is not applicable in this case; and SUMMARY METHODS OF DISTRAINT AND LEVY, WHEN TO
that the greater portion of his assets consists of real MADE; WARRANTS ISSUED AFTER THE PRESCRIPTIVE
properties located in Manila and shares of stock in the PERIOD; EFFECT OF. — In the collection of income tax, it
Philippine Racing Club which are all encumbered in is mandatory that the right of the Collector of Internal
various financial institutions and therefore there is no Revenue to collect it by the summary methods of distraint
possibility that he would abscond with his property or and levy exercised within the period of three years from
remove or conceal the same. the time the income tax return is filed, otherwise the right
The Collector of Internal Revenue opposed said can only be enforced by judicial action. Where, as in the
petition on November 19, 1954, on the ground that the present case, the deficiency income taxes were assessed
Court of Tax Appeals has no authority to restrain him from and the warrants for their collection by distraint and levy
executing the warrant of distraint and levy on the were issued after the three-year prescriptive period, said
properties of Aurelio P. Reyes in connection with the warrants, as well as the steps taken in connection with
the sale of the properties of the taxpayer were issued FACTS
without authority of the law and, hence, the Court of Tax
Appeals could properly enjoin their enforcement. Petitioner is a naturalized Filipino of Chinese parents, the
eldest son of a prosperous local businessman by the name of
2. ID.; INJUNCTION; POWER OF TAX COURT TO
Li Chay Too, who died sometime in 1948. In 1945 petitioner
RESTRAIN COLLECTION OF TAX; PREREQUISITE FOR
organized the Li Yao & Company and made himself managing
ISSUANCE OF WRIT. — While Section 305 of the National
partner; from 1948, to February 1955 he was president of, and
Internal Revenue Codeprohibits courts from granting
owned shares in, the Li Chay Too & Sons, Inc.; and in 1950 he
injunction to restrain the collection of any internal
organized a corporation known as the Far East Realty &
revenue tax, fee or charge imposed by the Code, however,
Investment Co. of which he was also stockholder and
Section 11 of Republic Act No. 1125 authorizes the Court
president. Petitioner filed his income tax returns for the years
of Tax Appeals to suspend at any stage of the proceedings
1945 to 1951. However, a deficiency income tax in the amount
the said collection when in its opinion, the same may
of P5,470.98 was assessed against him, which he paid.
jeopardize the interest of the Government and/or the
taxpayer, provided the taxpayer either deposits the
amount claimed or files a surety bond or not more than In 1952 the Collector of Internal Revenue (CIR) believing that
double the amount with the Court. Said Section 11 must petitioner had not reported his true incomes for the previous
be deemed to have modified Section 305 of the Internal years, appointed a team to examine his books, an additional
Revenue Code in view of the repealing clause contained in assessment of P899,794.02 was made against. A second team
said Act to the effect that "any law or part of law, or any of investigators was appointed and this team recommended a
executive order, rule or regulation or part thereof, deficiency income tax assessment of P2,722,030.33. This
inconsistent with the provisions of this Act is hereby team employed what is known as the net worth or inventory
repealed". (Section 21) method. A third team was appointed, this team recommended
an assessment of P1,505,768.54 against petitioner; the
3. ID.; ID.; ID.; BOND REQUIRED ONLY WHERE THE
inventory method was also used in making this assessment.
COLLECTION IS MADE IN ACCORDANCE WITH LA. — The
Demand was made for the collection of said assessment so
requirement of the bond as a condition precedent to the
petitioner herein presented a petition with the CTA for the
issuance of the writ of injunction applies only in cases
review of the said assessment. CTA found that the amount of
where the processes by which the collection sought to be
the income tax deficiency due from petitioner is P424,536.77.
made by means thereof are carried out in consonance
with the law for such cases provided and not when said
processes are obviously in violation of the law to the Petitioner Li Yao sought to reconsider the decision and the
extreme that they have to be suspended for jeopardizing assessment, alleging that the sum of P5,470.98 paid by him
the interests of the taxpayer. as additional tax for the years 1945 to 1947 should be
credited against his deficiency income taxes, so that instead
of P424,536.77 the -sum due should be only P411,294.12. The
court approved this petition for recoupment and reduced the
Li Yao v. Collector of Internal Revenue, G.R. No. L-11875,
assessment to P411,293.80.
[December 28, 1963], 119 PHIL 207-225
The Judge did not ask either of the two any question the
answer to which could possibly be the basis for determining
whether or not there was probable cause against Bache & Co. FACTS
and Seggerman. The participation of the Judge in the
proceedings which led to the issuance of Search Warrant 2-M- HELD
70 was thus limited to listening to the stenographer’s
readings of her notes, to a few words of warning against the
commission of perjury, and to administering the oath to the
complainant and his witness. This cannot be consider a
personal examination.
FACTS
Second, the search warrant was issued for more than one
HELD
specific offense. The search warrant was issued for at least 4
to Fortune Tobacco addressed to no one in particular. Then
Fortune Tobacco received, by ordinary mail, a certified xerox
FACTS copy of RMC 37-93. CIR assessed Fortune Tobacco for ad
valorem tax deficiency amounting to P9,598,334.00.
HELD
Fortune Tobacco filed a petition for review with the
CTA. 8 CTA upheld the position of Fortune. CA affirmed.
FACTS
HELD
HELD
POLITICAL LAW; ADMINISTRATIVE LAW;
ADMINISTRATIVE AGENCIES; RULE MAKING POWERS;
LEGISLATIVE RULE AND INTERPRETATIVE RULE;
||| (Commissioner of Internal Revenue v. Court of Appeals, G.R. DISTINGUISHED. — Let us distinguish between two kinds of
No. 119761, [August 29, 1996], 329 PHIL 987-1043) administrative issuances — a legislative rule and an
interpretative rule. In Misamis Oriental Association of Coco
Traders, Inc., vs. Department of Finance Secretary , (238 SCRA
63) the Court expressed: ". . . a legislative rule is in
FACTS the nature of subordinate legislation, designed to implement
a primary legislation by providing the details thereof. In the
Fortune Tobacco Corporation ("Fortune Tobacco"), engaged in same way that laws must have the benefit of public hearing,
the manufacture of different brands of cigarettes, registered it is generally required that before a legislative rule is
"Champion," "Hope," and "More" cigarettes. BIR classified adopted there must be hearing . In this connection, the
them as foreign brands since they were listed in the World Administrative Code of 1987 provides: "Public Participation. —
Tobacco Directory as belonging to foreign companies. If not otherwise required by law, an agency shall, as far as
However, Fortun changed the names of 'Hope' to practicable, publish or circulate notices of proposed rules
'Hope Luxury'and 'More' to 'Premium More,' thereby removing and afford interested parties the opportunity to submit their
the said brands from the foreign brand category. views prior to the adoption of any rule. "(2) In the fixing of
rates, no rule or final order shall be valid unless the proposed
A 45% Ad Valorem taxes were imposed on these brands. Then rates shall have been published in a newspaper of general
Republic Act ("RA") No. 7654 was enacted – 55% for locally circulation at least two (2) weeks before the first hearing
manufactured foreign brand while 45% for locally thereon. "(3) In case of opposition, the rules on contested
manufactured brands. 2 days before the effectivity of RA cases shall be observed. "In addition such rule must be
7654, Revenue Memorandum Circular No. 37-93 ("RMC 37-93"), published. On the other hand, interpretative rules are
was issued by the BIR saying since there is no showing who designed to provide guidelines to the law which the
the real owner/s are of Champion, Hope and More, it follows administrative agency is in charge of enforcing. " It should be
that the same shall be considered locally manufactured understandable that when an administrative rule is merely
foreign brand for purposes of determining the ad interpretative in nature, its applicability needs nothing further
valorem tax - 55%. BIR sent via telefax a copy of RMC 37-93 than its bare issuance for it gives no real consequence more
than what the law itself has already prescribed. When, upon
the other hand, the administrative rule goes beyond merely
(Commissioner of Internal Revenue. v. Burroughs Ltd., G.R.
providing for the means that can facilitate or render least
cumbersome the implementation of the law but substantially No. L-66653, [June 19, 1986], 226 PHIL 236-241)
adds to or increase the burden of those governed, it behooves
the agency to accord at least to those directly affected a
chance to be heard, and thereafter to be duly informed,
before that new issuance is given the force and effect of law. FACTS
2. ID.; ID.; ID.; ID.; ID.; REVENUE MEMORANDUM Burroughs Limited is a foreign corporation authorized to
CIRCULAR NO. 37-93; A LEGISLATIVE RULING; DUE engage in trade or business in the Philippines through a
OBSERVANCE OF THE REQUIREMENTS OF NOTICE, OF
branch office located at De la Rosa corner Esteban Streets,
HEARING AND OF PUBLICATION FOR ITS VALIDITY SHOULD
Legaspi Village, Makati, Metro Manila. Sometime in March
NOT HAVE BEEN IGNORED. — A reading of RMC 37-93,
particularly considering the circumstances under which it 1979, said branch office applied with the Central Bank for
has been issued, convinces us that the circular cannot be authority to remit to its parent company abroad, branch profit
viewed simply as a corrective measure(revoking in the amounting to P7,647,058.00. Thus, on 14 March 1979, it paid
process the previous holdings of past Commissioners) or the 15% branch profit remittance tax, pursuant to Sec. 24 (b)
merely as construing Section 142(c)(1) of the NIRC, as (2) (ii) and remitted to its head office the amount of
amended, but has, in fact and most importantly, been made in
P6,499,999.30. Claiming that the 15% profit remittance tax
order to place "Hope Luxury," "Premium More" and
should have been computed on the basis of the amount
"Champion" within the classification of locally manufactured
cigarettes bearing foreign brands and to thereby have them actually remitted (P6,499,999.30) and not on the amount
covered by RA 7654. Specifically, the new law would have its before profit remittance tax (P7,647,058.00), Burroughs Ltd.
amendatory provisions applied to locally manufactured filed on 24 December 1980, a written claim for the refund or
cigarettes which at the time of its effectivity were not so tax credit of the amount of P172,058.90 representing alleged
classified as bearing foreign brands. Prior to the issuance of overpaid branch profit remittance tax. On 24 February 1981,
the questioned circular, "Hope Luxury," "Premium More," and
Burroughs Ltd. filed with the Court of Tax Appeals, a petition
"Champion" cigarettes were in the category of locally
for review (CTA Case) 3204 for the recovery of the amount of
manufactured cigarettes not bearing foreign brand subject to
45% ad valorem tax. Hence, without RMC 37-93, the P172,058.81. On 27 June 1983, the tax court rendered its
enactment, of RA 7654, would have had no new tax rate Decision, ordering the Commission of Internal Revenue to
consequence on private respondent's products. Evidently, in grant a tax credit in favor of Burroughs Ltd. the said amount
order to place "Hope Luxury," "Premium More," and claimed; without pronouncement as to costs. Unable to
"Champion" cigarettes within the scope of the amendatory obtain a reconsideration from the decision, the Commissioner
law and subject them to an increased tax rate, the now
filed the petition for certiorari before the Supreme Court.
disputed RMC 37-93 had to be issued. In so doing, the BIR not
simply interpreted the law; verily, it legislated under its quasi-
legislative authority. The due observance of the requirements
of notice, of hearing, and of publication should not have been
HELD
then ignored.
Petitioner's aforesaid contention is without merit. What is In 1993, the CTA rendered a decision denying the request for
applicable in the case at bar is still the Revenue Ruling of a tax refund or credit in the amount of P5,299,749.95 on the
January 21, 1980 because private respondent Burroughs ground that it was filed beyond the two-year reglementary
period. The petitioner's claim for refund in 1986 was likewise
Limited paid the branch profit remittance tax in question
denied on the assumption that it was automatically credited
on March 14, 1979. Memorandum Circular No. 8-82 dated
by PBCom against its tax payment in the succeeding year.
March 17, 1982 cannot be given retroactive effect in the light These pronouncements by the CTA were affirmed in toto by
of Section 327 of the National Internal Revenue Code which the CA. Hence, this petition. Petitioner argues that its claim
provides — "Sec. 327. Non-retroactivity of ruling. Any for refund tax credits are not yet barred by prescription
revocation, modification, or reversal of any of the rules and relying on the applicability of Revenue Memorandum Circular
regulations promulgated in accordance with the preceding No. 7-85 stating that overpaid income taxes are not covered
by the two-year prescriptive period under the Tax Code and
Section or any of the rulings or circulars promulgated by the
that taxpayers may claim refund or tax credits within (ten) 10
Commissioner shall not be given retroactive application if the years under Art. 1414 of the Civil Code. CTAIDE
revocation, modification, or reversal will be prejudicial to the
The Supreme Court ruled that when the Acting
taxpayer except in the following cases (a) where the taxpayer
Commissioner of Internal Revenue issued RMC 7-85, changing
deliberately mistakes or omits material facts from his return
the prescriptive period of two years to ten years on claims of
or in any document required of him by the Bureau of Internal excess quarterly income tax payments, such circular created
Revenue; (b) where the facts subsequently gathered by the a clear inconsistency with the provision of Sec. 230 of the
Bureau of Internal Revenue are materially different from the 1977 NIRC. In so doing, the BIR did not simply interpret the
facts on which the ruling is based, or (c) where the taxpayer law; rather it legislated guidelines contrary to the statute
acted in bad faith."||| passed by Congress. It bears repeating that Revenue
memorandum-circulars are considered administrative rulings
(in the sense of more specific and less general
interpretations of tax laws) which are issued from time to
(Philippine Bank of Communications v. Commissioner of time by the Commissioner of Internal Revenue. It is widely
accepted that the interpretation placed upon a statute by the
Internal Revenue, G.R. No. 112024, [January 28, 1999], 361
executive officers, whose duty is to enforce it, is entitled to
PHIL 916-933)
great respect by the courts. Nevertheless, such interpretation
is not conclusive and will be ignored if judicially found to be
FACTS
erroneous. Thus, courts will not countenance administrative
Petitioner, Philippine Bank of Communications, on issuances that override, instead of remaining consistent and
August 7, 1987, requested the Commissioner of Internal in harmony with, the law they seek to apply and implement.
Revenue (CIR) for a tax credit of P5,016,954.00 representing
the overpayment of taxes in the first and second quartets of
1985. On July 25, 1988, it filed a claim for refund of creditable
HELD
taxes withheld by their lessees from property rentals in 1985
for P282,795.50 and in 1986 for P234,077.69. Pending
COMMISSIONER OF INTERNAL REVENUE; ERRORS IN
investigation by the CIR, petitioner instituted a petition for
ADMINISTRATIVE INTERPRETATION; CANNOT PUT THE STATE
review on Nov. 18, 1988 before the Court of Tax Appeals (CTA).
IN ESTOPPEL. — Fundamental is the rule that the State pursuant to Section 24(b) of the National Internal Revenue
cannot be put in estoppel by the mistakes or errors of its Code, as amended by Rep. Act No. 2343 and the Implementing
officials or agents. As pointed out by the respondent courts, General Circular No. V-334 issued by the Commissioner of
the nullification of RMC No. 7-85 issued by the Acting Internal Revenue on April 12, 1961. For the years 1963 through
Commissioner of Internal Revenue is an administrative 1968, petitioner dutifully observed the practice. With the
interpretation which is not in harmony with Sec. 230 of 1977 amendment of Section 24(b) of the Tax Code by Rep. Act No.
NIRC, for being contrary to the express provision of a statute. 5431 on June 27, 1968, increasing the tax rate from 30% to
Hence, his interpretation could not be given weight for to do 35%, the Commissioner of Internal Revenue revoked, for
so would, in effect, amend the statute. being "erroneous for lack of legal basis" Gen. Circular No. V-
334, by issuing Revised Memo-Circular No. 471, basing the tax
5. ID.; ADMINISTRATIVE BODIES; ADMINISTRATIVE
therein prescribed on gross income. Pursuant thereto,
DECISIONS; DO NOT FORM PART OF THE LEGAL SYSTEM. —
respondent Commissioner issued against petitioner a letter of
Article 8 of the Civil Code recognizes judicial decisions,
assessment and demand requiring the latter to pay deficiency
applying or interpreting statutes as part of the legal system
with holding income tax on the remitted film rentals for the
of the country. But administrative decisions do not enjoy that
years 1965 to 1968 in the total amount of P525,897.06.
level of recognition. A memorandum-circular of a bureau head
Without acting on petitioner's request for a reconsideration
could not operate to vest a taxpayer with a shield against
and withdrawal of the assessment, respondent Commissioner
judicial action. For there are no vested rights to speak of
issued a warrant of distraint and levy over the former's
respecting a wrong construction of the law by the
personal and real property. On petition for review filed with
administrative officials and such wrong interpretation could
respondent Court of Tax Appeals, the latter dismissed it and
not place the Government in estoppel to correct or overrule
affirmed the questioned assessment. Petitioner appealed
the same. Moreover, the non-retroactivity of rulings by the
contesting the retroactivity of Revised Memo-Circular 471 and
Commissioner of Internal Revenue is not applicable in this
averring prescription of the right of respondent Commissioner
case because the nullity of RMC No. 7-85 was declared by
to assess the deficiency with holding income tax.
respondent courts and not by the Commissioner of Internal
Revenue. In reversing the judgment appealed from and setting aside
the assessment, the Court ruled that in the interest of justice
and fairplay, rulings or circulars promulgated by the
Commissioner of Internal Revenue have no retroactive
||| ABS-CBN Broadcasting Corp. v. Court of Tax Appeals, G.R. application where to so apply them would be prejudicial to
No. L-52306, [October 12, 1981], 195 PHIL 33-45 taxpayers, who in the case at bar, relied in good faith and
religiously complied with no less than a circular issued "to all
internal revenue officials" by the highest official of the
Bureau of Internal Revenue and approved by the then
FACTS
Secretary of Finance.
Petitioner cornoration was engaged in the business of
telecasting local as well as foreign films acquired from
foreign corporations not engaged intrade or business within HELD
the Philippines, for which petitioner paid rentals after
withholding and turning over to the Bureau of Internal
Revenue income tax of 30% of one-half of the film rentals
TAXATION; ASSESSMENT AND COLLECTION OF TAXES;
CIRCULARS OR RULINGS OF THE COMMISSIONER OF
INTERNAL REVENUE HAVE NO RETROACTIVE APPLICATION;
CASE AT BAR. — It is clear from Sec. 338-A (now Sec. 327) of
the Tax Code as insisted by Rep. Act No. 6110 on August 9,
1969 that rulings or circulars promulgated by the
Commissioner of Internal Revenue have no retroactive
application where to so apply them would be prejudicial to
taxpayers. The prejudice to petitioner of the retroactive
application of Memorandum Circular No. 4-71 is beyond
question. It was issued only in 1971, or three years after
1968, the last year that petitioner had with held taxes under
General Circular No. V-334. The assessment and demand on
petitioner to pay deficiency `withholding income tax was also
made three years after 1968 for a period of time commencing
in 1963. Petitioner was no longer in a position to withhold
taxes due from foreign corporations because it had already
remitted all film rentals and no longer had any control over
them when the new circular was issued. Neither does
petitioner fall under any of the enumerated exceptions stated
in the Section.|||