RCBC vs. CIR
G.R. No. 170257. Sept. 7, 2011
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Ponente: Mendoza, J.
Facts:
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Petitioner RCBC is a general banking corporation and it
filed its annual corporate ITRs for the Foreign Currency
Deposut Unit (FCDU) for the taxable years 1994 and
1995.
On Aug. 15, 1996, RCBC received a Letter of Authority
(LoA) issued by respondent CIR authorizing a special
audit team to examine the former’s books of accounts,
records, and other documents for internal revenue
taxes from Jan. 1, 1994 – Dec. 31, 1995.
On Jan. 23, 1997, RCBC executed 2 waivers of defense
of prescription under the Statute of Limitations
covering the taxable years 1994 and 1995, thus,
extending the period for the BIR to assess up to Dec.
31, 2000.
On Jan. 27, 2000, RCBC received a FLD with
assessment notices showing the deficiency tax totaling
Php4.1 billion.
On Feb. 24, 2000, RCBC filed its protest together with
relevant documentary evidence.
On Dec. 6, 2000, RCBC got another FLD with a FAN
which was dated Oct. 20, 2000 which was by reason of
the requested reinvestigation reducing the deficiency
tax to only Php303 million.
RCBC then paid but only Php15.4. It refused to pay the
deficiency onshore tax and documentary stamp tax
(DST) totaling Php287 million. RCBC also argued that
the Jan. 23, 1997 waiver it made was not valid on the
ground that it was not signed by the CIR as required by
sec. 222(b) of the NIRC.
On the onshore issue, RCBC stated as defense that it
was a borrower and a constituted as the withholding
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agent that was primarily liable for remittance of said
tax.
CTA partially grants. But ordered RCBC to pay
Php171.8 million for the onshore tax. Also, it cannot
assail the validity of the waivers after it had paid the
reduced amount of taxes.
On July 22, 2009, while on appeal to the Supreme
Court, RCBC manifested that this case is now moot and
academic as it already paid the DST on Special Savings
Account for the taxable years 1994 and 1995 after BIR
approved the tax abatement.
Issue(s): WON petitioner is estopped from assailing the
validity of the waivers
Held: YES.
Ratio:
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Article 1431 of the New Civil Code gives basis to the
doctrine of estoppel. It states that an admission or
representation is rendered conclusive upon the person
making it, and cannot be denied or disproved as
against the person relying thereon. A party is
precluded from denying his own acts, admissions or
representations to the prejudice of the other party in
order to prevent fraud and falsehood.
Such doctrine is applicable here as RCBC, through its
partial payment of the revised assessments issued
within the extended period impliedly admitted the
validity of the waivers.
As evidence, RCBC even immediately paid the said
deficiency tax upon receipt of the revised assessments
on Dec. 6, 2000. Thus, RCBC is already estopped. Had
RCBC truly believed that the waivers were invalid and
that the assessments were issued beyond the
prescriptive period, then it shouldn’t have paid the
reduced amount in the assessment.