After a Bureau of Internal Revenue (BIR) audit, T Corp., a domestic corporation engaged in buying and
Question:
After a Bureau of Internal Revenue (BIR) audit, T Corp., a domestic corporation engaged in buying and selling scrap metals, was found to have a deficiency income tax of ₱25,000,000.00, including interests and penalties, for the year 2012. For 2012, T Corp. filed its income tax return (ITR) on April 15, 2013, because it used the calendar year for its accounting. The BIR sent the Preliminary Assessment Notice (PAN) on December 23, 2015, and eventually, the Final Assessment Notice (FAN) on April 11, 2016, which were received by T Corp. on the same dates that they were sent. Upon receipt of the FAN, T Corp. filed its protest letter on June 25, 2016.
Thereafter, and without action from the Commissioner of Internal Revenue (CIR), T Corp. filed a petition for review before the Court of Tax Appeals, alleging that the assessment has been prescribed. For its part, the CIR moved to dismiss the case, pointing out that the assessment had already become final because the protest was filed beyond the allowable period.
(a) Is T Corp.'s contention regarding the prescription of the assessment meritorious? Explain.
(b) Should the CIR's motion to dismiss be granted? Explain.