Service Resources, Inc. vs. Commissioner of Internal Revenue

DECISION

with the Bureau of Internal Revenue (BIR) with Certificate of Registration (OCN) No. 3RC0000466898 and Tax Identification No. 000-144-156-000.s Respondent is the Commissioner of the BIR, the government agency vested with the authority to administer and enforce national internal revenue taxes, including, among others, the power to credit or refund internal revenue taxes erroneously or excessively or illegally paid, assessed or collected. He holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City. He is represented by the lawyers ofthe Legal Division ofBIR Revenue Region No. 7B-East NCR with office address at 25th Floor, The Podium West Tower, ADB Avenue, Mandaluyong City, where he may be served with summons, notices and other court processes.6

FACTS

On April 12, 2019, petitioner filed its Annual Income Tax Return (BIR Form No. 1702-RT) [Annual ITR] forTY 2018, which reflected an overpayment of P40,739,501.00, 7 computed as follows:

Total Income Tax Due

1,619,380.00

Less: Total Tax Credits/Payments

Prior Year's Excess Credits Other

Than Minimum Corporate Income

Tax IMCIT)

21,663,339.00

Creditable

Tax

Withheld

from Previous Quarter/ s per BIR Form No. 2307 15,571,862.00

Creditable Tax Withheld per BlR

Form No. 2307 for the 4'" Quarter 5,123,680.00 42,358,881.00 .

c---:--.c (40, 739,50 1.00) .

Total Amount Pay_a_ble (Overpayment) Petitioner marked the option "To be refunded" for overpayment in the said Annual ITR forTY 2018. On August 26, 2020, petitioner filed with the BIR, Revenue District Office No. 43, an Application for Tax Credits/Refunds 'Par. 4, Summary of Admitted Facts, ,JSFI, Docket- Vol. I, p. 145; Exhibit "P-7", Docket -Vol. II, p. 575.

" Par. 2, Summary of Admitted Facts, JSFI, Docket- Vol. I, pp. 144 to 145.

(BIR Form No. 1914),8 and a letter dated August 4, 2020,9 requesting for the refund of its unutilized CWTs forTY 2018, in the amount of 1.'20,695,542.15.

On May 17, 2021, petitioner filed a Submission with Manifestation, 10 stating therein that it filed by electronic mail (e-mail) on April 12, 2021, the present Petition for Review, thereby submitting hard copies thereof. 11 Respondent filed his Answer on November 8, 2021.12 The Pre-Trial Conference was initially set on February 17, 2022,13 but upon respondent's motion,14 was reset and held on April 7, 2022,15 wherein respondent manifested that he will no longer present witnesses. Prior thereto, petitioner's Pre-Trial Brief was filed on February 8, 2022, 16 while Respondent's Pre- Trial Brief was submitted on April 5, 2022_17 On AprilS, 2022, respondent transmitted the BIR Records for the present case, consisting of289 pages, in one (1) folder. 18 On April 27, 2022, the parties submitted their Joint Stipulation of Facts and Issues, 19 which was approved by the Court in the Resolution dated May 17, 2022,20 thereby deeming the termination of the Pre-Trial. The Pre-Trial Order dated May 26, 2022 was then issued.21 As trial ensued, petitioner presented its testimonial and documentary evidence. It offered the testimonies of the following s Exhibit "P-2"", Docket- Vol. II, p. 531. 9 Exhibit "P-3"", Docket- Vol. II, pp. 532 to 535. 10 Docket- Vol. I, pp. 6 to 8.

11 Docket- Vol. I, pp. 10 to 35.

" Docket -Vol. I, pp. 73 to 77.

13 Notice of Pre· Trial Conference dated November 25, 2021, Docket- Vol. I, pp. 79 to 81. 14 Very Urgent Motion for Nesetting of Hearing (Scheduled on February 17, 2022), electronically filed on February 15, 2022, Docket- Vol. I, pp. 100 to 103. The hard copy thereof was received by the Court on February 17, 2022, Docket- Vol. I, pp. 106 to 108.

15 Order dated February 15, 2022, Docket - Vol. 1, p. 105; Minutes of the hearing held on, and Order dated, April7, 2022, Docket- Vol. I, pp. 119 to 124. 16 Docket- Vol. I, pp. 82 to 97.

17 Docket- Vol. I, pp. 114 to 116.

IS Respondent's Compliance with Manifestation and Explanja]tion dated April 8, 2022, Docket- Vol. I, pp. 127 to 128.

19 Docket- Vol. I, pp. 144 to 152.

2o Docket - Vol. I, p. 218.

individuals, namely: (1) Ms. Ma. Kristina Barza,22 petitioner's Finance Manager; and (2) Ms. Normita L. Villaruz,23 the Court- commissioned

Independent

Certified

Public

Accountant

(ICPA).24

The Report and

submitted on July respectively. 2 s Supplemental Report of the ICPA were 26,

2022 and August

16, 2022, Petitioner filed its Formal Offer of Evidence on October 7, 2022, 26 to which respondent filed his Comment [Re: Petitioner's Formal Offer of Evidence] on October 20, 2022. 27 In the Resolution dated December 5, 2022,28 the Court admitted petitioner's offered exhibits, except for ( 1) Exhibits "P-1-A", "P-

1-B"

"P-1-C"

"P-2-A"

"P-3-A"

"P-8-A"

and "P-11-A"

for ' ' ' ' ' ' petitioner's failure to submit the duly marked exhibits; (2) Exhibits "P-7 -A to "P-7 -F", for petitioner's failure to submit the originals for comparison; (3) Exhibits "P-576", and "P-3856" to "P-3864", for being illegible; and (4) Exhibit "P-4163", for not being found in the records of the case. Thereafter, upon petitioner's Motion for Reconsideration, which was filed on January 20, 2023,29 and respondent having failed to file a comment,3° the Court, in the Resolution dated May 23 2023 3 1 admitted Exhibits "P-1-A" "P-1-B" "P-1-C" "P- ' ' ' ' ' 2-A" "P-3-A" "P-8-A" "P-11-A" and "P-4163" while Exhibits ' ' ' ' ' "P-576", and "P-3856" to "P-3864", were still denied admission. "Exhibit "P-38", Docket- Vol. I, pp. 40 to 60; Minutes of the hearing held on, and Order dated, June 21,2022, Docket- Vol. I, pp. 240 to 240-B, and 241 to 243, respectively. n Exhibits "P-39" and "P-44", Docket- Vol. I, pp. 389 to 405, and pp. 417 to 431, respectively; Minutes of the hearing held on, and Order dated, August I 6, 2022, Docket -Vol. I, pp. [489] to 491; and Order dated September 20, 2022, Docket- Vol. I, pp. 503 to 503-A.

24 Oath of Commission dated June 21, 2022, Docket - Vol. I, p. 240-C; Minutes of the hearing held on, and Order dated, June 21, 2022, Docket - Vol. I, pp. 240 to 240-B, and 241 to 243, respectively.

"Exhibits "P-40" and "P-43", Docket- Vol. I, pp. 272 to 381, and 439 to 487, respectively. 26 Docket- Vol. II, pp. 505 to 519.

n Docket- Vol. II, pp. 899 to 900.

2s Docket- Vol. II, pp. 904 to 905.

In the meantime, on February 3, 2023, petitioner filed its Memorandum. 32 Respondent, however, failed to file his memorandum. 33 The case was submitted for decision on May 23, 2023.34

THE ISSUE

As stipulated by the parties, the Issue for this Court's resolution is as follows:

"(a) Whether or not Petitioner is entitled to its claim for refund of its unutilized creditable withholding tax forTY 2018 in the amount of [1']20,695 ,542 .15."35 Petitioner's arguments:

Petitioner argues that it has refundable excess creditable tax withheld in 2018 in the amount of 1'20,695,542.15; that it has complied with all the requisites in a claim for refund of CWTs; that the administrative and judicial claim for refund were made within the two-year prescriptive period; that the income upon which the unutilized creditable withholding taxes were withheld were declared as part of petitioner's gross income; and that the fact of withholding of the unutilized creditable withholding taxes for taxable year 2018 is duly established. Respondent's counter-arguments:

Respondent counters that petitioner failed to sufficiently prove and demonstrate that there was an erroneously or illegally collected tax which could be subject of refund. He asserts that petitioner's claim that it is entitled to the amount of 1'20,695,542.15 is not proven by documentary evidence. He alleges that the Petition for Review filed by petitioner refers to certain documents that are attached therein but no documents were provided to prove its claim for refund. 12 Docket- Vol. II, pp. 929 to 950.

33 Records Verification dated March 14, 2023, issued by the Judicial Records Division of this Court, Docket- Vol. II, p. 955.

34 Resolution dated May 23, 2023, Docket- Vol. II, pp. 960 to 962. J.s Statement of the Issues, JSFI, Docket- Vol. I, p. 145.-

Further, respondent invokes the oft-repeated doctrine that a claimant has the burden of proof to establish the factual basis of his or her claim for tax credit or refund and that tax refunds, like tax exemptions, are construed strictly against the taxpayer. It is therefore incumbent upon the taxpayer to show that it complied with the provisions of Section 204 in relation to Section 229 of the 1997 National Internal Revenue Code (NIRC), as amended, and this petitioner failed to do.

THE RULING OF THE COURT

We find the Petition for Review partly meritorious.

Petitioner

complied with Section 76 of the 1997 NIRC, as amended, and has not carried over the excess CWTs being claimed for refund.

Pertinent to the resolution of the present case is Section 76 of the 1997 NIRC, as amended, which is quoted hereunder for ready reference, viz.:

"SEC.

76.

Final Adjustment Return. -

Every

corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year, the corporation shall either:

(A) Pay the balance of tax still due; or (B) Carry-over the excess credit; or (C) Be credited or refunded with the excess amount paid, as the case may be.

In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor."~ The above provision discusses the two (2) options of a taxable corporation whose total quarterly income tax payments in a given taxable year exceed its annual income tax due. The taxpayer may either: ( 1) carry-over the excess amount to the succeeding taxable quartersjyears until it is fully utilized or (2) file a claim for refund in the form of cash or tax credit certificate. However, once the carry-over option is taken actually or constructively, it becomes irrevocable for that taxable period.36 The phrase "for that taxable period" refers to the taxable year when the excess income tax, subject of the option, was acquired by the taxpayer. 37 In exercising its option, the corporation must signify in its annual corporate adjustment return (by marking the option box provided in the BIR form) its intention, either to carry over the excess credit or to claim a refund. To facilitate tax collection, these remedies are in the alternative and the choice of one precludes the other.3s A perusal of petitioner's Annual ITR for TY 2018 shows that it had income tax credits in the total amount of P42,358,881.00, consisting of the following: (i) prior year's excess tax credits other than the MCIT in the amount off>21,663,339.00, and (ii) CWTs accumulated during the four (4) quarters ofTY 2018 in the aggregate amount of !'20,695,542.00, 39 detailed as follows:

c-=--:-~--c-----,----.----------­

Prior Year's Excess Credits Other Than

---,----

MCIT

--- ---------·--------··· Add: Creditable Tax Withheld- Taxable year 2018 --- --·--·--·- 1---___:_:foc::_r_the first_thre<o quarters ___ _ for the 4th Quarter -- _f'15,5J 1,862.00 , __ 5_, 123,680.00

Total Tax Credits

f' 21,663,339.00 20,695,542.00 p 42,358,881.00 36 Rhombus Energy, Inc. us. Commissioner of Internal Revenue, G.R. No. 206362, August 1, 2018, citing the case of Republic o{the Philippines, represented by the Commissioner of Internal Reuenue us. Team (Phi is.) Energy C01poration (fonnerly Mirant (Phils.) Energy Corporation), G.R. No. 188016, January 14, 2015; Philam Asset Management, Inc. us. Commissioner of Internal Revenue, G.R. Nos. 156637 & 162004, December 14, 2005; Systra Philippines, Inc. us. Commissioner of Internal Revenue, G.R. No. 176290, September 21, 2007.

37 Commissioner of Internal Revenue us. Ban/( of the Philippine Islands, G.R. No. 178490, July 7, 2009.

3H Philippine Bank of Comrnunications us. Commissioner of Internal Revenue, et al., G.R. No. 112024, January 28, 1999.

3° Exhibit "P-1", Schedule 7- Tax Credits/Payments, Docket- Vol. ll, p. 528."'-- Petitioner's prior year's excess credits other than the MCIT in the amount of .1'21 ,663,339.00 represent the balance after deducting petitioner's claim for refund of unutilized CWTs for TY 2017 (in the amount of.P16,779,933.00) from the amount of .1'38,443,272.00 excess tax credits reflected in petitioner's Annual ITR forTY 2017.40 Records show that petitioner utilized a portion of its prior year's excess credits for TY 2018 in the amount of f'21,663,339.00 to pay for its MCIT due forTY 2018 in the amount of f'1,619,380.00, leaving a balance of its prior year's excess credits off'20,043,959.00 and creditable taxes withheld during TY 2018 in the amount of f'20,695,542.00, totaling f'40,739,501.00, unutilized as of December 31, 2018, as shown below:41 Prior Year's Excess Credits other than MCIT I' 21,663,339.00

Less: Income Tax Due (MCIT)

1,619,380.00 ·-~~--··-~----·- ·--· -~·--- ---~-·- f-· 1' 20,043,959.00

Balance of Prior Year's Excess Credits

Add: Creditable Taxes Withheld - Taxable year 2018 20,695,542.00 Excess Creditable Taxes Withheld as of December 31, 2018 1'40, 739,501.00 Since petltwner marked the box corresponding to the option "To be Refunded" in its Annual ITR for TY 2018,42 the CWTs forTY 2018 in the amount of f'20,695,542.00 may be a proper subject of a claim for cash refund pursuant to the afore- quoted Section 76 of the 1997 NIRC, as amended. This refund option was further affirmed by petitioner when it carried over only the amount of !'20,043,958.65 or f'20,043,959.00 as prior year's excess tax credits in its Quarterly43 and Annual44 ITRs for TY 20 19. Said amount excludes the CWT being claimed for refund in this case amounting to .1'20,695,542.00.

4" Exhibit "P-43'', p. 439, Docket- Vol. I, p. 444; Exhibit "P-29", Part II- Total Tax Payable, Lines 20 and 21, Schedule 7 -Tax Credilsjl'ayments, Docket- Vol. I, pp. 258 and 263, respectively.

41 Exhibit "P-1", Part II- Total Tax Payable, Docket- Vol. II, p. 523. 42 Exhibit "P-1 ", Line 21, Docket- Vol. II, p. 523. 43 Exhibits "P-8" to "P-10", Line 311\, Docket- Vol. II, pp. 583, 587 and 590. '"Exhibit "P-11", Line 1, Schedule 7, Docket- Vol. 11. p. 599.-..

Petitioner's compliance with the requisites to claim a refund or credit for unutilized excess CWTs.

In addition to the requisites provided under Section 76 of the 1997 NIRC, as amended, jurisprudence and pertinent Revenue Regulations (RR) provide that in order for a taxpayer to be entitled to a refund or an issuance of a TCC for unutilized excess CWTs, the following three (3) requisites must be further complied with:

1. The claim for refund must be filed within the two- year prescriptive period as provided under Sections 204(C) and 229 of the 1997 NIRC, as amended;

2. The fact of withholding must be established by a copy of a statement duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom; and

3. The income upon which the taxes were withheld must be included in the return of the recipient. 45 Thus, it behooves petitioner to establish the foregoing requisites.

Anent the first requisite, the pertinent provisiOns are Sections 204(C) and 229 of the 1997 NIRC, as amended, which provide as follows:

"SEC.

204.

Authority

of the

Commissioner

to Compromise, Abate and Refund or Credit Taxes. - The Commissioner may-

XXX

XXX

XXX

45 Republic of the Philippines, represented by the Commissioner of Internal Revenue us. Team (?hils.) Energy Corporation {fo17nerly Mirant (?hils.) Energy Corporation), G.R. No. 188016, January 14, 20 15; United International Pictures AB us. Commissioner of Internal Revenue, G.R. No. 168331, October 11, 2012; Citibank N.A. us. Court of Appeals, et al., G.R. No. 107434, October 10, 1997; ACCRA Investments Corporation us. The Honorable Court of Appeals, et al., G.R. No. 96322, December 20, 1991; Section 2.58, Revenue Regulations No. 2-98, as amended. a--

(C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund." (Emphasis supplied)

X

X

X

"SEC. 229. Recovery of Tax Erroneously or fllegally Collected.- No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." (Emphasis supplied) It is well settled that the two (2) -year prescriptive period for claiming a refund of overpaid income taxjCWTs commences to run on the date of filing of the Final Adjustment Return46 (or Annual ITR). This is so because it is only when the Final Adjustment Return covering the whole year is filed that the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures. 47 In other words, it is only logical to reckon the two-year prescriptive 4" ACCRA Investments Corporation vs. The Honorable Court of Appeals, eta/., G.R. No. 96322, December 20, 1991; Commissioner of Internal Revenue us. TMX Sales, Inc. and the Court of Tax Appeals, G.R. No. 83736, January 15, 1992; Commissioner of Internal Revenue us. The Philippine American Life Insurance Co., et al., G.R. No. 105208, May 29, 1995.

period from the time the Final Adjustment Return or the Annual ITR was filed, since it is only at that time that it would be possible to determine whether the corporate taxpayer paid an amount exceeding its annual income tax liability.4s Here, petitioner filed its Annual ITR49 forTY 2018 via the electronic filing and payment system or eFPS of the BIRon April 12, 2019. Thus, counting from April 12, 2019, petitioner had until April 12, 2021, within which to file both its administrative and judicial claims.

Records

show that petltwner seasonably filed its administrative claim for refund on August 26, 2020.50 However, although the present judicial claim was electronically filed on April 12, 2021,51 or within the two-year prescriptive period, the hard copy of the Petition was only filed on May 17, 2021.52 Nevertheless, CTA En Bane Resolution No. 4-2021 dated February 24, 2021, allows the filing of pleadings, motions, and other court submissions by e-mail during the Period of State of Public Health Emergency due to the COVID-19 Pandemic. However, litigants shall submit, by personal filing or licensed courier, the required number of hard copies of the pleadings, motions, and other court submissions within five (5) calendar days from date of filing by email.S3 Moreover, in cases where there are filing fees or other legal fees that are required to be paid on the pleadings, motions, and other court submissions filed by e-mail, litigants are required to submit proof of payment of the filing fees or other legal fees due thereon within five (5) calendar days from the date of filing through email.54 Failure to do so shall be a ground for declaring the pleading, motion, and other court submission as deemed not filed which may result in the dismissal of the petition for review, complaint or information, and the imposition of other appropriate sanctions as may be determined by the Court. 55 <~-8 Metropolitan Bank & Trust Company us. The Comrnissioner of Internal Revenue, G.R. No. 182582,April 17,2017.

49 Exhibit "P-1", Docket- Vol. 11, pp. 522 to 530. so Exhibits "P-2" and "P-3", Docket- Vol. 11, pp. 531 and 532 to 535, respectively. 51 Docket- Vol. I, p. 9.

'' Docket - Vol. I, pp. I 0 to 35.

'" Paragraph 3, CTA En Bane Resolution No. 4-2021.

Hence, pursuant to this Court's En Bane Resolution No. 4-2021, petitioner must submit, by personal filing or licensed courier, the required number of hard copies of its Petition and proof of payment of the filing fees or other legal fees due within five (5) calendar days from the date of filing of email, or until April17, 2021.

However, due to the physical closure of the courts brought about by the COVID-19 Pandemic, the Supreme Court issued the following Administrative Circulars (ACs) suspending the filing periods for pleadings/ court submissions for Courts in the National Capital Region and nearby provinces until the physical reopening of the relevant court, to wit: ~----------~------~~---------~--------,-------~--------~ AC No.

Date Issued

___ _,S"'u-o:bJ,_-·e._.,c'-"t------=+-~---c-C=-o~nc::t::-e"'n:.::t __ =__, 15-2021 April 3,

RE:

EXTENSION

OF "Likewise, the filing 21-2021 2021

THE

PHYSICAL periods of pleadings and CLOSURE OF COURTS other court submissions April 10, 2021

AND

THE

FILING that fell due or would fall

PERIODS

FOR due during the period

PLEADINGS

AND beginning from March

OTHER

COURT 29 to Aprilll, 2021 are SUBMISSIONS IN LIGHT hereby EXTENDED for

OF

THE

FURTHER seven (7) calendar days,

EXTENSION

OF

THE counted from April 12,

ENHANCED

2021. xxx"

COMMUNITY

QUARANTINE

FROM

APRIL 5 TO APRIL 1 1, 2021.

RE:

EXTENSION

OF

PHYSICAL CLOSURE OF

COURT

"Considering the unabated rise of COVID- 19 cases, the requests of the judges and court personnel, and upon the concurrence of the members of the Court en bane, ALL the courts and judicial offices m the

National Capital Judicial

Region and the provinces of Bulacan, Cavite, Laguna, and

Rizal

(NCJR+)

shall remain physically closed until 18 April 2021. They may be reached through their hotlines and email addresses as posted in the

Supreme

Court

website.

XXX

XXX

XXX

L_ ________ L_ ________ _L ___________________ ~--------------~~

22-2021 29-2021 April 14, 2021 April 30, 2021

RE:

PHYSICAL

CLOSURE OF COURTS

IN

ENHANCED

COMMUNITY

QUARATINE

AND

MODIFIED ENHANCED

COMMUNITY

QUARANTINE AREAS

The time for filing and service of pleadings and motions during this period 1s SUSPENDED and shall resume seven (7) calendar days counted from the first day of physical reopening of the relevant court."

"Considering that the National Capital Region, and the provmces of Abra, Bulacan, Cavite, Laguna,

Quirino

and Rizal, and Santiago City are under

Modified

Enhanced

Community

Quarantine

(MECQ)

until 30 April 2021, the physical closure of courts in the said areas 1s likewise extended to 30 April 2021.

XXX

XXX

XXX

The time for filing and service of pleadings and motions during this period 1s SUSPENDED and shall resume seven (7) calendar days counted from the first day of physical reopening of the relevant court."

RE:

WORK "Considering that the

ARRANGEMENTS

IN

National Capital Region, COURTS ON 3- 14 MAY the provinces of Abra, 2021 Bu1acan, Cavite, Laguna, Quirino, and Riza1, and Santiago City, Isabela, continue to be under

Modified

Enhanced

Community

Quarantine

(MECQ)

until 14 May 2021, ALL first and second level courts, and appellate collegiate courts, and their judicial offices in the said areas shall continue to be physically closed until 14

May

2021.

XXX

XXX

XXX

L_ ___

_____L _______ -~-------------------~----------~a.......

CTA Case No. I 0503

,---------,-·-------,---------·-- 33-2021 May 14, 2021

RE:

COURT

OPERATIONS

STARTING 17 MAY 2021

The time for filing and service of pleadings and motions during this period in these areas is SUSPENDED and shall resume after seven (7) calendar days counted from the first day of the physical reopening of the relevant court."

"Considering that the

National Capital Region

and nearby provinces of Bulacan, Cavite, Laguna, and Rizal, together with some provinces and cities, have been placed under

General

Community

Quarantine

(GCQ)

starting 15 May until 31 May 2021, all first and second level courts, and appellate collegiate courts (except the Supreme Court), and the judicial offices in these areas under GCQ shall be physically opened with a skeleton force of at least thirty percent (30%) to at most fifty percent (50%), beginning 17

May

2021 until further notice."

Based on the foregoing circulars, the reopening of courts resumed on May 17, 2021, and petitioner had seven (7) days from this date, or until May 24, 2021, within which to file hard copies of its Petition for Review as well as to show proof of payment of its filing fees. Thus, petitioner timely filed both its administrative claim for refund with the BIR on August 26, 2020,56 and its judicial claim for refund through the present Petition for Review on May 17, 2021,57 thus, fulfilling the first requisite.

With regard to the second and third requisites, Section 2.58.3(B) of RR No. 2-98, as amended, states: sc. Exhibits "P-2" and "P-3", Docket- Vol. II, pp. 531 and 532 to 535, respectively.

"Sec. 2.58.3. Claim for tax credit or refund. -

XXX

XXX

XXX

(B)

Claims for tax credit or refund of any creditable income tax which was deducted and withheld on income payments shall be given due course only when it is shown that the income payment has been declared as part of the gross income and the fact of withholding is established by a copy of the withholding tax statement duly issued by the payor to the payee showing the amount paid and the amount of tax withheld therefrom." (Emphasis supplied) The second requisite mandates petitioner to prove the fact of withholding of the claimed CWTs through a copy of the statement duly issued by the payor (withholding agent) to the payee showing the names of the payor and payee, the income payment and the amount of tax withheld therefrom. In Commissioner of Internal Revenue vs. Philippine National Bank, 58 the Supreme Court held that the Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307), complete in relevant details, is the competent proof to establish the fact that taxes are withheld.

To prove the fact of withholding of the subject claim, petitioner submitted various Certificates of Creditable Tax Withheld at Source (BIR Forms No. 2307)59 duly issued by its clients for taxable year 20 18 which were examined by the Court- commissioned ICPA.

A review of the ICPA Report dated July 25, 202260 shows that the aforesaid BIR Forms No. 2307 reflected CWTs totaling P20,695,542.23 on income payments of Pl,034,777,106.63, broken down as follows:6l

CY 2018

1" quarter 2nd guart'='~ 3cd quarter '-"----"· - ---

Exhibit

"P-40"

·-----·-- -

Annex F1

Annex F;, c-·-----·--· -

Annex F3

-- al Amount of me Payments

Tot

I nco er B IR Forms 2307 p .. ·--·-·---------'- r_ 2_14,829,263.46 - . 2§_1,085,5_02.97 282,289,611.22 58 G.R. No. 180290, September 29, 2014. s<J Exhibits "P-3275" to "P-3510".

r.o Exhibit "P-40", Docket- Vol. I, pp. 272 to 381. 61 Exhibit "P-40", Annex F, Docket- Vol. I, p. 370. ~

Amount of CWTs

Claim Per Petition

___ Lor Review

!' 4,296,585.33 5,621,710.07 5,645,792.23

4th quarter Annex F., 256,572,728.98 5,131,454.60

Total

1' 1,034,777,106.63 1' 20,695,542.23 - - Out of the said amount of 'P20,695,542.23 being claimed, the Court finds that the amount of 'P2,200,626.93 must be disallowed for not being properly supported with BIR Forms No. 2307, detailed as follows:

Exhibit No.

Customer's Name

Income Payments

CWTs

TIN of petitioner was incomplete

"P-3309"

Pricon Microelectronics Inc.

r 5,116,802.95 r 102,336.06

"P-331 0"

Pricon Microelectronics Inc.

4,367,253.24 87,345.06

"P-3311"

Pricon Microelectronics Inc.

5,933,817.50 118,676.35

"P-3312"

Pricon Microelectronics Inc.

6,929,532.41 138,590.65

"P-3313"

Pricon Microelectronics Inc.

5,983,611.03 119,672.22

"P-3314"

Pricon Microelectronics Inc.

4,563,197.29 91,263.95

"P-3367"

Pricon Microelectronics Inc.

5,369,190.00 107,383.80

"P-3369"

Pricon Microelectronics Inc.

6,977,113.50 139,542.27

"P-3371"

Pricon Microelectronics Inc.

6, 954,426.50 139,088.53

"P-3372"

Pricon Microelectronics Inc.

6,388,035.31 127,760.71

"P-3432"

Pricon Microelectronics Inc.

4,914,192.65 98,283.85

"P-3433"

Pricon Microelectronics Inc.

4, 706,028.50 94,120.57

"P-3434"

Pricon Microelectronics Inc.

5,049,958.07 100,999.16

"P-3435"

Pricon Microelectronics Inc.

5,351,484.34 107,029.69

"P-3493"

Pricon Microelectronics Inc.

5,534,534.50 110,690.69

"P-3494"

Pric011 Microelectronics Inc.

4,295,728.98 85,914.58

"P-3495"

Pricon Microelectronics Inc.

4,672,226.64 93,444.53

"P-3496"

Pricon Microelectronics Inc.

3,539,992.50 70,799.85

"P-3497"

Pricon Microelectronics Inc.

4,011,221.00 80,224.42

Subtotal

I' 100,658,346.91

I'

2,013,166.94 TIN of petitioner was not complete and BIR Form 2307 has no signature oft he payor

"P-3492"

Pricon Microelectronics Inc.

r 5,351,484.34 p 107,029.69

Subtotal

r 5,351,484.34

I'

107,029.69 The BIR Form 2307 did not contain signature of the payor

"P-3279"

Bandai Namco Philippines, Inc.

p 2,434,697.60 r 48,693.95

"P-3354"

NYK Auto Logistics Philippines Inc

675,619.63 13,512.39

"P-3374"

San no

Philippines

Manufacturing

Corporation

741,555.18 14,831.10

Subtotal

r 3,851,872.41 r 77,037.44 BIR Form 2307s were dated 2017 and 2016

"P-3294"

Jobskills Training Center Inc.

r 107,142.86 r 2,142.86

"P-3348"

,Jobskills Training Center Inc.

62,500.00 1,250.00

Subtotal

I'

169,642.86 r 3,392.86

Total

I' 110,031,346.52

I'

2,200,626.93

It bears stressing that under Section 236 of the 1997 NIRC, as amended, a tax return, statement or other document filed with the BIR should indicate the filer's TIN for proper identification for tax purposes.

Hence, without the proper indication of the TIN in the supporting BIR Forms No. 2307, the corresponding CWT claim must be disallowed. Furthermore, BIR Forms No. 2307 which do not contain the signature of the payor/withholding agent must be disallowed because the same cannot be considered as validly issued pursuant to Section 2.58(B) of RR 2-98. Likewise, BIR Forms No. 2307 which were dated in the years 2017 and 2016 must be disallowed, since they do not fall within the period covered by the present claim. Consequently, only the remaining CWT in the amount of P18,494,915.07 is found to be supported by valid BIR Forms No. 2307 which are complete in their relevant details. Thus, petitioner has shown compliance with the second requisite, i.e., the establishment of the fact of withholding of the amount of P18,494,915.07 with the related income payments of P924,745,760.11, computed as follows: ___!_ncome Payments

CWTs

--------·-- Total CWTs Per BlR Forms No. 2307 j> 1 ,034,777,106.63 I' 20,695,542.23

Less: Disallowances

110,031,346.52 2,200,626.93 Difference between CWT per BIR Forms No. 2307 and CWT Claim per petitioner's 2018 Annual!TR .23

CWTs Properly Supported With BIR

Forms No. 2307 f' 92:'l,745,760.11 I' 18,494,915.07 --- .. _________ We then proceed to the third requisite, i.e., that the income upon which the taxes were withheld formed part of the income declared in petitioner's Annual ITR.

In its Annual ITR for TY 2018, petitioner declared "Net

Sales/Revenues/Receipts/Fees"

in the amount of P1,158,300,978.00.62 The same amount was reported in its

Audited Financial Statements (AFS), particularly in the Statements of Comprehensive Income as "Service Revenues".63 To ascertain that the gross sales where CWTs (were withheld and deducted), were duly and properly reported in petitioner's Annual ITR and AFS for TY 2018, the ICPA examined original copies of BIR registered Billing Statements and Official Receipts (ORs) issued by petitioner forTY 2018.64 As validated and confirmed by the ICPA, the total gross sales collected, which were the basis of the claimed CWTs, were duly reported in the petitioner's 2018 and 20 17 AFS and Annual ITRs.6s However, upon further scrutiny of the related Billing Statements and ORs as summarized in petitioner's Schedules of Sales Per Customer Based on Billing Statements66 and Schedule of Collections Per Official Receipts (OR) traced to 2018 and 2017 Sales67 forTY 2018, the Court found that the income payments received by petitioner in the amount of P23,280,218.08 do not form part of petitioner's declared service revenues in its 2018 Annual ITR.

Hence, the corresponding claim of .P465,604.36 must be disallowed, detailed as follows: ,--~~~~~----~--- .

Exhibit

Income

Disallowed

BrJ:?ther Industries (Pt?-ili_epinc_~)__!~~-~ ------- --------·-1- No.

Payments

CWTs (2%) __

--- "P-3281" _1'_23.509.161.50 --~- -- - 1-' -~.

Per BIR Form No. 2307 'er 2018 Annua/JTJ?f>S -·--~

I--·

·----~··-··

Amount of Service

Less: Tracecl ro Senn:ce Nevenue 1 --------------

Billing Statement

l<evenue Per 2018

Annual ITR

-,-

Date

Numbe1

1-----~--·-· --- January _J_il,_2018 0673 1'3,925,669.43 - 4,961,941.15 ----r--------- -~-·-- ------··:- 4,~47,548.96 February 2, 2018 0685 February 20, 2018 0694 March 2, 2018 76130_ 2,924,853.69 March 20,2018 0706 4,215,106.64 20,875,119.87

-2018 Annual ITR

1' 2,634,041.63 1' 52,680.83 -------- ···--- ---~~· Not. Traced to Service Revenue Pet --------------- \--~~-·----------- -~- --·--- ~---··-· EMD Technologies Philippines, Inc.

"P-3285"

1' 50,429.25 -·~------ Per BIR Form No. 230.._7 __ _ er 2018 Annual !TR(/!

Less: Traced to Seroice Reuenue P

Amount of Service f----·

Revenue Per 20 18

Billing Statement

Date

Number

Annual!TR 6 3 Exhibit "P-14", Docket- Vol. II, p. 615. 6' Exhibit "P-43", B. VALJI)ATION OF SI\LES AND COLLECTIONS WI-JERE CWTs WERE WITHHELD, Docket- Vol. I, p. 443.

65 Exhibit "P-43", A. VALIDI\TION OF SI\LES 1\ND COLLECTIONS, Docket- Vol. I, p. 449. 66 Exhibit "P-40", Annexes B, B1 to B21, Docket- Vol. I, pp. 290 to 356. 67 Exhibit "P-43", Annexes K, K, to K,, Docket- Vol. I, pp. 475 to 487. 68 Exhibit "P-40", Annex B:J, Docket- Vol. I, p. 293. 6° Exhibit "P-40", Annex B1, Docket- Vol. I, p. 298. d4--

| January 18,2018 | 6495 | PB _27,003. = 27,003.56 | [ Not Traced to Service Revenue Per 2018 Annual ITR P 23,425.69 468.51 | ee Industries Manila Corp., _ Per BIR Form No. 2307 FF: 3288” [P __1,693,994.00 |__ Less: Traced to Service Revenue Per 201 8 Annual ITR

Amount of Service

Billing Statement Revenue Per 2018

Date Number Annual ITR_ TT s - January 23, 2018 0676 | P1,691,287.63 1,691,287.63 Not Traced to Service Revenue Per 2018 Annual ITR iv 2,706.37 54.13 | Digital Philippines Inc.

Per BIR Form No. 2307.

_9,576,431.87 | _ Less: Traced to Service Revenue Per 2018 Annual IPR?

TLE

Billing Statement

Amount of Service

Revenue Per 2018

+

Date Number Annual ITR +

LE January 20, 2018 682 P1,847,280.52 February 5, 2018 690 350,135.27 TT ml February 5, 2018 689 | 1,881,122. 35 | | February 20, 2018 697. | _1,526,676.56 February 20,2018 | 698 | 40,188.21 | | | | | March 5, 2018 703 ; 259,891.51 a March 20, 2018 709 1,412,176.66 | L March 20, 2018 | ~—710 an 16,777.02 I, 7,334,248.60 Not Traced to Service Revenue Per 2018 Annual ITR P 2,242,183.27 44,843.67 Island Quarry and Aggregates Corpor ation Per BIR Form No. 2307 “P-3292” 1,254,978.00 | Less: Traced to Service Revenue Per 2018 Annual ITR? | _

Amount of Service

Billing Statement Revenue Per 2018 L

Date Number Annual ITR . | January 22, 2018 4184 P 9,028.95 | February 19, 2018 4208 120,393.87 —L [Febuary 19,2018 [4208 [112,135.00 _f February 19, 2018 4209 25,517.74 i” _ February 19, 2018 4209 24,522.83 | February 19, 2018 4210 _ 45,362.06 8 February 19, 2018 4210 43,390.14 February 19,2018 | 4211 9,028.93 | / t February 19, 2018 4211 9,028.93 t February 19, 2018 4212 380.97 399,789.40 Not Traced to Service Revenue Per 2018 Annual ITR —b 855,188.60 Per BIR Form No. 2307 1,126,225.50 Less: Traced to Service Revenue Per 201 8 Annual ITR®

Pac P

Billing Statement

Amount of Service

Revenue Per 2018

Date Number Annual ITR f March 20, 2018 4223 P147,023.23 March 20, 2018 4223 156,155.43 | |____ March 20,2018 | 4224 40,182.35 |

March 20, 2018 4224 43,827.77 | March 20, 2018 4225 7,148.00 March 20, 2018 4225 __ 9,028.93 April19, 2018 | 4236 | 9,380.21 | April 19, 2018 4236 8,060.42 or April 19, 2018 4234 1 52,998.91 | [ L April 19, 2018 T 4234 48,161.31 an April 19, 2018 4235 T 141,225.10 [_ April 19, 2018 | |. 4235 _ 140,121.67 _ | L | May 18, 2018 4244 126,031.86 ~ May 18, 2018 4244 [ 19,683.95 May 18, 2018 | 4245 52,211.66 May 18, 2018 | 4245 41,592.67 L_ June 6, 2018 | 4251 4 _ 22,470. 42 | _ 1,065,303. sr | | _ Not Traced to Service Revenue Per 2018 Annual TR P 60,921. 61 | 1,218.43 JAE Philippines Inc.

Per BIR Form No. 2307 —

“P-3293”

we Less: Traced to Service Revenue Per 2018 Annual ITR™ 101, 105, =ay——

Amount of Service

Billing Statement Revenue Per 2018 .

Not Traced to Service Revenue Per 2018 Annual ITR

P

Date Number Annual ITR TT

January 24,2018 [ 0398 | P12,629,543.52 al I January 30, 2018 | 0400_ 41,932.96 | | _ February 8, 2018 0403 17,102,469.57 | | February 22, 2018 0410 113,485.32 T 4 February 24, 20187 | ~ 0408 17,883,527.31 February 23,2018 [| 0409 730,920.56.

March 7, 2018 | 0413. if 143,318.97 | | | __ March 12, 2018 | 0414 17,989,584.33 | E March 13, 2018 0415 26,874.75 | | March 14, 2018 0406 10,218.30 March 20, 2018 0417 879,726.55 | ___ 1 FE March 23, 2018 | 0420 | 21,886,280.19[ | = March 23, 2018 0421 7,981.85 March 27, 2018 0426 28,325.19 i” 90,038,393.29 _| | 221,338.65 11,066,932.57 Per BIR Form No. 2307 "p.3296" |p 3,201,777.00 pS Philippines, Inc.

Less: Traced to Service Revenue Per 2018 Annual waz

Amount of Service

Billing Statement Revenue Per 2018

| | _— — Date __Number _ Annual ITR _ [ t January 11, 2018 | 0258 Pp 2,850.00] January 22, 2018 0259 | 563,944.50 February 06,2018 | 0260 583,958.50 | _ | February 15, 2018 0261 | 352,507.00 March 06, 2018 0263 pS _ _ February 21, 2018 0262 604,373.50 March 14, 2018 0264 ___ 13,490.00 March 21, 2018 0265 579,840.00 7 April 04, 2018 0266 491,693.50 3,192,657.00 Not Traced to Service Revenue Per 2018 Annual ITR

| P

9,120.00 182.40

Per BIR Form No, 2307 : "P-3350" | P 2,720,012.50 Less: Traced to Service Revenue Per 2018 Annual ITR7

Amount of Service

Billing Statement Revenue Per 2018 i Date Number Annual ITR | ;

= April 23, 2018 a 0268 P 461,670.50 April 13, 2018 670.5 | 0267 May 08, 2018 0269 __ 487,724.00 May 23, 2018 0271 "427,834.00 May 11, 2018 0270 466,450.50 June 06, 2018 0272 ° June 22, 2018 0275 | 425,318.00 | 2,268,997.00

P

Not Traced to Service Revenue Per 2018 Annual ITR 451,015.50 | 9,020.3 _{_ rs an oe a ee ee on ee NYK Auto Logistics Philippines Inc.

Per BIR Form No. 2307 | ["p-3297" | P 4,620.00 92.40 “|"p-3208" | P_ 820,650.46 16,413.01 a "p-3299" | P__ 679,899.50 13,597.99 |

Sohd Cement Corporation

Per BIR Form No. 2307 “P-3321” 6,100,294.00 Less: Traced to Service Revenue Per 2018 Annual ITR?7

Amount of Service

Billing Statement Revenue Per 2018 |.

Date Number Annual ITR

February 19, 2018 4189 P 353,947.31 February 19, 2018 4190 5,964.79

{Ty

[8

Jittts

-| February 19, 2018 | 4191 22,740.74 = February 19, 2018 4192 957.02 :

February 19,2018 «4193s, 823.26 February 19, 2018 4194 652.28 February 19, 2018 4195 «109,394.39 February 19, 2018 4196 7 248,332.36 | February 19, 2018 4197 © 15,030.31 February 19, 2018 4198 79,484.30 February 19, 2018 4199 10,793.52 i February 19, 2018 4200 __35),398.52 | — E February 19, 2018 | _ 4201 16,438.07 | _ + a . February 19, 2018 4202 136,730.09 | _ February 19, 2018 | 4203 7,744.81 | { February 19, 2018 4204 181,618.27 February 19, 2018 4205 8,153.38 February 19, 2018 _ 4206 129,445.53 [| . February 19, 2018 4207 2,659.07 7 1,712,908.02 | Not Traced to Service Revere Per 2018 Annual ITR _ | P 4,387,385.98 87,747.72 Southern Asia-Pacific Division of the General Conference of Seventh-day Adventist Per BIR Form No. 2307 __ | “P-3322” 23,383.88 | 467.68 Victory Christian Fellowship of Los Banos, Inc. ; : Per BIR Form No. 2307 [“P-3510" | P 65,924.00

Less: Traced to Service Revenue Per 2018 AnnuallTR78

Amount of Service

Billing Statement

Revenue Per 2018

Date

Number

Annual!TR Aug. 17,2018 8471

I'

12,135.24 Sept. 04, 2018 8476 12,928.70 Oct. 17, 2018 8494 10,167.77 Dec. 07, 2018 9216 -~~---- ~-__1_1,9_49_.27

TOTAL NOT TRACED TO SERVICE REVENUE PER

2018 ANNUAL ITR

---- 47,180.98 r 18,743.02 374.86 p 23,280,218.08 P465,604.36 - Moreover, the Court noted a discrepancy between the CWTs as reflected in the BIR Forms No. 2307 issued by JAE Philippines, Inc. and the CWTs deducted per the ORs issued by petitioner to the said entity in the amount of 1'178,039.31, as shown below:

CWTs Actually

CWTs Per BIR

Deducted per

Client

Forms No. 2307

ORs

Discrepancy

JAE PhiliJ2j)irl~_s_,_lnc.

10,766,951.0279 10,588,911.7180 178,039.31 - -----·- --~---.

Petitioner's claim shall be further reduced by the aforesaid discrepancy of 1'178,039.31, considering that petitioner failed to show that the related income payment of 1'8,901,965.50 (1'178,039.3 H- 2%) was declared in its Annual ITR. Resultantly, the income payments of 1'892,563,576.53 related to the claimed CWTs of 1'17,851,271.40 formed part of petitioner's taxable income per its 20 18 Annual ITR, hence, satisfying the third requisite, as shown in the following computations, to wit:

-~·· CWTs properly supported wit h BIR Forms -------·- No.2307 f-'.'-::..C.:=..::_c___~-------·-

Less: Disallowances

~---~~~---- a.) CWTs, the income pay ments of which serv1ce were not traced to the revenues per petitione r's 2018 Annual

ITR

~----~- f-----:--c--=-c-~~~---:-·----- - b.) Discrepancy between t he CWTs reflected per BIR Form s No. 2307 and --

Income Payments

f--1'~924,745,760.11

I'

23,280,218.08 8,901,965.50 78 Exhibit "P-40", Annex Bn. Docket- Vol. I, p. 356. 79 Exhibits "P-3293", "P-3347", "P-3404" and "P-3469". so Exhibit "P-43", Annexes K1 to K,, Docket- Vol. I, pp. 4 76 to 487. a.,...

CWTs

I" 18,494,915.07 f' 465,604.36 178,039.3!_ the CWTs deducted per OR s issued by petitioner

Total Disallowances

IR Forms

e 1ed as lared nual ITR CWT properly supported with B No. 2307 and the related incom payments were traced and verifi forming part of petitioner's dec service revenues in its 2018 An p 32,182,183.58 p 643,643.67 1'892,563,576.53 Pl7,851,271.40 In sum, petitioner has sufficiently proven its entitlement to a refund in the amount of P17,851,271.40, representing its excess and unutilized CWTs forTY 2018.

WHEREFORE, in light of the foregoing considerations, the present Petition for Review is PARTIALLY GRANTED.

Accordingly, respondent is ORDERED TO REFUND in favor of petitioner, the reduced amount of P17,851,271.40, representing the latter's excess and unutilized CWTs for TY 2018.

WE CONCUR:

~-r.~ CATHERINE T. MANAHAN

Associate Justice

(With due respect, and zssenting Opinion) ROMAN G. DEL ROSARIO

Presiding Justice

~ ~

f. ~ ., F'o.fo.._~ MARIAN Im. REvis-FAJARDO

Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

Presiding Justice

REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

SPECIAL FIRST DIVISION

SERVICE RESOURCES, INC., Petitioner, CT A CASE NO. 10503

Members:

-versus- DEL ROSARIO, P.J. , Chairperson, MANAHAN, and REYES-FAJARDO, JJ.

COMMISSIONER OF INTERNAL

Promulgated:

REVENUE, Respondent.

X------------ --------- ------------- ---

CONCURRING AND DISSENTIN

DEL ROSARIO, P.J.:

I concur in the partial grant of refund to petitioner. It is my humble opinion, however, that allowing the refund of creditable withholding taxes (CWTs) pertaining to petitioner's alleged branches without the latter's Bureau of Internal Revenue (BIR) Certificates of Registration is improper. Upon scrutiny, said CWT Certificates specify, among others, the (1) name of the home office, (2) Tax Identification Numbers (TINs) of the alleged branches [consisting of twelve (12) digits, the last three (3) of which refer to the branch code] distinct from that of the home office, and (3) respective addresses of the alleged branches. Except the name of the payees therein, there is no indication in the CWT Certificates that relate to the home office. In the Resolution dated December 5, 2022,1 the Court denied Exhibits "P-7-A" to "P-7-F" (described in petitioner's Formal Offer of Evidence as "Petitioner's BIR Certificates of Registration of its branches") for petitioner's failure to submit the originals for ' CTA Docket Vol. tt, pp. 904-905 .~

CONCURRING AND DISSENTING OPINION

Service Resources, Inc. vs. Commissioner of Internal Revenue comparison. In its Motion for Reconsideration2 of the said Resolution , petitioner agreed with the Court's observation and manifested that it would no longer contest the denial of the same. Considering the denial of the alleged branches' Certificates of Registration, it becomes uncertain whether the TINs and the addresses indicated in the CWT Certificates belong to petitioner's branches.

Albeit

only impliedly, the ponencia acknowledges the indispensability of a BIR Certificate of Registration; otherwise, it would not have been able to determine which of the CWT Certificates bear incomplete TIN, a finding that can only be had upon comparison of the CWT Certificates with the corresponding

BIR Certificates of

Registration.

In the ponencia, the categorization of disallowances under headings: "TIN of petitioner was incomplete" and "TIN of petitioner was not complete and BIR Form 2307 has no signature of the payor" reveals that the ponencia had to examine the completeness and accuracy of the TIN as reflected in the CWT Certificates vis-a-vis petitioner's TIN as stated in its Certificate of Registration. This scrutiny, however, was applied only for CWT Certificates pertaining to petitioner's home office. In contrast, for CWT Certificates of petitioner's alleged branches, the ponencia accepted the TIN displayed on such CWT certificates as accurate and attributable to petitioner, provided that the initial nine (9) of the twelve (12)-digit TIN matched the TIN of petitioner's home office. Thus, even without the alleged branches' BIR Certificates of Registration to verify the TINs indicated in the CWT Certificates, the ponencia readily attributed the CWT Certificates to petitioner. If the ponencia applied stringent scrutiny to the home office's TIN, it is unclear why the same level of scrutiny was not applied to the TIN of the alleged branches. If the first nine (9) digits of the twelve (12)-digit TIN on the CWT Certificates match the TIN of petitioner's home office, but the last three

(3) digits are incorrect or incomplete, I submit that the CWT Certificates should be disallowed and categorized under incomplete TIN or incorrect TIN, as the case may be.

In Sony Philippines Incorporated vs. Commissioner of Internal Revenue, 3 1 espoused the view that even though the taxpayer's TIN (as indicated in the CWT Certificate) is incomplete, if the CWT Certificates reflect petitioner's name and address and the same can be 2 CTA Docket Vol. II, pp. 906-911.

'CTA Case No. 10115, December 16, 2021 C1J

CONCURRING AND DISSENTING OPINION

Service Resources, Inc. vs. Commissioner of Internal Revenue CTA Case No. 1 0503

Page 3 of 3

cross-referenced to the submitted and duly admitted BIR Certificate of Registration, then the CWT Certificates may be considered complete in relevant details necessary to aid the Court in evaluating the subject refund claim.

The ponencia, however, requires less than that. For the ponencia, as long as the payee is under petitioner's name, (albeit the last three (3) digits of the twelve (12)-digit TIN appearing in the CWT Certificate cannot be ascertained, and with an address that cannot likewise be verified), the refund of CWTs arising therefrom, according to how the ponencia computed the refundable amount, may still be granted.

To my mind, with the denial of the BIR Certificates of Registration of petitioner's alleged branches, the TINs stated in the CWT Certificates cannot be linked to specific BIR Certificates of Registration. Without the branches' BIR Certificates of Registration, the Court cannot refund the CWTs supported by CWT Certificates which, although bearing petitioner's name, indicates unverified TINs and addresses.

Actions for tax refund are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven 4 Undoubtedly, treating the CWT Certificates as pertaining to petitioner's alleged branches without proof of the branches' correct Tl N and addresses violates the principle of strict construction of refund claims.

ALL TOLD, I VOTE to partially GRANT the Petition for Review, subject to adjustment of the refundable amount in view of the disallowance of the CWT Certificates pertaining to petitioner's alleged branches.

ROMAN G. DEL

Presiding Justice

• Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G. R. No. 159490, February 18, 2008.