Court of Tax Appeals
0CTA Case No. 2053
REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY
Tie,
veraue CoTeks CAST HO, 2053
COMMESSIGAWA OF INTRRSAL |
sae . tH
Respondent. &
BPecriIsionsk
Petitioner, a corporation which is keeping
its books and filing its income tex returns on
the calenfar year basia, Tiled its income tax
return for the year 196 on April tl, 1969 and
paid the amount of °650,375.50, representing the
first installment, The secon! instalinent of
2690, 375.50 was pald on July 1% and 15, 1959s
The income tax wes computed by petitioner on the
basis of the rates prevailing prior to the effeo |
tivity of Republic Act He, 5431 which Inareased
the rates frém 22% on the first #100,090 net income
to 258, ant fron 308. to 35% on the cet Income tn
exeess of 919%,99 . Respordent, however, believes
that the new rates of corporate income tax as
provided in Republie Act lo, 431 became effective
on July 1, 1968, hence, an accessment was made
acainst setitioner for seficiensy inoone tax for
DPCISION »
CTA CAST NO. 2053
2
the periot from July 1 to December 31, 1960. As
aanitted by counsel for respoment, the amount of
the seficteney income tax, plus interest, would be
PIE pCO ar the interpretation af regponéent
as to the date of effectivity of Republic Act %o.
5431, O22 Gprlied to petitioner, ie correct. .
‘The aesessnent against petitioner having been
auly orotested br it and denied by respontent, the
former has appealed, ‘he only issue presented for
our consideration relates to the dete of effectivity
of Republic Act No, 9431 as applied to petitioner.
Seetion 10 of Republic Act Noe 5431 providers
m™C, 154 The provisions of this
Act shail a to inceme for taxe
able years after June 3°,
o
“Tt ds adadtthd thet petitioner ts keeping ite
beeke omé filing its income tex returns on the
calendar year basic. “herefore, tts “taxable
yoar” for purposes of the Income Tex lew is the
period fron January 1 to December 31 each yours
It follows thet the beginning of its texable year
after June 3%, 1968, tn January 1, 196%) and not
' July 4, 1968, ‘The decision of respondent holding
that the proviaions of Nepublic Act No» 5431 are
applicable to_ petitioner effective July 1, 1968,
is obvicurly erroneous, An clearly and correctly
expldined“by respordent* MHimseFe:
DECISION
CTA CASE NO, 2053 3 "The term ‘taxable year’, in aecoun anf income taxation had ine ' @eed acquired the = meaning as an a ey twelve months beginning J ay ey & and ending Deeem- der 39 which is termed a calendar year or an Saas —— of twelve months end the last day of a month other on Dasadar which (is = fiseal year. (Section eZ? 9 tax Code) Since AeA. B rad aah Guanienat be tha Gupen orate income tax law, this Office be thet Congress used the term *texable year’ in the ~~ of its meaning es Gefined by the Code {tecif.
“After June 30, 1960, the first and next taxable years ere the fiseal ae beginning July 1, 1968 « December 1968 and the calendar year begin- p Tag January 1, 1969. Therefore, when Congress stated in Seetion 10 or Red. No. 5434 that "The provisions of this Act shell apply to income for taxable years pepe | after June 30, 1968', it is indubiteble that it fixed the mg¢ period of the inereeased Fates of corporate incase teginntng e or periods ay tg 1968 ~ December 1, 1 565 and ¢ for calener period beginning ee 1569 these per!tofs being’ the tire first and next t + years beginning after dune 30, 1 "In view of the for ed soetrie es well rg the now well Sea onan . ee ogee gr thet terms ohn ty By in wate wainery -awe unless the context provides at ae, it is the opinion of this Orfiee us it hereby holds that as regerés calender year corporations the inarcased rates of corporate Income tax preseribed by "As Noe 5431 shall pie Rh earned by them only be- & J t, 1969." (BI, ruling addressed to Sax Service of the a 418
DECISION «
CTA CASH NO, 2053 h CaTeds Moe 2263, Dots 175 1973.) _ .Respondent reversed his previous rulings anda now wanta this Court te agree with him that by Sec- tion 1° of Republite Act No. 5431, the law has ine tended that the ‘provistons of said Aet should aprly to income earned from July 1, 19608 regardless of the taxpayer's accounting period. The theory of respomient has been rejected by us in our decision in The Manila Times "ublishing Co., Ines ve Com- missioner of Internal Revenue, CeTeA. Now 2263, Dece 175 1973" (cert. denied in Gey Noe 1H30154, May 10, 1974), involving the same issue, and ve feel it unnecessary to make further elaboration on the matter, | | WHITREFORE, in line with the decision in the ease of The Wanila Times Publishing So. Ines, cited above, the decision appealed from is hereby reversed. No pronouncement as to eosts.
30 ORDRAD, | Quezon City, June 3, 197%e
2 CO _ DA Chai
ROMAN M, WMALI es Presiding Judge am ON Le pase
Associate
Ieee also Rural Denk of ag sag IM@e Ve saa mi oner of Int, “OV. c.tA. Hos 1, 1974, cert. denied in Gs. lo. Im3OK76, May ie "Roou, p 419