Ayala Corforation, et al. vs. ~ Commissioner of Internal Revenue

DECISION -

CTA CASE NO. 2574 summons and other court prec at his office ato othe Uureau af Tinnteros) Revenue Eldg., Government Canter, Diliman, Quezan

Citys

or ts) Qn January 5, 1901, petitioner paid to mas pondernt the AMC & af P170,406.85 represanting the 35% tan on interest incane derived fram canmmercial paper transactions imposerc the former Section S2410(b) of the National Internal eis verte Core af LET 7 » AS amended. The saic oa paid by sleaipicldl cy the promis sory roles without atc etitier hilippaine American Life Tnsurance OM ELATLY y Ine whi mh teas cenelg@ ee the former Section B10 was a liability of petitioner as a borrower y WAM premiul get : ef fect ti immediately, 4 3 he a For euadid Zi oh 2 eo.

tak oon conmercial paper transactions by abroge ting the pravigsions of of koe National Tn eee nel pied

Liu

cH

4. Vt. ket yen, hime of paynoort ty petitioner ha vrespencdenk af the oo for amount. mf PAs, 408 97, thn Re Regulatiang i2nmolenanting the pravi af FR LFa¢ moh beer park faba theese fore Sane ive prep Asta pres the promis reves yy, i frost ogee. iesued anc whieh the afored paich w natoydbbh ga the Lmpoagsahterm doitped me

VOEPTL Ss 3

implemanting PD ;

form oh obteimany funde from the public, re “herorgh chy 296

DECISION ~

CTA CASE NO. 2576 respondent admitted the allegatinns in paragraphs 1,

Sad

a issuance, endorsement, or acceptance of debt ainetruments for the borrowers oan ACCOUNE « for purpose of tealanding ar purchasing of receivables ancl ather obligations. These ine trumeants may include, but need noth be limited ta, H, repurchese aqcreements .

ot é ghment ov and similar insteumente Ww. ZOU Poas may be authorized by the Central Bank of the Fhilippines for banks and non-bank financial intermediaries: Frovided, however, thak debt instruments iasued hy ir berbant laans, ine Luding those between ar among quasi banks shall not he considered as deposit substitute debt inatriumantea ba Ory Sep Lemire Mt, LOG, immediately after petibinmnmer cdiscovered the erroneoaus paymeand obo respondant of the aforesaid amount oof PL79, 406.85, petitioner submitted with wmespondent a formal request for othe refund of bthe said amount oor the tasuarnce of am tas creelil: meme covering bho eames

6. Paobaidonearer trac fod Poeie ua thy aforesaid claia far rerend oe ceedit and that oa sufficient came has already elapsed, and regpondenmt has not yet made a final decision an the said claims ran Pati hiener believes that respondent may not be able ta give hi final decision on the said claim in due time and ino order to prevent prescription of ats claim, petitioner is iting this petihian for review ain acceordencea wath law.

In his answer to the petition for review, and © bub specafsceally, derred the allegation 290

DECISION

CTA CASE NO. 2A7¢ in paragraph 2 for lack of knawiecdge ar infarmatian sufficient toa form a helief as to the truth thereof. Whether the amount of FI70,496.85 was actually paid toa, and received by, the government, according tt respondent , Ls subject of verification. Reaspondent also admitted the allegatian in paragraph 4 of the petition as tea the definition of "deposit substitubes" under Revenue Regulations No. 212-80, implementing Presidential Decree No. L755, but he denied the rest of the averments in said paragraph and the allegations in paragraph 7 of the petition, for being mere Opinions, arguments and cone dusionms oo the part oof petitioner, and carrion eois . épd oy be respandearnt admitted the allegations an poereadraph SG af Lhe petition that neatitioner, an a Lather dated September 30, 1981, regueshed bar refund ar credit of the amount af PLO, 406.85, he denied bhe grouuiicis relied upon ain support of the request and the allegatian that seid amount of F170,406.95 was erroneously paid, for being erroneous conclusions of fact and/or law, the truth being those stated as 296

DECISION ~

CTA CASE NO.

special and affirmative defense wits oat aor Foetal kiewier os ordayiib ke oe laim fhe refund/eredit has praearrdbec preosuant be Section 2° of khe te7? Pax Code. The 28% tax was allegedly Ld oon January igei. The petition for review was filed with this Hororable Court on January 24, 1983, or beyond 2 years from the date of payment of the tax;

Oa Linder Section 222, Tax Cade af 1977, no suit for the racovery of national internal revenue tax shall be began after the expiration of two years from date af payment af the tax:

7a The 39% fax oon intersat income from commercial paper transaction, paid by petitioner as borrower an pramissary notes ested, war collemted dn scecordance with Jaw and regqulationmg: hanse, it is nok refurdat bess

8. It ig incumbent upon petitioner to show compliance with the provisions of

Sections BFS and 295 of the National

Internal Revenue Cercle rg Lee? . Ag amended s

9. A claim for refund is construed etrdetly against claimants, Since a claim for refund pertakes of the mature of an exempkion fram taxetion (Momm. af Int. Fev. ve. Ledesma, GAR. Mo, LeL?aoo, 3h SCRA 9S January 3O, Leo).

In reply ti the ATVS of respondent, the of respondent.

i! petitioner stated that its claim for refund credit has applicable National Internal nak prescribed pursuant te Section FOP of 299 the “ayer Code bherause

DECISION ~

CTA CASE NO. S374 petitioner had until January 2S, L965 within which to file its petition for review, the tax subject of the claim having been paid on January 23, 1°81. Considering however that January 23, 1983 fell ona Sunday, petitioner had until danuary 2&4, L9G2 (the next warking cay following Sunday? within which toa file its petitton for review, After the issues were aotmned, this Case was set for hearing, However, whenever Chis cage was called for hearing petitioner simply made a manifestation chat “Ehe cladiin far refund ts being pursued in the adinimistrative leval", and therefore requested for Lbmea or ehlang of che: case, Mes objections or HypNy:

thier WED e ih berpose|ecd hy respondent. Thar ia Were ENP distances Wher petitioner mover for aio res athang of the case because petikioner An herpetecet te present tk ats WLtNeSseas or met fe hee Pore a CODA 1 LOrerr its documentary evidence. No wilme@ss was presented by petitioner, however, and meither did petitioner offer any documentary evidence which would prove its entitlement to the refund or cracit of the tax involved in this case. Then cdutrdiod the hesaring on 3800

DECISION -

CTA CASE NO, Oe Qetober 18, L?°er, petitioner manifested that “thas is a claim for orefund ehdeh ipvolves purely questions of law, hawever, respondents counse still verifying the veracity of khe payment af the taxes. That they have agreed to ceoraify based oan the originals of the receigbesa ho bee submathed fo respondent on OQekobar 29 C1937) afler which they would file the necessary pleadings. Farties will then submit the case for decissoan after frling their respective menorancdums « «Ma No statement at yer ai firab joan EVES hey bhvees veracity of the payment of Che bases was siti t ted by the parties, Neither did they file with this Court the "necessary pleadings”! or bbe respect ive Memaranduuns « Serooge Sospyhempybaec ah, 1 SER

a Vee Cred:

ordered that this c: be submithed for decision.

It is thus clear beyond doubt that there is mo ground ar basis tuponm whieh this Court can issue a judgment ordering respondent to refund or credit ta herein petitioner the amount involved in its claim. Settled is the rule that ino oan action for tax refund or cradit, petitioner has hha burden of proof to shaw that it is entitled ta the refund or 3014

DECISTON

CTA CASE NO. Sore a Fadmecd ae ore foendable because credit of the amount « taxes are opresuunme toa have far coallednted Ln accordance with laws and regulations on the matter. Fatitioner having failed bho gsustein the burden Placed upon ah fey pr@esmieb aoe wrth f theal atoois antitled to the refed oor cradit af the amount involved he rein, this Court could mat Look wath approval to the grant of che re fan.

/Aand more sa when ait ie considered that a refund of taxes undaubtedly parhakes of the nature of an exemption, and the same cannot be allowed unless granted in che most explicit and categorical language. (desing, Ime. we. Avwditar General, L~ 17888, Oct. 29, 19748, 2 SCRA FA4, ) (Vlaimes far refund are construed slrsetly agqarnek elaimants since a claim for refund as ain the nature of an exemption from taxation. (Commissioner of Internal Revenue ve. Ledegina, Lele no9, Jan, FO, LP70, 31 SCRA 95.) As sek forth in Cammissioner of Internal Revenue vse GQuerrera, L-S0812, Geaph. if, 1967, 21 SCRA i8O: “"Freom 2906, an Clatholic Church vas, Hastings to 1946, in Esso Standarcd Eastern, Ine.

VS. Acting Commissioner of Cugtoms, th has been the

DECISTON -~

CTA CASE NO. 2476 canstank and uniform holding that exemption fram taxation is not favored and is never presumed, so that if granted it must be strictly canstrued against the taxpayer. Affirmatively put, the law frowns on exemption from taxation, hence, an exempting provisian should he construed atriactyssimi durzg.". (Catholic Church vs. Hastings, 3 Phil. 7VOl: Esso Standard Eastern, Inc. vs. Acting Cammissioner of Customs, L-219841, et. “a8, 1966, 18 SCRA 486 3 Phil. Acetylene Ve Commissioner of Internal Revenue, L-i97O07, Aug. 17, 1967, aa SORA 1O34s Commissioner of Internal Revenue ve. Guerrera, L-2O942, Sept. Be, A957, 21 SCRA 180; Manila Electric Cm. vs. Vera, L-29987, Qet. Se, 1975, 67 SCRA 351.)

WHEREFORE. finding the petition for review without merit, the same is dismissed and the refund/credit sought is hereby denied.

80 ORDERED.

Quezon City, Metro Manila, dune 241, 1989,

Quronde JL

AMCNTE FILLER

PrearidiAg dudqe 303 ah

DECISION ~

CTA CASE NO. 3574 WE CONCUR s fon jeave) CONSTANTE C. ROAQUIN Associate haces x.) x oer

Aex- » REYES {~

Associate Judqe

CERTIFY CAT Ian

J hereby certify that this deacisinn i ER reached after due consultation among the mambers of the Court of VAM Oppena ls aby agcooecbearn og with Section 12, Articte VITT of the Consta lution.

Cduracile. (La /

AMANTE/ FILLER

Mreagiding Judge

Court of Tan Appeals