CTA Case No. 3695

DECISION -

CTA CASE NO. Qo o ’ After crediting the payments made in the total amount of F40,141.00, petitioner's said return resulted to a refund of the amount of F2,969.42 (Annex C, Fetition). On July Qs 17G2,, petitioner filed an amended final adjusted corporate Annual Inceme Tax Return, declaring therein a tax due of Fi,994,74 and after crediting previous payments, there is ar fundable amount af FP28,146.26. 4 (Annex C1).

For the first quarter of Fiscal Year ending September aQ y i992, it filed its Corporate Quarterly Incame Tax Return on January 29, 1982 and Paid the tax due thereon in the amount of P8,280.25 on January 29, 1982 (Exhibit DeS, Fetitioner) after crediting the excess income tax payment stated in its unadjusted quarterly income tax return in the amaunt of F,969.42, for the last quarter of fiscal year ending September 20, 19681. (Annex "CC",

Fetition)

For the second quarter of fiscal year ending September 50, 1982, it filed a Corporate Quarter - - Income Tax Return on April 28, 1982 declaring a

Cot

DECISION -···

CHI CASE l\10 .

--· 4 ·- ta:-:able net income of P57~816.23 and paid the corres ponding tax due thereon in the amount of F'14~454-.00 (E: :-~hibit.s "E-·1" and "E- 2" ~ Petitioner) . For the third quarter of the s a me fiscal year~ it filed a Corporate Quarterly Income Tax Return on

August 25~

1982~ declaring a net taxable income in the amount of P80~502.00.

Afte r crediting the amounts it pa id during the fir s t qua rter a nd second quarter in the amounts of P 8~ 2 80.2 3 and P14,454 . 00 r·espec ti vel y ~ plus the e:-~cess income ta:-:

payment for the year in the amount of P38~146.26~ as stated in its adjus ted F ina 1 Corpor·a te Qu <: \rter 1 y Retu r·n ~ or a total amount of P60~380.49, said return showed a refund of the amount of P40,732.49.

Fen··

it ~;

f ina 1 quart.el"' l y n=~tunl for· the same fi s cal ye ar, it dec lare d ~ net loss of P2 24,732.54. Ac c or·d :i .. ng J. y, petitioner· thn.t J. et t e r dated t'lr::~y 9 ~ 1983 filed a c laim for refund of the excess payment of income tax paid for the fiscal years ended _ ..

September 30, 1981, and September 30~ 1 982~ in t he tota l a mount of F'60 ~ 380 . 49. Withou t waiti n g fo r respondent's action ·in its c l ai m f o r r e fund, petitioner filed t he instant petition for review on October 26~ t983.

DECISION

CTA CA!3E 1\lO.

c· - · ...J -- ,, nes pcmdent maintains that.

the creditable income tax payments prior to October 26~ 1981 have already prescribed when petitioner filed the instant. petition for· r·eview on October 26~ 1983.

"F'etit.ion e:~r failed to file a for·mal claim therefor with the r··espondent and instead~ opted to cr·edit. t.hr-, same for· the following fis ca l year~ thereby assuming th€·? r·isk of its c laim to pn?scribe as it has so presc ribed."

Section 292 of the Tax Code so prescr·ibes ~ "In a ny cas e ~ no s uit or proceeding s h,~ll bP begun aftc-?r· the e:-: pi r·a t ion of two years f t-orn d ate of pc:~yment (") ·f the ta:·:

·or pc.:.?na 1 ties regardless of any su perve ning cause that may arise F'eti t.i.cmer·· i'.\Vet-s that pr-e sc ription does not operate as a bar in the i nstant case si nce what is involved are ta:-:es paid in quarterly installments and ~'lithheld at source.

"When a ta:{ paid in i.nsta 11 men ts, the prescriptive per· iod of two years provided in Section 306 (now Sec. 292 ) of thE?

National

Internal

Revenue .. Code shou ld b e counted fn::HTl the date of final payment~" Since t h e 1981 f ina 1 income ta:·: retl.trn was f i 1 ed on its due .:a oe

DECISION ~ 5 ReneS

cTa case no. Qe ~ date, L.@., January 14, 19682, the two year prescriptive period runs from said date and the refund af all the quarterly periods concerned has not prescribed.

This recurring legal question which seemingly sQO troubled the respondent as when to toll the two- year prescriptive period was squarely faced and ruled upon in the recent case of TMX Sales, Ime. va.

anue (CTA Case No.

27AS, Ageil 19°86), where, as here, the ruling Plainly applies, inter afra, thus - The apparent contentious quibble on the computation of the 2-year prescriptive period under Section 292 af the Tax Corce had been squarely resolved in earlier 2s of the Suprema Couwurk which lend settling eloquence to khe precise issue in the cage ah kar. Thus ruled, gnoter alra, “When aiobtax paid ain installments, the prescriptive period of twa years provided in Geetion 206 (now Sea, 292) af the Revenue Code shauld be counted fram the date of the final or last installment. MoM OK This rule proceeds from the theory that, ain contemplation of tax laws, there 18 mo payment until the whole or entire tax liability is completely paid. Thus, a payment of aopart or portion thereof, cannot operate to start the commencement of the statute of limitations.’ In this regard the word "tax" or words “the tax" in statutory provisions camparable to Sectian 306 of our’ Revenue Code have been unifarmly held to refer to the entire tax oe

DEC IS I 01\1 ···

CTA CASE 1\10.

-- 7 -- <:\nd not a por·tion th£:n··eot (Clad:: v. U.S. 69 F 2d 748; A.S. Kriedner Co. v . U.S. 30 F Supp. 724 ; Hills v. U.S. 50 F 2d 302~ 55

F

2d 100.1.)

and the voca b 1 es II payment of ta, .~ '' wi. thin stattJte~;

rf.-?qLt.ir··i ng r-ef Ltnd claim, r·e·fer· to the date when a ll theta:-: was paid~ not when a portion was paid

(Bt-aun

v.

U.S.

8

F

Supp. · 869, 863;

Collector of Internal Revenue ~. Prieto, 2

SCRA

1007;

Commissioner

of In ternal Revenue v.

Palanca~ 18 SCRA 496).

Let it s uffice, petitioner had an overpaid income t."::l.:·:E"s ·for·· the fiscal year endE>d September ~:r.o, .1.9Bl as s hown in its final adjustment retur n~ prescribed in Section 86 (now SE>c. 69) of the Tax Code, filed '1"\ J. .~.J::l .. l,l_0.C.Y ..... J..'.t~ ... J5'J:J..Z., . which as earlier· ruled~ deemed the reckoning date to start the l'··unn.i.ng (.J"f the tv-m·-year per·iod of 1 imitation.

It

is an admitted fact that the petitioner was clE>arly e ntitled to it but for the s prouting imprE>ssion of thE' '' r·i.sk of :i. t~:; c:l<:l.irn to pr·esCI'" .i.be '' by having the same credited against future tax liabilities as precipitately broached by the respondent.

I

Under·

1 / availed o·f the circumstances disclos ed ~ the automatic tax credit consonance with law expressly providing: petitioner sc heme in 11 In case the cor·por·ation is entitled to a refund of the e:-:c:ess estimated quarter·l y income ta:<es paid~ the 62 )

DECISION a

cTa caSE no. gm 2275 refundable amount shawn on its final adjustment return may be credited against the estimated quarterly income tax liabilities far the taxable quarters of the succeeding taxable year." (Tbid.). We think that this expedient devise whic canvenieantly ensures the callection of taxes due operates not as a waiver of a taxpayer’s right to enforce ai ocloam for refund or litigate a suit for recovery of excess payments if so warranted.

Be that as it may, the final adjustment return filed on November 29, 1982 covering the total taxable income for the fiscal year ended September SO, 19B2 has shown a refundable amount due in the total sun of F6O,880.49 which is not in dispute. Accardingly, petitioner filed an administrative claim and ineskituted a judicial suit for the refund therefor oan May 97, IL9AS and Octeaher 26, 198%, respectively. This comports with the 2-year statutory prascriptian tolled from January 14, i982. And, far be it from a comedy of errors the conjured "risk of prescription" posed, is nowhere here nor there, so to speak.

Cor

DECISION

CTA

Cf.'I~3E 1'-ICJ .

·-· 9 ··- t ht-? ,~ c-'? for-e find the petitioner's entit l ement to a favorable determination as a - ..

matter of fact a nd l aw. llJHEREFORE, t he a moun t soug ht for-

No

[-30 ORDERED.

refund or·· ~dit of the ta:-:ab l e~invol ved costs.

the is Quezon City, Metro Manila, September 29, 1988 .

WE CONCUF\:

AMANTE

ILLER

Presid/g Judge f r---.-.........~ C. ROAQUIN i!>::Pz.~

Associate Judge

DECI S ION -

CTA CASE NO .

- 10 - C E R T I F I C A T I 0 N

I

hereby certify that this decision was reached after due consultation among the members of the

Court

of

Tax

Appeals

in accordance with Section 13~ Article VIII of the Cons titution. . . Presidi

Judge

Court of Tax Appeals

C ~3