Court of Tax Appeals
0~::.Pub Lic of J'Lie.L"T11lll'R. ~Ourt of Tax Appea~ ~U£Zon Ci.,;Tl Gagayan Electric Power & Light Co., Inc vs. CO~L''HSS Ioner of Internal Revenue
.~::.PuB LiC OF
J'liE
.l"t11Lll'r •••.
~OURT OF TAX APPEA~
~U£ZON Ci.,;tl
GAGAYAN ELECTRIC POWER &
LIGHT CO., INC.,
Petitioner,
- versus -
C.T.A. CASE NO. 3 76 1
CO~L''HSS IONER OF INTERNAL
REVENUE,
Respondent.
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D E C I S I 0 N
Submi tted tor decision in this case is the issue of
jurisdiction, which has been ~aiscd as one of respond : t's
affirmative defenses incor porated in his answer, filed on
October 24, 1984.
From the records . it appears that petitioner is a
corporation duly organized and
..... .
CXlS'-lng under the laws.
.I t has its principal office at Suite A, 8th floor, Strata
100 Bldg., Emerald Avenue, Ortigas C G~.plex, Pasig, Metro
Manila, and that said petitioner is a holder of a legis-
lat ive franchise granted by Republic Act No. 3247, as
amended by Republic Act Nos .. 570 and 602J, by virtue of
which . it is engaged in tLe distribution of electric powE~ r
in c ertain mL:n iL i pal it ies in the Province of hisamis
Oriental and Cagayan de Oro .ity.
(Pars. 1 and 3, Petition
for Review, 5dmitted in Paragraph l , Answer, pp . 1 and
52 , CTA rec.)
DEC ISION -
CTA CASE NO . 3761
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2 -
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I n a letter o f petitioner dated J une 25, 1981, it
requested responden t Commissioner of Inte r nal Revenue
for a r ul i ng or c ertificat i on t o the e f fect that petition~r's
i ncome from t ime deposits a nd deposit substitu te s a re
exempt fr om the 20% withholdi ng tax under Revenue Regulation
No . 112-80 , i mpl ementing P.D. No. 1739.
(pp . lO-ll, CTA
rec . )
In reply t o the aforesaid letter, respondent on
September 3, 1981 informed p :t i ~ ione r that exemption from
all t axes and assessments under a legislative franchise
is limited only t o tho se incorpe der i ved from its '; usiness
covered by t he franchise , a nd al l i ncome derived from any
a c t i vity o r business not specified by the franchiJ r is
subj e ct t o i nc ome tax .
(Annex "C", pp. 13-14 CT.l\ rec.)
I n a letter of petitioner dated December 14, 1981, it
.reques t ed responden t t o clarify his stand on this matter
si nce t here were s eve r al occasions wherein ~etitioner wes
e xempted on t he same i ssue rai sed by it .
(Annex "D", pp.
15-17, CT.l\ rec . }
In a nswe r t o t he clarification lelter, r~spondent
wr o te ·petitioner a letter dated October 11, 1983, and
r e c eived by the latter on March 9, 1984, informing peti-
t ione r t hat the inte r est yield from deposit ~ubstitutes
(mon y mark0t placeme nts) .are not subject tq franc hi~e
t a x but t o 20% wi thholding income tax under Sect i o n
24 (cc) of the Tax Code.
(~ . nnex "E" pp. 18-19, C'I'A rec;
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DECISION -
CTA CASE NO. 3761 - 3 - a l so see paragraph 11, petition for review ~ dmitted i ~ ..
paragraph ans~er , pages l and 52, CTA rec.)
On Apr il 6 , l984f petitioner interposed its appeal to the Court and r espondent, on Octobe r 24, 1984, filed hi s answer raising the fo l lowing special and af~irmative defenses:
4 .
Pe t it i oner has no t filed a claim for re f und or credi t with respondent Commissiorier of Inter nal Reve nue; therefore, this Honor able Court acqu i r e s no jur i f:,,ic · i on over the case ; 5.
The peti tion sta ~es no cause of action. It fails to allege the date whe n the tax was paid7 4 6 .
One who claims t o be exempt from payment of a partic ular t ax must do so under clear and unmis t akable terms found in t he statute . As held by the S:..1preme Court in the c ase of Coi. n;"ssioner o f Internal Revenue vs. Guerrero, 21 SCRA 183; "x x x The r ule appli c:d with undevia t i ng rigidity in the Philippines is that f or a tax exemption to exist, it must be so categoric · lly declared in word:::.; tha t admit no doubt. x x x."
7.
Exempt ion from all taxes and assessments unde r a legislative franchise is limited to income der i ved from busines s covered by the franchise.
I nte,est i ncome which accr ~e s on petitioner's time deposit substitutes is an extranebus income derived fr om busi ness not specified i n the fr anchis0;
8.
Petitioner's intere s~ income/yield from money mvrke t placements is su bject to income tax ; consequently, i t i s subj ec t to t he 2 0 ~ withholding tax imposed by Section 24(cc) of t he Tax Code, as amended by P.D . _o. l7 39i 9.
Any amount claimed to have been with- held must be shown to have been p id to, and received by, the Bureau of Internal Revenue ; 2 •!
DECISION
CTA CASE No.
3761 ed ‘ * 10. Tue collection of the tax was made in accordance with law and regulations cn the matter and, therefere, the same is not refendable;
il. c is incumbent upon petitioner to show that it has complied with the provisions 292 and CTA rec.)
of Sections
(pp. 52-54 Did petitioner file a written tax credit before the pursuant to Section 292 of Petitionc: contends t June 25, 1951 and December tor a ruling or certi from the 20% withholding wiz: that the taxes fication 95 ef the Tax Code.
claim tor refund or
Commissioner of Internal Revenve
Tax Code?
hat the two 14, 198 cE baba.
wnether gies points only to one purpo id by respondent be refunded to the petitioner, because the said letters intended clearly to recover the amount withheld by respondent, and, therefore, it has complied with the rvectulroment of Section 292 cf the Tax Code, and this court has yuris- tation over the instant case, We cannet subscribe to petationer's view. Section z nternal Revenue Code provides: Sec, 292, Recovery | er reneoue ly or shall be Raiatained in any court for the recovery of any mational internal revenue tax hereafter alleged to have been erroneousiy or illecally assessed or collected, Of any penalcy claimed to have been colleczed wi bthout authority, er of any Gum alleged to have been excessive of in
ON EN
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DECISION -
CTA CASE NO. 3761 ..
- 5 - manner wrongfully c o l lected, until a claim for re fund or credit has been d uly filed with the Commissione r of I nterr.al Re venue i but s uch suit or proceeding may be mainta ined, whether c r not such tax, penalty, or sum has been paid under protes t o r du ress .
In a ny case, no such suit or proceeding sha ll be begun after the expir at ion t wo years from the date o f payment of the tax or penalty regardles s of any super vening c a use t hat may ar i se after p ayment: Provided, howe ve r, That the Commissioner may eve~ without a writte n c l a im therefor, refund or cr edit ~ny tax, whe r e on the fact of the return upon which payment was made , such p a yment appears c learly to have be~ n er r oneously pa i d . The law i 3 clear and explic it. The above law requires a taxpayer to file a written c laim for refund 4 before t he Commiss ioner of Internal Revenue within t he period of t wo years from the date t he tax was e r r::.>· · neously or illegally colle cted. The aforesaid two letters of petitioner addressed t o the Commissione r of Interna l Revenue are not claims for refund or tax credit as contemplated under said Sect ion 292 of the Tax Code . A clos e scrutiny o f the aforesaid l etters show that peti t ioner merely req ues t e d fo r a r uling or a certif i - catio:1 on the question as to ·whether 1 t is exempt f rom the 20 % tax withheld from its i ime deposi t and deposit · s ubstitutes.
Surely, pet itioner may have the view of having t he said withheld taxes refunded to i t. But tl is in te nt i on was .1eve r c lea!:" ly or expressly manifes t ed by petitioner by me ~ns of the filing o f a written claim seeking clearly the r efund o f e r roneous or i l leg a lly 2oo
DECISION -
CTA CASE NO . 3761 - 6 - collected taxes with the Commissioner.o~ Internal Revenue as required under Section 292 of tbe Tax Code. Se ttled is th0 rule that a claim fo r refund as contemplated in the above quo ted provision of law, h a s been defined as a document filed within t he statutory period in which· tl].e !:_axpayer_ has ind icated with r ea sonable clarity that he i s demandins ~ ::_e tur_n of overoaid taxes and the groun6s upo ~ which he j s mak i .g his demand . (Julia V. Forhan, 45 BTA '/99) Nowhere in the s aid 4 l e tters of petit ione r which s how, with defi n iter ess , a demand for the refund of the a mount of ta}~es alL 9•'d to hav e been erroneously.or illegally paid, and which ultimately gives notice to the Gove rnment t hat s uc h collec t ion of taxes are questi c ned or sought to be ref undeC; and if lhe taxes are truly erroneously or illegally paid , then the collec tion thereof be corr ec te ~ , or the t axes otherwise refunded. (Bermejo o r Coll. GR L-3029, Jul~ 29, 1950.)
WHEREFORE , petit i oner havin f a iled to file a · proper writte n claim fo r refund for errone ously o~ illeg a lly paid taxes be f ore the Commiss ioner of Inte r nal Revenue as mandator ily r equir ed under Section 292 of t he Tax Code , this Co ur t hGreby dismisses this case for lack of jurisdic tion.
DECISION -
CTA CRSE NO. 3761 SO CRDERED.
Quezon City, Metro
WE CONCUR:
+ cle FILE : z i Presid4na Judge
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