CTA Case No. 3767

DECISION

- 3 - the Tax Code of 1977, as amended, provide s : Section 292.

Recove ry of Tax Erroneously or Illegally Collected.- t·Jo suit or proceeding sha 11 be rna in- taine d i.n any court for the recovery of any national internal revenue tax · he reafter alleged to hav~ ~een crro, neously or illegally assei~ c d or collected, or of any penalty claim~d to have been collected without authority - or of any sum alleged to have been ex- cessive or in any manner wrongly collected, until a claim for refund or credit has been duly fi16d . with the Commissioner : but such suit or proceed in_g . may be rna in- tained, whether or not such tax, penalty or sum has been paid under pr~~est or duress .

!.12 . -~-~~LS.~~, no s_~tch §.Y..i t_2!. .

I2I..2~~ee <~_ing_ s ha 11 be b.£gun after th~ ~ei.£.9.l. i OJ:!.. .. .?..f. _ _1y~~ r s from the date. S:?l....J2.0Y.~ n t of _!:.bS...J:·~~.I! <l 1 ~..Y-E£9. a r d- 1-.~.ss of .~!!.J' __ superv~~ cause that n'la~ ~ise._~tt~=-~ . J-2.~.Y~nt: Provided, however, 'l'ha t the Cc missioner me\y , even v1i thou t. a written claim therefor , refund or c redit any tax, where on the fac e of the ret ur n upon which payment wus made, s uch payme nt appears clearly to huve been erroneously puicl.

(Und eu;~c or ing ours . )

Petitioner for the year e nded December. 31, 1981 filed its Corporate Income Tax Return on April 15, 1982. In th e snid return, it credited the total amount of P90,723.00, allegedly representing the total amount of creditable withholding tax a t. source for the said year, by its various withholdinq agents aforementioned (Exhs. c, E and F) •. 'naving incurred a net loss, ACCRA sought " . .

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- 4 for the refund f all the tax withheld at source here- in stated.

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A review of all the receipts -of payments and/or remittance of the tax withheld, they were paid and ' remitted to the Bureau of Inter~al Revenue by the \·lithholding agents from February . td December, 1981. (Exhs. C-1, C-1-a to C-12, C-12~a, inclusive: Exhs.

D-1, D-1-a to D-10, D-10-a, inc1~sive:

Exhs. F-2, F-2-a to F-11, F-11-a inclusive.) Furthermore, a computation of the alleged taxes withhe ld at source as supported by ~vid~nce only re- sulted to an amount of P82,751.91 and not ~90,723.00, computed as follows:

WITHHOLDING AGENT

.

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AMOUNT WITllHELD

1.

Malayan Insurance Co.i Inc. · P 1,429.97 (Exh. "C", Pe titioner) 2.

Angara Concepcion Regala &

73,588.00

Cruz Law Office

(Exh. "D", I . titioner) 3.

MJ Development Corp.

1,155.00 (Exh. "E", Petitioner) 4.

Philippine Global Commt,mication,Inc. 6,578.94 (Exh. "F", Petitioner}·

T 0 T A L •

• • • • • • • . • ~~~:!1~~,;~~ Th~ instant petition fo~ review was filed only on April 13, 1904, or more than two ( 2) .Years from the 13 "{ .~ ..... .,.,. . . ·.

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- 5 - dates of payment or remittance of the alleged overpaid income tax withheld at source. We have no doubt that petitioner's claim for refund had "already prescribed pursuant to Section 292 of the Tax Code of 1977, as amended.

Moreover, as decided by this Court in the case of - :.

Pacific Procon Limited, C.T.A. ~ase No. 3200, dated January 25, 1984, affirmed by t~~ Supreme Court by virtue of its denial of the petition for .teview filed by peti- tion0 r (G.R. No. L-68013, Nov. 12, 1984), held that: .

\ "The two-year period for , judicial recovery of the tax alleged t6 have _-been erroneously or illegally paid or col- lected is a positive and mandatory requir e ment of Section 306 (now Section 292) of the Tax Code.

(Gibbs vs.

Collector of Internal Revenue, L-13453, _ Fe bruary 29, 1960, 107 Phil. 232; ~uagua Electric Light Plant Co., Inc. vs. The Collector of Internal Revenue & The Hon. Court of Tax Appeals, supra.) . It is prescriptive (College of Oral & Dental , Surgery vs. Court of Tax Appeals, 102 Phil. 912; Panay Electric-~s. Collector of Internal Revenue, 103 Phil. 819:

Lu Do & Lu Ym

vs~ tentral Dank of the · Philippines, 108 Phil. 566), and in order to confer jurisdiction upon the court, it is necessar.y that in all cases the suit must be brought within the statutory period of two years and the requirements provided for in Section 306 (now 292) _l 1st have been duly complied with.

(Collector of Internal Revenue vs. 136

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DECISION

CTA Cl\SE NO. 37tJ7 ' ' 'i" ''lflll •.

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The Court of Tax Appeals & Hume

Pi~e & ~sbestos Co., Inc., supra.) . More- over, the provision is mandatory and is not subject to any q~alificati6n, hence, it applies regardless -of the conditions under which payment may have been made." (IBM Philippines, Inc. vs. Commissioner of Internal Revenue, CTA ·.

Case No. 2855, February 21, 1981, citing Guagua Ele ctric Light Plant Co., Inc. vs. Collector of Internal Revenue, 1 SCHA 1221.)

"x x x While . the gro~s income and deductions declared in ~ne quarter are now allowed .to be cumulated with those of t he succeeding quart~rs of the s ame taxa! 'e year, and the tax-'paid for any one quarter on cumulative basis is creditable against .the quarti3rly tax liability for ea~h ~ucceedi~g ' quarters of the taxable ye ar, the law ·h~s pl~ced, as initiated by Presidential Decree No. 30, all corporations on a tax withholding system of income tax payment on a quarter- ly basis.

(Sees. 85, 86 & 87, National

Internal Hevenue Code: Manila Central

University vs. Commissioner of Internal Revenue, CTl\ Case No. 2848, October 19, 1978.)

"Ne verthe less, eve n on the assumption that the sum of P29,408.34 as income tax for the first quarter of , l978 remained outstanding as a refundable amount until the incurrence of a loss at the end of the taxable year, or until the filing of the final nnd adjustment return, the J?rovision of Section 292 that 1·In any case, "no such suit or proceeqing shall be begun after the expiration of two years from the date of payment of the tax or pgnalty regard- less of any supervening cau s e that may arise after payment' would still foreclose 133 ' l' lfl w

- 7 - this Court's jurisdiction to take cognizan<~ of the instant case. The two- yeu r :·rcscriptive period for bringing the suit for refund to the Court would still be reckoned from the da te of payment of the tax on May 30, 1978.

X

X

x" Finally, claims for refuhd are co~struecl strictly against claimants since a claim for refund partakes of t.lle nC~. tu re of an except ion · for tm<a t ion (Commi ssi.oner · ..

of Internal Revenue vs. L e clesm~~ 31 SCRA 95) ~ and it is incurnben t: upon pe ti tione r to show that ·it has com- plied with the provision of Section 292 of the Tax Code ' ~ .

as amended and failur e to susta1~ , said burden is fatal t.o i ts claim for refund·. \'HIEREFOI:.E , this instunt case filed by petit.ioner is hereby dis ··iosed.

With costs against petition~i.

\VE CONCUH:

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DECISION

CT~ CASE NO. 3767 - 8 - C E R T t F I C A T I 0 N I hereby certify ~hat this decision was reached after due consultation among the members of the Court .; '· of Tax Appeals in accordance ~i~h Section 13, Article VIII of the Cc ~ Gtitution. ..

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AMANTE

ILLER

Pres id :L1g Judge

Court 6~ Tax Appeals

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