CTA Case No. 3976

DECISION

2 praying that respondent be ordered to refund to petitioner the said amount of P35~516.00. The facts are not disputed, res pondent having submitted this case for decision on the bas is of the pleadings and after petitioner has pr-·esen ted its evidence in support of its entitlement to its claim for-· r-·efund.

As can be gl eaned the pleadings and the evidence pn~se nted:

.1.

Petitioner· is fot-eign corporation e ngaged .in the bus iness of being a common carr·ier a uthori zed to call in Philippine ports to load and unload freight in the Philippines where it is represented by the Soriamont Steamship Agencies, Inc. , domestic l'li th off ices at Soriamont House, 801 United Nations Avenue~ MaHila; r··es ponden t is the duly appointed Commissioner of InterTlal F\evenue with offices at the BIR National Bldg., Diliman, Quezon City where he may be served with summons.

2 ..

For· the first three quarters of its f i sea 1 year-· ending September· 30, 1983, petitioner· filed its quarterly income tax returns and paid the taxes due thereon, as follows:

Confirm ation Fayment Receipt Quarter Ended Amount Paid Order No. AL 2, Si Dec. 1982 F 3350.00 OZ991S2 0627930 Zi Mar. 1983 21,657.00 O997TIOS OF 482357 a0 June 1985 3.829.000 1513167 OFSS2F9 Total PSS, 516.00 A photocopy each of the tax returns and the tax payment receipts are marked and described as follows:

Exhibit Description A Income tax return for quarter ended Si December 1982 B Fayment Order No. O299132 dated 22 February 1983 C Confirmation Receipt No. NG27 930 dated 22 February 1983 D Income tax return for quarter ended 21 March 1983 E Fayment Order No. 0997903 dated ea May 1985 F Confirmation Receipt No. 0948227 dated 25 May 1983 6 Inceme tax return for quarter ended 30 June 1985 DECISION .....

- 4 ·- H Payment Or-der No.

1513167 dated 26 August 1983 I ..,.. ··-' .

Confirmation Receipt dated 26 August 1983 No.

Petitioner ·f i.l ed its final 0955299 corporate annua 1 income t.on:

r-eturn for- ·f isca 1 year ending September 30, 1983 on Januar·y 13, 1984 (E>:h.

J) which is be:dc.H .. e the 'f i 'f teen th day of the fourth month 'following the close of the 'f isca1 year as r .. equi r-ed by Section 86 of the app 1 i.cab 1 e Na tiona 1 Internal Revenue Code. Said 'final corporate income tax return showed a net loss of P215,399.81 and a refundable on the face of the return overpaid income tax of P35,516.00. 4.

On Apr·il 26, 1984, petitioner filed a 1 et tet-· dated April 23, .1984 with respondent requesting the refund of the overpaid income tax of P35,516.00.

(E:·:h. E.)

5.

And 'for the judicia 1 recovery of said overpaid income tax of P35,516.00, petitioner filed the instant peti ti.on for- review on September 26, 1985.

446

DECISION --

-- 5 - Is petitioner entitled to the refund of alleged J,.

e:·:cess income paid for fiscal year ending September 30~ 1983 amounting to P35~516.00? On the special and affirmative defense of respondent that it is incumbent upon petitioner to show that it has complied \'lith the provisions of Sections 292 and 295 of the appl icab 1 e Na tiona 1 In ter··na 1 Revenue Code, r·egar·d ing the f i 1 ing of a claim for refund with the Commissioner of Internal Revenue and commencement of the suit for· re ·fund with this Court within two years from date of payment of the ta:·:, the r·ule is that a ta:·:payer whose income is withheld at source will be deemed to have paid his tax liability when the same falls due at the end of the tax year.

(Gibbs vs.

Commissioner of Internal Revenue~ L-17406, November 20, 1965, 15 SCRA 318.) And in this case where the is payable by the ta:·:payer in quarterly installments, the final payment is the last quarter payment at the end of the tax year when it is finally ascertainable that the taxpayer either made profits or suffered losses in the operations.

DECISION ···

... 6 -- (Commissioner· of Internal Revenue vs.

Aust r·alia E l·: pn~ss Ltd.~ G.R. No.

85956~ April 10, .1989. )

In the present case~ petitioner had until ,Januar- y 15 ~ 1984 the fifteenth day of the fourth man th fa 11 owing the c: 1 ose of its f isca 1 year as r·equi r·ed by Sec t .. i.on 86 of the app 1 icab 1 e Na tiona 1 In ten1a 1 Revenue Code, within which to f i 1 e its adjustment or· final t-etur"n and make the ·final payment.

S <:\id final cot··par·ate income tal{ return filed on ,J .:.,.nuar·y 13, .1984 shmAJed a net loss of P215,399.81 and refundable excess payment of income tal·( in the amount of P35,516.00. Petitioner in sai d annual f"ettu·n opted to claim a refund of the over·paid income tal·( as presc:r· ibed by Section 7 of Revenue Regulation 10-·77' othenAJ.ise known as Regulations the Method of Computing Corporate Quarterly Income Tax on a Cumulative Basis.

Since the claim for refund in this case was filed with the Commissioner of Internal Revenue on Apr·iJ. 26, 1.984, it is thus clear that it was well within the two- year period provided for in Section 44a ..

- 7 - 292 of the applicable Tax Code. The same is true with respect to the f i 1 ing of the petition for review with this Court on September 26, 1985. Then, too, f espondent contends as special and affirmative defense that the mere averment that petitioner suffered a loss does not ipso facto merit a tax refund.

Petitioner, it should be noted, is not claiming a ta :·:

refund on a mere avet-ment that it suffered a loss. The c:: 1 aim for l~ efund is based on the f ina 1 corpor-ate income ta}: return which showed a net loss of P215,399.81 and a refundab 1 e e:·:c:ess payment of income ta:< amounting to P35,516.00 2\S established by the evidence presented by petitioner. (Exhibits J, J - 1 to J-11, inclusive, p. 10, CTA records.) No controverting evi dence was presented by respondent. Neither was any evidence disputing petitioner's entitlement to its c 1 aim for..

r-efund was pres en ted by respondent. And this case having been submitted for decision on the pleadings and on the face of the unrebutted evidence of petitioner showing that it is entitled to the refund of P35,516.00, respondent may be 44 3

DECISION --

... 8 ...

consider·ed to have no serious objection or opposition to petitioner's entitlement to the t-efund.

The circ umstances obtaining in the case at bar· compe 1 us therefore to sustain the tenabi 1 i ty of peti. ti.oner· ' s r i.ght to the r·e ·fund of P35 ~ 516.00 based on the evidence and pleadings on which r·esponden t submit ted this case for dec is ion. If respondent may~ even without a wr·i tten claim the r·efor, refund or· credit any tax~ where on the face of the r··etut-n upon which payment was made~ such payment appears to have been erroneously paid (Sec.

292~ NIRC)~ we see no reason why respondent cannot.

r·efund or·· credit the amount of P35 ~ 516.00 invo 1 ved het··ei.n when the ret.ur·n upon which payment !l~as made, p 1 ead ings and the evidence c 1 ear 1 y show that it is refundable. / Petitioner's claim for refund has been pending 1"'-li th r·esponden t' s Bur·eau for e>:amina tion, verificat ion and checking since April 26~ 1984.

Through all the yea r::_s~ no action whatsoever was taken by r·esponden t.

The records make it c: 1 ear that petitioner's income tax return for the taxable 450

DECISION -·-

- 9 - year- in question has shown a net loss of P215~399.81 and a r-efundable excess payment of income tax in the amount of P35~516.00. Respondent has not issued any deficiency assessment nor- disputed the cor-r-ectness ther-eof. The requisite BIR payment ot-·ders and Central Bank confir-mation r-eceipts shm-Jing payments of the subject over-paid income tax had been presented and admitted in evidence.

(Dataprep [Phils.]~ Inc.

vs.

Commissioner of Internal Revenue, CTA Case No.

3600, March 30, 1984; Sun Insurance Office Limited vs.

The Acting Commissioner of In ter·na 1 Revenue, CTA Case No. :3205 ~ June 23, 1987. ) /Respondent has never placed in issue the correctness of the gross income reported, the legality of the deductions c 1 aimed, and the fa c: t of substantiation of such deductions.

And respondent having submitted this cas e for judgment on the pleadings and after petitioner has presented its evidence in support of its entitlement to the refund, without offering rwoof as to the truth of his allegations in his answer, respondent must be ~nderstood to have 451

DECISION ··

CTA CAS E NO. 3 976 ·- 10 ·- a dmitted the truth of all the material allegations of petitioner, and to rest his motion for judgment on these allegations. 1 (Bauermann v.

Casas, 10 Phil. 386.)

o t muc h need be said on r·espondent · s other s pec i a 1 and a f ·f i r-·ma ti ve de ·fense that the instant c a se does not involve illegally or erroneously c ollec ted ta:-:es and therefore petition for review does n o t 1 i e.

By Section 292 of the National Inten1 a l Rev e nue Co de (now Section 231), the ta x pa yer mus t file a written claim for refund with the But-e a u o ·f In tern a 1 Revenue within twcl years a fte r payment of an internal revenue tax alleged to have been et- r··oneous 1 y or i 11 ega 11 y paid, or "g.f. __ ~.QY. and that the action for recovery must be instituted in Court also within two years after· payment. The applicable statute employs the term "ex c essive or· in any manner wrongfully collected". The law is clear.

We are not to indulge in statutory construction. If the overpaid in c ome ta:{ in the amount of P35, 516.00 452

DECISION -

CTA CASE NO. 2976 involved herein is not excessive, it was at least wrongfully paid or collected.

WHEREFORE, respondent Commissioner of Internal Revenue is hereby ordered to grant a refund and/or tax credit to petitioner Asia Australia Express, Ltd., represented by Soriamont Steamship Agencies, Inc., in the amount of PI5,516.00 representing averpaid income tax for its taxable year ended September 30, 1983. No costs.

S0 ORDERED.

Quezan City, Metro Manila, October 18, 1989.

Cher AMANTE Presid g Judge WE CONCUR: f Mm CONSTANTR C. ROAQUIN sssaciate Judge Z. REYES Associate Judde 458 ...

._...

DECISION -··

- 12 - 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 Constitution. F'r·esidir g Judge Court of Tax Appeals 454