Unibake Incorporated vs. Commissioner of Internal Revenue

DECISION -

- 2 - year's quarterly credits, and 2) P20,720.00 representing quarterly income tax payments for the second and third quarters of its FY 1983, petitioner's 1983 annual income tax return showed a refundable amount of P284.00 which did not then include the erroneously paid corporate development ta x of P12,561.00.

In a letter dated October 15, 1985 and received by the respondent on October 16, 1985, petitioner requested for the refund or tax credit of the amount of P12,561.00 representing the corporate development tax previously paid.

The basis thereof was Batas Pambansa (BP) Blg. 399, promulgated May 19, 1983, repealing the corporate development tax under Section 24(e) of the National Internal Revenue Code and implemented by Revenue Memorandum Circular No.

1- 84, dated January 9, 1984.

The petition for review likewise filed on October 16, 1985.

The case presents the question of whether or not 1) this court has jurisdiction and 2) petitioner is covered by BP Blg.

399 as implemented.

378

- 3 - f_!L!?-.t., the impression prec i pita te 1 y broached by the respondent is that the petition is time- barred, having been filed beyond the two-year period of limitation, "In any such case, no suit or proceeding shall be begun after the expiration of two years from date of payment of the tax or penalty regard less of any supervening cause that may arise after payment." (Sec.

292 of the Ta .k.· Code).

The ta>: sought to be refunded was paid sometime during the Fiscal Year ended June 30, 1983, and the claim for refund as well as the petition for review were filed on October 16, 1985, or a lapse of two years. This apparent contentions quibble on the computation of the 2-year prescriptive period under Section 292, ibid, had been square 1 y reso 1 ved in earlier decisions of the Supreme Court which lends settling eloquence to the precise issue in the case at bar.

Thus, in a case where the tax is payable in quarterly installments the final payment is the last quarter payment at the end of the tax year when it is finally ascertained that the taxpayer either made a profit or suffered losses.

371

- 4 - (Coaaissioner o~ Internal Revenue v. Asia Australia Express Ltd., G.R. No. 85956, April 10, 1989). And the t.:n:payer has until the fourth month following the close of the fiscal period within which to file a final adjustment return of the preceding fiscal year (Sec.

87, Tax Code), which may well be the reckoning date for the two-year prescriptive period.

In the instant case, petitioner's annual corporate income ta>: return for FY ended June 30, 1983, was submitted on October 16, 1983 and the administrative claim for refund filed with the Commissioenr of Internal Revenue and the petition for review instituted with this Court, both on October 16, 1985.

This should comport within the 2 - year statL1tory proscription tolled from October 16, 1983, hence seasonably filed. The Court takes jurisdiction. The second issue bears on the valid application of Batas Pambansa Blg. 399, otherwise entitled, "AN ACT ABOLISHING THE ADDITIONAL TEN

PERCENT TAX

ON

TAXABLE NET

INCOME OF CLOSELY-HELD

CORF'ORAT IONS, REPEALING FOR THE PURPOSE PARAGRAPH I l

- 5 -

(e) OF SECTION TWENTY-FOUR OF THE

NATIONAL ~ INTERNAL

REVENUE CODE, AS AMENDED" approved on May 19, 1983, and implemented by Revenue Memorandum Circular No. 1-84, dated January 9, 1984, providing: Accordingly, corporations otherwise qualifying as "closely-held corporations" , •r<l whoa.e ta:<e..b~~ar ends after May · 19, ' i t l9E!:~ . .J ~re no longer · subiect to the · provisions of Set;:ti_p~4J.j;!_). of the Tax ;' Code..!..

Corporations otherwise qualifying 1 as "closely-held corporations" whose fiscal year ends before May 19, 1983, are still liable to pay the corporate development tax.

(Underscoring, petitioner's) There is nothing ambiguous nor obscure in the language of Batas Pambansa Bl~. 399, supra, as implemented, insofar as the same is brought to bear Ltpon tHe circumstances obtaining. As it appears, petitioner corporation had been subjected to and accordingly paid the lOX development corporate tax since the FY ending June 30, 1979 as imposed under Section 24(e) of the Tax Code of 1977, viz.: "In addition to the tax imposed in subsection (a) of this Section, an additional tax in an amount equivalent to lOX of the same taxable net income shall be paid by a domestic or resident foreign corporations which qualifies as a closely-held 3 ..... , . . ' - - 6 corporation as define herein x x". The corporate development tax sought to be refunded/credited was paid during the FY ended June 30, 1983, which, pursuant to the repealing BP Blg.

399 as implemented was no longer leviable, thus, "According 1 y, corporations otherwise qualifying as 'closely- held corporation' whose taxable year ends after May 19, 1983, are no longer subject to the provisions of Section 24(e) of the Ta:-: Code." This is a more than a statement of the obvious. We uphold petitioner.

WHEREFORE, respondent is hereby ordered to grant the petitioner the tax refund/or credit sought in the amount of P12,561.00 representing erroneously paid corporate development tax for the FY ended June 30, 1983. No costs.

WE CONCUR:

(on leave) CONSTANTE C. ROAQUIN Associate Judge - 7 - CERTIFICATION I hereby certify that this decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. Presidi Judge Court of Tax Appeals -