Equatorial Realty Development Inc. vs. Commissioner of Internal Revenue

DECISION -

Taxable Income 1987 Tax due (35'i'-) 0 - 2 - Less:

Prior Year's excess credit Creditable Expanded Withholding Tax 1987 A•ount Refundable p 385, 7L~0. 52 135,009.18 169,578.24 228,462.80 p 263,031.86 -------------- -------------- and that when it filed its income tax return for 1988 tax yeat~, it h ad a t~esulting t~efundable amount of P431, 831.47, co~puted as foll ows: Taxable Income 1988 Tax Due <35'i'-) Le s s: Prior Year' s ~efund a bl~ Amount/Excess Credit Cred i table Expanded Withholding Ta x 1988 A•ount Refundable \ !

\ p 188,710.06 66,048.52 263,031 .86 234,848.13 p 431,831.47 ------------- ------------- On November 23, 1989, petiti on er filed with the t~ espondent, tht~ough the Appellate Divis,ion , its claim for refuh d of the aforesaid amount of 1='431,831.47 and alleges that despite its repeated follow - up, the said claim was not ~ acted upon and that it has no other plain and ~dequate remedy except to file the instant petition ~onside ring that the statutory period of two <2> years withiri which to file such claim is about to prescribe. Respondent in his a nswer that petitioner's claim fo r refund "i s still being in ve stigated by t~ espondent:;"

that the "ct~edit fot~ expanded witt\ hold i ng taxe s " clai med by petitio net~ .

...

-

DECISION -

C~T.A. Case No. 4409 "ha v e no t be en s h own to be in accordance wi t h l a w and t~eg•.tla t ion s ;"

th a t th e t a xes col l e c ted are presumed to have been paid a nd c ol lected in accordance with law; the petition s t a te s no c ause o f action in that it did not all e ge the date when the tax sought to be refund e d or c r ed ited was pa i d and that it i s "incumbent upon t he p etiti on er to show compliance with the provisi ons o f S e c t i on s 243 and 245 (formerly Section s 2 9 2 a nd 295} of the Tax Code. "

In its Resolution 'dated Jt.t l y 8, 1992, t he Cot.trt dismissed the petit i on for lack of int ere s t to pt~osecut e.

Petiti'onet~• s · Mot ion fat~ Reconsideration, without objecti on of respond ent, was gt~ant ed .

Subsequently , petitioner for mally · ~ffered t he following documentary evidence: Certificates of Cteditable Inc o me Ta x Withheld at Source <BIR Form 1743. 1) for the year 1987 issued to peti tione r b y its various ten<.,nts. <Exhibit A to A-27>; !

Schedu l e of 5~ expanded withh oldi ng t axes withheld from the rental pay ments t o petitioner by the withholdi n g ag ent s o f respondent for the year 1987, tota lling P228,673.70.

<Exhibi~ B> ';

1987 Income Tax Return of pet i tio n er.

<Exhibit C> ;

1048 , -

Certi f icates of Creditable In c ome Tax Withheld at S ource <BIR For m 1743. 1) for the year 1988 issued to petitioner by its various tenants. <Exhibit D to D-23>; Schedule of 5% expanded withholding taxes withhe ld from the rental payments to petitioner by the withholding agents of respondent for the year 1988, totalling P23L~, 8.l~8. 1L~ .

(Exhibit E > ;

1988 Income Tax of petitioner. <Exh. F>; and Claim for Refund dated Nove mber 2 1 , 1989.

<Exh.

G> After r espondent ~ has •ub~it ted his comment on !

the aforestated evidence offered by petitione r and the latter's re pl y thereto, th e Cour~t admitted all the said Exhibits from A tc;~ G ,inclusive ; Dates \ \ for the recept .on of respondent 's evidence were set but ailed to pre sent his e vide nce notwithstanding several postponements upon his . ' request.

Thus the Court was constrained t o rule "that t~espondent• s t"ight to pr•es ent!' .. h is evi d ence is deemed waived " . Both pc.'\rties waiv~d the . filing of in of the it~ con t · en t i on s • Section 8 of BI R Revenue Regulations No. 13-78 implementing the provisions I of Presidentia l ']I Dect~ee No. 1051, amending Section s 30 and 53 of the National Internal Reven te Code provides: ..

"' n r ,~ , / -

DECISION -

C~T.A. Case No. 4409 - 5 - Sect ion 8 . Clai•s for tax credi t or refund.

, Claims fat' tax Ct'edit ot' refund of income tax deducted • and withheld on income payments shall be given due course only when it is shown on the return that the income payment received was declared as part of the gross income and the fact of withholding i s established by a copy of the statement, duly issued by the payor to the payee <BIR Fot'm No. 1743-A) showing the amount paid and the amount of tax withheld therefrom.

Petitioner has s hown that it declared in its income tax returns <Exh. C and F> its income from the t'entals paid · by the le\sees of its real properties and that the 'amounts withh eld by said lessees are specified in the copies of their \ statements in BIH Fot' m \ No.

~743 <Exhibits to A-·2 7 >.

Pet it ionet' sea s onably filed its petition within th•? period allowed by law, ttnder· Sec.230 .,. of the Tax Code the pertinent pt'ovi,.sion is het'ein quoted to wit:

SEC.

230.

Recovery o f t ax erroneously or illegally collected. No suit or proceeding shall be ~aintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erron eously or illegally asses s ed or collected, or of any penalty claimed ' to have been collected without authority or of any sum alleged to have been collected without authority or of any"sum alleged to h ave b e en excessive or in any manner w t' on g f u 1 i y co 1 1 e c t e d , u n t i 1 a c 1 a i m f o t' 1051 _, - - E, - refund or credit ha s been duly filed with t he Commissioner;

but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no s uch s u it ~:n~ Q!.:.Q..Ceed_j..JJ.!l .?h~ll be begun after~ the expit~ at ion Qf. t"li!., year~s fr~om_ t h e date o f Q..~.YJ!l..en't!_ g_f th~- tax .2.!.:. Q_enalty r~eqardless Q.f §'..!J..Y.. s ~ r~ v J! n_in g_ !;.~..!:!~ t hat m C!Y. ad~.§-~ ~.ft et~ Q.fi.YJlU?.Dt : Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of t he return upon which payment was made, s uch payment appears clearly to have been erroneous ly paid.

Clearly , herein pet it ione~ properly filed its petition for revi~w on December 14,

1989 ,

well within the pet~i od pr~ovi ded for~ 'by law. Petitio ner~ \ likewise established that the income upon which the taxes were withh•ld were include d in the tax Moreso, petitioner has clearl y proven by documentary evidences that income tax were wit~held \ <Exhibit C and F) from th e rentats paid by the lessee of its rea l properties as ev i denc ed in the copies of t h eir statements in BIR Form No.

1743 <Exhibit A to A-27).

Considering that it has co mpli ed re ligiously with the requirement of the l aw, as a wc.'\y of I proving ent i tlement to th e refund sought f or. The Court is convinced that it deserves the relief be i n g prayed ' for. 1052 -

DECISION -

C~T.A. Case No. 4409 - 7 - Cases of this nature were properly disposed of by this Court as held in Paseo Realty and Development Corporation vs . CIR, CTA Case No. 4528, dated April 30, 1993. In view of the Foregoing, respondent Commis sioner of Internal Revenue is hereby ordered to refund to pe titioner the sum of P431,831.47 represent ing e~ ces s e ~panded withholding tax.

WE CONCUR:

~&~~ E ESTO D. ACOSTA ,residing· 2e As soc iate Jud

CERTIFICAT ION

I hereby certify that t his Decision was ' .t reached after due consultation a mong the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Cona~itution . ~Q,~ ERNESTO D. ACOSTA Pr esiding Judge Court of Tax Appeals _,