Citibank, et al. vs. The Commissioner of Internal Revenue

DECISION -

- 2=<— of the National Internal Revenue Code for the third quarter of 1988 with the following information:

Tax Nature Gross Receipts Rate Gross Receipts Tax FCDU account (Exh. "A") P_ 1,040, 383.00 3% P_ 364,134.00 Regular account (Exh. "B") P 5, 498,847.25 0% nil . 5, 044, 022.50 ix P = -50, 440. 22 13, 384, 088. 32 3% 401,522.65 366, 103, 427.83 on 16, 305, 171.39 P377, 802, 689. 17° P18, 757,134.26 Consolidated (Exh. “C") P 5,498, 847.25 i nil 5, 044, 022. 50 ik P = 50, 440. 22 13, 384, 088. 32 3% 401,522.65 967,.143,810.83 = 5% = _ 18, 669, 305. 39 P378, 843, 072, 17** P19, 121, 268.26 # should be P390, 030, 385. 90 ## should be P391, 070, 768. 90 The aggregate amount of PF19,121,268.26 was paid by the petitioner as evidenced by Confirmation Receipt No. B-ise45309 “(Eubibit "D"). and Payment Order No. 4036590 (Exhibit "E").

Fetitioner, through SGV and Co., CPAs, filed on June 9, 1989 a letter-claim for refund dated June 7, 1989 with the respondent of the amount of P312,114.85 representing alleged overpaid gross receipts tax for the period from July 1 to September 30, 1988. As stated in the letter, the alleged overpayment “arose from the application of the wrong GRT rate., i.@., instead of 5x, the rate of 35% was inadvertently applied." (Exhibit "G") © 715 ood

DECIS ION -

C.T.R. CASE NO. 4503 - 3- In the same claim pet iti oner contended:

"We s ubm it that the appt"opt"i at e GRT rate is 5~ as indicated in S ection 119( c } of the Tax Code because t he FCDU oth et" i n com1?

t"ept"e se nt s m i see 11 aneo us it em s treated as gross income under Section 28 of th e Te-a>< Code.

Th e I.HH? of the 35~ as GAT rate is clear ly erroneous.

The amount of the overpaymen t is P312,11 4.85, computed &B follow s: Per ret urn <P1,040 , 383 x 35% ) Should be <P1,040, 383 x 5~) Overpayment P3EA , 134. 00 52,019 ~15 ~312 , 114. 85"

l. 9'30 ' peti tion@r fil ed this petition.

The sole issue before this Court is wh ethe r or not petitione r" is entit led to the refund in the amount of P312, 114.85 t"epresent ing an alleged ovet"payment of ta>< on gro ss receipts of its FCDU account.

The pt"ovision of law i nv ol ve d is Sec. 11'3 of t h e Tax Code , quoted as f o llows: "Sec.

1 1'3.

TaJ< on bank s .and non- bank financial intermediari e s .

There shall be c oll ected a tax on gt"oss t"eCt?ipts den"ived ft"om sol..tt"ces within t he Philippines by all banks a nd non-bank fina ncia l i ntermed iaries in accordance with the following schedule: ><><>< ><><>< XXX <c > On royalti es, t" e ntals of property, real or persona l, profits from exchange and all ot her it e ms treated as gro ss i n co me under Section 28 of this Code • ••••"••••• ••• .. •••• •••• 51.

-4- xxx xxx xxx, " Respondent, in his Memorandum, stated, among others, that taxes are presumed to have been collected in accordance with law; that it is incumbent upon petitioner to prove that it is entitled for aorefund of gross receipts tax erroneously paids and that petitioner failed to support its claim by sufficient evidence sinces "There is no evidence showing that the FCDU' s other income represents miscellaneous items treated as gross income under Section 28 of the Tax Code on which the S% gross receipts tax is based. It is for this reason that Mr. Jose Sunga, Jr., the Revenue Officer who investigated the claim for refund requested from an audited. statement mr income. and. expenses. for the ending. September 30, 1988 but whi ch petitioner failed to comply «xx. Neither did petitioner present said document in evidence.

The only evidence on hand showing the FCDU's gross receipts for the quarter ending September 30, 1988 is petitioner’s statement of quarterly gross receipts tax for FCDU for the third quarter of 1988 in the amount of F1,040, 383.900 xxx. Said evidence is insufficient to show the correct tax base for the o% gross receipts tax xxx. " (Memorandum. for Respondent, C.T.A. Records, pp. 75-76) There is no dispute as to the applicable tax provision and the corresponding tax rate. Respondent’ s argument is based on the premise that petitioner failed to prove that the amount of P1,040, 393.00 is the correct amount subject to tax.

el

- 5- This Court is not con vinced. In a t' esolution dated Sept embet' 10,1 '392 , this Court admitted al l exhibits formall y offered by the petit io~er for failure on the part of re s pondent to s ubmi t his com me nt or objection evi dencin g lack of oppo sition thereto.

Respondent cannot now claim that the tax base a mountin g t o P1 , 040,383.00 is not supported by sufficient avide nc • Th t ax r t •.n"ns <Exhibits " A" and "C") whict were d uly received (Exhibit s

"A-1 "

and "C- 1") by the respond£~n t ar e suffici e.nt en ough on the part of the petitioner to de s tro y the presumption in favor of the respondent and to prove that petitioner is entitled for a refund. Respondet t alleged t h t p t itioner fa iled to respond to the reque st the re venue off ice r who inv est igc.,ted c l i m to ~;ub mit an a udited statement of inc ome and e><penses for the quarter ending September 30, 1988;

thus, the amount of P1,040, 383.00 a s tax base i incorrect.

It is ironic that wh il e the re &pond ent cla imed that the ta x base is inccnqt"e c t, he did not ad vance be fore this Cour-t any a moLtnt wh ich i n his opinion is th e correct tax base . He who alleg es a fact ha s the of it, Victory Shipping Agency National Labor Relations 722 ,, :'

- 6- Commission, 200 SCRA 178>. Mere allegation is not evidence <Gat•aitan v. Court of Appeals,

200 SCRA

37).

The presumption of cort'ect ness of the statements was not overturned by the respondent. In fact , respondent had authorit y to examine t h e b o o ~< ~~ a nd t' e c o t' d s o f p e t i t i o n e r and t o i s s u e a ss e s smt~ nt as to the cort' ect t '" x base within the pre s criptive period. His failm'e to do so should not, :i n an y way, prejudice taxpayer like the petitioner in this case. This CrJtn' t, as sanctuat' Y of taxpayers, grants the petition puy·~• uant to Sec.

230 of the Tax Code wh i ch pt' o v ides : "Sec.

230.

Recover·y or tax er•J·•oneottsly ot• illegally collected. - No suit or pr oceeding shall be maintained in any co1..n't for the reco v ery of any n <.:\t ion.::~ 1 i nt et'n.:.d revenue tax hereaft t'H' alleged to have been erroneo usl y or illegally a ssessed or collected , or of any penalty claimed to have been c nllected without authot'ity, or of any s um alleged to have been excessi ve or in any marmet• Wt'ongfully col lected, •..1nt il a claim for refund or credit has been duly filed with the Commissioner ;

but such suit or proceeding may be maintained, wh ether Ot' not such ta><, penalty, or sum has been paid under protest or dure ss . In an y case, no such suit or pt' oceeding s hall be begun after the expiration of two years fr om the date of payment of the tax or penalty reg a rdle ss of any supet'vening cause that may arise aftet' payment:

Pt•ovided, hf:n>~ever·, }"hat t .. b . ..!? ____ _!;;_Q_f!l m i s 2__i on ~L_.J!L? y , e v en wit h o u t "!

~rli:t~_n claim therefot', refund or credit 'I

-~ JI=-

any tax, where on the face of the return upon which payment was made, such payment appears Clearly to have been erroneously paid. (Underscoring supplied. )

xxx xxx Hux," It can easily be adduced from the returns filed by the petitioner that indeed, there was an overpayment of the gross receipts tax.

WHEREFORE, in view of the foregoing, respondent is hereby ordered to issue a tax credit certificate amounting to F312,114.85 in favor of the petitioner representing gross receipts tax erroneously paid.

WE CONCUR:

2. Cedar Ve ERNESTO D. ACOSTA residing Judge ° r7 RAMON O. DE Associate Judge cy , 14 - --

- 8- I hereby certify that this decision waa reached after due con5ult ation mong th m mbers of the Court of Tax Appeals in accordance with Section13, Article VIII of the Constitut i on. ~$).~

ERNEBTO D~ ACOSTA

Pr1niding Judge Court of Tax Appeals .. .

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