VAN ~ELLE <Phi1s. >, INC vs. COMMISSIONER OF INTERNAL REVENUE

Republic of the Philippines

COURT OF TAX APPEALS

Quezon City

VAN

~ELLE <Phi1s. >,

INC.,

Petitioner,

-

versus -

C.T.A. CASE NO. 4783

COMMISSIONER OF INTERNAL

REVENUE,

Respondent.

Promu1gated:

FEB 0 8 1995

X ----------------------------------------

D

E

C

I

S

I

0

N

This

case

involves

a

claim

for

refund

of

overpaid

income

tax

for

the

calendar

year

ending

December 31, 1989 in the amount of Pl,017,465.00.

Petitioner

is

a

domestic

corporation,

engaged

in

the

business

as

a

confectioner.

On

April

7,

1990, petitioner filed its annual income tax return

for

the

year ended December 31, 1989 which shows a

taxable

income

of

P3,167,666.00

and

an

income

tax

due

of

P1, 108,683.00.

In

its

'quarterly

income

tax

return

for

the

first quarter, petitioner

paid its income tax liability

in

the

amount of P2,126,148.00 which

is

computed

as

follows:

D E C I S I 0 N -

C.T.A. Case No. 4783

Quarter

1st

2nd

817570203

817395984

-

2 -

05-31-89

08-31-89

3rd

817493960

11-29-89

TOTAL INCOHE TAX PAID FOR 1989

A:HOUHT

655,711.00

678,423.00

792,014.00

p 2,.126,.148.00

=============

Petitioner averred that it overpaid its income tax

liability

for

the

year

1989

in

the

amount

of

P1,017,465.00, instead of its actual liability which

is

P1,108,683.00.

On

April

7, 1991,

petitioner filed its annual

income

tax

return

for

its

calendar

year

ended

December 31, 1990 showing a net loss of P5,352,455.00.

Petitioner alleged that

since he was not able

to

utilize its excess tax payments made in 1989 during

the

taxable year 1990 and 1991, it is entitled to the refund

pursuant

to Section 69, in relation to Section

230

of

the National Internal Revenue Code.

On

March 22, 1991, petitioner filed its written

claim for refund of overpaid income tax for 1989 in

the

amount of P1,017,465.00.

To

this date, respondent

has not yet acted

upon

petitioner's claim for refund.

Hence, this petition for

review

inorder

to toll the running of

the

two

year

prescriptive period prescribed in Section 230 of the Tax

Code.

238

D E C I S I 0 N -

C.T.A. Case No. 4783

-

3

-

Upon these facts, respondent raised as special and

affirmative

defenses

lack

of cause

of

action

under

Section 204 of the Tax Code, wherein the Commissioner of

Internal Revenue may refund or credit taxes

erroneously

or

illegally received.

Furthermore, respondent

assert

that

petitioner failed

to

establish that

the

tax

liability in the amount of P1,017,465.00 was erroneously

and

illegally collected.

Tax

refund

are

construed

strictly against the taxpayer as they are in the

nature

of tax exemption.

The sole issue raised in this petition is

whether

or not petitioner is entitled to the refund of

overpaid

income tax for the year 1989.

Petitioner

presented the following

documents

in

support of its claim:

( 1 )

<2>

(3)

Exhs.

"A" and "E" -

1989

and

1990

Annual Income Tax Returns.

Exhs.

"B", "B-1", "C",

"C-1",

"D"

and

"D-1"

Payments

orders

and

Confirmation Receipts for the first

three quarters of 1989.

Exh.

"I" -

Claim for

refund

March

21, 1991, filed with the

on March 22, 1991.

dated

BIR

Clearly, petitioner proved its proper

entitlement

to its claim for refund.

239

D E C I S I 0 N -

C.T.A. Case No. 4783

-

4 -

Records

reveal

that, in

a