F. Jacinto Group, Inc. vs. Commissioner of Internal Revenue

DECISION

This is a judicial action for the refund of the sum of .P972,780.42, representing overpaid creditable withholding tax for the calendar year ended December 31, 1993. The facts are undisputed. Petitioner is a domestic corporation duly organized and existing under the laws of the Philippines. It is engaged in the business of rendering management services with office address at F. Jacinto House, #116 Rada Street, Legaspi Village, Makati, Metro Manila. For the year 1993, petitioner filed its annual income tax return on April 12, 1994 showing taxable net income in the amount of .P912,461.99, an income tax liability of P319,361.70 but with a refundable sum of P2,735,201.03 arising from its 1992 carried-over excess tax credit of .P1,465,538. 00 and the 1993 creditable withholding tax at source in t he sum of P1,589,024.73. The details of which are as follows:

- 2 - Income:

Services fees (Schedule 2) Miscellaneous income (Schedule 3) Total Less:

Deductions (Section D) Net Income Tax Due Less:

a.

Prior years excess credit b.

Quarterly payments made this year c.

Creditable tax withheld Total Amount Refundable P.31,781,382.56 178,050.00 P.32,378,318.04 31,465,856.05 p.

912. 461.99 p.

319 '361. 70

p. 1,465,538.00 0.00 1,589,024.73

p. 3,054,562.73

p. 2' 735. 201.03 Petitioner opted to carry over this overpaid income tax in the amount of ~2,735,201.03 as tax credit for the succeeding taxable year 1994. However, out of the amount of .P2,735,201.03, petitioner alleged that only the s um of ~1,589,024.73 was carrie d-over and applied to income tax liability of 1994 in the amount of ~616,244.31. The balance of .P1,146,176.30 (P.2,735,201.03 less .P1,589,024.73) representing 1992 excess income tax payment was the subject of CTA Case No . 5231 which was alread y decided in favor of petitioner and has reached its finality through this Court's Entry of Judg ment, dated September 5, 1997. Petitioner, on April 10, 1996, filed a letter-claim for refund with the Bureau of Internal Revenue pursuant to Section 69 of the National Internal Revenue Code, as amended, with respect to the balance of ~972,780.42 out of the 1993 excess creditable withholding tax of .P1,589,024.73

DECISION -

C.T.A. CASE NO . 5349 - 3 - after applying the amount of P616,244.31 as income tax payment for 19 9 4.

On April 11, 1996, a day after filing the administrative claim for refund, petitioner lodged its appeal with this Court in order to beat the running of the two-year prescriptive period to claim for the refund of excess income tax payment in accordance with Section 230 of the National I nter nal Revenue Code, as amended. The sole issue to be resolved by this Court is whether or not petitioner is entitled to the refund of the amount of ~972,780.42, representing overpaid income tax for the year 1993 resulting from an excess pa y ment of creditable withholding tax at source. The issue besetting this Court is not h ing new. Earlier, we have already decided in favor of the same petitioner a n umber of claims for refund involving the same facts and issues, to wit: CTA Case No.

4971 5086 5231 Year Involved 1990 1991 1992 Amount Granted P1,096,272.00 965,628.00 1,096,272.00 Date Decided 04-05-95 01-16-97 08-15-97 Entry of Judgment 06-29-95 02-02-97 09-05-97 In these previous cases, We have already laid down the basic requirements needed for a grant of refund of creditable withholding taxes, to wit:

1.

the two Section - 4 that it filed a (2) year period 299 (now 230) of Revenue Code;

claim for refund within as prescribed under the National Internal 2.

that were withheld recipient; and the were income upon which the taxes included in the return of t h e 3.

the fact of withholding is established by a copy of statement (BIR Form 1743.1) duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom. ( Sec. 10, Rev. Reg. 6-85; see Citytrust Finance Corporation vs.

The Commissioner of Internal Revenue, CTA Case No.

4134, November 11, 1991;

and Citytrust Finance Corporation (Formerly Investor's Finance Corporation/FNCB Finance) vs.

Commissioner of Internal Revenue, CTA Case No. 4046, February 24, 1993).

A perusal of the evidence submitted by petitioner reveals that it has successfully met the above requirements. The claim for refund was timely filed within two years from the date of payment of the tax.

Its claim for refund with the Bureau of Internal Revenue was filed on April 10, 1996 (Annex 0, pp.

25 and 26, CTA records) and its Petition for Review with this Court was filed on April 11, 1996.

The two-year period commences to run on April 12, 1994, the date when petitioner filed its final adjustment return for the year 1993 (Commissioner of Internal Revenue v.

TMX Sales, Inc. et al., G.R. No. 837736, January 15, 1992). The income upon which the creditable withholding taxes were paid were included in petitioner's 1993 Corporation

- 5 - Annual Income Tax Return under Schedule No.

2 Section A (Exhs. E and E-1, p. 60, CTA records). The 1993 creditable withholding taxes were duly supported by Certificates of Creditable Withholding Tax at Source [BIR Form 1743.1] (Exhs. F, G, H, I, and J, pp. 62 to 65, CTA records) and were proven to have been remitted to the Bureau of Internal Revenue by copies of the Monthly Remittance Returns of Income Taxes Withheld of the respective withholding agents ( Exhs. P, Q, R, S, T, U, V, W, X, Z, AA, 88, CC, DO, EE, FF, GG, HH, II, JJ, KK, LL, MM, NN, 00, PP, QQ, RR, SS, TT, UU, VV, WW, X X, Y Y, ZZ, AAA, 888, CCC, DOD, EEE, FFF, GGG, HHH, III, JJJ, KKK, LLL, and MMM, pp. 72 to 121, CTA records). In fact, respondent did not have any objection with respect to petitioner's entitlement to the refund.

It even presented in evidence the revenue examiner's report on the claim for refund of petitioner for the year 1993 recommending the granting of the amount of ~972,780.42 (Exhs. 2, 2-a, and 2-b, pp.

137 and 138, CTA records), pertinent portions of which reads as follows: Considering that the herein taxpayer was already investigated for the year 1993 as per attached report of investigation, and that it appears from the above cited facts that the said claim for refund is valid and legitimate, it is therefore recommended that the claim for refund in the amount of P972,780.42 be granted.

- 6 - We agree wit h t h e afore q uote d reco mme ndation. Belo w is a ta bul a r c omputat i on of p e t i t i on e r' s excess in c om e tax p a ym ent fo r t h e y ear 1993: Withholding Agent Jacinto Iron & Steel Sheets Corp . Camara Steel Industries, Inc. Jacinto Press Coat Corp . Mindanao Steel Corporation Beatriz Mar keting & Trading Corp. Total less: 1994 income tax liability

AMOUNT REFUNDABLE

Amount of Income Payment p 918,108.00 9,546,590 .00 478,494.55 14,512,152.00 6,326,016 .00 P31,781,360.55 Amount of Tax Withheld Exh .

p 45,888.00 477,324.00 23,924.73 725,592.00 316,296.00 P1,589 ,024.73 616,244.31 p 972, 780.42 6 H

WHEREFORE, fi nd i ng t h e petitio n for review me r itorious, respon dent is hereb y ORDERED to REFUND i n favo r of peti t i on er th e s um o f P972,780.42. r e p rese nti ng overpaid inco me tax for the y ear 1993.

WE CONCUR:

~~~ ERNESTO D. ACOSTA Presi ding J u d g e ~Q ~ /ff Associa t e J~~

- 7 - CERTIFICATION I hereby certify that the above 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.

~·~~~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals