Maria Dona Aliboso, et al. vs. Commissioner of Internal Revenue

DECISION

JIMENEZ,

LORETA

JOVELLANOS,

ELIZABETH

JUAN,

ANGELICA

KARUNUNGAN,

NORL YN

LAGSIT, CARL Y JAMES LAPING, NORMAN LU,

JOAN

REINA

LUNA,

MANNY

MABALOT,

AUGUSTUS

MAGNO,

ELVIRA

MARTINEZ,

ILUMINADA

MENDOZA, DAISY MENDOZA, MARIE MINA, MARIE CHRISTINE MONTOYA,

THERESA

MORA,

JANET

MUTYANGPILI, JOCELYN NARCISO,

JULIET

NECIA,

CLAIRE

ANN

ODSINADA, EMMANUEL ONG, WEMA PACANO, MA.

VICTORIA

PANTALEON, NAJA PENAS, CHRISTY PLANCO, FARAHTONI PLANCO, MA.

THERESA PRADO, KAREN QUIETA, ELAINE QUINTO, ANGELITO RABE,

MARY

GRACE

RAMOS,

ARNEL

REYES, · MA.

ELENA

ROCES,

CHRISTIAN

ROMAGOS, MA.

LUALHATI RUEDA, CLARK SALAS,

MARIA

CLARISSA

SAMSON, MARCELLA ANN SANTOS, JOAQUIN

SARDONA

JR.,

ROWENA

SARMIENTO, MA. CORAZON SISON, MA. RITA ST A. CRUZ, LEA BENET A SUMULONG,

PRECIOUSA

SUNGA,

SHERYL

TAMAYO,

JENNIFER

TANTAMCO,

ALDOUS

MOSES

TIRONA, MA.

ELOISA

TUASON, MARIA CECILIA VILLANUEVA, EDNA VILLAREAL, CHARINA VILLARINO, ROWENA VINAN, BRYAN VISAYA, DULCINEA JOY YRAITA, JULIE YU, FLORDELIZA ZACARIAS, Petitioners, -versus-

COMMISSIONER OF INTERNAL

REVENUE, Respondent.

~

This Petition for Review filed by petitioners on July 10, 2015 involves claims for the refund of their alleged income tax payments in the aggregate amount of P58,892,068.16 for taxable years 2012 and 2013, the details of which are as follows:

Alleged Alleged income Petitioners income tax tax paid for 2013 paid for 2012 Total claims Maria Dona D. Aliboso P 449632.61 Joy |. Arcinue 655,135.36 Mary Abigail C. Bacud 538,096.16 Bernadette B. Bigasin 1,138,805.00 Ma. Patricia A. Lim Kristine Leah A. Mercado Kathleen C. Aton-Osias Raquel Bernadette P. Velasquez Jamila Yasmina R. Achanzar Sarah C. Senas Thelma Gail G. Abiva Arnold L. Aguila Pp | 18°7,634.47 | Franchoise Marie B. Alonzo-Calala Karen K. Andes Leah P. Arboleda Rosaly P. Ariate-Jimenez | 295,938.22| | 295,938.22 | Donatila T. Balagtas | 792,952.34; | 792,952.34 | Glenda C. Balatbat

Fatima Mabor Bautista

Melchor R. Bureros Patricia P. Calcetas Catherine E. Clarin Katherine Mitzi H. Co | 136,487.04] | 136,487.94 | |Ma.CristinaN. Concepcion | 298,199.64] | 298,199.64 | 381,711.00 jleslieA. Cruz] 260,014.11 | | 260,014.11 | Fatima Christine N. De Ramos- 232,256.00 243,268.00 475,524.00

Blanco

Melanie M. Dela Cruz 452,909.30 458,848.00 911,757.30 Aleli D. Dela Rosa 105,128.65 64,681.00 169,809.65 Edwin E. David 286,330.33 323,180.00 609,510.33 Celedonia G. De Felipe 646,931.75 479,626.00 1,126,557.75

Agnes V. Diamante Shiela S. Dimal Marie Kristine S. Estrella Sheryl A. Evangelista Jane I. Fantilanan Angelica Luz B. Fernando

Ericka Joy Mangalile-Gajete

Kristine L. Galang Marie Jeminette F. Gatchalian Dorothy C. Geronimo Paul Anthony F. Gokioco Lani R. Gomez

Glen De Leon Gonzaga

Gemmaline D. Gonzalez Melani A. Gonzales Jhona G. Guillen Pamela P. Gutierrez Diana Marie T. Hernandez Ma. Kristina C. Hidalgo Iris Evadie C. Jimenez Loretta C. Jovellanos Elizabeth C. Juan Angelica C. Karunungan Norlyn G. Lagsit Daryl James A. Laping Norman T. Lu Joan Reina M. Luna Manny C. Mabalot Augustus A. Magno Elvira S. Martinez Maria lluminada R. Mendoza Daisy B. Isidro-Mendoza Marie Vic E. Mina Marie Christine G. Montoya Theresa R. Mora Janet R. Mutyangpili Jocelyn M. Narciso Juliet L. Necia Claire Ann F. Odsinada Emmanuel I. Ong Wema G. Pacano Ma. Victoria Isabel G. Pantaleon Naja P. Penas Christy C. Planco Farahtoni G. Planco Ma. Theresa D. Prado Karen I. Quieta

Elaine Estolano Quinto

Angelita R. Rabe Mary Grace M. Ramos Arne! F. Reyes Ma. Elena S. Roces Christian Paolo E. Ramagos Maria Lualhati A. Rueda 207,075.18 207,075.18 451,418.90 444,266.00 895,684.90 129,038.47 129,038.47 138,962.55 148,517.00 287,479.55 136,410.82 136,410.82 169,938.50 169,938.50 173,527.81 178,244.00 351,771.81 230,718.09 253,648.00 484,366.09 229,452.23 200,284.00 429,736.23 433,174.50 432,538.00 865,712.50 246,760.31 259,047.00 505,807.31 414,667.40 392,099.00 806,766.40 275,524.31 293,986.00 569,510.31 331,384.81 329,785.00 661 '169.81 290,486.34 283,443.00 573,929.34 89,348.31 89,348.31 301,460.12 301,460.12 244,251.66 265,788.00 510,039.66 398,457.28 398,457.28 199,224.00 199,224.00 663,678.73 693,843.00 1,357,521.73 157,620.23 336,256.48 493,876.71 152,093.17 160,094.00 312,187.17 203,181.24 206,380.00 409,561.24 176,140.68 176,140.68 508,377.48 514,158.00 1 ,022,535.48 86,870.50 168,449.00 255,319.50 427,620.91 215,029.00 642,649.91 331,572.43 339,547.00 671,119.43 698,395.60 707,789.00 1 ,406,184.60 490,590.31 490,590.31 228,864.32 240,875.33 469,739.65 337,668.13 348,516.00 686,184.13 342,742.75 371 '150.00 713,892.75 389,934.94 389,934.94 213,190.19 216,459.00 429,649.19 221,493.00 227,103.00 448,596.00 165,529.02 165,819.00 331,348.02 187,354.36 192,150.00 379,504.36 234,734.41 282,207.00 516,941.41 181,755.00 181,755.00 278,583.58 264,287.00 542,870.58 141,613.78 156,836.00 298,449.78 175,690.76 175,690.76 240,248.95 240,248.95 367,745.38 367,745.38 142,368.01 148,326.00 290,694.01 144,972.48 144,972.48 199,800.87 201,943.00 401,743.87 160,203.93 275,963.00 436,166.93 177,003.49 180,638.00 357,641.49 250,043.48 261,259.00 511,302.48 190,893.97 190,893.97 292,252.16 292,252,1§_ f

|JoaquinS. Sardona, Jr | 261,145.55] | 261,145.55 | 5 Ma. Rita S. Sta. Cruz 386,801.0 393,794.00 780,595.05 Jennifer Barrientos Tantamco | 233,202.72| | 233,202.72 | | Maria Cecilia Ylagan-Villanueva | 268,174.50| | 268,174.50 |

THE FACTS

The following petitioners are employees of the Asian Development Bank (ADB) for the whole year of 2012, to wit: Arnold L. Aguila; Rosaly P. Ariate-Jimenez; Donatila T. Balagtas; Katherine Mitzi H. Co; Ma. Cristina N. Concepcion; Leslie A. Cruz; Agnes V. Diamante; Marie Kristine S. Estrella; Jane |. Fantilanan; Angelica Luz B. Fernando; Jhona G. Guillen; Pamela P. Gutierrez; Ma. Kristina C. Hidalgo; Iris Evadie C. Jimenez; Daryl James A. Laping; Maria lluminada R. Mendoza; Theresa R. Mora; Wema G. Pacano; Christy C. Planco; Farahtoni G. Planco; Ma. Theresa D. Prado; Elaine Estolano Quinto; Christian Paolo E. Ramagos; Maria Lualhati A. Rueda; Joaquin S. Sardona, Jr.; Jennifer Barrientos Tantamco; and Maria Cecilia Ylagan-Villanuevaa. ' ' Exhibits “P-61-2”, “P-61-48”, “P-61-9”, “P-61-16”, “P-61-17”, “P-61-20”, “P-61-28”, “P-61-30”, “P-61-35”, “P-61-36”, “P-61-42”, “P-61-43”, “P-61-45”, “P-61-47”, “P- 61-53”, “P-61-61”, “P-61-65”, “P-61-72”, “P-61-76”, “P-61-77”, “P-61-78”, “P-61- 80”, “P-61-85”, “P-61-86”, “P-61-90”, “P-61-98”, “P-61-102”, Docket — Vol. IV, pp. 1866, 1912, 1873, 1880, 1881, 1884, 1892, 1894, 1899, 1900, 1906, 1907, 1909, 1911, 1917, 1925, 1929, 1936, 1940 to 1942, 1944, 1949, 1950, 1954, 1962, and 1966, respectively.

The rest of the petitioners, however, are employees of the ADB for the period January 1, 2012 to December 31, 2013.2 The ADB was established pursuant to the Agreement Establishing The Asian Development Bank, signed on December 4, 1965 by member-countries, one of which is the Philippines. Respondent is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR), vested with authority to administer all laws pertaining to internal revenue taxes, with principal office at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City.3 On April 12, 2013, respondent issued Revenue Memorandum Circular (RMC) No. 31-2013.4 This BIR issuance provides, among others, that only the officers and staff of the ADB who are not Philippine nationals shall be exempt from Philippine income tax. 5 Believing RMC No. 31-2013 to be issued ultra vires, two Filipino ADB employees, on their own, and on behalf of the other Filipino employees of the ADB, questioned its legality in the Regional Trial Court (RTC) of Mandaluyong City in February 2014 and sought that it be invalidated.6 In Erwin Salaveria and Portia Gonzales vs. Commissioner of Internal Revenue (Civil Case No. MC14-8775, RTC - Mandaluyong, 2 Exhibits "P-61" "P-61-1" "P-61-3" to "P-61-8" "P-61-10" to "P-61-15" "P-61-18" to ' ' ' ' "P-61-19", "P-61-21" to "P-61-27", "P-61-29", "P-61-31" to "P-61-34", "P-61-37" to "P-61-41", "P-61-44", "P-61-46", "P-61-49" to "P-61-52", "P-61-54" to "P-61-60", "P- 61-62" to "P-61-64", "P-61-66" to "P-61-71", "P-61-73" to "P-61-75", "P-61-79", "P- 61-81" to "P-61-84", "P-61-87" to "P-61-89", "P-61-91" to "P-61-97", "P-61-99" to "P-61-101", "P-61-103" to "P-61-109, "Docket- Vol. IV, pp. 1864 to 1865, 1867 to 1872, 1874 to 1879, 1882 to 1883, 1885 to 1891, 1893, 1895 to 1898, 1901 to 1905, 1908, 1910, 1913 to 1916, 1918 to 1924, 1926 to 1928, 1930 to 1935, 1937 to 1939, 1943, 1945 to 1948, 1951 to 1953, 1955 to 1961, 1963 to 1965, and 1967 to 1973, respectively.

3 Pars. 1 and 2, Joint Stipulation of Facts and Issues (JSFI), Docket- Vol. I, p. 643. 4 SUBJECT: Guidelines on the Taxation of Compensation Income of Philippine

Nationals

and

Alien

Individuals

Employed

by

Foreign

Governments/Embassies/Diplomatic

Missions

and

International

Organizations Situated in the Philippines

5 Par. 11, Petition for Review, vis-a-vis Par. 5, Answer, Docket- Vol. I, pp. 23 to 24, and 296; and Par. 4, JSFI, Docket- Vol. I, p. 643 6 Par. 16, Petition for Review, vis-a-vis Par. 7, Answer, Docket- Vol. I, pp. 27, and 297. ttl

Branch 213), or the action to nullify the RMC, the RTC on September 30, 2014, disposed as follows:

"WHEREFORE, premises considered, judgment is hereby rendered as follows:

a) declaring

Section

2 (d) (1)

of Revenue

Memorandum Circular (RMC) 31-2013 as void for being issued without legal basis, in excess of authority and/or without due process of law; and b) declaring Section 2 (d) (1) of RMC No. 31-2013 as void in the absence of legislation and/or regulation to the contrary". 7 Respondent moved to reconsider the above Decision, but the RTC denied the motion in its Order dated January 9, 2015.8 Thereafter, respondent appealed the RTC Decision to the Court of Appeals docketed as CA-G.R. CV No. 104374. On July 3, 2015, the Court of Appeals promulgated a Resolution dismissing the appeal because respondent improperly elevated the RTC case by ordinary appeal instead of a petition for review on certiorari before the Supreme Court. 9 Respondent then filed a petition for review on certiorari before the Supreme Court, questioning the dismissal of the Court of Appeals. The case is still pending resolution by the High Court. 10 Prior to the filing of the instant Petition for Review, petitioners filed a claim for refund of the subject income taxes with respondent, and the latter failed to act thereon. 11 On July 10, 2015, petitioners filed the instant Petition for Review.

7 Par. 17, Petition for Review, vis-a-vis Par. 7, Answer, Docket- Vol. I, pp. 28, and 297; and Exhibit "P-55", Docket- Vol. IV, pp. 1820 to 1851. 8 Par. 18, Petition for Review, vis-a-vis Par. 5, Answer, Docket- Vol. I, pp. 28, and 297. 9 Par. 19, Petition for Review, vis-a-vis Par. 5, Answer, Docket- Vol. I, pp. 28, and 297; and Exhibits "P-56" and "P-56-1", Docket- Vol. IV, pp. 1852 to 1863. 10 Petitioner's Memorandum with Manifestation, Docket- Vol. IV, p. 2083. 11 Par. 5, Pre-Trial Order dated July 1, 2016, Docket- Vol. I, pp. 652 to 664. ~

Respondent filed his Answer on September 30, 2015, 12 interposing the following special and affirmative defenses, to wit: (1) this Court has no jurisdiction to entertain the instant Petition for Review; (2) herein petitioners failed to file the instant claim for refund and Petition for Review within the two-year prescriptive period provided under Section 229 of the National Internal Revenue Code (NIRC); (3) granting, without admitting, that this Court has jurisdiction, the alleged decision of the RTC - Branch 213 from which petitioner based his claim for refund is void; (4) the same was issued by a regular court that has no jurisdiction to take cognizance of the case relating to the validity of RMC No. 31-2013; and (5) the power to rule on the validity of revenue issuances administered by the BIR are within the jurisdiction of this Court, and not the regular courts. After the pre-trial conference held on May 5, 2016, the parties filed their Joint Stipulation of Facts and Issues (JSFI) on June 6, 2016. 13 In the Resolution dated June 10, 2016, 14 the Court approved the parties' JSFI and terminated the pre-trial. The Court then issued a Pre-Trial Order on July 1, 2016. 15 During trial, petitioners presented their documentary evidence, and the testimony of their witnesses, namely, Attys. Esther R. Ibanez, 16 and Peter Paul S. Romero. 17 On March 27, 2017, petitioners filed their Formal Offer of Evidence18 offering Exhibits "P-1" to "P-58" "P-60" to "P-61" inclusive ' ' of submarkings. Respondent filed his Comment/Objections on Petitioner's Formal Offer of Evidence on April 20, 2017. 19 12 Docket- Vol. I, pp. 296 to 306. 13 Docket- Vol. I, pp. 643 to 646. 14 1 Docket- Vo. I, p. 649.

15 Docket- Vol. I, pp. 652 to 664. 16 Exhibit "P-1" (Judicial Affidavit of Atty. Esther R. Ibanez), Docket- Vol. I, pp. 395 to 405, and 514 to ; Minutes of the hearing held on, and Order dated, August 23, 2016, Docket - Vol. II, pp. 943 to 946; Exhibit "P-16" (Supplemental Judicial Affidavit of Atty. Esther R. Ibanez), Docket- Vol. II, pp. 672 to 682; and Minutes of the hearing held on, and Order dated, August 23, 2016, Docket- Vol. II, pp. 943 to 946. 17 Exhibit "P-57" (Judicial Affidavit of Peter Paul S. Romero), Docket - Vol. III, pp. 1229 to 1233; Minutes of the hearing held on, and Order dated, October 11, 2016, Docket- Vol. III, pp. 1424 to 1430; Exhibit "P-60" (Supplemental Judicial Affidavit of Peter PaulS. Romero), Docket- Vol. III, pp. 1483 to 1486; and Minutes of the hearing held on, and Order dated, January 24, 2017, Docket- Vol. III, pp. 1597 to 1602. 18 Docket- Vol. IV, pp. 1638 to 1693. 19 Docket- Vol. IV. Pp. 1979 to 2036. ~

In the Resolution dated September 13, 2017, 20 the Court admitted all of the said Exhibits, except for the following: 1 Exhibits "P-19-1" "P-19-2" "P-19-3" "P-23-7" "P-34" "P-34- .

, ' ' ' ' 1" "P-36" "P-42-2" "P-48-3" "P-54" "P-54-1" "P-54-2" "P- , , , ' , , ' 54-3" "P-54-4" "P-54-5" "P-55" and "P-58" for failure to , ' , ' present their originals for comparison;

2. Exhibits "P-54-6" and "P-54-7", for failure to present their originals for comparison and for failure to identify the exhibits; and

3. Exhibits "P-61-79" and "P-61-80", for failure of the exhibits formally offered to correspond with the documents actually marked.

On September 20, 2017, respondent filed a Motion to Dismiss, 21 praying for the dismissal of the instant Petition for Review for this Court's lack of jurisdiction over the subject matter. On the other hand, petitioners filed a Motion for Partial Reconsideration on October 3, 2017, 22 praying for the reconsideration of this Court's Resolution dated September 13, 2017, and for the issuance of a Resolution admitting in evidence Exhibits "P-23-7", "P-

34" "P-34-1" "P-55" "P-58" "P-61-79" and "P-61-80"

, ' ' ' .

In the Resolution dated December 27, 2017, 23 the Court denied respondent's Motion to Dismiss for lack of merit; while partially granting petitioners' Motion for Partial Reconsideration, and thereby admitting Exhibits P-55", "P-58", "P-61-79" and "P-61-80". During the supposed initial presentation of respondent's evidence on March 20, 201824, respondent's counsel manifested that he will no longer present evidence for the respondent because there is no Revenue Officer's Report as regards the refund claim of petitioners in this case. Upon his motion, he was granted ten (10) days from the said date to file respondent's Memorandum. On the 20 Docket- Vol. IV, pp. 2042 to 2046. 21 Docket- Vol. IV, pp. 2047 to 2057. 22 Docket- Vol. IV, pp. 2058 to 2063. 23 Docket- Vol. IV, pp. 2071 to 2075. 24 Order dated March 20, 2018, Docket- Vol. IV, pp. 2090 to 2091. ~ other hand, the Court noted the filing of petitioner's Memorandum with Manifestation25 on January 15, 2018. Upon the filing of respondent's Memorandum on March 26, 2018, 26 the instant case was submitted for decision on April4, 2018. 27 Hence, this Decision.

THE ISSUES

The parties submitted the following issue for this Court's resolution, to wit:

"WHETHER

OR

NOT

PETITIONERS

ARE

ENTITLED TO CLAIM REFUND FOR INCOME TAXES

PAID IN TAXABLE YEARS 2012 AND 2013 ALLEGED

TO BE ERRONEOUSLY AND/OR ILLEGALLY PAID".28 Petitioners' arguments:

Petitioners argue that their income tax payments were made erroneously and/or illegally collected by respondent by virtue of the latter's failure to recognize the tax-exempt status granted by treaty to ADB employees. They emphasize that this Court is not being asked to rule on the legality of BIR RMC No. 31-2013 as the court of law that has jurisdiction over such question is the RTC.

According to

petitioners, since the legal basis for collecting the income tax has been voided by a court of law, it follows that the actual collection of the tax is illegal and/or erroneous and necessarily, the taxes paid must be returned to the petitioners. Moreover, petitioners contend that payment by them of income tax is an aberration introduced by BIR RMC No. 31-2013; and that it is only proper that taxes paid by petitioners pursuant to the RMC should be returned to them.

25 Docket,- Vol.. IV, pp. 2076 to 2085. 26 Docket- Vol. IV, pp. 2093 to 2102. 27 Docket- Vol. IV, p. 2104.

28 Issue, JSFI, Docket- Vol. I, p. 644. ~

Lastly, petitioners aver that this Court may allow the claim for refund, notwithstanding the petition in the Supreme Court filed by respondent involving the validity of BIR RMC No. 31-2013. Respondent's counter-arguments:

Respondent contends that petitioners are not entitled to the refund of their income tax payments in the aggregate amount of P58,892,068.16 for taxable years 2012 and 2013 for failure to substantiate their claim.

Allegedly, petitioners are Filipino citizens and under the employ of the ADB; that there is no doubt that petitioners are liable for income tax on the compensation income they have earned on account of such employment; and that petitioners cannot claim that the coverage of Article XII of "Headquarters Agreement" only concern the privileges and immunities of the higher officials of the ADB because such contention is utterly misplaced. In addition, respondent points out that RMC No. 31-2013 is only a clarification of existing policies etched in Philippine law; and that the alleged subsequent practice of non-taxability of ADB employees, which is contrary to existing law, cannot in any way displace what the law had provided from the start.

Finally, respondent asserts that the claims for refund of petitioners do not have a factual and legal basis; and that the amount of P58,892,068.16, representing income tax payment for taxable years 2012 and 2013 were paid in accordance with existing law, hence, the same cannot be considered as having been erroneously paid.

THE COURT'S RULING

The instant Petition for Review is bereft of merit. Section 229 of the NIRC of 1997 provides as follows: "SEC. 229. Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally ~ assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the 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 such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid."

The foregoing provisions allow recovery of taxes erroneously or illegally collected.

An "erroneous or illegal tax" is defined as one levied without statutory authority, or upon property not subject to taxation or by some officer having no authority to levy the tax, or one which is some other similar respect is illegal.29 Furthermore, in

Commissioner of Internal Revenue

vs.

Acosta,30 the Supreme Court stated the requirements of the above- quoted Section 229, to wit:

"Noteworthy, the requirements under Section 230 31 for refund claims are as follows:

1. A written claim for refund or tax credit must be filed by the taxpayer with the Commissioner;

2. The claim for refund must be a categorical demand for reimbursement;

3. The claim for refund or tax credit must be filed, or the suit or proceeding therefor must be commenced in court within two (2) years from date of payment of the tax or penalty 29 Commissioner of Internal Revenue vs. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, April25, 2012, citing BLACK'S LAW DICTIONARY, Fifth Edition, p. 486. 3o G .R. No. 154068, August 3, 2007. 31 Now Section 229 ofthe NIRC of 1997. ~ regardless of any supervening cause. (Emphasis ours.)

In our view, the law is clear. A claimant must first file a written claim for refund, categorically demanding recovery of overpaid taxes with the CIR, before resorting to an action in court. This obviously is intended, first, to afford the CIR an opportunity to correct the action of subordinate officers;

and second, to notify the government that such taxes have been questioned, and the notice should then be borne in mind in estimating the revenue available for expenditure." Based on the foregoing jurisprudential pronouncements, the refund claimant must show that: (1) a written claim for refund or tax credit has been filed with respondent; (2) such claim must be a categorical demand for reimbursement; and (3) the same claim was filed, or the suit or proceeding therefor must have commenced in court, within two (2) years from date of payment of the tax or penalty, regardless of any supervening cause. Before determining whether the alleged income tax payments are erroneous or illegal, We shall primarily ascertain whether petitioners have shown compliance with the requirements of Section 229 of the NIRC of 1997.

Petitioner

failed to show compliance with the requirements

of Section 229 of the NIRC of

1997.

During the proceedings in this case, petitioners attempted to offer in evidence the supposed administrative claims they filed with respondent, marked as Exhibits "P-54", and "P-54-1" to "P-54-7''.32 In the Resolution dated September 13, 2017, 33 however, the Court denied, inter alia, the admission thereof, for failure to present their originals for comparison.

While petitioners filed a Motion for Partial Reconsideration of the said Resolution regarding the denial of admission of certain 32 Petitioners' Formal Offer of Evidence, Docket- Vol. IV, pp. 1638 to 1693. 33 Docket- Vol. IV, pp. 2042 to 2046. ~

Exhibits, 34 they did not pray for the reconsideration on the denial of admission of said Exhibits "P-54", and "P-54-1" to "P-54-7. In fact, petitioners aver in the said Motion the following statements, to wit: "10.

Likewise, petitioners will no longer ask for the reconsideration of the denial of Exhibits P-54 to P-54-7 considering that the respondents admitted to the filing of an administrative claim for refund with the Commissioner of Internal Revenue prior to the filing of the petition with this Honorable Court. This was stated in page 2 of the Pre-Trial Order dated July 1, 2016, citing Par. 1,

Respondent's 'Comment/Reply (to the Request for

Admission)' filed on March 10, 2016, p. 367, CTA Docket, to wit:

'xxx 5.

The petitioners, prior to filing the instant petition, filed a claim for refund of the subject income taxes with respondent Commissioner of Internal Revenue and, as of this date, respondent has not approved the refund."' It was error on the part of petitioners to merely rely on the said admission of respondent as to the filing of their administrative claims. This is so because while the said admission may fulfill the first requirement of Section 229 of the NIRC of 1997, it does not necessarily satisfy the second and third requirements of the said provision.

To repeat, the said second requirement is that the refund claim must be a categorical demand for reimbursement. Without the subject administrative claims being admitted in evidence, this Court cannot ascertain whether the claims for refund were indeed categorical demands for reimbursement. Thus, We rule that petitioners failed to prove compliance with the second requirement. In the same vein, respondent's admission of the fact of filing of the administrative claims does not by itself prove as to when the same were filed.

Hence, this Court cannot likewise determine for certain whether the said administrative claims were filed within the two(2)-year period from the alleged date of payment of the subject 34 Docket- Vol. IV, pp. 2058 to 2063. ~ taxes.

Such being the case, there is likewise no showing that petitioners complied with the third requirement of Section 229 of the NIRC of 1997.

With the foregoing findings alone, this Court is justified in denying the instant Petition for Review. Nevertheless, even granting that all of the requirements of Section 229 of the NIRC of 1997 have been complied with in this case, We find that the subject income tax payments are not erroneous or illegal, and thus, are not refundable. The

Decision of the

RTC of

Mandaluyong, Branch 213 in Civil Case No. MC14-8775 is invalid and therefore, not a binding precedent in this case Petitioners stresses that since the legal basis for collecting the income tax, i.e., RMC No. 31-2013, has been voided by a court of law, it follows that the actual collection of the tax is illegal and/or erroneous and necessarily, the taxes paid must be returned to the petitioners.

The reasoning of petitioners is specious. In Banco De Oro, eta/. vs. Republic of the Phils., et.a/., 35 the Supreme Court held:

"The

Court of Tax

Appeals

has undoubted jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund. It is only in the lawful exercise of its power to pass upon all matters brought before it, as sanctioned by Section 7 of Republic Act No. 1125, as amended.

This Court, however, declares that the Court of Tax Appeals may likewise take cognizance of cases directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance 35 G.R. No. 198756, August 16,2016. r

(revenue orders, revenue memorandum circulars, rulings).

Section 7 of Republic Act No. 1125, as amended, is explicit that, except for local taxes, appeals from the decisions of quasi-judicial agencies (Commissioner of Internal Revenue, Commissioner of Customs, Secretary of Finance, Central Board of Assessment Appeals, Secretary of Trade and Industry) on tax-related problems must be brought exclusively to the Court of Tax Appeals. In other words, within the judicial system, the law intends the Court of Tax Appeals to have exclusive jurisdiction to resolve all tax problems. Petitions for writs of certiorari against the acts and omissions of the said quasi-judicial agencies should, thus, be filed before the Court of Tax Appeal.

Republic Act No. 9282, a special and later law than Batas Pambansa Big. 129 provides an exception to the original jurisdiction of the Regional Trial Courts over actions questioning the constitutionality or validity of tax laws or regulations. Except for local tax cases, actions directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance may be filed directly before the Court of Tax Appeals.

Furthermore, with respect to administrative issuances (revenue orders, revenue memorandum circulars, or rulings), these are issued by the Commissioner under its power to make rulings or opinions in connection with the implementation of the provisions of internal revenue laws. Tax rulings, on the other hand, are official positions of the Bureau on inquiries of taxpayers who request clarification on certain provisions of the National Internal Revenue Code, other tax laws, or their implementing regulations. Hence, the determination of the validity of these issuances clearly falls within the exclusive appellate jurisdiction of the Court of Tax Appeals under Section 7(1) of Republic Act No. 1125, as amended, subject to prior review by the Secretary of Finance, as required under ~

Republic Act No. 8424." (Emphases and underscoring supplied) Based on the foregoing, the determination of the validity of administrative issuances issued by the BIR, such as the RMC No. 31- 2013, falls within the exclusive appellate jurisdiction of this Court, not the RTC. Thus, the RTC of Mandaluyong, Branch 213, is not vested with jurisdiction to declare the invalidity of RMC No. 31-2013. A judgement rendered by a court without jurisdiction is null and void and may be attacked anytime. It creates no rights and produces no effect. It remains a basic fact in law that the choice of the proper forum is crucial, as the decision of a court or tribunal without jurisdiction is a total nullity. A void judgment for want of jurisdiction is no judgment at all. All acts performed pursuant to it and all claims emanating from it have no legal effect. 36 Simply put, a void judgment or order has no legal and binding effect. It does not divest rights and no rights can obtained under it; all proceedings founded upon a void judgment are equally worthless. 37 Correspondingly, the Decision dated September 30, 2014 of RTC of Mandaluyong, Branch 213, is a nullity. It did not have any legal and binding effect. Thus, it did not divest rights, and no rights can be obtained thereunder.

RMC No. 31-2013 is not the legal basis for collecting the subject income tax but the

National

Internal Revenue Code of 1997

To reiterate, an "erroneous or illegal tax" is defined as one levied without statutory authority,38 or upon property not subject to taxation or by some officer having no authority to levy the tax, or one which is some other similar respect is illegal. 39 In this case, the subject income tax payments were levied with statutory authority.

36 Bilag, et al. vs. Ay-ay, et al., G.R. No. 189950, April24, 2017. 37 Go vs. Echavez, G.R. No. 174542, August 3, 2015. 38 Commissioner of Internal Revenue vs. Philippine National Bank, G.R. No. 161997, October 25, 2005.

39 Commissioner of Internal Revenue vs. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, April25, 2012.

~

At the outset, it must be stressed that without doubt, the State's inherent power to tax is vested exclusively in the Legislature.40 As a corollary, the Supreme Court has since ruled that the power to tax includes the power to grant tax exemptions.41 Thus, the imposition of taxes, as well as the grant and withdrawal of tax exemptions, shall only be valid pursuant to a legislative enactment.42 Pursuant to Section 23(A) of the NIRC of 1997, all of a resident citizen's income is subject to tax, to wit: "SEC. 23. General Principles of Income Taxation in the Philippines. - Except when otherwise provided in this

Code:

(A) A citizen of the Philippines residing therein is taxable on all income derived from sources within or without the Philippines;" (Emphasis supplied) In addition and in relation to the above provision, Sections 24, 31 and 32(A)(1) of the NIRC of 1997, as amended by R.A. 9504 read: "SEC. 24. Income Tax Rates. - (A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the Philippines. -

(1) An income tax is hereby imposed:

(a) On the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections (8), (C) and (D) of this Section, derived for each taxable year from all sources within and without the Philippines by every individual citizen of the Philippines residing therein;

XXX

XXX

XXX

4° Film Development Council of the Philippines vs. Colon Heritage Realty Corporation, G.R. No. 203754, June 16,2015.

41 Refer to Quezon City vs ABS-CBN Broadcasting Corporation, G.R. No. 166408, October 6, 2008.

42 Secretary of Finance Cesar B. Purisima, et al. vs. Representative Carmela F Lazatin, et al., G.R. No. 210588, November 29,2016. ~

The tax shall be computed in accordance with and at the rates established in the following schedule:

Not over P1 0,000 ............................. . Over P1 0,000 but not over P30,000 ..... . 5%

P500+10%

of the excess over P10,000 Over P30,000 but not over P70,000... ... P2,500+15% of the excess over P30,000 Over P70,000 but not over P140,000..... P8,500+20% of the excess over P70,000 Over P140,000 but not over P250,000... P22,500+25% of the excess over P140,000 Over P250,000 but not over P500,000... P50,000+30% of the excess over P250,000 Over P500,000... ... ... ... ... ... ... ... ... ... ... P125,000+32%

XXX

XXX

of the excess over P500,000 xxx." (Emphases supplied) Moreover, Sec. 31 and 32 of the NIRC of 1997 define what are taxable income and gross income, respectively, to wit: "SEC. 31. Taxable Income Defined. - The term 'taxable income' means the pertinent items of gross income specified in this Code, less the deductions and/or personal and additional exemptions, if any, authorized for such types of income by this Code or other special laws." (Emphasis supplied) "SEC. 32. Gross Income. - (A) General Definition. - Except when otherwise provided in this Title, gross income means all income ~

The tax shall be computed in accordance with and at the rates established in the following schedule:

Not over P1 0,000 ............................. . Over P1 0,000 but not over P30,000 ..... . 5%

P500+10%

of the excess over P10,000 Over P30,000 but not over P70,000...... P2,500+15% of the excess over P30,000 Over P70,000 but not over P140,000... .. P8,500+20% of the excess over P70,000 Over P140,000 but not over P250,000... P22,500+25% of the excess over P140,000 Over P250,000 but not over PSOO,OOO... P50,000+30% of the excess over P250,000 Over PSOO,OOO... ... ... ... ... ... ... ... ... ... ... P125,000+32%

XXX

XXX

of the excess over PSOO,OOO xxx." (Emphases supplied) Moreover, Sec. 31 and 32 of the NIRC of 1997 define what are taxable income and gross income, respectively, to wit: "SEC. 31. Taxable Income Defined. - The term 'taxable income' means the pertinent items of gross income specified in this Code, less the deductions and/or personal and additional exemptions, if any, authorized for such types of income by this Code or other special laws." (Emphasis supplied) "SEC. 32. Gross Income. - (A) General Definition. - Except when otherwise provided in this Title, gross income means all income ~ derived from whatever source, including (but not limited to) the following items:

(1) Compensation for services in whatever form paid, including, but not limited to fees, salaries, wages, commissions, and similar items;" (Emphases supplied) Based on the foregoing provisions, it is clear that the compensation income of a Philippine national or a citizen of the Philippines, who are residing therein, from all sources within and without the Philippines, is subject to income tax. Correspondingly, it was error for petitioners to assume that RMC No. 31-2013 is the legal basis for collecting the subject income tax.

The imposition of income tax on the compensation of Philippine nationals or citizens of the Philippines, who are residing therein, has been in Our statute books, from the time the RP-ADB Agreement was entered into.

Petitioners likewise aver that the income tax-exempt status of ADS employees under the RP-ADB Agreement43 enjoyed by them for close to five (5) decades already, was only "disturbed" with the issuance of respondent's RMC No. 31-2013. We disagree.

At the time the RP-ADB Agreement was entered into by the Philippine Government, i.e., on December 22, 1966, the law then in force was the NIRC of 1939.44 This law had the following provisions to the effect of imposing tax on the income of Philippine nationals or citizens, to wit:

43 Formally known as the "Agreement Between the Asian Development Bank and the Government of the Republic of the Philippines Regarding the Headquarters of the Asian Development Bank".

44 Commonwealth Act No. 466.

~

"SECTION 21.

Rates of Tax on Citizens or

Residents.

- There shall be levied, assessed, collected, and paid annually upon the entire net income received in the preceding taxable year of the Philippines, a tax equal to the sum of the following:

XXX

XXX

xxx."

(Emphasis

and underscoring supplied) "SECTION 28.

Meaning of Net Income. - 'Net income' means the gross income computed under section 29 less the deductions allowed by section 30." (Emphasis supplied) "SECTION 29.

Gross Income. -

(a) General Definition. - {Gross income' includes gains, profits, and unicorn derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, xxx, and income derived from any source whatever." (Emphasis supplied) Even the NIRC of 1977,45 the tax code after the NIRC of 1939, had the following taxing provisions on the income of Philippine nationals or citizens, to wit:

"SECTION 21. Rates of tax on citizens or Residents. - A tax is hereby imposed upon the taxable net income received during each taxable year from all sources by every individual, whether a citizen of the Philippines residing therein or alien residing in the

Philippines

determined in accordance with the following schedule: xxx

XXX

XXX

xxx."

(Emphasis

and underscoring supplied) "SECTION 28.

Meaning of net income. - 'Net income' means the gross income computed under section twenty-nine, less the deductions allowed by section thirty." (Emphasis supplied) 45 Presidential Decree No. 1158.

~

"SECTION 29.

Gross Income. -

(a) General Definition. - 'Gross income' includes gains, profits, and unicorn derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, xxx, and income derived from any source whatever." (Emphasis supplied) In view of the foregoing, it cannot be denied that the Philippine Legislature has exercised, and have been exercising, its power to tax the income of Philippine nationals or citizens, at the time the RP-ADB Agreement, up to the present time. Thus, We find no basis in declaring that, at any one time, salaries and emoluments of ADS's officers and staff, who are Philippine nationals or citizens, were ever exempted from income tax.

Furthermore, in arguing that officers and staff of ADS, who are Philippine nationals or citizens, are exempt from income taxation, petitioners cannot find solace on Section 45(b) of the RP-ADB Agreement. In fact, it is very clear that while the said provision grants tax exemption on the salaries and emoluments paid by the ADB to its officers and staff, it qualifies that the Philippine government has the power to tax ADS's officers and staff, who are Philippine nationals or citizens.

Section 45(b) of the RP-ADS Agreement provides as follows:

"Section 45 Officers and staff of the Bank, including for the purposes of this

Article

experts and consultants performing missions for the Bank, shall enjoy the following privileges and immunities:

XXX

XXX

XXX

(b) Exemption from taxation on or in respect of the salaries and emoluments paid by the Bank subject to the power of the Government to tax its nationals;" (Emphases and underscoring supplied) Considering the earlier quoted Sections 23(A), 24, 31, and 32(A)(1) of the NIRC of 1997-the law in force for taxable years 2012 and 2013-vis-a-vis the foregoing provision of the RP-ADB Agreement, it cannot be said that it is RMC No. 31-2013 which ~ imposed income tax on the salaries and emoluments of officers and staff of ADB, who are Philippine nationals or citizens. To repeat, even without the issuance of RMC No. 31-2013, the taxability of the said salaries and emoluments remains, by virtue of the said provisions of the NIRC of 1997 and the RP-ADB Agreement. Furthermore, it must be clarified that Section 2(d)(1) of RMC No. 31-2013 is not violative of Section 45(b) of the RP-ADB Agreement. On the contrary, the said Section 2(d)(1) of RMC No. 31- 2013 upholds the said Section 45(b) of the RP-ADB Agreement, when the former declared that tlonly officers and staff of the ADB who are not Philippine nationals shall be exempt from Philippine income tax."

Relative thereto, it must be noted that Section 32(8) of the NIRC of 1997 recognizes the treaty obligations entered into by the Government which grants income tax exemptions, to wit: "SEC. 32. Gross Income. -

XXX

XXX

XXX

(B) Exclusions from Gross Income.- The following items shall not be included in gross income and shall be exempt from taxation under this Title:

XXX

XXX

XXX

(5) Income Exempt under Treaty. -

Income of

any kind, to the extent required by any treaty obligation binding upon the Government of the Philippines." (Emphases and underscoring supplied) It is worthy of note that like the provisions imposing tax on the income of Philippine nationals or citizens, the foregoing provision has been in Our statute books since the enactment of the NIRC of 1939,46 and thus, is already in existence when the RP-ADB Agreement has been entered into by the Philippine Government. The same provision was also re-enacted in the NIRC of 197747-the precursor of the NIRC of 1997.

Thus, there is no indication that the Philippine Government violated the RP-ADB Agreement, insofar as the 46 Section 29(b)(6), Commonwealth Act No. 466. 47 Section 29(b), Presidential Decree No. 1158. ~ imposition of tax on the salaries and emoluments paid by the ADB to its officers and employees, who are Philippine nationals or citizens, is concerned.

Applying Section 32(8) of the NIRC of 1997 to the instant case, only those income which are clearly covered by the tax exemption granted Section 45(b) of the RP-ADB Agreement must be recognized by the Philippine Government.

Any item of income, beyond the scope of the said granted tax exemption, must already be subject to income taxation, specifically, the salaries and emoluments of officers and staff of ADB, who are Philippine nationals or citizens. Long settled is the rule that the power of taxation is a high prerogative of sovereignty. Its relinquishment is never presumed.48 An intention on the part of the legislature to grant an exemption from the taxing power of the state will never be implied from language which will admit of any other reasonable construction.49 Thus, despite the natural reluctance to surrender part of one's hard earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. 50 A tax exemption cannot arise from vague inference. 51

Tax

exemptions must be clear and unequivocal. A taxpayer claiming a tax exemption must point to a specific provision of law conferring on the taxpayer, in clear and plain terms, exemption from a common burden.

Any doubt whether a tax exemption exists is resolved against the taxpayer. 52 Tax refunds, like tax exemptions, are construed strictly against the taxpayer and liberally in favor of the taxing authority, and the taxpayer bears the burden of establishing the factual basis of his claim for a refund. 53 48 Luzon Stevedoring Corporation vs. Court of Tax Appeals, et al., G.R. No. L-30232, July 29, 1988.

49 Lung Center of the Philippines vs. Quezon City, et al., G.R. No. 144104, June 29,2004. 5° Commissioner of Internal Revenue vs. Algue, Inc., et al., G.R. No. L-28896, February 17,1988.

51 Digital Telecommunications Phils., Inc. vs. City Government of Batangas, et al., G.R. No, 156040, December 11, 2008 52 Supra.

53 Philippine Long Distance Telephone Company vs. Commissioner of Internal Revenue, G.R. No. 157264, January 31, 2008.

(VJ

In this case, however, petitioners failed to establish the factual basis of their claims for a refund for taxable years 2012 and 2013. Specifically, petitioners failed to show that they are not Philippine nationals or citizens, so as to entitle them to the tax exemption granted under Section 45(b) of the RP-ADB Agreement. Thus, petitioners' claim for refund must perforce fail.

WHEREFORE, in light of the foregoing considerations, the instant Petition for Review is DENIED for lack of merit.

WE CONCUR:

Presiding Justice

"" ER~P.UY Assoc1ate Justice

r. ~ ,£.t- ~. M~~ _ c~ WITo N. MINDARO-GRULLA

Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

Presiding Justice

Chairperson, Special 1st Division

REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

SPECIAL FIRST DIVISION

MARIA

DONA

ALIBOSO,

JOY

ARCINUE,

MARY

ABIGAIL

BACUD, MA.

Members:

PATRICIA

LIM,

KRISTINE

LEA MERCADO, KATHLEEN OSIAS,

RAQUEL

BERNADETTE VELASQUEZ,

JAMILA

YASMINA

ACHANZAR,

SARAH

SENAS,

THELMA

ABIVA,

ARNOLD

AGUILA,

FRANCOISE

MARIE

ALONZO-CALALAY, KAREN ANDES, LEAH ARBOLEDA,

ROSALYN

ARIATE,

DONATILA

BALAGTAS,

GLENDA

BALATBAT,

FATIMA

BAUTISTA,

MELCHOR

BUREROS,

PATRICIA

CALCETAS,

CATHERINE

CLARIN, KATHERINE MITZI CO, MA.

CHRISTINA

CONCEPCION,

MILLET

CONCEPCION, MARTIN ERICSSON CRUEL,

CAROLINE

VALENTINA

CRUZ, LESLIE CRUZ, MA.

CELINA

CRUZ,

MARIA

SIMONETTE

DAQUIS, EDWIN DAVID, CELEDONIA

DE

FELIPE,

FATIMA

CHRISTINE

DE

RAMOS,

MELANIE

DELA

CRUZ, ALELI DELA ROSA, AGNES DIAMANTE, SHIELA DIMAL,

MARIE

KRISTINE

ESTRELLA,

SHERYL

EVANGELISTA,

JANE

FANTILANAN,

ANGELICA

LUZ FERNANDO, ERICKA

JOY

GAJETE, KRISTINE C!l/ DEL ROSARIO, PJ., Chairperson, UY, and, MINDARO-GRULLA, JJ.

SEPARATE CONCURRING OPINION

GALANG,

JEMINETTE

GATCHALIAN,

DOROTHY

GERONIMO,

PAUL

ANTHONY GOKIOCO, LANI GOMEZ, GLEN GONZAGA,

GEMMALINE

GONZALEZ, MELANI GONZALEZ, JHONE GUILLEM,

PAMELA

GUTIERREZ, DIANA MARIE HERNANDEZ, MA. KRISTINA HIDALGO,

IRIS

EVADIE

JIMENEZ,

LORETA

JOVELLANOS, ELIZABETH JUAN,

ANGELICA

KARUNUNGAN,

NORLYN

LAGSIT,

DARYL

JAMES

LAPING,

NORMAN

LU, JOAN REINA LUNA, MANNY MANALOT,

AUGUSTUS

MAGNO,

ELVIRA

MARTINEZ,

ILUMINADA

MENDOZA,

DAISY

MENDOZA,

MARIE

MINA,

MARIE

CHRISTINE

MONTOYA,

THERESA

MORA,

JANET

MUTYANGPILI,

JOCELYN

NARCISO, JULIET NECIA, CLAIRE ANNE ODSINADA, EMMANUEL ONG,

WEMA

PACANO, MA.

VICTORIA

PANTALEON, NAJA PENAS,

CHRISTY

PLANCO, FARAHTONI PLANCO, MA.

THERESA PRADO, KAREN QUIETA, ELAINE QUINTO,

ANGELITO

RABE,

MARY

GRACE

RAMOS,

ARNEL

REYES, MA. ELENA ROCES, CHRISTINA ROMAGOS, MA.

LUALHATI

RUEDA,CLARK SALAS, MARIA CLARISSA SAMSON, MARCELLA ANN SANTOS,

JOAQUIN

SARDONA JR.,

ROWENA

SARMIENTO, MA.

C!f

SEPARATE CONCURRING OPINION

CORAZON SISON, MA. RITA STA. CRUZ,

LEA BENETA

SUMULONG,

PRECIOUSA

SUNGA, SHERYL TAMAYO,

JENNIFER

TANTAMCO, ALDOUS MOSES TIRONA, MA.

ELOISA

TUASON,

MARIA

CECILIA

VILLANUEVA,

EDNA

VILLAREAL,

CHARINA

VILLARINO,

ROWENA

VINAN,

BRYAN

VISAYA,

DULCINEA

JOY

YRAIT A,

JULIE

YU,

FLORDELIZA

ZACARIAS, Petitioners, -versus-

COMMISSIONER

OF

Promulgated:

INTERNAL REVENUE, Respondent.

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

SEPARATE CONCURRING OPINIO

DEL ROSARIO, PJ.:

I concur with the ponencia in denying for lack of merit the Petition for Review filed on July 10, 2015. I wish to stress, however, that contrary to the ponencia's conclusion, the parties' admission, as contained in paragraph II (A)(S) of the Pre-Trial Order, to the effect that petitioners filed claims for refund with the Commissioner of Internal Revenue (CIR) prior to the filing of the Petition for Review with the Court of Tax Appeals (CTA), indubitably confirms the timeliness and sufficiency as to form of the administrative claims. While judicial admission requires no further proof, they are binding upon the parties making the same. On this~

SEPARATE CONCURRING OPINION

score, the pronouncement in Oscar Constantino vs. Heirs of Pedro Constantino1 is enlightening, viz.: "Judicial admissions are legally binding on the party making the admissions. Pre-trial admission in civil cases is one of the instances of judicial admissions explicitly provided for under Section 7, Rule 18 of the Rules of Court, which mandates that the contents of the pre-trial order shall control the subsequent course of the action, thereby, defining and limiting the issues to be tried. In Bayas, et. a/. v. Sandiganbayan, et. a/., this Court emphasized that: Once the stipulations are reduced into writing and signed by the parties and their counsels, they become binding on the parties who made them. They become judicial admissions of the fact or facts stipulated. Even if placed at a disadvantageous position, a party may not be allowed to rescind them unilaterally, it must assume the consequences of the disadvantage. (Highlighting ours) Moreover, in Alfelor v. Halasan, this Court declared that: A party who judicially admits a fact cannot later challenge the fact as judicial admissions are a waiver of proof; production of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of controversy. Consequently, an admission made in the pleadings cannot be controverted by the party making such admission and are conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored, whether objection is interposed by the party or not. The allegations, statements or admissions contained in a pleading are conclusive as against the pleader. A party cannot subsequently take a position contrary of or inconsistent with what was pleaded. (Citations omitted) Xxx. (Additional boldfacing supplied; citations omitted) In the present case, records disclose that petitioners paid their income taxes for 2012 on July 12, 2013 and for 2013 on various dates from February 5, 2014 to April 15, 2014. 2 Pursuant to Section 112 (C) of the National Internal Revenue Code (NIRC) of 1997, they have two- years from their payment of income taxes to file an administrative claim for refund, to wit(.,"'] 1 G.R. No. 181508, October 2, 2013. 2 Paragraph 6, Petition for Review, CTA Docket Vol. I, pp. 19-21; Exhibits P-3 to P-53, inclusive of sub-markings.

SEPARATE CONCURRING OPINION

Petitioner IT axpayer

Date

of

Payment

of

I

2012

Income

I

Tax

I

I

1

Maria Dona Aliboso

July 12, 2013 2

Joy Arcinue

July 12, 2013 3

Mary Abigail Bacud

July 12, 2013 4

Bernadette Bigasin

July 12, 2013 5 Ma. Patricia Lim July 12, 2013 6

Kristine Lea Mercado

July 12, 2013 7

Kathleen Osias

July_ 12, 2013 8

Raquel

Bernadette

July 12, 2013 Velas_guez 9

Jamila

Yasmina

July 12,2013

Achanzar

10

Sarah Senas

July 12, 2013 11

Thelma Abiva

July 12, 2013 12

Arnold Aguila

July 12, 2013 13

Francoise

Marie

July 12, 2013

Alonzo-Calalay

14

Karen Andes

July 12, 2013 15

Leah Arboleda

July_ 12, 2013 16

Rosalyn Ariate

July 12, 2013 17

Donatila Balagtas

July 12, 2013 18

Glenda Balatbat

July 12, 2013 19

Fatima Bautista

July 12, 2013 20

Melchor Bureros

July_ 12, 2013 21

Patricia Calcetas

July 12, 2013 22

Catherine Clarin

July 12, 2013 23 Katherine Mitzi Co.

July 12, 2013 24 Ma.

Cristina

July 12, 2013

Concepcion

25

Millet Concepcion

July 12, 2013 26

Martin Ericsson Cruel

July 12, 2013 27

Caroline Valentina Cruz

July 12, 2013 28

Leslie Cruz

July 12,2013 29 Ma. Celina Cruz July 12, 2013 30

Maria Simonette Daquis

July 12, 2013 31

Edwin David

July 12, 2013 32

Celedonia De Felipe

July 12, 2013 33

Fatima

Christine

De July 12, 2013

Ramos

34

Melanie Dela Cruz

July 12, 2013 35

Aleli Dela Rosa

July 12, 2013 36

Agnes Diamante

July 12, 2013 37

Shiela Dimal

July_ 12, 2013 38

Marie Kristine Estrella

July 12, 2013 39

Sheryl Evangelista

July 12, 2013 40

Jane Fantilanan

July 12, 2013 41

Angelica Luz Fernando

July 12, 2013 42

Ericka Joy Gajete

July 12, 2013 43

Kristine Galang

July 12, 2013 44

Jeminette Gatchalian

July 12, 2013 45

Dorothy Geronimo

July 12, 2013 46

Paul Anthony Gokioco

July 12,2013 47

Lani Gomez

July 12,2013 48

Glen Gonzaga

July 12, 2013 49

Gemmaline Gonzalez

July 12, 2013 50

Melani Gonzalez

July 12, 2013 51

Jhona Guillem

July 12, 2013 52

Pamela Gutierrez

July 12, 2013 53

Diana Marie Hernandez

July 12, 2013 54 Ma. Kristina Hidalgo July 12, 2013 55

Iris Evadie Jimenez

July 12, 2013 56

Loreta Jovellanos

July 12, 2013 Last day to file

Date of Payment of

Last day to file administrative

2013 Income Tax

administrative and and judicial judicial claims for claims for refund for 2013 refund for

Income Tax

2012

Income

Tax

July 12,2015 April 14, 2014 April 14, 2016 July 12, 2015 April15, 2014 April15, 2016 July 12, 2015 April 10, 2014 Apri110, 2016 July 12, 2015 April10, 2014 April10, 2016 July 12, 2015 March 24, 2014 March 24, 2016 July 12, 2015 April10, 2014 April10, 2016 July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 April10, 2014 April 10, 2016

I

July 12, 2015 April10, 2014 Apri110, 2016

I

I

July 12, 2015 April 4, 2014 April4, 2016 ' July 12, 2015 April 10, 2014 Apri110, 2016 July 12, 2015 July 12, 2015 March 20, 2014 March 20, 2016 July 12, 2015 March 21, 2014 March 21, 2016 July12, 2015 A_Qril 4, 2014 AQril 4, 2016 July 12, 2015 July 12, 2015 July 12, 2015 April 11, 2014 April11, 2016 July 12, 2015 April4, 2014 April 4, 2016 July 12, 2015 March 22, 2014 March 22, 2016 July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 April 8, 2014 April 8, 2016 July 12, 2015 July 12, 2015 July 12, 2015 March 27, 2014 March 27, 2016 July 12, 2015 A_Qril14, 2014 April14, 2016 July 12, 2015 April 8, 2014 April 8, 2016 July 12, 2015 July 12, 2015 April 8, 2014 April 8, 2016 July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 April 8, 2014 April 8, 2016 July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 April1, 2014 April1, 2016 July 12, 2015 March 5, 2014 March 5, 2016 July 12, 2015 April 8, 2014 April 8, 2016 July 12, 2015 July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 July 12, 2015 April 11, 2014 Apri111, 2016 July 12,2015 July 12, 2015 July 12, 2015 Apri19, 2014 April 9, 2016 July 12, 2015 April11, 2014 April11, 2016 July 12, 2015 April10, 2014 April 10, 2016 July 12, 2015 ~ril 11, 2014 April11, 2016 July 12, 2015 April 7, 2014 April 7, 2016 July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 April 8, 2014 April 8, 2016 July 12, 2015 March 21, 2014 March 21, 2016 - July 12, 2015 March 21, 2014 March 21, 2016 July 12, 2015 July 12, 2015 July 12, 2015 April10, 2014 April10, 2016 July 12, 2015 July 12, 2015 July 12, 2015 April 11, 2014 April11, 2016 ~

SEPARATE CONCURRING OPINION

57 __|{ Elizabeth Juan July 12, 2013 July 12, 2015 | February 5, 2014 February 5, 2016 58 __| Angelica Karunungan July 12, 2013 July 12, 2015 | March 31, 2014 March 31, 2016 59__| Norlyn Lagsit July 12, 2013 July 12, 2015 | April 14, 2014 60__| Daryi James Laping duly 12, 2013 July 12, 2015 Norman Lu July 12,2013 | July 12, 2015 | April 10, 2014 April 10, 2016 July 12, 2013 | July 12, 2015 | March 21, 2014 March 21, 2016 Manny Mabalot July 12, 2013 July 12, 2015 64 Augustus Magno July 12, 2013 July 12, 2015 | March 31, 2014 March 34, 2016 65 Eivira Martinez July 12, 2013 July 12, 2015 | March 20, 2014 March 20, 2016 66 lluminada Mendoza July 12, 2013 July 12, 2015 67__| Daisy Mendoza July 12, 2013 March 14, 2014 March 14, 2016

Marie Mina

Marie Christine

Montoya _

April 11, 2014 pou 11, 2016

70 Theresa Mora

“1 Janet Mutyangpili

Jocelyn Narciso

Juliet Necia

Claire Anne Odsinada

Emmanuel Ong

Wema Pacano

Ma. Victoria Pantaleon

Naja Penas

79 | Christy Planco

80 Farahtoni Planco

81 Ma.Theresa Prado

82 Karen Quieta

Elaine Quinto

84 | Angelito Rabe

85 __| Mary Grace Ramos

April 11, 2014 April 11, 2014 April 14, 2014 March 20, 2014 July 12,2013 | July 12, 2015 \ July 12, 2013 July 12, 2013 July 12, 2015 Sen ae July 12, 2013 | July 12, 2015 | April 11,2016 | July 12, 2013 July 12, 2015 July 12,2013 | July 12, 2015 July 12, 2013 July 12, 2013 July 12, 2015 | —sSY July 12,2013 | July 12, 2015 July 12, 2013 July 12, 2015 July 12, 2015 July 12, 2015 | April 7, 2014 July 12,2013 | July 12, 2015 April 14, 2016 July 12,2013 | July 12, 2015 | March 20, 2014 March 20, 2016 July 12,2013 __| July 12, 2015 July 12, 2015 | April 8, 2014 March 20, 2016 July 12, 2013 July 12, 2013 July 12, 2013 April 7, 2016 April 8, 2016 Arnel Reyes July 12,2013 | July 12, 2045 Ma.Elena Roces July 12, 2013 July 12, 2015 | April 2, 2014 April 2, 2016 88 | Christian Romagos July 12, 2013 July 12, 2015 89 Ma. Lualhati Rueda July 12, 2013 July 12, 2015 i" 90 _ | Clark Salas July 12, 2013 July 12, 2015 [ April 10, 2014 91 Maria Clarissa Samson _ | July 12, 2013 July 12, 2015 | April 1, 2014 92 __| Marcella Ann Santos July 12, 2013 July 12, 2015 | April 7, 2014 94 Rowena Sarmiento July 12, 2013 95 | Ma. Corazon Sison July 12, 2013 96__| Ma. Rita Cruz July 12, 2013 April 10, 2016

Ani

March 20, 2014 March 21, 2014 March 20, 2016 March 21, 2016 July 12, 2015 July 12, 2015 97 Lea Beneta Sumulong July 12, 2013 July 12, 2015 | April 1, 2014 April 1, 2016 98 Preciousa Sunga July 12, 2013 April 15, 2014 April 15, 2016 99 _| Sheryl Tamayo July 12, 2013 April 7, 2014 April 7, 2016 100 102

Jennifer Tantamco

Aldous Moses Tirona

Ma. Eloisa Tuason

Maria Cecilia Villanueva

July 12, 2013 July 12, 2013 July 12, 2013 July 12, 2073 July 12, 2045 July 12, 2015 April 11, 2016 March 21, 2014 April 11, 2014 July 12, 2015 Edna Villareal July 12, 2013 | July 12, 2015 | April 8, 2014 April 8, 2016 Charino Villarino July 12, 2013 | July 12, 2015 | April 2, 2014 April 2, 2016 Rowena Vinan July 12,2013 _| July 12, 2015 | April 20, 2014 April 20, 2016 Bryan Viaya July 12, 2013 July 12, 2015 | April 11, 2014 April 11, 2016 108 | Dulcinea Joy Yraita July 12, 2013 July 12, 2015 | March 21, 2014 March 21, 2016 109 | Julie Yu July 12, 2013 July 12, 2015 | March 21, 2014 March 21, 2016 110 | Flordeliza Zacarias July 12, 2013 July 12, 2015 | March 31, 2014 March 31, 2016 Based on the foregoing tabulation, the claims for refund for income taxes paid in 2012 must be filed on or before July 12, 2015 while the claims for refund for income taxes paid in 2013 must be filed on or before February 5, 2016 to April 15, 2016, depending on the date of the payment.

As aforementioned, respondent admitted that petitioners filed their administrative claims for refund prior to the filing of the present of

SEPARATE CONCURRING OPINION

Petition on July 10, 2015, meaning the administrative claims were filed at the latest on July 10, 2015 (right before the Petition was filed before the Court), which is within the two-year period reckoned from the payment of their income taxes. Moreover, the sufficiency of the administrative claims as to their form is likewise necessarily deemed admitted.

Notwithstanding the foregoing, I share the view that petitioners' payment of income taxes is not illegal or erroneous as extensively discussed in the ponencia, thus, their claim for refund must perforce be denied.

All told, I CONCUR in the result.

Presiding Justice