MAUNSELL PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLI C OF THE PHI LI PPINES Court o f Tax Appeal s QUEZON C ITY SECOND DIVISION MAUNSELL PHILIPPINES, INC ., CTA CASE NO . 7860 Petitioner, For: Issua nce of a Tax Cred it - v e rsu s- Certifi c ate Members: CASTANEDA, JR ., Chairperson CASANOVA, and MINDARO -GRUllA, J.J. COMMISSIONER OF INTERNAL Promulgated: REVENUE , OCT 2 1 2011 ~ ~:.OSP. "?. Respondent. X-----------------------------------------------------------------------------------------------------X DECISION MINDARO -GRULLA, J_., This is a Pe tition for Review filed o n January 15, 2009 by Maunsell Philippines, Inc. against the C o mmission e r o f Inte rnal Re venue (CIR) as respondent, before the Court in Division , pursuant to Rule 4, Section 3 (a) (2), in relati o n to Rule 8, Section 4(a), o f the Revised Rules o f the Court of Ta x Appeals (RRCTA) . Pe tition e r prays therein that this Court render judgment ordering respondent to issue a ta x credit certific ate in its fa vo r in the total!

Mouns e /1 Philippines, In c. v. CIR Page 2 of 24 C TA C ASE NO. 7860 DE C ISION amount of P3,839,671.31, allegedly representing excess/unutilized creditable withholding taxes for the fiscal year (FY) 2006. Petitioner Maunsell Philippines, Inc. is a corporation duly organized and registered under the laws of the Philippines, which is primarily engaged in the general business of providing engineering Consultancy, technical, advisory, construction project management, and environmental impact analysis services as well as implementation and execution of plans, and doing any and all other businesses incidental thereto. 1 Its principal office is located at 11 /F Ayala Life-FGU Center, 6811 Ayala Avenue , Makoti City. Petitioner is registered with the Securities and Exchange Commission (SEC) on July 16, 1996 under SEC Registration No . A 1996- 02509. 2 It is also registered with the Bureau of Internal Revenue (SIR) Revenue District Office No. 50-South Makoti as a value-added ta x (VAT) entity with Tax Identification No. 004-868-770-000 on July 26, 1996.3 Respondent Commissioner of Internal Revenue is the officer vested by law with authority to decide, approve and grant refunds of erroneously paid or excessively collected ta xes . She holds office at the SIR National Office Building, Diliman , Quezon City. L I Exhibi t "A-2 ". 2 Exhibi t "A ". 3 Exhibit " B" .

Maunse/1 Philippines, Inc. v. CIR Page 3 of 24 CTA CASE NO . 7860 DECISION During the first three (3) taxable quarters of its fiscal year ending September 30, 2006, petitioner accumulated creditable withholding taxes amounting to P2,773,482.54. Petitioner reported the aforesaid withholding tax credits in its income tax returns filed for the first three taxable quarters of FY 2006. 4 Petitioner was not able to utilize its withholding tax credits except for the portion applied to settle its minimum corporate income tax (MCIT) liability amounting to P497,494.28, when it filed its FY 2006 Annual Income Tax Return on January 25, 20075; as its operation during FY 2006 resulted in net loss. In its amended Annual Income Tax Return for FY 2006, petitioner indicated that its chosen option is "To be issued a Tax Credit Certificate" for its overpaid taxes of P3,839,671.30. 6 On July 13, 2007, petitioner filed on administrative claim for the issuance of a tax credit certificate for its purported overpaid income tax for FY 2006 with the Bureau of Internal Revenue _? Respondent foiled to oct on petitioner's administrative claim for the issuance of a tax credit certificate, prompting petitioner to file the instant Petition for Review before this Court on January 15, 2009 .c. 4 Exhibits ''E". "G" and "I". s Exhibit " K" . 6 Exhibit " K-5" . 7 Exhibit "C".

M o unse /1 Ph ilippines, Inc. v. CIR Page 4 of 24 CTA CASE NO. 7860 DEC I SION On March 9, 2009, respondent filed her Answer through registered moil, interposing the following Special and Affirmative Defensess: " 4) Assuming with o ut admitting that Pe titio ne r fil ed a c laim for re fund , th e some is subjec t to inves tig ation by th e Bure au o f Inte rnal Reve nue; 5) Pe titio ne r foil e d to d e m o nstrate that th e tax, whi c h is th e subject of this c ase, w as e rro neously or ille gally collec ted; 6) Taxes paid a nd co llec ted ore p resumed to hove bee n mod e in accordan ce w ith th e lo w s and reg ulatio ns, he nce, no t re fun da ble; 7) It is inc umbe nt upo n th e Pe titio ne r to sho w that it has complie d with th e pro visio ns o f Sectio n 204( C) in re latio n to Sectio n 229 o f th e Tax Cod e, as amend e d , upo n w hic h its c laimed fo r refund is premised; 8) In on a c tio n for tax re fu nd th e b urd e n is upon th e taxpayer to prove that he is e ntitle d th e re to, and failure to disc harge said b urd e n is fata l to th e c laim (Emmanu e l & Ze naida Ag uila r v. Commissio ner, CA- GR No. Sp . 16432, M a rc h 30, 1990 c ited in Aba n, La w o f Basic Ta xatio n in th e Philippines, /51 editio n, p. 206) ; 9) C laims fo r re funds ore co nstru e d stric tl y against th e c laim ant, th e so m e partake th e nature o f exem ptio n fro m taxatio n (Co mmissio ner o f Intern a l Revenue vs. Led esma, 3 1 SCRA 95) and as suc h, th ese ore looked up o n with disfavo r (Western Mino lco Corp. vs. Commissio ne r o f Internal Reven ue, 124 SCRA 12 1) ." On April 20, 2009, petitioner filed its Pre-Trial Brie f. On April 24, 2009, respondent filed a Pre-Trial Brief. On May 11 , 2009 , petitioner and re sp o ndent fi le d their Joint Stipulation of Facts and Issues .[ a Docket, pp . 62-63 .

Mounse/1 Philippines, Inc . v. CIR Page 5 of 24 CTA CASE NO. 7860 DECISION On May 22, 2009, this Court approved the Joint Stipulation of Facts and Issues, and pre-trial was considered terminated. During trial, petitioner presented testimonial and documentary evidence in support of its claim. Petiti oner's three (3) witnesses were Arnulfo 0. Reyes, Jane Tiomson and Rodelio S. Acosta. Thereafter, petitioner filed its Formal Offer of Evidence to which respondent did not file her comment, and with their admission, petitioner is deemed to hove formally rested its case. The documentary evidence formally offered ore as follows: Exhibits Description A A-1 SEC Certificate of Incorporation A-2 Articles of Incorporation of Maunsell Philipines, Inc. A-3 Primary Purpose of Maunsell Philippines, Inc. B Secondary Purpose of Maunsell Philippines, Inc . c BIR Certificate of Registration No. 9RC0000208032 C-1 Application for refund or issuance of a Tax Credit C-2 Certificate (TCC) on creditable withholding tax E dated July 13, 2007 E- 1 Date filed by the Taxpayer (July 13, 2007) E- 2 BIR Stam p Received (July 13, 2007) E- 3 E-4 Quarterly Income Tax Return for the First Quarter of Fisca l Year 2006 (BIR Form No. 1702Q) F Line 9 of the Quarterly Income Tax Return for the First Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) Line 29D of the Quarterly Income Tax Return for the First Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) Line 30 of th e Quarterly In come Tax Return for the First Quarter of Fiscal Year 2006 {BIR Form No. 1702Q) Reference Number, Date/Time Filed , and Batch Number on the upper right hand corner of the Quarterly Income Tax Return for the First Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) eFPS Proof of Filing BIR Form 1702Q for th e first quarter of Fiscal Year 2006(

Maunse/1 Philippines, Inc. v. CIR Page 6 of 24 CTA CASE NO. 7860 DECISION G Quarterly Income Tax Return for the Second Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) G-1 Line 9 of th e Quarterly Income Tax Return for the Second Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) G -2 Line 29D of the Quarterly Income Tax Return for the Second Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) G-3 Line 30 of the Quarterly Income Tax Return for the Second Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) G-4 Reference Number, Dote/Time Filed, and Botch Number on the upper right hand corner of the Quarterly Income Tax Return for the Second Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) H eFPS Proof of Filing BIR Form 1702Q for the second quarter of Fiscal Year 2006 Quarterly Income Tax Return for the Third Quarter of Fiscal year 2006 (BIR Form No. 1702Q) 1-1 Line 9 of the Quarterly Income Tax Return for the Third Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) 1-2 Line 29D of the Quarterly Income Tax Return for the Third Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) 1-3 Line 30 of the Quarterly Income Tax Return for the Third Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) 1-4 Reference Number, Dote/Time Filed, and Botch Number on the upper right hand corner of the Quarterly Income Tax Return for the Third Quarter of Fiscal Year 2006 (BIR Form No. 1702Q) J eFPS Proof of Filing BIR Form 1702Q for the third quarter of Fiscal Year 2006 K Annual In come Tax Return for the Fiscal year 2006 (BIR Form No. 1702) K-1 Line 10 of the Annual Income Tax Return for Fiscal Year 2006 (BIR Form No. 1702) K-2 Line 30D of 1he Annual Income Tax Return for the Fiscal Year 2006 (BIR Form No. 1702) K-3 Line 30 of the Annual Income Tax Return for the Fiscal Year 2006 (BIR Form No. 1702) K-4 Reference Number, Dote/Time Filed , and Botch Number on the upper right hand corner of the Annual Income Tax Return for th e Fiscal Year 2006 (BIR Form No. 1702) K-5 The ticked mark of th e option " To be issued a Tax Credit Certificate" l Audited financial statement for fiscal year 2006 l-1 Dote filed by the Taxpayer (January 12, 2007) l-2 BIR Stomp Received (January 12, 2007) l -3 Signature o f Mr. Rodelio C. Acosto4

Maunse/1 Philippines, Inc. v. C/R Page 7 of 24 CTA CASE NO. 7860 DECISION M Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Sagittarius Mines, Inc. for Oct. to Dec. 2005 M-1 Amount of tax withheld for Oct. to Dec. 2005 M-2 Signature of the authorized representative N Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Hanjin Heavy Industries & Construction Co. Lld. for Oct. to Dec. 2005 N- 1 Amount of tax withheld for Oct. to Dec. 2005 N-2 Signature of the authorized representative 0 Certificate of Creditable Tax Withheld at Source (B IR Form No. 2307) issued by Philip Morris Philippines Manufacturing Inc. for Oct. to Dec. 2005 0-1 Amount of tax withheld for Oct. to Dec. 2005 0-2 Signature of the authorized representative p Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Fort Bonifacio Development Corporation for Oct. to Dec. 2005 P-1 Amount of tax withheld for Oct. to Dec. 2005 P- 2 Signature of the authorized representative Q Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Leighton Contractors (Asia) Limited for Oct. to Dec. 2005 Q-1 Amount of tax withheld for Oct. to Dec. 2005 Q-2 Signature of the authorized representative R Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by PNOC Exploration Corporation for Oct. to Dec. 2005 R- 1 Amount of tax withheld for Oct. to Dec. 2005 R-2 Signature of the authorized representative s Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Mirant Pagbilao Corportation for Oct. to Dec. 2005 S- 1 Amount of tax withheld for Oct. to Dec. 2005 S-2 Signature of the authorized representative T Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Mirant Sual Corporation for Oct. to Dec . 2005 T-1 Amount of tax withheld for Oct. to Dec. 2005 T-2 Signature of the authorized representative u Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by lligan Cement Corporation for Oct. to Dec. 2005 [

Mounse/1 Philippines, Inc. v. CIR Page 8 of 24 CTA CASE NO. 7860 DECISION U- 1 Amount of tax withheld for Oct . to Dec. 2005 U-2 Signature of the authorized representative V Certificate of Creditable Tax Withheld at Source (BIR Form V- 1 No. 2307) issued by Asian Terminals, Incorporated for Oct. V-2 to Dec . 2005 W Amount of tax withheld for Oct. to Dec. 2005 Signature of the authorized represen tative W-1 W-2 Certificate of Creditable Tax Withheld at Source (BIR Form X No. 2307) issued by Davao Light & Power Co., Inc. for Oct. X-1 to Dec. 2005 X-2 Amount of tax withheld for Oct. to Dec. 2005 Y Signature of the authorized representative Y- 1 Certificate of Creditable Tax Withheld at Source (BIR Form Y- 2 No. 2307) issued by EEl Corporation for Oct. to Dec. 2005 Z Amount of tax withheld for Oct. to Dec. 2005 Signature of the authorized representative Z- 1 Z-2 Certificate of Creditable Tax Withheld at Source (BIR Form AA No. 2307) issued by Intel Tech. Phils., Inc. for Oct. to Dec. 2005 AA- 1 Amount of tax withheld for Oct. to Dec. 2005 AA-2 Signature of the authorized representative BB Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Davao Light & Power Co. , Inc. for Jan . BB-1 to March 2006 BB -2 Amount of tax withheld for Jan. to March 2006 CC Signature of the authorized representative CC - 1 Certificate of Creditable Tax Withheld at Source (BIR Form CC -2 No. 2307) issued by Intel Tech. Phils ., Inc. for Jan . to March DO 2006 Amount of tax withheld for Jan . to March 2006 Signature of the authorized representative Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by CaiEnergy International Services, Inc.- Regional Operating Headquarters for Jan . to March 2006 Amount of tax withheld for Jan. to March 2006 Signature of the authorized representative Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Manila Water Company, Inc . for Jan. to March 2006 Amount of tax withheld for Jan . to Marc h 2006 Signature of the authorized representative Certificate of Creditable Tax Withheld at Source (BIR Form ~

Mounse/1 Philippines, Inc. v. CIR Page 9 of 24 CTA CASE NO. 7860 DECISION DD - 1 No. 2307) issued by Hedcor, Inc. for Jan. to March 2006 DD -2 Amount of tax withheld for Jan . to March 2006 EE Signature of the authorized representative EE - l Certificate of Creditable Tax Withheld at Source {BIR Form EE -2 No. 2307) issued by Leighton Contractors (Asia) Limited for FF Jan. to March 2006 Amount of tax withheld for Jan. to March 2006 FF - 1 Signature of the authorized representative FF -2 GG Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Fort Bonifacio Development Corporation GG-1 for Jan. to March 2006 GG-2 Amount of tax withheld for Jan . to March 2006 HH Signature of the authorized representative HH - 1 Certificate of Creditable Tax Withheld at Source (BIR Form HH - 2 No. 2307) issued by Mirant Sual Corporation for Jan. to II March 2006 Amount of tax withheld for Jan. to March 2006 11 - 1 Signature of the authorized representative 11 -2 JJ Certificate of Creditable Tax Withheld at Source (BIR Form JJ - 1 No. 2307) issued by Mirant Pagbilao Corporation for Jan. JJ-2 to March 2006 KK Amount of tax withheld for Jan . to March 2006 Signature of the authorized representative KK - 1 KK -2 Certificate of Creditable Tax Withheld at Source (BIR Form ll No. 2307) issued by Davao Light & Power Co., Inc. for April to June 2006 ll-1 Amount of tax withheld for April to June 2006 ll-2 Signature of the authorized representative Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by HEDCOR, Inc. for April to June 2006 Amount of tax withheld for April to June 2006 Signature of the authorized representative Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Fort Bonifacio Development Corporation for April to June 2006 Amount of tax withheld for April to June 2006 Signature of the authorized representative Certificate of Creditable Tax Withheld at Source {BIR Form No. 2307) issued by Mirant Sual Corporation for April to June 2006 Amount of tax withheld for April to June 2006 Signature of the authorized representative(

M a unse /1 Philippines, Inc . v. C IR Pa ge 10 of 24 CTA CASE NO. 7860 DECISION MM Certificate of Creditable Tax Withh e ld a t Source (BIR Fo rm No. 2307) issu e d by Hanjin He a vy Industries & Constru c tio n MM - 1 Co. Ltd. for April to June 2006 MM -2 Am o unt o f tax withh e ld fo r April to June 2006 NN Sig nature o f th e authorized re presenta tive NN -1 Certifi c ate of Creditable Tax Withh e ld a t Source (BI R Fo rm NN -2 No. 2307) issued b y M anila Sou th coas t Deve lopm e nt 00 Corpo rati o n for April to June 2006 Am o unt o f tax withh e ld fo r April to June 2006 00 - 1 Signa ture o f th e authorized representative 00-2 pp Certifi c ate o f Creditable Ta x Withh e ld a t Source (BIR Form No. 2307) issued by Sagittarius M ines, In c. fo r April to June PP - 1 2006 PP -2 Am o unt o f tax withh e ld for Apri l to June 2006 QQ Signature o f th e auth orized representative QQ-1 Certific ate of Cre ditable Ta x Withh e ld a t Source (B IR Fo rm QQ-2 No . 230 7) issued b y To ledo Power Company for Ap ril to June RR 2006 Am o unt o f tax withh e ld for Ap ril to June 2006 RR - 1 Signa ture o f th e a uth orized representative RR -2 Certific ate o f Cre ditable Ta x Withh e ld a t Source (BIR Fo rm ss No. 2307 ) issued b y Inte l Tec h . Phils., Inc. for April to June 200 6 SS - 1 Am o unt o f tax withh e ld fo r Ap ril to June 2006 SS -2 Signature o f th e auth orized re presentative n Certific ate o f Cre ditable Tax Withh e ld at Source (BIR Fo rm No. 230 7) issue d by Essensa Eas t Forbes Condominium TI -l Corpo ratio n for July to September 2006 TI -2 Am o unt o f tax withh e ld fo r July to Septem b e r 2006 Signature o f th e auth orized represen ta tive uu C e rtific ate of Cre ditable Tax Withh e ld at Source (BIR Fo rm No. 2307) issue d b y lliga n Cem e nt Corpora tio n fo r July to Septe mbe r 2006 Am ou nt o f tax w ithhe ld for July to Septem b e r 2006 Sig nature o f th e auth orized represen tative C ertificate of Cre ditable Tax Withh e ld at Source (BIR Form No. 2307) issue d by Bero ng Nickel Corpo ra tio n fo r July to Septe mbe r 200 6 Am o unt o f ta x w ithh eld fo r July to Septe m ber 2006 Sig nature o f th e a uthorized representa tive C ertific ate of Credita b le Ta x Withh e ld a t Sou rce (BI R Form No. 2307) issued b y Mira nt Sual Corp o ra ti o n fo r July to Septe mbe r 2006 (

Mounse/1 Philippines, Inc. v. CIR Page 11 of 24 CTA CASE NO. 7860 DECISION UU-1 Amount of tax withheld for July to September 2006 UU - 2 Signature of the authorized representative vv Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Miront Pogbiloo Corporation for July VV-1 to Sep tember 2006 VV-2 Amount of tax withheld for July to September 2006 Signature of the authorized representative ww Certificate of Creditable Tax Withheld at Source (BIR Form WW-1 No. 2307) issued by Manila Southcoost Development WW-2 Corporation for July to September 2006 Amount of tax withheld for July to September 2006 Signature of the authorized representative XX Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Sagittarius Mines , Inc. for July to XX- 1 September 2006 XX-2 Amount of tax withheld for July to September 2006 Signature of the authorized representative yy Certificate of Creditable Tax Withheld at Source (BIR Form YY - 1 No. 2307) issued by ENSR International Phils., Inc. for July to YY -2 September 2006 Amount of tax withheld for July to September 2006 zz Signature of the authorized representative ZZ - 1 Certificate of Creditable Tax Withheld at Source (BIR Form ZZ-2 No. 2307) issued by Leighton Contractors (Asia) Limited for AAA July to September 2006 Amount of tax withheld for July to September 2006 AAA- 1 Signature of the authorized representative AAA -2 BBB Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Intel Tech. Phils. Inc. for July to BBB - 1 September 2006 BBB -2 Amount of tax withheld for July to September 2006 CCC Signature of the authorized represen tative CCC-1 CCC-2 Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) issued by Filipinos Investments Ltd . for July to September 2006 Amount of tax withheld for July to September 2006 Signature of the authorized representative Letter doted July 13, 2007 to the Chief of Revenue Accounting Division of the BIR BIR Stomp Received (July 16, 2007) Signature o f Mr. Arnulfo 0. Reyes c

Mounse/1 Philippines, In c. v. C/R Page 12 of 24 CTA CASE NO. 7860 DECISION DDD Judic ial Affidavit of Mr. Arnulfo 0. Reyes execu ted on DDD-1 June 17, 2009 EEE Signature appearing above th e nam e "AR NULFO 0. REYES" EEE- 1 EEE - 2 List of Certificates of Creditable Taxes Withh e ld , FY Ending EEE-3 September 30, 2006 FFF Signature of Mr. Arnulfo 0. Reyes FFF - 1 Signature o f Ms. Jane G. Tiamson Amount of Php 4,337, 165.58 GGG GGG - 1 Annual Income Tax Return o f Fiscal Year Ending September HHH 30, 2007 HHH - 1 Line 28- Prior Year' s Excess Credits FY 2002 & 2003 in th e Ill amount of Php 11 ,205,777.00 Ill- 1 Judic ial Affidavit o f MS. JANE TIAMSON executed on July 15, JJJ 2009 JJJ -1 Signature appearing above th e name "JA NE TIAMSON" KKK First Quarterly Incom e Tax Return for Fiscal Year Ending KKK - 1 September 2007 LLL Line 29 A - Prior Year's Excess Credits- Php 0.00 MMM Second Quarterly Inco m e Tax Return for Fiscal year Ending MMM- 1 September 2007 MMM-2 Line 29A- Prior Year's Excess Credits - Php 0.00 MMM-3 MMM-4 Third Quarterly Income Tax Return fo r Fiscal year Ending MMM-5 September 2007 MMM -6 Lin e 29A- Prior Year' s Excess Credits - Php 0.00 MMM -7 Judic ial Affidavit o f MS. JANE TIAMSON executed on October 21 , 2009 Signature appearing above th e nam e " JANE TIAMSON" Maunsell Philippines, Inc.'s Genera l Ledger for the period from October 1, 2005 to September 30, 2006 Summary o f Creditable Withh olding Taxes Withheld by C lient Fiscal year 2006 Signature o f Ms. Jane Tiamson Signature of Mr. Arnulfo 0 . Reyes Maunsell 's Official Receipt No. 2804 dated Novembe r 11 , 2005 Maunsell 's Official Receipt No. 2835 dated December 16, 2005 Maunsell's Official Receipt No. 3056 dated August 7, 2006 Maunse ll 's Offic ial Receipt No. 3125 dated September 25, 2006 Maunse ll' s Official Receipt No . 31 24 do ted Sep tember 25, 2006 ,

Mounse/1 Philippines, Inc. v. CIR Page 13 of 24 CTA CASE NO. 7860 DECISION MMM -8 Maunsell's Official Receipt No. 2903 dated February 23, 2006 MMM-9 Maunsell's Official Receipt No. 2769 dated October 10, 2005 MMM-10 Maunsell's Official Receipt No. 2925 dated March 17, 2006 MMM - 11 Maunsell's Official Receipt No. 2984 dated May 24 , 2006 MMM - 12 Maunsell's Official Receipt No. 2772 dated October 12, 2005 MMM - 13 Maunsell's Officia l Receipt No. 3088 dated August 29, 2006 MMM - 14 Maunsell's Official Receipt No. 3033 dated July 17, 2006 MMM - 15 Maunsell's Official Receipt No. 3070 dated August 11, 2006 MMM - 16 Maunsell's Official Receipt No. 2767 dated October 7, 2005 MMM - 17 Maunsell's Official Receipt No. 2897 dated February 17, 2006 MMM - 18 Maunsell's Official Receipt No. 2981 dated May 19, 2006 MMM - 19 Maunsell's Official Receipt No. 2806 dated November 11, 2005 MMM -20 Maunsell's Official Receipt No. 2947 dated April 12, 2006 MMM -21 Maunsell's Official Receipt No. 2888 dated October 12, 2006 MMM -22 Maunsell's Official Receipt No. 2999 dated June 7, 2006 MMM -23 Maunsell's Official Receipt No. 2814 dated November 25, 2005 MMM -24 Maunsell's Official Receipt No. 3091 dated August 31, 2006 MMM -25 Maunsell's Official Receipt No. 2768 dated October 7, 2005 MMM -26 Maunsell's Official Receipt No. 2786 dated October 20, 2005 MMM -27 Maunsell's Official Receipt No. 2793 dated October 27 , 2005 MMM -28 Maunsell's Official Receipt No. 2827 dated December 7, 2005 MMM -29 Maunsell's Official Receipt No. 2851 dated January 5, 2006 MMM -30 Maunsell's Official Receipt No. 2873 dated January 23, 2006 MMM -31 Maunsell's Official Receipt No. 2898 dated February 17, 2006 MMM -32 Maunsell's Official Receipt No. 2921 dated March 8, 2006 MMM -33 Maunsell's Official Receipt No. 2937 dated March 29, 2006 MMM -34 Maunsell's Official Receipt No. 2963 dated May 4, 2006 MMM -35 Maunsell's Official Receipt No. 2973 dated May 15, 2006 MMM -36 Maunsell 's Official Receipt No. 3009 dated June 21 , 2006 MMM -37 Maunsell's Official Receipt No. 3034 dated July 19, 2006 MMM -38 Maunsell's Official Receipt No. 3069 dated August 11 , 2006 MMM -39 Maunsell's Official Receipt No. 3086 dated August 23, 2006 MMM -40 Maunsell's Official Receipt No. 2978 dated May 17, 2006 MMM -41 Maunsell's Official Receipt No. 3000 dated June 7, 2006 MMM -42 Maunsell's Official Receipt No. 3092 dated August 31 , 2006 MMM -43 Maunsell's Official Receipt No. 3098 dated September 7, 2006 MMM -44 Maunsell's Official Receipt No. 3109 dated September 14, 2006 MMM -45 Maunsell's Official Receipt No. 2766 dated October 7, 2005 MMM -46 Maunsell's Official Receipt No. 2811 dated November 18, 2005 MMM -47 Maunsell's Official Receipt No. 2870 dated January 20, 2006 MMM -48 Maunsell' s Official Receipt No. 2871 dated January 20, 2006 MMM -49 Maunsell's Official Receipt No. 3080 dated August 18, 2006(

Mounse/1 Philippines. Inc. v. CIR Page 14 of 24 CTA CASE NO. 7860 DECISION MMM -50 Maunsel l's Official Receipt No. 3110 dated September 15. 2006 MMM -51 Maunsell's Official Receipt No. 2966 dated May 8, 2006 MMM -52 Maunsell's Official Receipt No. 3106 dated August 3, 2006 MMM -53 Maunsell's Official Receipt No. 2988 dated May 26 , 2006 MMM -54 Maunsell's Official Receipt No. 2867 dated January 20, 2006 MMM -55 Maunsell's Official Receipt No. 2800 dated November 9, 2005 MMM -56 Maunsell's Officia l Receipt No. 2896 dated February 17, 2006 MMM -57 Maunsell's Official Receipt No. 3061 dated August 9, 2006 MMM -58 Maunsell's Official Receipt No. 2785 do ted October 19, 2005 MMM -59 Maunsell 's Official Receipt No. 2790 dated October 26 . 2005 MMM -60 Maunsell's Official Receipt No. 2822 dated December 1, 2005 MMM -61 Maunsell 's Official Receipt No. 2843 dated December 23, 2005 MMM -62 Maunsell's Official Receipt No. 2844 dated December 23, 2005 MMM -63 Maunsell's Official Receipt No. 2854 dated January 11, 2006 MMM -64 Maunsell's Official Receipt No. 2868 dated January 20, 2006 MMM-65 Maunsell's Offic ial Receipt No. 2923 dated March 29 , 2006 MMM -66 Maunsell's Official Receipt No. 2944 dated April 11. 2006 MMM -67 Maunsell's Official Receipt No. 3001 da ted June 7, 2006 MMM -68 Maunsell's Official Receipt No. 3085 dated August 23 , 2006 MMM -69 Maunsell's Official Receipt No. 3105 dated August 13, 2006 MMM -70 Maunsell ' s Official Receipt No. 3121 dated September 22. 2006 MMM -71 Maunsell's Official Receipt No. 3122 dated September 22, 2006 MMM -72 Maunsell's Official Receipt No. 2782 dated October 18, 2005 MMM -73 Maunsel l's Official Receipt No. 2883 dated February 1, 2006 MMM -74 Maunsell's Official Receipt No. 2801 dated September 11, 2005 MMM -75 Maunsel l's O fficial Receipt No. 2773 dated October 12, 2005 MMM -76 Maunsell 's O fficia l Receipt No. 2821 dated November 30. 2005 MMM -77 Maunsell 's O fficia l Receipt No. 2964 dated August 5, 2006 MMM -78 Maunsell's Official Receipt No. 3026 dated July 7, 2006 MMM -79 Mau nsell's Of ficia l Receipt No. 3027 dated July 7, 2006 MMM -80 Maunsell's Officia l Receipt No. 2965 dated May 5. 2006 NNN Maunsell's List of Certificates of Creditable Taxes Withheld for Fiscal Year Ending September 30, 2005 NNN - 1 Signature of Ms. Jane Tiamson NNN -2 Signature of Mr. Arnu lfo 0. Reyes 000 Annua l Income Tax Return for Fiscal Year Ending September 30,2005 000-1 Signature of Ame lia F. Ward (

Mounse/1 Philippines, Inc. v. CIR Page 15 of 24 CTA CASE NO. 7860 DECISION PPP Judicial Affidavit of Mr. RODELIO S. ACOSTA executed on PPP - 1 March l, 2010 Signature appearing above the name "RODELIO S. QQQ ACOSTA" RRR Maunsell's List of Certificate of Creditable Taxes Withheld m for FY ending September 30, 2006 prepared by Audit TTT-1 Maunsell's Inventory of CWT (Oct 05-Sept 06), as of Sept 2006 Judicial Affidavit of MS. JANE TIAMSON executed on March 26, 2010 Signature appearing above the name "JANE TIAMSON" Petitioner and respondent stipulated on the Iotter's documentary exhibits so that the presentation of respondent 's witness was dispensed with. Respondent filed her Formal Offer of Evidence to which petitioner did not file its comment, and with their admission, respondent is deemed to hove formally rested her case. The documentary evidence formally offered ore as follows: Exhibits Description 2 2004 In come Tax Return of Maunsell Philippines Inc, 3 filed through EFPS Amended 2004 Income Tax Return of Maunsell Philippines Inc . filed through the EFPS 2005 Income Tax Return of Maunsell Philippines Inc . filed through th e EFPS Thereafter, the parties were ordered to submit their respective memorandum within thirty (30) days from receipt of the Resolution9 doted November 12, 201 0.( 9 Docket, pp. 445-446.

Mounse/1 Philippines, Inc. v. C/R Page 16 of 24 CTA CASE NO. 7860 DECISION On January 19, 2011, the case was deemed submitted for decision , considering petitioner 's Memorandum filed on January 17, 2011 and the report of the Court's Records Division that respondent foiled to file her Memorandum. Ia The issues 11 , as jointly stipulated by the parties, ore as follows: "a. Whether or not the Petitioner has excess/creditable withholding taxes for FY 2006; b. Whether or not Petitioner's right to claim for issuance of tax credit certificate of the overpaid income ta xes for FY 2006 is substantiated with supporting documents." Petitioner claims that it is entitled to the issuance of a tax credit certificate in the amount of P3,839 ,67 1.31, representing its purported excess/unutilized creditable withholding tax for the FY 2006. Petitioner maintains that it is entitled to the issuance of a ta x credit certificate since it was able to comply with the three (3) basic requirements prescribed under Section 2.58.3 of Revenue Regulations No. 2-98 and as laid down in the case of Filinvest Development Corporation vs. Commissioner of Internal Revenue and Court of Tax Appeals 12. Petitioner contends that it filed its administrative claim before respondent and this Court within the prescriptive period pursuant to Sections 204(C) and 229 of the Notional Internal Revenue Code (NIRC) '- 10 Docket. p. 465. 11 Docket. p . 93. 12 G .R. No . 146941 , Augus t 9, 2007 .

Maunse/1 Philippines, Inc. v. CIR Page 17 of 24 CTA CASE NO. 7860 DE C ISION of 1997; that it declared as port of gross income in the Annual Income Tax Return the income upon which the taxes were withheld; and that the fact of withholding was duly established. Petitioner likewise submitted the following documents: 1. Letter-claim for the issuance of a tax credit certificate on creditable withholding taxes (CWT) doted July 13, 2007; 13 2. Amended Annual Income Tax Return for the FY 2006; 14 3. Audited Financial Statement for the FY 2006; 15 4. Certificates of Creditable Tax Withheld at Source; 16 5. Annual Income Tax Return for the FY 2007;17 and 6. Quarterly Income Ta x Returns for the FY 2007. 18 Petitioner asserts that it clearly indicated its intention to be issued a tax credit certificate for its FY 2006 income tax overpayment when it did not corry-over the said overpayment in the succeeding FY 2007. Under Section 2.58.3 of Revenue Regulations No . 2-98, otherwise known as the Withholding Ta x Regulations , in order to be entitled to a claim for refund or issuance of a tax credit certificate for excess/unused creditable withholding tax, the following requisites must be satisfied : 1. That the claim for refund was filed within the two- year reglementory period, prescribed under Section 204(C), in relation to Section 229 of the NIRC of 1997, as amended; 2. That the fact of withholding is established by a copy of the statement duly issued by the poyorc 13 Exhibit "C". 14 Exhibit " K" . 1s Exhibit "L". 16 Exhibits "M" to "BBB" . 17 Exhibit "FFF". 18 Exhibits "HHH" , "Ill" , and "JJJ" .

Mounse/1 Philippines, Inc. v. CIR Page 18 of 24 CTA CASE NO. 7860 DECISION (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom; and 3. That it is shown on the return of the recipient that the income payment received was declared as part of the gross income declared in the income tax return of the recipient. l9 Anent the first requisite, petitioner maintains that it filed its claim for issuance of a tax credit certificate before respondent and this Court within the prescriptive period pursuant to Sections 204(C) and 229 of the NIRC of 1997, as amended. Sections 204(C) and 229 are quoted hereunder for ready reference, to wit: "SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit taxes. - The Commissioner may - XXX XXX XXX (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they ore returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty : Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund." "SEC . 229. Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall b e maintained in any court for the recovery of any notional 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:( 19 Citibonk N.A. vs. Court of Appeals, et of ., G.R. No . 107434 , O c to b e r 10, 1997 .

Mounse/1 Philippines, Inc. v. C/R Page 19 of 24 CTA CASE NO. 7860 DECISION but such suit or proceeding may be maintained, whether or not such ta x. 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 dote 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 mode, such payment appears clearly to hove been erroneously paid." Furthermore, in ACCRA Investments Corporation vs. Court of Appeals, et a1. 2o , the Supreme Court declared that the tax payer has two (2) years from the filing of the Final Adjustment Return within which to file a claim for refund of excess creditable income taxes withheld , both in the administrative and judicial levels. Petitioner argues that the filing of its administrative claim for refund on July 13, 2007 as well as its Petition for Review on January 15, 2009 were both mode within the two-year prescriptive period, counting from January 25, 2007, the dote when it filed its Amended Annual Income Ta x Return for FY 2006. This Court does not agree. In the case of Philippine Airlines, Inc. vs. Commissioner of Internal Revenue 21 , this Court held: "It is true that the re ckoning of the two-year prescriptive period is at the time of filing of the final adjustment return. However, the coun tin g should be mode from the dote of filing of the original final adjustment return and not from th e dote of filing of the amended return . This was emphasized by this Court in th e case of Benguetc 2o G.R. No. 96322, December 20, 1991. 21 CTA Case No. 6327, August 28, 2003.

Maunse /1 Philippines, Inc. v. C/R Page 20 of 24 CTA CASE NO. 7860 DECISION Manag e m e nt C orporatio n vs. Commissio ne r o f Inte rnal Re ve nue, C TA C ase No. 5492, Janu a ry 27, 1999, wh e re in in d isp osi ng o f th e said issue, th e co urt rul e d in thi s wise : ' An analysis of the evid e nce submitte d by p e titio ne r re veals that it fail ed to show that th e c laim for re fund was tim e ly file d w ithin two years fro m th e date of pa ym e nt o f ta x. Pe titio ne r fail e d to present th e original Corpo rate Annual Incom e Ta x Re turns fo r th e c al e ndar years 199 4 a nd 1995 to e nable Us to verify if th e c laim for re fund w as mad e within the two-year reg lementary peri od. Both d ocume nts are needed for th e purp ose o f d e te rmining wh eth er p e titio ner fil e d th e claim fo r re fund with th e resp ond ent a nd the petitio n fo r re view w ith this Court w ithin th e two-year prescripti ve p erio d , reckoned fro m th e ac tua l date o f filing o f th e o rig ina l fin a l a djustment re turn s (Commissio ner of Intern a l Revenue v. Philippin e Am eric an Life Ins ura nce Co. , 244 SCRA 446). Th e m e re all eg ati o ns by th e Counsel of p e titio ner th a t th e 1994 a nd 1995 income tax re turns w e re fil e d in April , 1995 and April , 1996, resp ec tiv e ly, and that th e cla im for re fund was fil ed within the two-year peri od have to be verifie d . We could no t see th e reason w hy suc h impo rta nt doc ume nts were no t p resented b y the p e titio ner during th e tria l o f th e case. In th e a b se nce of th ese material d ocuments, th e Court is constrain ed to d e ny p e titi o ner's p rayer.' Our p ron o unc eme nt in the above case w as sig nific antly affirm e d by th e Court o f A p peal s in th e case e ntitl e d Be nguet Manage m e nt Corp oratio n vs. Commissio ne r o f Inte rnal Re ve nue, CA-GR SP No. 52737, pro mulg ate d o n Oc to b e r 29, 1999, w ith e ntry o f Judgment da te d November 27, 1999, th e pertinen t portio n of w hic h rea d s as fo llo w s:' 'C le arly, th e tim e o r d a te o f a ctua l filin g by the Pe titioner o f its 199 4 and 199 5 Annua l Incom e Tax Re turns with th e BI R, ca n we ll be verifi e d fro m its duplic ate copies since a ll income tax re turns fil ed with th e BI R are stamped 'Received ' on the date they are fil e d w hic h also show s th e date o f its a c tual fil ing. Thu s, there is no g ainsayin g why th e Public Respondent deemed it necessary for th e Pe titi o ner to p resent copi es o f its o ri g inal 1994 and 1995 Annu a l In co m e Ta x Re turns fo r th e m to verify if, indeed, th e claim fo r re fund with th e BIR an d th e 'Pe titio n for Review (

Mounse/1 Philippines, Inc. v. CIR Page 21 of 24 CTA CASE NO. 7860 DE C ISION with them, were made within the two-year reglementary period. xxx" As borne out by the records, petitioner only submitted its FY 2006 amended Annual Income Tax Return, which was filed on January 25, 2007 but failed to offer as evidence its FY 2006 original Annual Income Tax Return. Applying the above-cited jurisprudence, the original return is important in order for this Court to ascertain whether the filing of the administrative and judicial claims for refund or issuance of a tax credit certificate were made within the two-year reglementory period. Absent such document, this Court has no way of determining whether the claim was timely filed. Moreover, the said original return is necessary for this Court to verify if petitioner's original option was to be issued a tax credit certificate for the unapplied creditable taxes withheld since as provided under Section 76 of the NIRC of 1997, once the option to corry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be conside red irrevocable for that taxable period. Thus, if petitioner has originally chosen the option "to be carried-over as tax credit next year/quarter", it will be precluded from claiming the issuance of a tax credit certificate for the said excess payment.'

Mounse/1 Philippines, Inc. v. CIR Page 22 of 24 CTA CASE NO. 7860 DECISION Section 76 of the NIRC of 1997 states : "SEC. 76. Final Adjustment Return. - Every corporation liable to tax under Section 27 sha ll file a final adjustment return covering the total taxable income for the preceding c alendar or fisca l year. If the sum of the quarterly tax payme nts made during th e said taxable year is not e q ua l to the to tal ta x due on the entire taxable income of that year, the corpo ration shall e ith er: (A) Pay the balance of tax still due; or (B) Carry-over th e excess credit; or (C) Be credited or re fund ed with th e excess amount paid, as the case may be . In case the corporation is en titl ed to a tax c red it or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against th e es timated quarterly inco m e ta x liabilities for th e taxable quarters of th e succeed ing taxabl e years. Once the o ption to ca rry-over and apply the excess quarterly in come tax against income tax due for the taxable quarters of the succeeding taxable years has been mad e, such option shall be considered irrevocabl e fo r that ta xable period and no applicatio n for cash refund or issua nce of a ta x c redit certificate shall be a llowed th e re for ." This Court has ruled in a long line of cases 22 that once the carry- over option has been made, the same becomes irrevoca ble for that taxable period and the taxpayer can no longer claim for a cash refund or issuance of a tax credit certificate for overpaid inco me tax payment for the said year.( 22 Sithe Philippines Holdings, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 6274, April 4, 2003; Banco Filipino Savings & Mortgage Bonk vs. Commissioner of Internal Revenue , CTA Case No . 637 4, April 3, 2003; Philippine Airlines, Inc. vs . Commissioner of Internal Reve nue , CTA Case No. 6 134, May 16, 2003.

Maunse/1 Philippines, Inc . v. C/R Page 23 of 24 CTA CASE NO . 7860 DECISION The Supreme Court's ruling in the case of Commissioner of Internal Revenue vs. Bank of the Philippine lslands 23 corroborates the foregoing in this wise: "Hence, the con trolling foetor for the opera tion of the irrevocability rule is that th e taxpayer chose on op tion; and once it hod already done so, it cou ld no longer make anoth er one. Conseq uently, after th e ta xpayer opts to corry-over its excess ta x c redit to th e fo llowing ta xable period, th e question of whether or not it a c tually gets to apply sa id tax credit is irre levant. Section 76 of th e NIRC of 1997 is explic it in statin g that o nce the option to corry over has been mode, ' no application for ta x refund or issuance o f a tax credi t certi fica te sha ll be allowed therefor'." Thus, the failure of petitioner to present its original Annual Income Ta x Return fo r the FY 2006 is fatal to its claim fo r th e issuance o f a ta x c redit certificate for its alleged e xcess /unutilized creditable withholding tax in the amount o f P3,839,67 1.31 for the FY 2006. WHEREFORE , premises considered, the Petition for Review is hereby DISMISSED for lack of merit. SO ORDERED . ~ . 1\4~~ - G'~ CIELITO N. MINDARO-GRULLA Associate Justice WE CONCUR: Q~s-a..r-~~.Q CAESAR A. CASANOVA Associate Ju stice JlJANITO C . CASTANEDA/ .}ft - Associate Justice 23 G.R. No . 178490, July 7, 2009.

Mounse/1 Philippines, Inc. v. CIR Page 24 of 24 CTA CASE NO. 7860 DECISION ATTESTATION I attest 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's Division. C~fu-J\_NJiro~Ch.cC.ASaT.ANrE~D~A, fR \L,. p� Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, 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's Division. \~~ .~ ERNESTO D. ACOSTA Presiding Justice