CTA Case No. 3594 (Decision)

. -...-~ .�, IIJIIl'tnn.rc or 'nt! .-un.t~~rNN COURT OF TAX Arf'U.l.B Q\;.~�.!.Ul'l C l ! .., CAINTA REALTY CORPORATION , Petitioner , - versus - C . T . A. CASE NO . 3594 THE COMMISSIONER OF INTERNAL REVENUE, Respondent . X- - - - - - - - - - - - - - - X DECISION Petitioner on March 9 , 1981 filed its 1980 final adjustment return which showed a net loss in the amount of e6 , 540 and A zero tax liability . However , during the same taxable year petitioner had creditable income taxes withheld consisting of 5% expanded withholding tax on rental and ( l5% withholding tax on savings account in the tot a 1 sum of fL7 , 7 6 6~ paid on November 3 0 , 19 8 o�� On March 3 , 1983 , petitioner , through its auditors, filed a claim for refund of said amount of e7 , 766 . Without waiting for respondents action on the claim for refund , petitioner filed with this Court its petition for review on March 4 , 1983 . The issues to be resolved are : (1) Whether or not the petition is barred by prescription ; and 12 4

DECISION - CTA CASE NO . 3594 2 (2) Whether petitioner is entitled to the refund of the sum of e7 , 766 . 00 . Under the law , a claim for refund of tax alleged to have been erroneously or illegally collected shall be filed with the Commissioner of Internal Revenue within two years from the date of payment of the tax and no suit or proceeding for refund shall be begun after the expiration of the two-year period . Thus , Section 292 of the National Internal Revenue Code reads : "SEC . 292 . - Recovery of tax erro - neo~sly 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 excessive or in any manner wrongfully collected , until a claim for refund or credit has been duly fi l ed with the Commissioner ; but such suit or proceeding may be maintained , whether or not such tax , penalty , or sum has been p a id under protest or duress . In any case , no such suit or proceeding shall be begun after the exp�ration of i!:!..Q._ years from the date of p.J!..Y men � of the tax or pennlty regardles s of a ny supervening cause that may arise after payment : Provided , howev e r , that the Commissioner may , even without a written claim therefore , refund or credit any tax , where on the face of the return upon which payment was made , such pay - ment appears clearly to have been erroneously paid . x x x" 120

DECISION - CTA CASE NO . 3594 3 And Section 295 of the same Tax Code reads : " SEC . 295 . - Authorit the Commissioner to comprise , abate---a-n~d----~--~-c-r-e-d~i~t--t-a-x-e-s--. ---- The Commissioner may - (2) X X X (3) Credit or refund taxes erroneously or illegally received , penalties imposed without authority , refund the value of internal revenue stamps when they are 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 tax - payer files in writing with the Commissioner a claim for credit or refund within t~ o years after the payment of the tax_ or penalty . " The two-year period for judicial recovery of the tax alleged to have been erroneously or illegally paid or collected is a positive and mandatory requirement of Section 292 of the Tax Code . ~ Gibbs vs . Collector of Internal Revenue , L-13453 , February 29 , 1960 , 107 Phil . 232; Guagua Electric Light Plant Co . , Inc . vs . Collector of Internal Revenue & The Han . Court of Tax Appeals , supra) . It is prescriptive (College of Oral & Dental Surgery vs . Court of Tax Appeals , 102 Phil . 912 ; Panay Electric vs . Collector of Internal Revenue, 103 Phil . 819; Lu Do & Lu Ym vs . Central Bank of the

DECISION - CTA CASE NO . 3594 4 Philippines , 108 Phil . 566) , and in order to confer j urisdiction upon the court , it is necessary that i n all cases the suit must be brought wit h in the statutory period of two years and the requirements provided for in Section 292 must have been duly complied with (Collector of Internal Revenue vs . The Court of Tax Appeals & Home Pipe & Asbestos Co ., Inc ., supra.) . More- over , the provision is mandatory and is not subject to any qualification , hence , it applies regardless of the con~itions u n der which payment may have been made (IBM Philippines , Inc . vs . Commissioner of Internal Revenue , CTA Case No . 2855 , February 27 , 1981 , citing Guagua Electric Light Plant Co ., Inc . vs . Co l lector of Internal Reven u e , 1 SCRA 1221) . In this case , the subject ~ rpor ~ te i n come tax in the amo u nt of e7,766 . 00 was paid on November 30 , 1980 . The petition for review was filed o n March 4 , 1983 , or two years , three months and four days from date of payment of the tax , whic h is clearly beyond the two year prescriptive period provided for under Section 243 of the Tax Code . ._, 1') ~�

DECISION - CTA CASE NO . 3594 5 In view of our finding that the period to file ~ the claim for refund has prescribed , the question of I whether petitioner is entitled to the refund of the said amount of e7 , 766 . 00 becomes moot and academic . WHEREFORE , the herein petition for review i s hereby dismissed . With costs against petitioner . SO ORDI.RED . Quezon City , January 22, 1988 . . ~QUIN WE CONCUR : 126

--- DECISION - CTA CASE NO . 3594 6 CERTIFICATION I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 13 , Article VIII of the Constitution . Presidi g Judge Court of Tax Appeals 123