CTA Case No. 4346 (Decision)
REPUB L I C OF THE PH I L I P PI NE S COURT OF TAX APPEALS QUEZON C I TY MAXIMINO B. CASTILLO, C.T.A. CASE NO. 4 3 46 Petitioner�~ -��� vet- sus �-- COMMISSIONER OF INTERNAL REVENUE, Respondent. X- - - - - - - - - - - X DE C I s I 0 N This is a judicial action for the refund of the sum of P8~869.34 deducted from the total money value o �f petitioner- 's accumulated unused v acation and sick le <'='V l~ credits as employee of the Philippine National Bank~ Tarlac Branch. Petitioner was formally employed by the Phi l.i.ppine Nationa l Bank as Attor-ney of th~? Branch at Tarlac until he retired under the provi si on of Republic: Act No . 1616 as amended. Upon his r�eti remen t ~ petitioner entitl<;?d to the payment of his accumulated unused vacation and s ick leave credits amounting to F'83~578.74. Of this amount of unused vac.:.:\tio n ancl sick leave cl�-edits ~ the amount of F'8 ~ 869. :::A ~"as wi thhe 1d �for income ta;: and was remitted to the Bureau of Intern a l Revenue~ <:::>vidE~ncf:?d by a cer� ti�f icatipn elated ,January 26 ~
DECISION CTA CASE NO. 4346 - 2- 1989 issued by Senior Assistant Manager Roberto F. Melo of t he Philippine National Bank. CJn M.::~.l'�� ch 2~ 1989~ petitioner for-mally �filed with respondent Commis~ioner of Internal Revenue <~ c:l;::tim "fol'" refund of the l-'lithheld ta:-: in the amount of P8~869.34 as refundable to him. Th e lJnl y � issue in this case i s ~�Jhether or n ot petitioner is entitled to the refund of the s um of P8~869.34. We hold that petitioner is entitlr::?d to the reft..tncJ cJf , the SL\fn <Jf F'B, 869.34 as incocne ta~�~ withheld from out of the unused vacation and sick leave credits of petitioner. Thi s ~-.Ja �; the holding in the c .ase of Eft- en P. Castaneda Commi ssionet- of Internal l~eve~ nue, CTA Case . No. 3809~ decid e d by the Cour- t o �f Ta :-: Appea l s dated September� 26 ~ 1990 ~ affir me d in the de c i sio n on appeal by the Court of Appeals, and finally sustained by the Supreme Cour-t crf the Phi 1 ppines ~ on appe;"' 1 in G. R. No. 96016, dat ed October 17~ 1991 where~in i t h eld that: "The (Supreme) Cout-t has a 1 ready n .ll ed� that the terrnina l 1eave pay r. eceived by a goverTlmEmt o�fficial or employee is not s ubject to wi thholding (income) ta )-: . In the recent case of
DECISION CTA CASE NO. 4 3 46 - 3- J.!=!.S. !,I_? ..N .~ .......?P.r.:-.r..<:Jme <J vs. .. I.h.e ....J::l.P.rJ. � .... GJ.v.t 1. �!_t...... .. 9..E:?.J::: ::!..t\=:.~ C::.9..fT1_n1J?.?~9Q, __ �'J. ~ !3 . F\. No. 96032, 31 July 1991~ the Court behind t h e E.~>: p 1 ,7:\.i. n ed th e r�at i.oos,l e employee ' s entit l e ment to an exemption �f r �om ltJ .i t J-�,h o l d i. n g ( i. n c om P ) t a :-: CJ n h i s tenni.n<:t.l leF\v(::� pay a s "f ol l o\11s :" 11 >: :-: :�:commu tatio n of lea v r::~ cn?.d.i.ts man:::> co mm on l y knc:nvn ic.\S tenni.na-1 l eav�e ~ i ~; app li ed "for by a n officer or ~mp l oyee who re tir es~ resig n s or is se parated f rom the service through no fault o f hi s own. (M a nua l on l...eave r.:'td m in.i. ~:;tt��� c::~.tio n Cout��� se for Effectiveness published by the Civi l Service Commission~ pages 16- 17). In the exercise of the s o und perso nn e l policy~ th e C:3CJV(,?J�- J1m e n t. E~ n c: c1u r� age ~; unused l eaves to b e accumulate d . T h e Government r ecogni zes t hat for mos t publ ic s er�van t .1';, t���e t i r� e mf.'! n t p ay i ~; a lways l e s s th a n generous if not me,3g <::>t- and sc ,.. i mpy. . A modest nest egg whic h the s e n ior citizen my l ook fon'-lan:i to is thus avo id ed. T p r �mina l 1 e a ve~ P"''>-'mEn ts a1��e ~.:J .i. v e n not on l y at. the same time but. al so for the s;arne po l i cy co n s i dt? ration <-. ; govt:'r�n ing r� e t i t-f.~ii1E7 n t b(�'?fl f.?'fitc:.; , II 11 In �fin e~ not being part of the gross salary or income of a go ver� nrn en t 1::1. ret i t- eme n t o�f �f ici.c3 l en� f.�?mpl oyee but p ay i s; not b e nefit~ t e rminal l ea v e ~::;u hj f.�?c: t to inc orne ta >: � 11 WHEREFORE, petitioner i s ent i tled to the refund of the sum of PB,869. 3 4, fo r which 5~7
DECISION CTA CASE NO. 4 3 46 - 4- respondent is hereby ordered to so refund immed iately upon receipt of this decision. Without pronoucement as to cost. SO ORDERED . WE CONCUR: P!'�es .i.d .i ng Judge ~~a..Q~ ERNESTO D. ACOSTA (.) s<:;oc: ir:~ te Judge CE RT I F I CAT I 0 N I h e reby cer� t i -t' y th ;::~.t this dec ision v-1as reac h ed a ft er due con s ultation a mong the member s Sr;;> c::tion 13 ~ A r t i e le t./I I I of thr:~ Con s titution . ~~ F'r� es.idinq Juclg f..?
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