ASB DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC ASB DEVELOPMENT CORPORATION, C.T .A. EB NO . 124 Petitioner, (C .T .A. Case No. 6445) -versus- Present: COMMISSIONER OF INTERNAL REVENUE, Acosta, P.J. Respondent. Castaneda, Jr. Bautista, Uy, Casanova, and Palanca-Enriquez, JJ. Promulgated : OCT 1 3 2086~~~ X-----------------------------------------------------------------------------------------X DECISION BAUTISTA,~.: This is an appeal by way of a Petition for Review from the Decision promulgated on February 9, 2005 , and Resolution dated September 26, 2005, issued by the Second Division of the Court of Tax Appeals in C.T.A. Case No . 6445 . The dispositive portion of the assailed Decision reads: "IN VIEW OF THE FOREGOING , the petition for review is hereby DENIED for insufficiency of evidence. SO ORDERED."

Dec ision EB 124 (CTA Case No. 6445) and the dispositive portion of the assailed Resolution reads : "WHEREFORE , in view of the foregoing , Petitioner's "Motion for Reconsideration" and "Alternative Motion [To Adopt Motion for Reconsideration as Motion for New Trial]" are hereby DENIED for lack of merit. SO ORDERED." The antecedents, as borne by the records , are as follows : Petitioner is a domestic corporation duly organized and existing under the laws of the Republic of the Philippines with principal office at ASB Center, 114 Benavidez St., Legaspi Village , Makati City. It is engaged in real estate development which includes high rise condominium projects and leasing of properties (page 6, TSN, August 21 , 2002) . The nature of petitioner's business allows it to receive three different kinds of income payments , namely: (1) gains from sale of real property, (2) rental income , and (3) management fees . On April 17, 2000, petitioner filed with the Bureau of Internal Revenue (BIR) its tentative income tax return for the taxable year ended December 31 , 1999 (Exhibit A, CTA Docket) reflecting no amount of taxable income but a minimum corporate income tax (MCIT) due of P9 ,158,188.00 which was deducted from the prior year's excess credits of P28 ,933 ,325 .00 , leaving an overpayment of P19 ,775,137.00 as shown below: Gross Income p 475 ,911 ,547.00 475 911 547.00 Less: Deductions p Taxable Income p 9,158,188.00 Minimum Corporate Income Tax (MCIT) 28,933 ,325 .00 p 19,775,137.00 Less: Tax Credits Prior Year's Excess Credits P28 ,933 ,325.00 Creditable Tax Withheld First Three Quarters Fourth Quarter Tax Overpayment

Dec ision EB 124 (CTA Case No . 6445) In the said return , petitioner indicated its option to be issued a ta x credit certificate for the income tax overpayment of P19 ,775,137.00 . Subsequently, petitioner amended its 1999 income tax return and filed the same with the BIR on September 8, 2000 (Exhibit 8 , CTA Docket) also reporting no amount of taxable income but increasing its MCIT liability to P9 ,688,451 .00 and excess tax credits to P29 ,963,736.00, computed as follows : Gross Income p 529 ,904,344 .00 529 ,904 ,344 .00 Less: Deductions p Taxable Income p 9,688,451 .00 Minimum Corporate Income Tax (MCIT) 39,652 , 187 .00 p 29,963 ,736.00 Less : Tax Credits Prior Year's Excess Credits P 28,933,325 .00 Creditable Tax Withheld First Three Quarters 9,921 ,828 .00 Fourth Quarter 797 034 .00 Tax Overpayment According to petitioner, since the prior year's excess credits in the amount of P28 ,933 ,325.00 was already the subject of a separate claim for refund , the MCIT due of P9 ,688,451 .00 was offset against the creditable taxes withheld in 1999 amounting to P10 ,718 ,862.00. Thus , the income tax overpayment of P29 ,963 ,736.00 as of December 31 , 1999 consisted of the prior year's (1998) excess credits of P28 ,933 ,325.00 and excess creditable taxes withheld in 1999 of P1 ,030,411 .00. Again , petitioner signified its intention to be issued a tax credit certificate for its excess tax credits of P29 ,963 ,736.00 as of December 31 , 1999 (Exhibit 8-1 , CTA Docket). On April 18, 2001, petitioner filed its tentative income tax return for the taxable year ended December 31 , 2000 (Exhibit C, CTA Docket) wherein it declared a net loss of P32 ,754,363.00 and MCIT due of P2 ,934 ,981.00. Likewise , petitioner reported the amount of P29 ,963 ,736.00 as prior year's excess credits and the amount of P16,407 ,841 .00 as creditable taxes withheld during the first three quarters of 2000.

Dec ision EB 124 (CTA Case No . 6445) April 12, 2002 , filed with the Large Taxpayers Service of th e Bureau of Internal Revenue (BIR) , a formal letter in order to reiterate its request for the issuance of a tax credit certificate corresponding to the excess tax credits of P1 ,030,411 .00 for taxable year 1999 and of P3 ,570 ,473.00 for taxable year 2000 (Exhibit G, CTA Docket). As the two-year prescriptive period for filing of a judicial claim was about to lapse , petitioner filed its judicial claim before this Court , sitting as a Division , on the same day. Res pondent, in his Answer to the Petition for Review, raised the following Special and Affirmative Defenses: "4 . Petitioner's al leged claim for refund is subject to administrative routinary investigation by the BIR ; 5. Petitioner miserably failed to demonstrate that the taxes subject of the case at bar were erroneously or illegally collected ; 6. The amount of P4 ,600 ,884.00 representing alleged unutilized withholding tax credits for the calendar years ended December 31 , 1999 and December 31 , 2000 was not properly documented ; 7. Taxes paid and collected are presumed to have been paid in accordance with law and regulations , hence, not refundabl e; 8. In an action for refund the burden of proof is on th e taxpayer to establish its right to refund , and failure to sustain the burden is fatal to the cl aim for refund/credit ; 9. It is incumbent upon petitioner to show that it has complied with the provisions of Sections 204 (C) and 229 of the Tax Code on the prescriptive period for claiming tax refund/credit; 10. Well-settled is the rule that claims for tax refu nd/credit are construed in strictissimi juris against the taxpayer as they partake the nature of exemption from tax and it is incumbent upon th e petitioner to show that it is entitled thereto under the law." Afte r trial on the merits , the Second Division of this Court rendered the aforementioned assailed Decision and Resolution , denying petitioner's claim for refund .

Deci s ion EB 124 (CTA Case No. 6445) Hence , this instant appeal via petitio n for review, with petitioner raising the following assig nment of errors: "I THE HONORABLE COURT'S SECO ND DIVISION ERRED IN NOT FI NDING THAT PETITIONER HAS PRESENTED SUFFICIENT EVIDE NCE TO PROVE THAT THE INCOME ON ITS SALE AND LEASE OF REAL PROPERTIES AND FROM MANAGEMENT FEES, UPON WHICH THE TAXES WERE WITHHE LD, WERE DECLARED AS PA RT OF THE GROSS INCOME OF PETITIONER. II TH E HONORABLE COURT'S SEC OND DIVISION ERRED IN HOLDI NG THAT THIS HONORABLE COU RT CANNOT CONSIDER TH E RECORDS IN A PREVIOUS CASE FOR THE REASO N THAT IT IS NOT MANDATED TO TAKE JUDIC IAL NOTICE OF A PREVIOUS CASE . Ill THE HONORABLE COURT'S SECOND DIVISION ERRED IN HOLDI NG THAT THE SUBMISSI ON OF THE A DDITIONAL DOC UMENTS TO FULFILL THE RE QUIREME NTS IN PETITIONER'S A LTER NATIVE MOTION FOR NEW TRIAL IS CONTRADI CTORY TO PETITIO NER'S ARGUMENT THAT IT HAS ALREADY SUBMITTED SUFFI CIENT EVIDENCE TO SUPPO RT ITS CLAIM IN ITS MOTION FOR RECONSIDERATION." Th e Petition has no merit. It is well established by law and existing jurisprudence th at to be entitled to the refund/iss uance of a tax credit certificate , the claiman t must show compliance with the following requirements: 1. That the claim for refund was fil ed within the two-year prescriptive period provided under Section 204(C ) in relation to Sectio n 229 of the NI RC of 1997; 2. That the fact of withholding is established by a copy of a stateme nt duly issued by the payor (withholding agent) to the payee , sh owin g the amount paid and the amou nt of tax withheld th erefrom ; and

Deci sion EB 124 (CT A Case No . 6445) 3. That the income upon which the taxes were withheld were incl ud ed in the return of the recipient. 1 We agree with the finding of the Court's Second Division that petitioner complied with the first requirement, to wit: "The two-year prescri ptive period for the filing of a clai m for refund co mm ences from the date of filing of th e final adjustment return (ACCRA In ves tments Corporation vs. Court of Appeals, supra). The claimed exces s creditable withholding taxes pertain to tax able year 2000 to which petitio ner filed its tentative annual income tax return on April 18, 2001 (Exhibit C) . Counting from this date, petitioner had until April 18, 2003 with in which to file its claim both in th e administrative and j udicial levels . Clearl y, petitioner's administrative claim filed with the BIR on April 12, 2002 (Exhibit G) and the Petition for Review filed before this Court on the sam e date , fall within the two-year prescriptive period ." As for the second requirement, the Second Division has co rrectly held that the Certificates of Creditable Tax Withheld at Source and With ho lding Tax Remittance Returns proved that petitioner had creditable withholding ta xe s for taxable year 2000 amounting to P6,406 ,842 .89 , which includes the credita ble withholding taxes of P4 ,596 ,741 .65 arising from its sales of real prope rties and creditable withholding taxes of P1 ,80 1,101 .24 pertaining to its lease of real prope rties an d profe ssional fees . It was likewise correctly noted that the total am ou nt of creditable withholding tax of P6,406 ,842 .89 was lesser by P332 ,547.1 1 wh en comp ared with the creditable withhold ing tax reflected in petitione r' s amen ded 2000 incom e tax return amounting to P6,739 ,390.00. Howe ve r, for fa ilure to comply with the third re quirem ent, petitioner's claim for refund wa s denied by the Second Divi sion . Hence , petitioner sought for an affirmative relief before the Court En Bane, through the insta nt Petition for Review. 1Reve nue Regul ati o ns No. 2-98 , as ame nded ; C iti ba nk, N.A. vs. Cou rt of Appeals and or CIR , 2 80 SC RA 4 59 ; ACC RA Investm e nts Corpo rati on vs . Court Appea ls, 204 SCRA 957)

Deci s ion EB 124 (CTA Case No. 6445) Ane nt the first assignment of error raised before the Cou rt En Bane, petitioner avers that it has sufficiently established that th e incom e on which ta xes were withheld was repo rted as part of the gross incom e of petitione r and has re co nciled the same based on sound documentary and testimonia l evide nce . It claim s that the alleged discrepancy is due to the fact that the income payments received by the petitioner were recorded during the years wh en th e sal es were made, whi le the corresponding taxes were withh eld in another yea r. To prove that taxes were withh eld during taxabl e years 1999 and 2000 , petitioner prese nted the undisputed testimony of Atty . Dom ingo and submitted Summaries of th e Withholding Tax Certificates and Remitta nce Returns wherein the income pa ymen ts are detailed , i.e., the year the income wa s rece ived (the year the same wa s made, or rental and management fees were rece ived) , the year the gain on sale and income from lease or management service s were reporte d, the amount of income pa yment received, the amount of ta x withh eld, an d the date when such tax was withh eld. The Second Division correctly held that th e Sum maries of Creditable Tax Withheld at Source for Taxable Ye ar 2000 submitted by petition er we re insufficient to corroborate the testi mony of its lon e witn ess , Atty . Ro lando Doming o, the Senior Vice President of the petitioner's Accounting Department , and aptly expla ined as follows : "As indicated in the withhol ding tax certifi cates and in the Su mm ary of Creditable Ta x Withh eld at Sou rce for Taxab le Year 2000 (Exh ibits K to K-59) , the creditable taxe s of P1 ,81 0,1 01.24 were withheld fro m rental fees and professional fees in the resp ective amounts of P34,163, 596.80 and P2 ,038,428.00 or in the sum of P36,202,024.80 . Thi s Cou rt cannot verify with certainty whether the se income figures formed part of the gross incom e from lea se of real properties in the am ount of P48 ,082 ,511 .0 and miscell aneou s income of P8 ,673,544.00 reported by petiti oner in its amended 2000 incom e ta x retu rn . Petitioner sho uld have presented additional supporting documents such as general ledger, invoices/re ceipts , sales summa ry or an y other document wherein

Decision EB 124 (CTA Case o. 6445) th e in come related to the cre ditable withholding taxes of P1, 81 0,101 .24 can be traced as form ing part of th e income reported in its ame nded 2000 income tax return . The sam e holds true with regard to petitioner's gain on sale from rea l pro perties related to th e creditable withholding ta xes of P4 ,596 .74 1.65. The Summ ary of Creditable Tax Withheld at Source for Taxa ble Ye ar 200 0 (Exhibit J} , merely indicated the amount of the gain on sale corresponding to the creditable with hold ing taxes of P4 ,596 ,741 .65 and the date when such gain was re ported by petition er. Petitioner should have presented its income ta x returns for prior years when the subject gain on sa le was reported , sales lists or schedules of realize d gain from th e sale of real properties for the su bject years indicated in the summary (deta iling the custome r's nam e, selling price and cost of pro pe rty sold and gai n on sale) , lists of install ment payments received or any other docu ment wh erei n We can verify that the amount of petitioner's gain from sales of rea l properties pertaining to the creditable withho ldi ng taxes of P4,596,741.65 was properly reported in its amended 2000 income tax return and in its prior years income tax returns ." Petiti oner further claims that the req uirement of the Court , sitti ng as a Division , for the petitioner to present additional supporting documents such as general ledger, invoices/re ceipts , sales summary or any othe r document where in the income related to the creditable withholding taxes can be traced is "superfluous , unju st and inequitable consideri ng that in previous refund cas es decided and gra nted by the same Honorable Court , no su ch docum ents were required to be submitted in evi den ce." It insists that "for the Co urt to provide an additiona l requirement would affect the certainty and stability of cou rt decisions , and undul y enlarge clear and unambig uo us requirements for claim ing refunds." Moreover, petitioner pos its that to require additional documentation when other parties in th e same or in a similar situa tion were not, violates the equal protection clause of the Constitution protecting j ustice and fair play . Petitioner's arguments are devoid of merit.

Dec ision EB 124 (CTA Case No . 6445) Page I0 of 17 Th is issu e was add ressed in the Court' s assail ed Resolution dated September 26 , 2005. The Court En Bane quotes with approval the ruling of the Court a quo expressed in its Resolution de ny ing pe ti tioner's claim : "Petitioner recogni zes that it has th e du ty to prove tha t it decla red in its incom e tax return th e income corresponding to the clai med excess cre ditab le withhol ding taxes Thus, We find it absu rd for petitioner to state that it coul d not have anticipated for or mu ch less present in evidence the docum ents require d by this Court Contrary to what pet itione r is tryin g to imply , this Court did not impose a new requirement As ca n be rec alled , a la rge portion of petitioner's reported creditable taxes withheld during the year 2000 in the amount of P4 ,596 ,741 65 (Exhibit J) arose from its sale of rea l estate and condomi ni um units wh il e the remain ing amou nt of P1 ,81 0,1 01.24 arose from its lea se of re al properties and management services ren dered. W ith reference to th e creditable taxe s wi thheld 1n th e am ount of P4 ,596 ,74 1.65, petiti oner indicated in the "Su mmary of Credita ble Tax W ithheld at Source" (Exhibit J) that the corresponding gain on sale was reported in the year 2000 and in prio r yea rs, i.e., 199 1, 1994 , 1995, 1996, 1997 , 1998 and 1999 Considering that petitio ner did not su bmit its income tax return s for said prior yea rs except for th e years 1999 and 2000, thi s Court cannot ascerta in whethe r or not the amount of gain on sale indicated in th e summary was 1ndeed report ed in the said years. T he inco me tax return s are basic documents in provi ng compli an ce with the third requis ite an d th e non -presentation thereof is fata l to petitioner's clai m While petiti on er submi tted in eviden ce the income tax returns for 1999 and 2000 , however, its "S umma ry of Creditabl e Ta x Withheld at Sou rce " (Exhibit J) fail ed to reco nci le the total amo unts of gain on sale reflected in the return s vis-a-vis the alleged am ounts of ga in on sale attri butable to the cl aimed cre ditable withhol din g ta xes . To clarify this poin t, bel ow are th e first entries shown in th e summary Dat e Gain Cain on Income Tax ll a~ Exhibit Sale Withheld I' aid Re port(~d - ~m en ! J-1 0?/ 10/00 J -2 8/5/99 H73.360 50 9Q.021 64 4 .501.08 03/1 0100 J -3 I 4 501 08 04/1 0/00 J -4 90.0?1~4 4 501 08 05/ 10100 J-5 4 .5 01 08 08/1 0100 90 021.64 13.50~ /b 90.0/1 64 I I /70.064 92 As can be seen from th e abo ve, the gai n on sa le amounting to P1 ,473 ,360.50 pertain ing to the cred itable ta xes withheld by RJ Credit (Baco lod ) Services Corporation was allegedly rep orted in 1999. However, without supporting do cuments detailing the breakd own of the tota l gain on sale of P324 ,486 ,195.00 declared by petitio ner in its am ended 1999

Deci s ion EB 124 (CTA Case No. 6445) Page II of 17 inco me tax return (Exhibit B-2) , th is Court cann ot verify wit h certainty whether the gain on sal e of P1 ,473,360 50 correspondin g to the creditable taxes withh eld by RJ Credit (Baco lod) Services Corporation was actu al ly included in th e total figure of P324 ,486,195. 00 . Th e sam e holds tru e with the rema in ing reported creditable withhol ding taxes in th e amount pf P1 ,81 0,101 .24 arising from re ntal fees and professional fees received by petitioner in th e respective am ounts of P34 ,163,596.80 and P2 ,03 8,42 8.00. In its amended 2000 income tax retu rn , petitioner's decla red gross income from lease of rea l properties amounted to P48 ,082,511 .10 which does not tally with th e gross in come of P34 ,163,596 .80 reflected 1n the certifi cates. Likewise , in the said return , it ca nnot be determ1 ned whether the professiona l fees of P2 ,038 ,428. 00 were decl ared by peti tioner These professiona l fees fall under sal e of services but no amount of sal e of se rvi ces was indicated in the return Although petitioner reported a miscellaneous income of P8 ,673 ,544 .00, it cannot be verified whether the same included the profess io na l fees of P2 ,038 ,428.00. Thu s, th e necessity of su bmitting other documents such as general ledger, invo ice/re ceipts , sales summary or any ot he r document wherei n the rental fee s of P34 ,163,596. 80 and professio nal fees of P2,038 ,428 .00 in th e sum of P36 ,202 ,02 5.00 related to th e creditable with hold ing taxes of P1 ,810 ,101.24 can be traced as forming part of the gross income rep orted in peti ti oner's ame nded 2000 income tax return. We cannot re ly upon petitio ner's "Su mm ary of Cred itabl e Tax Withh eld at Source" (Exhibit K) as it merely enu merated the credit able withhol ding ta xes of P1,8 10,101.24 with the co rresponding incom e payments of P36,202 ,052 .00." In su pport of th e afo re-quoted f1nd1ngs of the Secon d Division, We adhere to the ruling of this Court in its Resol ut1on dated January 15, 19992 , where in We declared that "th e questio n of whether or not t he evidence submitted by a party is sufficient to wa rrant the granting of a refund lies with in the sound discretion and judgment of the Court. Peti tioner is remin ded that this is a case of refund. It has to show clea r and conv in c ing proof of its entitlement thereto. Mere testimonial eviden ce , even if unreb utted by any evid ence of Respondent, is not enough to grant w hatever amo unt the Petitioner seeks to be refunded ." 2China Bank ing Co rpo ration v. Con11nissionc t� oi" Internal Reve nue, C. T.A. Case No. 54 05 .

Dec ision EB 124 (CTA Case No. 6445) Moreover, this Court is not precluded from requi ring other evidence which will once and fo r all erase doubts to the claim for refund. It is we ll -settled that claims for refund , parta king of the nature of tax exem ptio ns , are con strued in strictissimi juris against the taxp aye r and liberally in favor of the taxi ng authority 3 Thu s, the burden of proof rests upon the tax payer to establis h by sufficient and competent evidence, its entitlement to a claim for refund .~ Wha t is sufficient and co mpetent evidence for one case may not be sufficie nt and co mpetent evide nce for another case. Petitioner must respect the Cou rt's discretion an d sound judgment on determining th e sufficiency of the evidence subm itted. It can not invoke the Equ al Prote ction Clause of the Constitution to avo id com plian ce w1th a req uirement imposed by the Cou rt . Based on the forego ing, the Secon d Division wa s co rre ct in req uiring petitioner to present additio nal supporti ng documents su ch as genera l ledger, invoi ces/receipts , sales summa ry or any other documen t whe rein the income relate d to the creditable withholding ta xes can be tra ced , and income ta x returns for the yea rs prior to 1999 and 2000 . W ith regard to its seco nd assignment of error, th e petitioner advances the view that assum ing arguendo th at the re was a need for petition er to submit the abovementio ned docu ments , th e Court could have taken jud icia l notice of CTA Case Nos . 5802 and 5513. Accord ing to the petitioner, in CTA Case No . 5802 which is also 3Ca lamba Stee l Center, In c. v. Commissio11cr ol" Internal Reve nu e, G.R. No. 1518 57, April 28, 2005 citing Co mmi ssio ner of Interna l Revenue' . So lidbank Corp .. Lll 6 SCRA 436. 461, November 25, 2003 , per Panganiban , J.; 13PI Leasi ng Corp. '� CA . 41 6 SCRA 4, 14, Novem ber 18, 2003 ; Paseo Rea lty & Deve lopm ent Corp. v. CA , G.R. No. I IlJ286. October 13 , 2004, p. 14 ; Commiss ioner vs. Tokyo Shipping Co., Ltd. , et a!., G.R. No. 68 252 . May 26. 1995; Da vao Gulf Lumber Corporation vs. Comm iss ion er of Inte rn al Revenue. e1 a!.. C.R. No. 122 161 , 1:e brua ry I, 1999; Phi lex Mining Corporati on vs. Co mmissioner of Internal Re ve nue. et a!., G.R. No. 120324, Apri l 2 1, 1999 ; Co mmi ss ioner of Interna l Revenue vs. S.C. .Johnson and Sons, In c.. et a!. , G.R. No. 127 105, June 25, 1999. 4 Phil. Geotherm al. In c. v. Co mmi ssio ner ol" Internal Re ve nue . G.R. No. 154 028 , Ju ly 29, 2005 .

Deci s ion EB 124 (CTA Case No . 6445) the same petitio ner's claim for refun d for ta xable year 1996, it presented annual income tax returns and sales su mmaries pertaining to ta xable ye ars 1990 to 1996 which the Court verified and fou nd to have du ly shown that the income from which creditable taxes were withheld we re 1nclud ed in petiti on er's gross income. Said income tax returns and sa les summarie s were offe re d as evi dence in said case. The Court partially gra nted petitioner's claim On the oth er hand , in CTA Case No . 5513 , which is also petitioner's claim for refun d for taxable year 1994, petiti oner offered as evidence its 1994 an d 1995 income ta x returns Thus , the petiti oner claims th at the Court had sufficient means to ascertain whether th e income fro m taxe s were withheld were reported or included in the petitio ner's gross income during prior yea rs . We are not persuaded . As a ru le, "courts are not authorize d to ta ke judi cial notice of the contents of the records of othe r ca ses , even wh en su ch ca ses have been tried or are pending in the same court , and notwithstanding til e fact th at both cases may have been heard or are actually pend ing before the sam e Judge."b W e agree with the dispos ition of this issue by the Court's Second Division in its assailed Resoluti on, to wit: "W ell-settle d is the ru le tha t courts wi ll on ly consider as evidence that which has been form ally offered (Candido vs. Court of Appeals, 253 SCRA 78) . In th e abse nce of an y formal offer , this Court cannot consider the records (i .e. , th e income tax returns an d sales summ aries for 1990 to 1996) in CTA Ca se No . 5802 as part of the reco rd s of herein case . Xxx XX X XXX Further, the matters sought by petitio ner to be taken ju di cial notice of by this Court are not among th os e which the law mandatoril y requires to be taken judi cial notice of under Sect1on 1, Rul e 129 of the New Rules on Evid ence. Neither can We consider th em re cord s of pub lic knowledge, capable of unquestionable de monstration , or ought to be known to judges 5 Tabuena v. CA, 196 SC RA 650, May 6. I<)91.

Decision EB 124 (CTA Case No. 6445) because of their jud icial fu nctions (Sec. 2, id .). Pa renthetically , the taking of ju dicial notice of any matter requires a hearing where the parties are give n the cha nce to be heard (Section 3, id.). Petitioner's failure in not presenting the required documents cannot be cured by com pel ling this Co urt to con sider th e records of anoth er ca se in order to sa ve its own case . Such legal maneuver is bereft of honesty and fair play." As regard s the third assi gnment of error, petitio ner avers that its former counsel 's reliance on previous , co nsistent , valid and binding jurisprudence amounts to excusa ble neglig en ce , which warrants the grant of a new trial. It further claims that though it admits that it has argued in its Moti on for Reconsideration that th e evidence sufficiently establish es the claim fo r refun d, its alternative Motion for New Trial should be grante d as alternative motions are all owed under the law and rules of procedure. We are not convinced . Fo r, and as correctly pointed out by the Court's Second Divisio n in its Res olution of Septem ber 26, 2005 "Petiti oner's argum ents are without me rit , If indeed petitioner's form er coun sel re lied on previous CTA cas es incl uding CTA Case No . 58 02 which granted petiti one r's 1996 claimed exce ss withhold ing ta xes , then it co mmitted gross mi stake or negligen ce in not pre se nting the income ta x returns and oth er supporting docum ents required by this Court in the assailed decision . If pe tition er was able to prese nt the income tax ret urns of all the years in which the income related to the cla imed creditable withholding was reported and the detailed sal es su mmaries reconciling the gross inco me figures reflected in the returns an d in the ce rtificates in the previous CTA Case No 5802 , the n th ere is no reason or excuse fo r petiti oner wh y it could not have done the same in the case at bar. Su ch gross inadvertence on the pa rt of petitioner's co unsel to present sai d evidence does not warrant the grant of a new trial. " A propos hereto, the Supreme Court has time and again emphasized that there will be no end to a suit if a new lawye r could be employed who could all ege negligence

Deci s ion EB 124 (CTA Case No. 6445) or incompetence of a former coun sel. 6 In the same vei n, the Court of Appeals ruled in "Now petitioner wan ts us to orde r a tri al de novo on the justifi cation that his cou nsel wa s grossly inept. Such a re ason is hardly plausible as the petitioner' s new couns el sh oul d kn ow. Ot he rwise , all a defeated party would have to do to salvage his case is claim neglect or mista ke on the part of his cou nsel as a grou nd fo r revers ing the adverse judgment. There would be no end to litigati on if thes e were allowed as every shortcoming of cou nsel could be the su bject of challenge by his client through another cou nse l who , if he is als o found wan ting , would likewise be disowned by th e sa me client th roug h another counsel , and so on ad infinitum. This woul d re nder cou rt proceed ings ind efinite , tentative and subject to reopen ing at any time by the me re su bterfuge of replacing couns el. " Based on the foregoing , We ru le that th ere is no basis for granting Petitioner's prayer for an Order to reopen th e case fo r new trial. WHEREFO RE, finding no reve rsibl e error co mm itted by th e Second Division of the Co urt in rendering the assailed Decis ion dated Fe bru ary 9, 2005 and Resolution dated September 26, 2005, th e insta nt petition for review is hereby DISMISSED for lack of merit and the assailed Decision and Resolution of the Seco nd Division of this Court are AFFIRMED in toto. SO ORDERED. 6 Citytru st Rea lty Corporati on v. Commi ss ioner of Intern al Revenue, CA-G.R. SP No . 364 87, May 31 , 2000, citing Aguil a vs. CF I of Batangas, 160 SC RA 35:2 and Tupas vs. Court of Appea ls, 193 SCRA 59 7. 7 AMI Ph ili pp ines v. Co mmi ss ioner of Int ern al Reve nu e. C/\-G. R. No. 47667, February 23, 1999 .

Deci s ion EB 124 (CTA Case No . 6445) WE CONCUR: L~-~ ERNESTO D. ACOSTA Presid ing Justice ~~Q.~~,Q. AEs~~u.stUiYce iuANiro C. CASTANED:K, JR. Associate Justice Ja- CAESAR A. CASANOVA Associate Justice

Decision EB 124 (CTA Case No. 6445) CER TI F ICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the above Decision has been reached in consultation with the members of the Court En Bane before the case was assigned to th e writer of the opinion of this Court. (' ',~-\R - '-- ~ ERNESTO D. ACOSTA Presiding Justice