cta_decision CTA Case No. 90899089 2018-08-10

SHENILYN ABALOS, RUEL GATCHALIAN, DONNA LACUNA, ANDREW GUTIERREZ, ROSARIO VERGARA, MARIA SUSAN TORRES, MARILYN MEDRANO, MA. CRISTINA DUENAS, GEMMA ESTHER ESTRADA, MARIA CYNTHIA PETALCORIN, PILIPINAS QUISING, SHIELA ROMANCE, ALELI ROSARIO, NICK ANGELO VILLALUZ, MARIA CARMELA ABADEZA, MARIA CONCHITA ABAO, ANNABELLE ABELLO, MINERVA ABRERA, REXEL ABRIGO, LOURDES ADRIANO, SHERWIN AGBAYANI, WILFREDO AGLIAM, AILEEN M. AGUILAR, BERNADETH AGUSTIN, JANICE ALALAY, MARIA CRISELDA ALANO, JANELYN ALCANTARA, MARIA CHARMAINE ALCANTARA, RAQUEL ALDABA, ANGELICA ALEJANDRO, LEONOR ALEJANDRO, ELIZABETH ALIMURUNG,

� REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SECOND DIVISION SHENILYN ABALOS, ET AL., CTA CASE NO. 9089 Petitioner, Members: -versus- Castaneda, Jr., Chairperson, Casanova Manahan, 11. COMMISSIONER OF Promulgated: INTERNAL REVENUE, AUG 10 2018 / Respondent. 17 /J:~ ,. ~ &... x----------------------------------------------------------------------------------x DECISION CASTANEDA, JR., J..: THE CASE This is a Petition for Review1 filed on July 13, 2015 by several Filipino employees of the Asian Development Bank (ADB), praying for the refund of their alleged erroneously and illegally paid income tax in the aggregate amount of Fifty-One Million Eight Hundred Four Thousand Nine Hundred Fifty-Five Pesos (P51,804,955.00) for taxable years 2012 and 2013. THE FACTS Petitioner Shenilyn Abalos and her co-petitioners are Filipinos and regular employees of ADB,2 whose office is located at 6 ADB Ave., Mandaluyong City.3 ~ 1 Docket, Vol. I, pp. 14-32. 2 Par. 1, Joint Stipulation of Facts and Issues, Docket, Vol. I, p. 321. 3 Par. 1, Admissions, Answer, Docket, Vol. I, p. 282.

DECISION CTA Case No. 9089 On the other hand, respondent is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR), who has the power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto or other matters arising under the National Internal Revenue Code (NIRC) or other laws or portions thereof administered by the BIR. He holds office at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City.4 On April 12, 2013, respondent issued Revenue Memorandum Circular (RMC) No. 31-2013 entitled "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." It provides, among others, that officers and staff of the ADB who are not Philippine nationals shall be exempt from Philippine income tax: "SECTION 1. BACKGROUND.- Foreign governments I embassies I diplomatic missions and international organizations situated in the Philippines acting as employers enjoy immunity from collecting taxes on salaries and emoluments of their employees, whether they are foreigners or Philippine nationals. This immunity from being constituted as withholding agents of the Philippine Government is accorded to these entities on the basis of international comity as embodied in several international agreements to which the Philippines is a signatory, such as, the Vienna Convention for International Relations (for embassies and diplomatic missions), Convention on the Privileges and Immunities of the United Nations, Convention on the Privileges and Immunities of Specialized Agencies (for the various agencies of the United Nations), Asian Development Bank Headquarters Agreement (for ADB), Articles of Agreement of the International Finance Corporation, among others. In recognition of this immunity, the Withholding Tax Regulations (Revenue Regulations No. 2-98, as amended), clearly reiterate the exemption from the withholding tax system of the remunerations being paid by foreign governments and international organizations to their employees who are residents or nationals of the Philippines. Section 2.78.1(8)(5) provides thus: 'Sec. 2.78. WITHHOLDING TAX ON COMPENSATION. - ... ~ 4 Par. 2, Joint Stipulation of Facts and Issues, Docket, Vol. I, p. 321.

DECISION CTA Case No. 9089 Sec. 2.78.1. Withholding of Income Tax on Compensation Income. - XXX (B) Exemptions from withholding tax on compensation. -The following income payments are exempted from the requirement of withholding tax on compensation: XXX (5) Compensation for services by a citizen or resident of the Philippines for a foreign government or an international organization. - Remuneration paid for services performed as an employee of a foreign government or an international organization is exempted. The exemption includes not only remuneration paid for services performed by ambassadors, ministers and other diplomatic officers and employees but also remuneration paid for services performed as consular or other officer or employee of a foreign government or as a non-diplomatic representative of such government.' However, it has been observed that the foregoing provisions have been a source of confusion on the correct tax treatment of the compensation income earned by Philippine nationals and alien individuals employed by foreign governments/embassies/diplomatic missions and international organizations. To clarify, the exemption from withholding taxes on the compensation of officials and employees applies to foreign governments/embassies/ diplomatic missions and international organizations. Since the withholding of tax is merely a method of tax collection, the exemption from withholding taxes does not equate to the exemption from paying the income tax itself. Section 23 of the National Internal Revenue Code (Tax Code) lays down the general principles in the taxations of citizens and alien individuals, to wit: 'SECTION 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 and without the Philippines; XXX (D) An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines; xxx' jJ&_

DECISION CTA Case No. 9089 As an exemption to the general rule, it is noted that most international agreements which grant withholding tax immunity to foreign governments/embassies/diplomatic m1ss1ons and international organizations also provide exemption to their officials and employees who are foreign nationals and/or non-Philippine residents from paying income taxes on their salaries and other emoluments. XXX XXX XXX SECTION 2. TAX TREATMENT OF COMPENSATION INCOME.- The tax treatment of Philippine nationals and alien individuals on compensation income received by them from foreign governments/embassies and missions and international organizations shall be as follows: XXX XXX XXX (d) Those Employed by Organizations Covered by Separate International Agreements or Specific Provisions of Law - 1. Asian Development Bank CADBl Section 45(b), Article XII of the Agreement between the Asian Development Bank and the Government of the Republic of the Philippines regarding the Headquarters of the Asian Development Bank provides: 'ARTICLE XII XXX 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 (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;' From the above, only officers and staff of the ADB who are not Philippine nationals shall be exempt from Philippine income tax." (Underscoring and emphasis supplied) Pt.-

DECISION erA case No. 9089 Pursuant to the RMC, the Filipino employees of the ADB were ordered to declare and pay income taxes for 2012 onwards.5 Accordingly, petitioners paid the following amounts as their income taxes for taxable years 2012 and 2013:6 PETmONER INCOME TAX PAID TOTAL ..............=2�0~.=1:2 2013 p i 148 126.oo I i �- ........ 218 344.81 l 258 979.03 I Aileen M. A uilar 229 108.61 ! Bernadeth A ustin ~9..1Ji.f.~~!9..!9.Y 126 836.73 I .M9.Ei.9....~ri~~IQ9.~1.9.1J() 200 886.78 : .J.9..1J.~.IYQ~I~D..~9..~9......... . . . . :::2.9,.~:2:L.1::.7.:.:3: :.:�.3::.:::5. . . 11,................................................................................ +�� Maria Charmaine Alcantara ' 146 937.72 1 167 i.~~q~~L.~I99.~9. . ........... ..... ..J ..... J~1.t?.ZP~.?.Qj ........................................ , e:!:~!~~ ~: ~!:!9~1i.f.9..~1~J9.1JQEQ !309~127t2.2l6 i! m=-::;. ;J;~1��~~ i I� � .� � i M9.Ei9..~Y.i~9. b9r9. A.!l!19.9.r.Igq 1.??.~9??.~?..9..( 1��~4J�~QQ I 9��4$.1~~1~~590;�!1�.~�2��9��1! R.Y.~b..~l.t.nQ9.9Y9.T..................................................... , .......................~?�~9.~I~11.L .............. J.~~~PJ.?.~.PP .. ! Glenita Amoranto ��-��-��-�� : 292 502.98 i+. .........................................................1................................... ��' .........................................2.....9.....2......1.5.....0......2..........9.....8..........! . . . . . . . . . . _M_~~-~~~iJ.i9.f.\1!1P9.E9. .. j ..n?.~1?1.?1.!?.�9~!..?~.�?�..j! . }_�?.&~?~?.IJ I3~6~8;~?4q2~4:.q0q0�Ji Catherine Anastaciq .......................��! ........ . ................ ~1.9.1.?.9..?.~.��.! . ... .�� 1 .... ~Y.~!yr,:~_~.D.9r9.9.9..... l ..................... ��! .........................................~1.?..t1?J.~P?... !.?J.t.~.1~:.9P..I. ............................... ?.J.�&1.1~Q?.j 458 512.95 ! 458 512.95 ! Maria Teresa Andrade 79 200.09 l Melod Andres 79 200. .:.c..:.;..:o..........................................................................+��:1:::.7:.9 402.8 179 402.85 I 2 491 9 .�.�..�� 11$7?3.:7�090~;.0909.� [!. ��4��5��4��6��6��7��$.?$8;~8~Ij9Ji 917 o ... . . . . . . . . . . . . . . . . . . ! i?~j�~;qq��] 1.~.~1.~.1?. ~ I ..................................... .. j' 917 031.90 ..............................................L ................................. j 0 . .?..9... 5 Par. 1, Joint Stipulation of Facts and Issues, Docket, Vol. I, p. 321. 6 Par. 13, Petition for Review, Docket, Vol. I, pp. 24-26.

DECISION CTA Case No. 9089 .z.:��;1~4.~~J : i1~~:~~I~~ I ~~~9~.:~~&~9-.~�-.:~-~~?lj1 . . . . . . . !..?.!.,Q9.�..~99..i . .:.: :.:.:�: :. :.: : : :�: �.�.�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_�__�_�_�_��_�_�_�_�_�_�_�_�_�_�_�_�_�_2_�_�_�_�_2_�_�_�_�__�_i_�_�_�_��l��_�_a_�_�_�_-_a_�_�_�_�_�_7_�_�_�_�__�_:__a_�_�_�_�_�_a_�_�_�_�_�_�_�_�_�_l_, �� 140 951.65 ! 760 597.00 t Maria Cristina Avila !. M~Ca?.voeei.Jnee.... .!?!.~ ?~-<-.-�~� ~� �~� �Y� � �� +� � � � �� c: ~. .cc..:...r.... 1- . J _ _13gsalia Baeza.................... . _ ... . ?~~r?�.?~~? !.�.9,?!.~~99. ...................~.?.~r~-~4:.~~.?. 1 AI!!I~--!?.~9.Y.i9. . .. ...... ........ . .. U?r9..?.~--~-~.?..... I . .U?.r9..?.~.&? Maria Nieva Ba uisa .........................................................?.~.?.t.~.?Z~~-~ . . ?.?9,99.9.~99. ... ?~.?r~~Z&~ "'-�� i� . . ... . ??~t�??.~.?.?.... ... ............................................... ................. .?.?~r�??~?.?....l ~~Jln�.JI J~?,1�Z~99.: 774~.183.13 t . . . . . . . . . . . . . . .?..~. ?.1..1.?.1~~� . :::::�:....:.:::.::.: ��-��! ?.1?.;.1~1~2�1 .:.::.::..........................+�j��.�..�.�..�..�.�..�..�..�.�..�..�.�..��?��?��~��t��H��4��:�-~~~.~r9~9.!.~?zz.,L .:::�: . . . . . . _. .??~?.~?.r~9...?~~7z~.9~..z?z. .. 203 910.83 i . j32~0;:0Ql.9?.1�_3;.Q0.Q0. i .. .. 203 910.83 ]... i rrameda Katherine Barrameda 225 695.63 t 225 69 � 206 679.50 t 206 679.50 204 724.44 ! 208 613.00 413 337.44 134 809.29 Dennis Baruian 134 809.29 I 320 658.12 Eileen Purita Battun 320 658.12 I 313 148.61 Gisela Patricia Bautista 313 148.61 I !. . . . . . . 1 JHuedremaBendoBniaeu~.tis��:t.�a��:��-:��:�:�:��:��:.�.�:��:�: : �::.:::.:::::::::::::2:::1:::9::::�7:::5::7:�~.z:21Iz1:~I.i 2?.2?.6?,9.~9.~99.. . 1 446 527.21 ! R.Y.~b..!?.e.OJ90Q .................... i . ........... J~.?t��.Z~~�l ............ J?.�.,9.?..~.~99..1 LQfe.H~ Beot~e.t: ....................... r ..... }~},Q?9.~?.9.(. .. ............... J ..~.C?.e..r.n.i..!?..e.n.i~~-09...................... ! .. ...... U�t.~9.~.~.?.?.. ! ��-��- L... ��~1~~Ll~r:~---�� ..:::::.:: .U4.:~~i:~~�::::! . . . �4_.�_ 5_.�_�l_.�_-~_o._� _�o._� Ar.:~.ge.l~_fr9..1J.~e.?.~..!?.e.rr.:J.9.1c:::.!1q�::::i::.�.:.�:.�.:.:.........: .?9.Jr???.~~�j _.�_�_�_�_�_�_�_�_�_�_�_�_�_�_�_5_.�_�_9_.�_�_�4_.�_�_.l. _ _ _._:_l.�.�.�.�.�.. :� �:..Ai!e..e..o...!?.e.rr.:~.~rc:!c:>................................. ., ................??.~&9.?..~.~~-.1 ....................?..~~,�.~~~99. .1 ~;~~~:~~~~~E9QIJi.~ 1 � � � � � � � � � � � � � � � � � � � � �~ i:-~-~ :~ ~ ..:.:.:..::::.:::::: 1$$;~2?.:Q.g:: .....................:::::.. i :.1...::::.:.:...-:..:..::::..::...... ~:~~e~a~~b~ �. . : : ]~~;~~~:t~ !.� � � � �. . . . . . . . . . . . . . . . . . . . . . . . . +��:....:.. 448 224.8 460 536.oo I 334 843.17 �� +��:.:..::::....:..l ..::::....:..::::..:..: 43 011. ��........��.��......�.�..��.��.::::.:::��: ��1.��:::��::: �� ) 273 107.94 i .............................................................../.....................................! ................................................... .................. ??.?.r?Z�~�.~ J ~!~ ~~:~ = = 1~H~H~l 192 199.95 ! ........................................................! �--~----~�4'.~-~~~~z~~?.zl ��-~----~-!.l.~z.~l-~~--~-~.9..~...1. --~~~~~9.4,?.~-~--~-9.9....1 On February 14, 2014, Mr. Erwin Salaveria and Ms. Portia Gonzales, Filipino employees of the ADB, filed a Petition to Nullify ;z.c..

DECISION erA Case No. 9089 Section 2(d)(1) of RMC No. 31-2013, with the Regional Trial Court (RTC) Branch 213 of Mandaluyong City, docketed as Civil Case No. MC14-8775.7 On September 30, 2014, the RTC promulgated a decision in Civil Case No. MC14-8775 declaring Section 2(d)(1) of RMC No. 31-2013 as void for being issued without legal basis, in excess of authority and/or without due process of law due to the absence of legislation and/or regulation to the contrary.8 A Motion for Reconsideration was filed by respondent but was denied on January 9, 2015.9 Respondent appealed the lower court decision to the Court of Appeals, docketed as CA-G.R. CV No. 104374, which dismissed it via Resolution dated July 3, 2015. Respondent filed a Motion for Reconsideration, but it was also denied by the Court of Appeals. 10 Respondent then elevated the case before the Supreme Court by filing a Petition for Review on Certiorari. The case is still awaiting resolution by the High Tribunal. 11 Armed with a favorable RTC ruling, petitioners allegedly filed their respective administrative claims for refund of income tax with the BIR under Section 229 of the Tax Code. 12 In a letter dated April 21, 2015, in reply to the request for refund by Maria Cristina Duenas, Gemma Esther Estrada, Maria Cynthia Petalcorin, Pilipinas Quising, Shiela Romance, Aleli Rosario, Maria Susan Torres, Rosario Vergara and Nick Angelo Villaluz (Duenas et al.) for their 2012 taxes respondent allegedly stated that: "In reply, please be informed that there is no legal basis to support your claim for refund. This Office has appealed the RTC decision, and hence, for all legal intents and purposes, it is not yet final and executory. Moreover, assuming that your clients are legally entitled to refund, per Revenue Delegation Authority Order (RDAO) No. 03-02 dated 15 February 2002, claims for tax refund shall be processed by Jc- 7 Par. 16 and 17, Petition for Review, Division Docket, Vol. I, p. 27. 8 Par. 17, Petition for Review, Division Docket, Vol. I, p. 27. 9 Par. 18, Petition for Review, Division Docket, Vol. I, p. 27. 10 Par. 19, Petition for Review, Division Docket, Vol. I, p. 28. 11 /d. 12 Pars. 4 and 5, Petition for Review, Division Docket, Vol. I, pp. 18-19; Annexes A toG, Petition for Review, Division Docket, Vol. I, pp. 135-226.

DECISION CTA Case No. 9089 the Revenue District Office (ROO) of the Bureau of Internal Revenue where the taxpayer is registered or required to be registered. In the instant case, since your clients are registered at RDO No. 41 - Mandaluyong City, the said office has the proper jurisdiction to process the claims. Accordingly, in the meantime, the docket of your claims for tax refund shall be indorsed to RDO 41."13 With respect to the refund of the 2013 income taxes paid by petitioners Duenas et al. and the request for refund filed by the rest of the petitioners, allegedly no response was made by the respondent. 14 On July 13, 2015, to prevent the lapse of the two-year period to file a refund claim under Section 229 of the Tax Code, the petitioners Shenilyn Abalos et al. were prompted to file the present Petition for Review before this Court. 15 On October 12, 2015, respondent then filed his Answer. 16 Respondent asserts that the assailed decision of RTC Branch 213 of Mandaluyong City, from which petitioners based their claims for refund, is void. Respondent alleged that the power to rule on the validity of revenue issuances administered by the BIR is within the jurisdiction of this Court and not the regular courts. 17 The pre-trial conference was initially scheduled on November 26, 2015,18 but was subsequently cancelled and reset to January 21, 2016.19 Petitioners filed their Pre-Trial Brief on January 19, 201620 and respondent submitted his Pre-Trial Brief on January 18, 2016. 21 On August 22, 2016, after presenting their witnesses, petitioners filed their Formal Offer of Documentary Evidence,22 consisting of Exhibits "P-1" to "P-36", inclusive of sub-markings. In its October 20, 201623 and May 24, 201724 Resolutions, the Court eventually admitted all the formally offered exhibits as petitioner's evidence. )'t- 13 Annex H, Petition for Review, Docket, Vol. I, p. 227. 14 Par. 4, Petition for Review, Docket, Vol. I, p. 18. 15 Par. 6, Petition for Review, Docket, Vol. I, p. 18. 16 Docket, Vol. I, pp. 282-293. 17 Par. 5, Answer, Docket, Vol. I, p. 291. 18 Docket, Vol. I, pp. 294-295. 19 Order, Docket, Vol. I, p. 233. 20 Docket, Vol. I, pp. 303-307. 21 Docket, Vol. I, pp. 300-302. 22 Docket, Vol. II, pp. 607-624. 23 Docket, Vol. II, pp. 677-679. 24 Docket, Vol. II, pp. 831-833.

DECISION CTA Case No. 9089 On July 31, 2017, respondent's counsel manifested that she will no longer present evidence25 and will adopt the arguments in the Answer as the memorandum for the case.26 On September 18, 2017, the Court declared the instant case submitted for decision, after the respondent's September 11, 2017 Manifestation27 and without petitioners' memorandum per Report of Records Division dated September 14, 2017.28 THE ISSUE The parties submitted the following issue for the Court's resolution: 29 "Whether or not petitioners are entitled to claim for refund for income taxes paid in taxable years 2012 and 2013 alleged to be erroneously and/or illegally paid." THE RULING Pertinent to the resolution of the issue at hand are Sections 204(C) and 229 of the NIRC of 1997, as amended, which is quoted hereunder for ready reference: "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 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 taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment~ 2s Order, Docket, Vol. II, p. 837. 26 Manifestation, Docket, Vol. II, p. 838-840. 27 Id. 28 Resolution, Docket, Vol. II, p. 843. 29 Issue, Joint Stipulation of Facts and Issues, Docket, Vol. I, p. 322; March 1, 2016 Order, Docket, Vol. I, p. 327.

DECISION CfA Case No. 9089 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." (Underscoring supplied) "SEC. 229. Recovery ofTax Erroneously orIllegally 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: Providec;l 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." (Underscoring supplied) According to these provisions, both the administrative and the judicial claims for refund must be filed with the CIR and the Court of Tax Appeals, respectively, within the two-year prescriptive period from the date of payment of tax. The table below presents the relevant dates of the income tax payments based on the evidence presented by the petitioners such as the Annual Income Tax Returns, BIR Payment Forms, BIR Revenue Official Receipts, Bank Deposit Slips, and the Certifications from the Revenue Accounting Division (RAD) of the BIR: 30 Exhibit "P-11-2", Docket, Vol. I, p. 393. 31 Exhibits "P-17'', Docket, Vol. I, p. 435. 32 Exhibit "P-13-1", Docket, Vol. II, p. 754. 33 Exhibit "P-14-1", Docket, Vol. I, p. 412.

DECISION CTA Case No. 9089 ,:1 July 2' 201334 & . ...... .. TJ\i)rii Andrew Gutierrez ........ April 11, 201436 July 15, 2015 April 11, 2016 +��:::J..u::::..l..v., 3!,?2t0?193J3~7~&~. April 15, 2016 ,.....................................................................................................i April f��+�� 1 J:.:!; !5, 2016 Rosario Vergara . July 15 201338 !. April15, 201439 July 15, 2015 12, 201340 & I July 15, 201442 I July 15, 2015 Maria Susan Torres I July 15 201341 !��+��..........c....o.:.:..t ................. f ..............................................+��!��!��! i I April 15, 201343 April 15, 201445 July 15, 2015 April 15, 2016 & ~:: ':::s~i'::,;::nas .J:.. J':I-!Y. A~~ A}P':IC!Yi 3; iOi~July ...................... ��m�� ...... ... I !?,?Q!.?.~:..J 14 201449 15, 2015 July 14, 2016 Gemma Esther ~::~~ -~...~~ I AJpurilly1155, ,220011353o51& I April 4, 220011445&2 i.~; July 15, ?n11\ i ,,1" 11, 201t:: July 11 : ....... , .v � ..~.~ ;~ ~ ~i~� � � � � � � � � � � � � � � � � � m�m .~.i~i~~.~f~l~~~f.;;~~..l..~i~i~~~:~l~~Q~~;t .I..=~~Y 15, 2015 July 15, 2016 ~'�'�i,l.~~f~,~~~f.;;~~J ~~~ ~4~~~~= ~ ,i.P...i.l..i�p��i�n��a��s��Q��u��i�s��i�n��g��t��A��..j:. .� 6 I July 15, 2015 July 14, 2016 .... J AJp~r:ili!1Y5!?'t?290!1.3?.6~1~�& I A}p~:r~illy1!1?',2?091!.4~6~3~& I July 15, 2015 July 15, 2016 ~ ~ Shiela Romance ��+ O m �� April 15' 201365 & i April 11' 201467 & ! J I 15 2015 J I 14 2016 Ni.i~c.l A;:-n:~;J'~E~'1<~J'V.il "aluz ~~~>~~ ~~:~~~1::& J~l: J~l: Aleli Rosario ! .k. I 15: 2015 10: 2016 '�� m��.l�m��,��..�� i~ 34 Exhibit "P-15-1", Docket, Vol. I, p. 427. 35 Exhibit "P-15-2", Docket, Vol. I, p. 427. 36 Exhibit "P-16-1", Docket, Vol. I, p. 432. 37 Exhibit "P-23", Docket, Vol. I, p. 447. 38 Exhibit "P-9-2", Docket, Vol. I, p. 387. 39 Exhibit "P-23-1", Docket, Vol. I, p. 448. 40 Exhibit "P-24", Docket, Vol. I, p. 449. 41 Exhibit "P-9-1", Docket, Vol. I, p. 387. 42 Exhibit "P-24-1", Docket, Vol. I, p. 450. 43 Exhibit "P-14-8", Docket, Vol. I, p. 423. 44 Exhibit "P-34", Docket, Vol. I, p. 468. 45 Exhibit "P-14-9", Docket, Vol. I, p. 415. 46 Exhibit "P-4-3", Docket, Vol. I, p. 371. 47 Exhibit "P-6-1", Docket, Vol. I, p. 377. 48 Exhibit "P-4-1", Docket, Vol. I, p. 370. 49 Exhibit "P-4-2", Docket, Vol. I, p. 370. 50 Exhibit "P-4-5", Docket, Vol. I, p. 372. 51 Exhibit "P-4-6", Docket, Vol. I, p. 372. 52 Exhibit "P-4-4", Docket, Vol. I, p. 372. 53 Exhibit "P-14-4", Docket, Vol. I, p. 421. 54 Exhibit "P-14-3", Docket, Vol. I, p. 421. 55 Exhibit "P-14-5", Docket, Vol. I, p. 422. 56 Exhibit "P-14-2", Docket, Vol. I, p. 421. 57 Exhibit "P-33", Docket, Vol. I, p. 467. 58 Exhibit "P-13-2", Docket, Vol. II, p. 756. 59 Exhibit "P-14-6", Docket, Vol. I, p. 422. 60 Exhibit "P-14-7", Docket, Vol. I, p. 422. 61 Exhibit "P-18-1", Docket, Vol. I, p. 437. 62 Exhibit "P-18", Docket, Vol. I, p. 436. 63 Exhibit "P-18-2", Docket, Vol. I, p. 438. 64 Exhibit "P-18-3", Docket, Vol. I, p. 439. 65 Exhibit "P-19-1", Docket, Vol. I, p. 440. 66 Exhibit "P-19", Docket, Vol. I, p. 440. 67 Exhibit "P-19-3", Docket, Vol. I, p. 442. 68 Exhibit "P-19-2", Docket, Vol. I, p. 441. 69 Exhibit "P-25", Docket, Vol. I, p. 451. 70 Exhibit "P-9-3", Docket, Vol. I, p. 387. 71 Exhibit "P-25-2", Docket, Vol. I, p. 453. 72 Exhibits "P-25-1" and "P-25-3", Docket, Vol. I, pp. 452 and 454.

DECISION CTA Case No. 9089 cone~;~:�~~~~ ..II~~!!�YI~.!.;~.?/....Q?..9i!~?..?~.~~ M9.r~h ?1~?9!.'.!~~ �..�.. �.l,!�. �. ~� ~.�.�.�l.�Y�. � �2-~�-.� �. . ..�.1.i�.�.5.s.�..... ~ ~rch I.��M�� I .................... ; 5 2 T J �.� ��1�...�.l� �s�-~�-� 21 ...... July 12, 201376 ly 13, 2015 July 14, 2016 Jul 15 2013 Lourc;l~~.~c:Jri9.Q.<?. , J~!YJ~~?.9!.?.~~ .... 1 I Jul 15 .?h~r.!.Y.i.r.:!.~91?9.Y~r.:!i. ... m.m....... J....J~!Y1~~...?.9!?.~~ ; APriJ ..!.9t.. ?.9!'.!~.~...... JJ.~Iy 15 2 10 2016 L !YY.i!fr.~c:J.Q.Agli_9r.:D... . .. )~JY.!.~c?.9!~~ ...J... jJ~Iy 15 20 I Aileen M. A uilar J J~1.?.9!~~~ APriJ.!.'.!1 ?.9J'.!~~ IJyly 15 2015 114 2016 [ ~~f.Q.~.c:J.~~b.A9Y?.~i.r.:! ................ J~JY..!.~.c?.9+?.~:. .... [ ........................................................................................I...JYIY..!.~~.?.9J~ ....j............. .......................................................... J .J... i}9.r.:!i.~~.~~~~9.Y...... ................................. J~JyJ~~?9!?.~ .I Jyly)~1.?9J~.'. .1 Mari~.~r..i.~~!c:J9.~!ano J.~IYJ.~t..?Q!?~= .J AP~i.IJ9t..?Q1'.!:? ... LJ..~.IY!.~~?9J.~..........AP~i.LJQ~?9!� .��.\ J~.r.:!-~1Yr.:!.~.lc;:9.!:1!9.F~ ��m�� .J~!YJ~~.?9!.~.~1. JJ~JyJ~t ?.Q!.~. ....A.......p.....r...i..l.......1.....1.....,......2......0.....1.....4......9...3.......&.............' ��i .. .................. i , Maria Charmaine July 15' 201392 July 15, 2016 Jul 15 201494 i Alcantara uel Aldaba ��+��. 73 Exhibit "P-11-1", Docket, Vol. I, p. 393. 74 Exhibit "P-11-43", Docket, Vol. I, p. 394. 75 Exhibit "P-11-3", Docket, Vol. I, p. 393. 76 Exhibit "P-11-4", Docket, Vol. I, p. 393. 77 Exhibit "P-10-1", Docket, Vol. I, p. 389. 78 Exhibits "P-26" and "P-26-1", Docket, Vol. I, pp. 455-456. 79 Exhibit "P-10-2", Docket, Vol. I, p. 389. 8o Exhibit "P-11-5", Docket, Vol. I, p. 393. 81 Exhibit "P-11-6", Docket, Vol. I, p. 393. 82 Exhibit"P-11-7", Docket, Vol. I, p. 393. 83 Exhibit "P-10-3", Docket, Vol. I, p. 389. 84 Exhibit "P-11-8", Docket, Vol. I, p. 393. 85 Exhibit "P-11-9", Docket, Vol. I, p. 393. 86 Exhibit "P-10-4", Docket, Vol. I, p. 389. 87 Exhibit"P-11-10", Docket, Vol. I, p. 393. 88 Exhibit "P-11-11", Docket, Vol. I, p. 393. 89 Exhibit "P-11-12", Docket, Vol. I, p. 393. 90 Exhibit "P-10-5", Docket, Vol. I, p. 390. 91 Exhibit "P-11-13", Docket, Vol. I, p. 393. 92 Exhibit "P-11-14", Docket, Vol. I, p. 393. 93 Exhibit "P-10-6", Docket, Vol. I, p. 390. 94 Exhibits "P-27" and "P-27-1", Docket, Vol. I, pp. 457-458. 95 Exhibit "P-11-15", Docket, Vol. I, p. 393. 96 Exhibit "P-11-16", Docket, Vol. I, p. 393. 97 Exhibit "P-11-17", Docket, Vol. I, p. 393. 98 Exhibit "P-11-18", Docket, Vol. I, p. 393. 99 Exhibit "P-11-19", Docket, Vol. I, p. 393. wo Exhibit "P-10-7", Docket, Vol. I, p. 390. 101 Exhibit "P-11-20", Docket, Vol. I, p. 393. 102 Exhibit "P-11-39", Docket, Vol. I, p. 394. 103 Exhibit "P-11-21", Docket, Vol. I, p. 393. 104 Exhibit "P-10-8", Docket, Vol. I, p. 390. 105 Exhibit "P-11-22", Docket, Vol. I, p. 393. 106 Alleged in the Petition for Review, Docket, Vol. I, p. 20. 107 Exhibit "P-11-40", Docket, Vol. I, p. 394.

DECISION CTA Case No. 9089 . . ,. . . . AP~.iJ. .~1~~9.~.1.~?.= AP~iJJ1L~QJ.�.......; ApriL?.r~91�...... i "ti� .....A.Pril?.c~9.!11.~.~. . . .L. 108 Exhibit "P-11-23", Docket, Vol. I, p. 393. 109 Exhibit "P-10-9", Docket, Vol. I, p. 390. 110 Exhibit "P-11-24", Docket, Vol. I, p. 393. 111 Exhibit "P-10-10", Docket, Vol. I, p. 390. 112 Exhibit "P-11-25", Docket, Vol. I, p. 393. 113 Exhibit "P-11-26", Docket, Vol. I, p. 393. 114 Exhibit "P-11-27", Docket, Vol. I, p. 393. 115 Exhibit "P-11-28", Docket, Vol. I, p. 393. 116 Exhibit "P-10-11", Docket, Vol. I, p. 390. 117 Exhibit "P-11-36", Docket, Vol. I, p. 394. 118 Exhibit "P-11-42", Docket, Vol. I, p. 394. 119 Exhibit "P-11-38", Docket, Vol. I, p. 394. 120 Exhibit "P-11-30", Docket, Vol. I, p. 393. 121 Exhibit "P-11-41", Docket, Vol. I, p. 394. 122 Exhibit "P-11-37", Docket, Vol. I, p. 394. 123 Exhibit "P-11-31", Docket, Vol. I, p. 393. 124 Exhibit "P-10-12", Docket, Vol. I, p. 391. 125 Exhibit "P-28", Docket, Vol. I, p. 459. 126 Exhibit "P-11-32", Docket, Vol. I, p. 393. 127 Alleged in the Petition for Review, Docket, Vol. I, p. 20. 128 Exhibit "P-10-13", Docket, Vol. I, p. 391. 129 Exhibit "P-11-33", Docket, Vol. I, p. 394. 130 Exhibit "P-10-14", Docket, Vol. I, p. 391. 131 Exhibit "P-11-34", Docket, Vol. I, p. 394. 132 Exhibit "P-11-35", Docket, Vol. I, p. 394. 133 Exhibit "P-10-15", Docket, Vol. I, p. 391. 134 Exhibits "P-29" and "P-29-1", Docket, Vol. 11, pp. 460-461. 135 Exhibit "P-8-1", Docket, Vol. I, p. 383. 136 Exhibit "P-8-2", Docket, Vol. I, p. 383. 137 Exhibit "P-8-3", Docket, Vol. I, p. 383. 138 Exhibit "P-7-1", Docket, Vol. I, p. 378. 139 Exhibit "P-7-2", Docket, Vol. I, p. 378. 140 Exhibit "P-8-4", Docket, Vol. I, p. 383. 141 Exhibit "P-7-3", Docket, Vol. I, p. 378. 142 Exhibit "P-7-4", Docket, Vol. I, p. 378. 143 Exhibit "P-11-29", Docket, Vol. I, p. 393.

DECISION CTA case No. 9089 j Irene Atienza ___ ~ July 15, 2013'"" ~;,~ j_July 15, 2015 July 15, 2016 , �� :::::] � I~l~}.~; ~~H};~ :J .. ~ APri.1.. .?1. ?.9J1~.~~. : 1 3:W~.i:~;j~t~�� ::.::�:.�:�:.:.:�:�: .:.: :.: : : : : :) J ...................J.Y.IYJ.?L?.Q.~.?....... .........�.�..��.�.�.��.�� . ... JY.IYJ.?..t. ?.Q~~~~=�� i......:...:::..::..::::.:.:.::::....::::.::::.:::::.::::............................................... +1��::JJ..yu::.l1,.y~. .. 15 2013 150 APriiJQL?.Q14151 JylyJ?L?.QJ? .. APriiJQL?.Q~� l . 1. : : .: :5.c. :2::.o:.:1:.::3. ,.....:....:.:.:...:..:.:::.....:::.::�.Ol..::::.:. .:::..................................................... 1....5.... Jul 15 2015 .. . : I Maria Nieva Baguisa 20 1 5 July 15, 2013153 Aj~~; 53 2� 1~:; & July 15, 2015 June 3, 2016 IOJ:~~9:Y.~!I6~.:ij~i.~:6~i�9 �. :.: :.:J��:.::J.~IY..J.?.,?.Pn~=~ �... :.:.:..:.::.:::::::::::::~:::::�::�: ::::::::::::�:::::�............JYIY~?L?.9.~.?...... ....... ��! L.~.yqgvif1~.,f:3.?.1.1.i.~?.l..r.:l.9.t.... . mj ......J.Y.JY ..!.?t ?.9..1~~=:. ....APri1 ..~.11 ?.9.11.~.~~ .............J.Y..I.Y..~.?L.?.9..~.?... , APriJJ1L?.9J.�. ��i I Ayqr~Y.f.i~.ri.~. l??.l.r.:l.?.9.r.:l. ..ml J.Y..IYJ?t?.9..~~~== L. . )y_lyJ?L?.Q~? L ... ..... ....... ! / Katherine Barbecho / July 7, 2016 ! i Marissa Barcenas t��i=iori5.5a6arot�� ...... ; ,�. Qi~?ri~�ij~�~i~:r.D~�~~m�� j �1 i Katherine Barrameda 1 f1~d~:r.::~~ir9.99.: �:�� ! Marian Therese i Bartolome r��i:Senni"s��sa"ru.ian�� ............................................................................1 j ~9T~tl..?.!t... ?QJ1.~.~.~ J....APE.i.1.. ~.11.. ?.9J1~:.~. 144 Exhibit "P-8-5", Docket, Vol. I, p. 383. 145 Exhibit "P-7-5", Docket, Vol. I, p. 378. 146 Exhibit "P-8-6", Docket, Vol. I, p. 383. 147 Exhibit "P-8-7", Docket, Vol. I, p. 383. 148 Alleged in the Petition for Review, Docket, Vol. I, p. 20. 149 Exhibit "P-8-8", Docket, Vol. I, p. 383. 150 Exhibit "P-8-9", Docket, Vol. I, p. 383. 151 Exhibit "P-7-6", Docket, Vol. I, p. 379. 152 Exhibit "P-8-10", Docket, Vol. I, p. 383. 153 Exhibit "P-8-11", Docket, Vol. I, p. 383. 154 Exhibit "P-7-7", Docket, Vol. I, p. 379. 155 Exhibit "P-30", Docket, Vol. I, p. 462. 156 Exhibit "P-20", Docket, Vol. I, pp. 443-444 157 Exhibit "P-8-12", Docket, Vol. I, p. 383. 158 Exhibit "P-7-8", Docket, Vol. I, p. 379. 159 Exhibit "P-8-13", Docket, Vol. I, p. 383. 160 Exhibit "P-8-14", Docket, Vol. I, p. 383. 161 Exhibit "P-7-9", Docket, Vol. I, p. 380. 162 Exhibit "P-7-10", Docket, Vol. I, p. 380. 163 Exhibit "P-8-15", Docket, Vol. I, p. 383. 164 Exhibit "P-7-11", Docket, Vol. I, p. 380. 165 Exhibit "P-8-16", Docket, Vol. I, p. 383. 166 Exhibit "P-8-17", Docket, Vol. I, p. 383. 167 Exhibit "P-8-18", Docket, Vol. I, p. 383. 168 Exhibit "P-8-19", Docket, Vol. I, p. 383. 169 Exhibit "P-8-20", Docket, Vol. I, p. 383. 170 Exhibit "P-8-41", Docket, Vol. I, p. 384. 171 Exhibits "P-31" and "P-31-1", Docket, Vol. I, pp. 463-464. 172 Exhibit "P-8-21", Docket, Vol. I, p. 383. 173 Exhibit "P-8-22", Docket, Vol. I, p. 383. 174 Exhibit "P-8-24", Docket, Vol. I, p. 383. 175 Exhibit "P-8-23", Docket, Vol. I, p. 383. 176 Exhibit "P-8-42", Docket, Vol. I, p. 384. 177 Exhibit "P-8-25", Docket, Vol. I, p. 383. 178 Exhibit "P-7-12", Docket, Vol. I, p. 380.

DECISION CTA Case No. 9089 Page 1_5 of 25 July 15, 2015 June 30, 2016 15 2015 Bernadette Buensoceso J.?L~Q.!.?...;........................................; ; -~~;_�h~-r.~~~:�~-~g~y_gri�i::j I 15, 2015 I July 15, LU.LO i 15 2015 Ethyt..~l!!9..Q.:~Qr~.r.~.9. ��!��'��'��'��'�� J?l~Q~? J�� .....................; Josefina Theresa July 15, 2013199 .......~.l!E9.QD..i.9...................... .....................] . ...N9..Q9./..~Y.?.~~-r.D-~.Q-~~ ��! :. I~i�:::!$; ?9!~~??:::::::�� .�_�_-_._-_.�-_.� � JJuyllyy_ _ 1~_?5t.,.. .2~0Q~1?5 �_�_�_I_,-�'��-�_�_�_�__�_�_�_�_-_..._................................................................, 2014 1:_ 2014202 !_' i ..........................................[. Juleah Anne Caballo i ll, & April July 15, 2015 July 10, 2016 Jul 10 ................L :.::.:!$.;:?.9!$.::] ........................................, J__u___l_, ..................................................................................................,!......__ 0.~-,, ! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........::...:..<.....:.:....:...;;....: ..00�00.,,..........1........................................................................... xTii.J1L~Q!1~?.~ i . . r APriJJ1L~QJ� A. . +1.......... ........::..::..1.....:::....: ...:::..: ..................... J_ _ _ _ 15 2015 I_, U_____ ............,I______1 J I. April 14, 2014208 & !, ' ' y 1 Jul 15 2014209 1 July 15, 2015 uly 15, 2016 ~' ~ L '�� 179 Exhibit "P-8-26", Docket, Vol. I, p. 383. 180 Alleged in the Petition for Review, Docket, Vol. I, p. 21. 181 Exhibit "P-8-27", Docket, Vol. I, p. 383. 182 Exhibit "P-22", Docket, Vol. I, p. 446. 183 Exhibit "P-21", Docket, Vol. I, p. 445. 184 Exhibits "P-8-28" and "P-8-29", Docket, Vol. I, p. 383. 185 Exhibit "P-7-13", Docket, Vol. I, p. 380. 186 Exhibit "P-8-30", Docket, Vol. I, p. 383. 187 Exhibit "P-8-31", Docket, Vol. I, p. 383. 188 Exhibit "P-7-14", Docket, Vol. I, p. 380. 189 Exhibit "P-8-32", Docket, Vol. I, p. 384. 190 Exhibit "P-8-33", Docket, Vol. I, p. 384. 191 Exhibit "P-7-15", Docket, Vol. I, p. 381. 192 Exhibit "P-8-34", Docket, Vol. I, p. 384. 193 Exhibit "P-8-35", Docket, Vol. I, p. 384. 194 Exhibit "P-8-36", Docket, Vol. I, p. 384. 195 Exhibit "P-7-16", Docket, Vol. I, p. 381. 196 Exhibits "P-32" and "P-32-1", Docket, Vol. I, pp. 465-466. 197 Exhibit "P-8-37", Docket, Vol. I, p. 384. 198 Exhibit "P-8-38", Docket, Vol. I, p. 384. 199 Exhibit "P-8-39", Docket, Vol. I, p. 384. 200 Exhibit "P-8-40", Docket, Vol. I, p. 384. 201 Exhibit "P-5-1", Docket, Vol. I, p. 374. 202 Exhibit "P-3-1", Docket, Vol. I, p. 361. 203 Exhibit "P-5-2", Docket, Vol. I, p. 374. 204 Exhibit "P-5-4", Docket, Vol. I, p. 375. 205 Alleged in the Petition for Review, Docket, Vol. I, p. 21. 206 Exhibit "P-3-2", Docket, Vol. I, p. 361. 207 Exhibit "P-5-3", Docket, Vol. I, p. 374. 208 Exhibit "P-3-3", Docket, Vol. I, p. 361. 209 Exhibit "P-3-4", Docket, Vol. I, p. 361.

DECISION CTA Case No. 9089 Based on the foregoing table, the Petition for Review filed on July 13, 2015 was filed within the two-year period from the respective dates of income tax payments. Significantly, however, it is noted that the written administrative claims for refund filed with the respondent CIR were not formally offer as evidence. Although the fact of filing of the administrative claims was alleged in the Petition for Review210 and the photocopies of which were attached as Annexes A to G211 these allegations were, nonetheless, subsequently denied by the respondent in the Answer. 212 Specifically, a thorough review of the petitioners' Formal Offer of Documentary Evidence213 consisted only of the following exhibits withoutthe copies of Annexes A toG: Exhibit Marking i Purpose ! Document Description "P-1"214 and Judicial Affidavit of Atty. To constitute the direct "P-12"215 Esther R. Ibanez and testimony of the witnesses. Amended Judicial Affidavit of Atty. Peter Paul s. Romero, respectively "P-2"21& Letter to the Ms. Eleanor To show that a request for Litao, Chief of Revenue certification of the income Accounting Division (RAD) taxes paid by petitioners of the SIR, dated March 5, was made to the SIR. 2015 "P-3"_217 "P-4"_218 "P- Certifications from the To show that petitioners paid income taxes for their 5",219 "P-6",220 "P-7",221 Revenue Accounting 2012 and 2013 salaries. "P-8",222 "P-9",223 "P- Division (RAD) of the SIR 10",224 "P-11",225 210 Pars. 4 and 5, Docket, Vol. I, pp. 18-19. 211 Docket, Vol. I, pp. 135-226. 212 Par. 4, Answer, Docket, Vol. I, p. 283. 213 Docket, Vol. II, pp. 607-624. 214 Docket, Vol. I, pp. 331-341. 215 Docket, Vol. II, pp. 746-753; see also Judicial Affidavit of Atty. Peter Paul S. Romero filed via registered mail on April 29, 2016, Docket, Vol. I, pp. 405-411. 216 Docket, Vol. I, p. 342. 217 Docket, Vol. I, p. 361-366. 218 Docket, Vol. I, p. 367-373. 219 Docket, Vol. I, p. 374-375. 220 Docket, Vol. I, p. 376-377. 221 Docket, Vol. I, p. 378-382. 222 Docket, Vol. I, p. 383-384. 223 Docket, Vol. I, p. 385-388. 224 Docket, Vol. I, p. 389-392. 225 Docket, Vol. I, p. 393-394.

DECISION CfA Case No. 9089 �::~::=-=~~:~:~-~Individual petitione~-and ITOShOWOmOulrt~ "P-4-1" to "P-4-6"/31 I respective amounts paid paid by petitioners "P-5-1" to "P-5-4"/32 " P - 6 - 1 ",23 3 "P-7-1" to "P-7-16", "P-8-1" to "P-8-42", "P-9-1" to "P-9-3", "P-10-1" to "P-10-15", "P-11-1" to "P-11-43", "P-13-1" to "P-13-2", "P-14-1" to "P-14-9", "P-15-1" to "P-15-2" and "P-16-1" ; :. "P-17"234 and "P-20''iislAnnual Income TaxRetlirns..; Samepurpose as above (ITR) for 2012 "P-18" to "P-19-3", 236 Bank Deposit Slips i Same purpose as above "P-22" to "P-24"/37 "P-25",238 ! "P-25-2" to "P-25-3",239 "P-26-1"/40 "P-27-1"/41 "P-28"/42 "P-29-1",243 "P-30",244 "P-32-1"245 and "P-33"246 226 Docket, Vol. II, pp. 491-495. 227 Docket, Vol. II, pp. 496-509. 228 Docket, Vol. II, pp. 510-512. 229 Docket, Vol. II, pp. 513-518. 230 Docket, Vol. I, p. 361-366. 231 Docket, Vol. I, p. 367-373. 232 Docket, Vol. I, p. 374-375. 233 Docket, Vol. I, p. 377. 234 Docket, Vol. II, p. 519. 235 Docket, Vol. II, p. 527-528. 236 Docket, Vol. II, p. 520-526. 237 Docket, Vol. II, p. 530-533. 238 Docket, Vol. II, p. 535. 239 Docket, Vol. II, p. 537-538. 240 Docket, Vol. II, p. 540. 241 Docket, Vol. II, p. 542. 242 Docket, Vol. II, p. 543. 243 Docket, Vol. II, p. 545. 244 Docket, Vol. II, p. 546. 245 Docket, Vol. II, p. 550. 246 Docket, Vol. II, p. 551. 247 Docket, Vol. II, p. 529.

DECISION BIR Payment Forms (BIR Same purpose as above CTA Case No. 9089 Form 0605) Bank of Philippine Islands Same purpose as above " P - 2 4 - 1 "- 248 Manager's check dated July "P-25-1" l 4, 2014 in the amount of "P-26",250 P104,306.00 "P-27"'251 "P-29",252 Same purpose as above "P-31"253 and "P-32"254 "P-31-1"255 "P-34"256 "P-35"257 i Decision dated 30 Same purpose as above i I September 2014 of Br. I ! 213, RTC Mandaluyong I City in Erwin Sa/averia et i i a/. vs. Commissioner of I I ~:~;~~-R~~e~~~7~~il I I ! 1� � ��ii=36"2sa��i.! Resolution of the Court of 1 To show and prove that the I I Appeals in CA-G.R. CV No. I Court of Appeals denied the 1 1 i 104374 dated 3 July 2015 i appeal of the Commissioner .~_ __l .... !~~~i~~of~e~fl~1~ I "P-36-1"259 I Resolution of the Court of To show and prove that the I Appeals in CA-G.R. CV No. Court of Appeals denied the ! I 104374 denying Motion for Reconsideration ! I respondent's Motion for by the Commissioner of I I Reconsideration i Internal Revenue of the I 1 Resolution of the Court of i I Appeals in CA-G.R. CV No. i l. ~.~3~~ ~:~ �~� � �~� � ~�~�l�~� � �~�~� ~�~� � � � � � �i 1 ................................................................................................................................................1....... .. .. . .................................................................................................... .. The photocopies of the administrative claims for refund that were allegedly filed with the respondent and attached as Annexes A toG of>-- 248 Docket, Vol. II, p. 534. 249 Docket, Vol. II, p. 536. 250 Docket, Vol. II, p. 539. 251 Docket, Vol. II, p. 541. 252 Docket, Vol. II, p. 544. 253 Docket, Vol. II, p. 547. 254 Docket, Vol. II, p. 549. 255 Docket, Vol. II, p. 548. 256 Docket, Vol. II, p. 552. 257 Docket, Vol. II, pp. 629-660. 258 Docket, Vol. II, p. 661-667. 259 Docket, Vol. II, p. 668-672.

DECISION CTA Case No. 9089 the Petition for Review260 were taken up in the testimony of Atty. Peter PaulS. Romero.261 Nonetheless, the originals of these documents were not identified, compared and marked in the testimony and were also not included in the Formal Offer of Documentary Evidence which was subsequently filed after the presentation of evidence for petitioners.262 In Pilipinas Shell Petroleum Corporation v. Commissioner of Customs/63 the Supreme Court reversed the finding of fraud by the trial court which was anchored on a memorandum that was not formally offered during trial. The Supreme Court explained at length why a piece of evidence that was not offered cannot be considered: "In the case at bench, a perusal of the records reveals that there is neither any iota of evidence nor concrete proof offered and admitted to clearly establish that petitioner committed any fraudulent acts. The CTA in Division relied solely on the Memorandum dated 2 February 2001 issued by the CIIS-IPD of the BOC in ruling the existence of fraud committed by petitioner. However, there is no showing that such document was ever presented, identified, and testified to or offered in evidence by either party before the trial court. Time and again, this Court has consistently declared that cases filed before the CTA are litigated de novo, party-litigants must prove every minute aspect of their cases. Section 8 of R.A. No. 1125, as amended by R.A. No. 9282, categorically described the CTA as a court of record. Indubitably, no evidentiary value can be given to any documentary evidence merely attached to the BOC Records. as the rules on documentary evidence require that such documents must be formally offered before the CTA. Pertinent is Section 34, Rule 132 of the Rules of Court which reads: Section 34. Offer of evidence. - The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified. From the foregoing provision, it is clear that for evidence to be considered by the court, the same must he formally offered. Corollarily, the mere fact that a particular document is identified and marked as an exhibit does not mean that it has already been offered as part of the evidence of a party. In Interpacific Transit, Inc. v. Aviles, We had the occasion to make a distinction between identification of documentary evidence and its formal offer as an ?*-' exhibit. We said that the first is done in the course of the trial and is 260 Petition for Review, Docket, Vol. I, pp. 135-226. 261 Questions 2-4, Amended Judicial Affidavit, Docket, Vol. II, pp. 747-748; please refer also to Questions 2-4 of the original Judicial Affidavit of Atty. Peter Paul S. Romero, Docket, Vol. I, pp. 406-407. 262 Docket, Vol. II, pp. 607-624 263 G.R. No. 195876, December 5, 2016.

DECISION CTA Case No. 9089 accompanied by the marking of the evidence as an exhibit while the second is done only when the party rests its case and not before. A party, therefore, may opt to formally offer his evidence if he believes that it will advance his cause or not to do so at all. In the event he chooses to do the latter, the trial court is not authorized by the Rules to consider the same. The Rule on this matter is patent that even documents which are identified and marked as exhibits cannot be considered into evidence when the same have not been formally offered as part of the evidence, but more so if the same were not identified and marked as exhibits, such as in the present case. An assay of the records reveals that the subject Memorandum dated 2 February 2001 was neither identified nor offered in evidence by respondent during the entire proceedings before the CTA in Division. Consequently, this is fatal to respondent's cause in establishing the existence of fraud committed by petitioner since the burden of proof to establish the same lies with the former alone. As a matter of fact, even if the aforesaid documentary evidence was included as part of the BOC Records submitted before the CTA in compliance with a lawful order of the court, this does not permit the trial court to consider the same in view of the fact that the Rules prohibit it. The reasoning forwarded by the CTA in Division in its Resolution dated 24 February 2009, that the apparent purpose of transmittal of the records is to enable it to appreciate and properly review the proceedings and findings before an administrative agency, is misplaced. Unless any of the party formally offered in evidence said Memorandum, and accordingly, admitted by the court a quo, it cannot be considered as among the legal and factual bases in resolving the controversy presented before it. By analogy, in Dizon v. CTA, this Court underscored the importance of a formal offer of evidence and the corresponding admission thereafter. We quote: 'While the CTA is not governed strictly by technical rules of evidence, as rules of procedure are not ends in themselves and are primarily intended as tools in the administration of justice, the presentation of the BIR's evidence is not a mere procedural technicality which may be disregarded considering that it is the only means by which the CTA may ascertain and verify the truth of BIR's claims against the Estate. The BIR's failure to formally offer these pieces of evidence, despite CTA's directives, is fatal to its cause. Such failure is aggravated by the fact that not even a single reason was advanced by the BIR to justify such fatal omission. This, we take against the BIR.' Per the records of this case, the BIR was directed to present its evidence in the hearing of February 21, 1996, but BIR's counsel failed to appear. The CTA denied petitioner's motion to consider ~

DECISION CTA Case No. 9089 BIR's presentation of evidence as waived, with a warning to BIR that such presentation would be considered waived if BIR's evidence would not be presented at the next hearing. Again, in the hearing of March 20, 1996, BIR's counsel failed to appear. Thus, in its Resolution dated March 21, 1996, the CTA considered the BIR to have waived presentation of its evidence. In the same Resolution, the parties were directed to file their respective memorandum. Petitioner complied but BIR failed to do so. In all of these proceedings, BIR was duly notified. Hence, in this case, we are constrained to apply our ruling in Heirs ofPedro Pasag v. Paracha: A formal offer is necessary because judges are mandated to rest their findings of facts and their judgment only and strictly upon the evidence offered by the parties at the trial. Its function is to enable the trial judge to know the purpose or purposes for which the proponent is presenting the evidence. On the other hand, this allows opposing parties to examine the evidence and object to its admissibility. Moreover, it facilitates review as the appellate court will not be required to review documents not previously scrutinized by the trial court. Strict adherence to the said rule is not a trivial matter. The Court in Constantino v. Court ofAppeals ruled that the formal offer of one's evidence is deemed waived after failing to submit it within a considerable period of time. It explained that the court cannot admit an offer of evidence made after a lapse of three (3) months because to do so would "condone an inexcusable laxity if not non-compliance with a court order which, in effect, would encourage needless delays and derail the speedy administration of justice.' Applying the aforementioned principle in this case, we find that the trial court had reasonable around to consider that petitioners had waived their right to make a formal offer of documentary or object evidence. Despite several extensions of time to make their formal offer, petitioners failed to comply with their commitment and allowed almost five months to lapse before finally submitting it. Petitioners' failure to comply with the rule on admissibility of evidence is anathema to the efficient, effective, and expeditious dispensation of justice. (Emphasis and underlining supplied) Clearly therefore, evidence not formally offered during the trial cannot be used for or against a party litigant by the trial court in deciding the merits of the case. Neither may it be taken into account on appeal. Since the rule on formal offer of evidence is not a trivial matter, failure to make a formal offer within a considerable period of time shall be deemed a waiver to submit it. Consequently, any evidence that has not been offered and admitted thereafter shall Jc-

DECISION CTA Case No. 9089 be excluded and rejected. (Citations omitted; emphasis and underscoring supplied) Section 204(C) authorizes the respondent CIR with, inter alia, the authority to grant tax refunds. In addition, the filing of the administrative claim before the respondent CIR under Section 204(C) is made a prerequisite for the filing of the judicial claim under Section 229: "SEC. 229. Recovery ofTax Erroneously orIllegally 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." (Underscoring supplied) In Metropolitan Bank & Trust Company v. Commissioner of Internal Revenue/64 the Supreme Court had the occasion to explain anew Section 229 and denied a refund claim of final withholding tax for the taxpayer's failure to comply with the requisites therein: "As may be gleaned from the foregoing provisions, a claimant for refund must first file an administrative claim for refund before the CIR, prior to filing a judicial claim before the CTA. Notably, both the administrative and judicial claims for refund should be filed within the two (2)-year prescriptive period indicated therein, and that the claimant is allowed to file the latter even without waiting for the resolution of the former in order to prevent the forfeiture of its claim through prescription. In this regard, case law states that "the primary purpose of filing an administrative claim [is] to serve as a notice of warning to the CIR that court action would follow unless the tax or penalty alleged to have been collected erroneously or )-- 264 G.R. No. 182582, April 17, 2017

DECISION CTA Case No. 9089 illegally is refunded. To clarify, Section 229 of the Tax Code - then Section 306 of the old Tax Code - however does not mean that the taxpayer must await the final resolution of its administrative claim for refund, since doing so would be tantamount to the taxpayer's forfeiture of its right to seek judicial recourse should the two (2)- year prescriptive period expire without the appropriate judicial claim being filed." (Emphasis and underscoring supplied) Because the administrative claims that were allegedly filed were not identified, marked and formally offered, the petitioners failed to prove that their administrative claims were filed within the two-year period under Section 204. Likewise, the petitioners also failed to establish that prior to the judicial claim, administrative claims for refund were in fact filed with the respondent CIR in compliance with Section 229. Taxpayers must prove not only their entitlement to a refund, but also their compliance with the procedural due process as non- observance of the prescriptive periods within which to file the administrative and the judicial claims would result in the denial of their claims. 265 As a final point, a review of the evidence offered disclose that the following petitioners failed to submit proofs of payment of the income tax which are subject of the claim for refund: [:!~!~~'~:i~~~~9ii TAmount of Claim . J.... M9.�----~~~iU9...AmP9r9 : ��--~--�� ~�?.&~?.?~---�� 2. Leticia Aranda 223,100.71 3. Brian Cafirma 181,209.75 Subtotal p 770,142.69 LI~-~~~~-~.Y~~-~---~-9:. .::1::.3.::.:.....................................;, ............................................................................................................! l. J.~ .M9Y.~IJ.~.-~9~9.Y. ........ . . . : +~ .............. JZ?.,7.��~99 � 2. Ruth Beni no 176 029.00 ... . ~L!l?..tC?..ti!..L............. -- . 1 P 354,795.00 TOTAL I p 1,124,937.69 Hence, even granting that petitioners' administrative claims were indeed timely filed, the foregoing claims in the aggregate amount of P1,124,937.69 should be denied. Claims for tax refunds are in the nature of tax exemptions, and as such, should be construed strictissimi juris against the taxpayers and liberally in favor of the government.266 The burden is upon the It:- 265 Commissioner ofInternal Revenue v. Manila Electric Company, G.R. No. 181459, June 9, 2014. 266 Eastern Telecommunications Phils., Inc v Commissioner oflnternal Revenue, GR 183531, March 25 2015

DECISION CTA case No. 9089 taxpayers to prove the factual basis of their claims.267 Petitioners, unfortunately, failed to discharge this burden. WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED for lack of merit. SO ORDERED. ~h c. c.sr-~ot..., 2 qUANITO C. CASTANEDl,JR. Associate Justice WE CONCUR: -t$- c~�;.~c..Jt_ - CAESAR A. CASANOVA ( With all due respect, please see my Dissenting Opinion) Associate Justice CATHERINET.MANAHAN Associate Justice 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.a_.r~ .~. J!JANITO C. CASTANED/rqlR. Associate Justice Chairperson 267 Panasonic Communications Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation of the Philippines v. Commissioner ofInternal Revenue, G.R. No. 178090, February 8, 2010.

DECISION CTA Case No. 9089 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. ROMAN G. DEt OSARIO Presiding Justice

I ~ ' REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY Second Division SHENILYN ABALOS, ET.AL., CTA Case No. 9089 Petitioner, Members: -versus- CASTANEDA, JR. , Chairperson CASANOVA, and MANAHAN, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, AUG 10 2018 / T-7~,. c-,. Respondent. ){- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - �_ - - ){ / DISSENTING OPINION MANAHAN,J.: My esteemed colleagues denied the Petition for Review on the following grounds: (1) the administrative claims for refund were not identified, marked and formally offered in evidence, hence, petitioners failed to establish that these were in fact filed with the Bureau of Internal Revenue (BIR) prior to the filing of the judicial claim; and (2) petitioners failed to submit proofs of payment of the income ta){es which are the subject matter of the refund claim. This twin failure, according to the majority, proved fatal to their claim because of non-compliance with the clear provisions of Section 229 of the 1997 National Internal Revenue Code (NIRC) .1 1 "Section 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. (emphasis supplied) XXX XXX XXX (JJ4(._

DISSENTING OPINION CTA Case No. 9089 Page 2 of4 There IS no disagreement to the contention that an administrative claim for refund is a prerequisite for filing a judicial claim for refund of national internal revenue taxes before the Court of Tax Appeals (CTA) and this rule admits only of a few exceptions provided under the relevant provisions of the 1997 NIRC.2 However, I dissent to the outright conclusion that the claims for refund should be denied because no documentary evidence of such claims as well as proofs of income tax payments were formally offered in evidence during trial. The general rule that no evidence formally offered in courts can be considered, admits of certain exceptions. Section 34, Rule 132 of the Rules of Court provides: "Rule 132 Section 34. - Offer of evidence. - The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified." The foregoing, however, admits of an exception. The Supreme Court has, in many decisions, relaxed the aforesaid rule and set forth two conditions for the exception to apply: a) that the evidence has been identified by testimony duly recorded and b) that the evidence has been incorporated in the records of the case.3 2 a. That the return filed showing an overpayment, shall be considered a written claim for refund (Section 204 (C)). b. That the CIR, may even without a written claim for refund, may grant the same, where on the face of the return, such payment appears clearly to have been erroneously paid (Section 229); 3 Star Two (SPV-AMC), Inc. vs. Howard Ko, et.al., G.R. No. 185454, March 23, 2011; CIR vs. United Salvage and Towage (Phils), Inc., G.R. No. 197515, July 2, 2014; The Heirs of Romana Saves vs. The Heirs of Escoiatico Saves, G.R. No. 152866, October 6, 2010; People of the Philippines vs. Susan Napat-A, G.R. No. 84951, November 14, 1989; The People of the Philippines vs. Silvestre Mate, G.R. No. L-34754, March 27, 1981.4Ht..-

DISSENTING OPINION CTA Case No. 9089 Page 3 of4 In this case, petitioner's witness, Atty. Peter Paul S. Romero, has identified these administrative claims for refund in his Amended Judicial Affidavit4 , to wit: Q. What have you done on behalf of petitioners in this case as one of their handling lawyers in relation to their claim for refund of income taxes paid? A - On their behalf, I previously requested the Commissioner of Internal Revenue to refund the income taxes they paid for their 2012 and 2013 salaries as employees of the Asian Development Bank. Q- What can you show to establish that you made the request? A.- Mam, I undersigned the administrative claim for refund for these petitioners. These claims are contained in the various letters addressed to the Commissioner of Internal Revenue copies of which have been attached to the petition filed with this Honorable Court as Annexes "A" to "G". (emphasis supplied) The Amended Judicial Affidavit of petitioners' witness which serves as his direct testimony on the claim for refund has been formally offered in evidence as Exhibit "P-12".5 Furthermore, these claims have been incorporated in the records of the case, as shown in the following pleadings replete in the case: Petition for Review, Pre-Trial Brief and the Amended Judicial Affidavit of Atty. Peter Paul S. Romero. Thus, in the interest of substantial justice, I humbly believe that these written claims for refund should be admitted as evidence of petitioners' substantial compliance with the requirements provided under the law. As to the second ground of denial that the proofs of payment were not submitted, the records of the case show otherwise. Petitioner presented in evidence Exhibits "P-3" to "P- 16", inclusive of sub-markings which refer to the Certifications issued by the Revenue Accounting Division (RAD) of the BIR certifying that the payments made by the concerned employees listed therein were verified and found includedI collected as per their database. The details of said Certifications (and other 4 Court Docket, Volume II, pp. 746-751. 5 Exhibit "P-12", Court Docket, Volume II, pp. 746-751.~

DISSENTING OPINION CTA Case No. 9089 Page 4 of4 evidence) however should still be analyzed and scrutinized during a full blown trial. Based on the foregoing, I vote against the denial of the petition for review. ~~T~ CATHERINE T. MANAHAN Associate Justice

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