PROVINCIAL GOVERNMENT OF BOHOL, represented by the Provincial Governor and the Provincial Treasurer v. COMMISSIONER OF INTERNAL REVENUE

CT A Form No. 8 111111111111 1111111111 1111111111111111111111111111111111111111111111111111111111 20-000380-0058 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE NO. 10394 PROVINCIAL GOVERNMENT OF NOTICE OF DECISION BOHOL, represented by the Provincial Governor and the Provincial Treasurer, Petitioner, - versus - COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF T HE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. MICHAEL KEVIN P. BAYONA Bureau of Internal Revenue Room 703, Litigation Division, BTR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Diliman, Quezon City ATTY. HANDEL T. LAGUNAY Office of the Provincial Legal Officer 2nd Floor, New Bohol Provincial Capitol New Capitol Site, Co~on District Tagbilaran City, 630u Bohol GREETINGS: You are hereby notified by these presents that on March 26, 2024, a Decision was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, March 27, 2024. Page 1 of I

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION PROVINCIAL GOVERNMENT CTA Case No. 10394 OF BOHOL, represented by the Provincial Governor and Members: the Provincial Treasurer, Petitioner, DEL ROSARIO, P.J ., Chairpers on, MANAHAN, and -versus- REYES-FAJARDO, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, R es p o n de nt. J{- - - - - - - - - - - - - - - - - - - - - - - - - - -- DECISION MANAHAN, J.: Before this Court is a Petition for Review filed by petitioner Provincial Government of Bohol, represented by its Provincial Governor and Provincial Treasurer, against respondent Commissioner of Internal Revenue, praying that judgment be rendered: (1) declaring petitioner entitled to the issuance of a t~ credit certificate in the amount of P2,447,669.39, allegedly representing excess t~es erroneously paid by petitioner, and illegally and wrongfully collected by respondent, for the period September 2018; and, (2) ordering respondent to grant petitioner t~ credit in the said amount ofP2,447,669 .39 .1 1 Docket , CTA Case No. 10394 , Vol. I, Prayer, Petition f or Review, p p. 8 t o 27 . ~

DECISION CTA Case No. 10394 THE PARTIES Petitioner Provincial Government of Bohol is a local government unit with office address at Bohol Provincial Capitol Building located in Gov. Lino I. Chatto Drive, Brgy. Cogon, Tagbilaran City, Bohol.2 It is represented by Provincial Governor Arthur C. Yap and Provincial Treasurer Eustaquio A. Socorin.3 Respondent, on the other hand, is the duly appointed Commissioner of Internal Revenue, who is tasked to assess and collect all national internal revenue taxes, fees and charges, and enforce all forfeitures, penalties, and fines connected therewith. Respondent holds office at the Bureau of Internal Revenue (BIR) National Office Building located at Agham Road, Diliman, Quezon City.4 THE FACTS On February 1, 2019, petitioner, through its Provincial Treasurer, Mr. Eustaquio A. Socorin, filed the letter dated January 28, 2019, addressed to Revenue District Officer, Mr. Aldo B. Osmeiia,s requesting the refund of its alleged over- remittance of withheld creditable income tax, value-added tax (VAT) and other percentage taxes for the month of September 2018. The remittance made on October 9, 2018, amounted to P2,447,669.39, computed by petitioner as follows: General Fund- 160 1E Correct Amount Amount Remitted Difference 1% 2% 250,562.00 946.09 249,6 15.91 Sub-total 2 18,4 33.65 749,046 .38 (530 ,612 .73) 468,995.65 749,992.47 (280,996.82) General Fund - 1600 2% 1,269.06 1,362.97 (93.91) 3% 54,505.48 173,632.77 (119, 127.29) 5% 1,310,704.35 2 , 9 8 6 ,5 7 4 . 3 4 (1,675,869.99) 5% 493 ,523. 18 8 6 5 , 1 0 4 .5 6 (371 ,581.38) Sub-total 1,860,002.07 4,026,674.64 (2,166,672.57) Total 2,328,997.72 4,776,667.11 (2,447,669.39) 2 Docket, Vol. I, Par. 1, Petitionfor Review, p . 8. 3 Id. , Vol. II, Exhibit "P-1 ", pp. 580 to 581. 4 Id., Vol. I, Par. 1, Petition for Review, vis-a -vis p ar. 1, Answer, pp. 8 and 128, respectively. s Id. , Vol. II , Exhibit "P-2", p . 582. ~

DECISION CTA Case No. 10394 Petitioner then sent follow up letters dated June 11 , 2019 and February 10, 2020,6 to inquire on the status of its request for refund of over-remittance of withholding taxes. On September 22, 2020, petitioner filed another letter dated September 21, 2020,7 accompanied by a duly accomplished Application for Tax Credits/ Refunds (BIR Form No. 1914) in the amount of P2,447 ,669.39, for the period September 1, 2018 to September 30, 2018.8 In the said letter, petitioner explained further the factual and legal basis of its claim for tax credit of its over-remittance of taxes withheld, which consist of expanded withholding taxes (EWT), VAT, and other percentage taxes. Petitioner then posted the present Petition for Review with this Court on October 8, 2020 which was received on November 6, 2020.9 Within the extended time granted by the Court,1o respondent posted his Answer on February 8 , 2021 ,11 interposing the following mrun special and affirmative defenses: 1. Petitioner is not entitled to tax credit of the alleged erroneously paid cr editable withholding taxes (CWT) and VAT and other percentage taxes for the month of September 2018 in the amount ofP2,447,669.39; 2 . Petitioner 's failure to allege that the purported withheld taxes were remitted to the BIR is fatal to its claim. It is unquestionably not entitled to any refund; and, 3. Petitioner failed to submit all relevant documents to substantiate its administrative claim for refund. 6 Id., Vol. II, Exh ibits "P-3" a nd "P-4", pp . 583 to 584. 7 Dock et , Vol. II, Exhibit "P-5", pp. 586 to 589. s Id., Vol. II , Exhibit "P-6", p . 590 . 9 Id., Vol. I, pp. 8 to 2 5 . 1o Id., Vol. I, Res p onden t's Motion fo r Extension of Time to File A nswer, pp. 12 1 to 124; Resolution dat ed J a nuary 28, 202 1, Docket- Vol. I, p . 127. u Id., Vol. I, pp. 128 to 135. ~

DECISION CTA Case No . 10394 In the Notice of Pre-Trial Conference dated February 23, 2021 issued by the Court, 12 the Pre-Trial Conference was set on April 22, 2021. The Pre-Trial Brief for the Petitioner was posted on April 19, 2021 ;13 while Respondent's Pre-Trial Brief was filed through electronic mail on August 20, 2021. 14 On April 19, 2021 , petitioner also posted its Omnibus Motion 1. To Postpone 2 . To Conduct Hearing via Video Conferencing, 15 due to the physical closure of Courts from March 25, 2021 to April 30, 2021, pursuant to the Supreme Court (SC) Administrative Circular No. 22-2021 dated April 14, 2021. 16 In the Resolution dated June 10, 2021,17 the Court granted the said Omnibus Motion, and the Pre-Trial Conference was reset to August 24, 2021 . However, the same was further reset to,1s and held on, November 11, 2021. 19 Respondent transmitted the BIR Records for this case on October 26, 2021.20 Thereafter, under SC Memorandum Order No . 10-2022 dated January 12, 2022,21 all courts in certain areas of the country, including the National Capital Region, were declared physically closed from January 13, 2022 to January 31, 2022. Since the parties failed to submit their Joint Stipulation of Facts and Issues as of February 24, 2022,22 the Court decreed, in its Resolution dated March 14, 2022,23 that the parties' right to file the same is deemed waived, and that the Pre-Trial is terminated. The Pre-Trial Order dated May 11 , 2022 was then issued.24 12 Id., Vol. I, pp. 137 t o 137-b. 13 Docket , Vol. I, pp. 182 to 193 . 14 Jd ., Vol. I, pp. 199 to 2 0 3. 1s Jd., Vol. I, pp. 17 4 to 179. 16 RE: PHYSICAL CLOSURE OF COURTS IN E NHANCED COMMUNITY QUARANTINE AND MODIFIED ENHANCED COMMUNITY QUARANTINE AREAS . 17 Id., Vol. I, pp. 197 to 198. IS Jd ., Vol. I, Notice of Resetting da ted September 2 1, 202 1, p . 20 5. 19 Id., Vol. I, Order da ted November 11 , 202 1, pp. 226 to 2 26 -b . 2o Id. , Vol. I, Respon den t's Comp liance dated October 15,2021 , p p. 2 14 to 2 16 . 21 RE: RISING CASES OF COVID 19 INFECTION / PHYSICAL CLOSURE OF COURTS IN SELECT AREAS. 22 Id ., Vol. I, Records Verifica tion Report d a ted February 24, 2022 issu ed by this Court's J u dicial Records Division , p. 2 37 . 23 Id ., Vol. I, pp. 255 to 256 . 24 Id. , Vol. I, pp. 2 84 t o 292. ~

DECISION CTA Case No. 10394 In the meantime, Petitioner's Supplemental Pre-Trial Brief with Motion for Remarking of Documentary Exhibits was posted on March 3, 2022.25 In the Resolution dated March 14, 2022,26 the Court granted the said Motion, and set the Commissioner's Hearing on March 31, 2022. However, petitioner later moved for the cancellation of the same, stating that it had already marked all the exhibits it intends to present.27 As trial ensued, petitioner presented its testimonial and documentary evidence. It offered the testimony of Mr. Eustaquio A. Socorin,28 petitioner's Provincial Treasurer. At the hearing held on April 7, 2022,29 the manifestation of respondent's counsel that he would no longer present any evidence was noted; and petitioner was granted a period of fifteen (15) days or until April 22 , 2022 to file its Formal Offer of Evidence (FOE) . However, per Judicial Records Division of this Court, petitioner failed to file an FOE as of June 13, 2022 .30 In the Manifestation with Attached Formal Offer of Documentary Exhibits for the Petitioner filed via electronic mail on June 30 , 2022,31 petitioner clarified that it has already filed its FOE on April 21, 2022, and that respondent has been furnished a copy of the FOE on even date; that upon investigation, the postmaster erroneously delivered the same to the BIR as shown by the stamp received dated May 11 , 2022, so that it requested respondent's counsel to forward the Court's copy of the FOE. The Formal Offer of Documentary Exhibits for the Petitioner was then posted on July 6, 2022 .32 Respondent filed his Comment (Re Petitioner's Formal Offer of Evidence) on May 10, 2022.33 25 Id., Vol. I, pp. 26 1 t o 263. 26 Dock et , Vol. I, pp. 255 t o 2 56. 27 Id ., Vol. I, Vol. I, Petitioner's Manifestation, pp. 258 to 259 . 28 Id., Vol. I, Exhibits "P-28" and "P-29", pp. 28 to 38, and 269 to 272, respectively; Docket, Vol. I, Minutes of th e hearing h eld on , and Order dated , April 7, 202 2, pp. 274-a to 274-g. 29 Minutes of t h e h earing h eld on , a n d Order dated, April 7 , 2022 , pp. 274-d and 274-f, r e s p e c t iv ely. 30 Id., Vol. II, p . 293 . 3 1 Id., Vol. I, pp. 296 to 298. 32 Id., Vol. I, pp. 3 19 to 33 1. 33 Id ., Vol. I, pp. 279 to 28 1. a. .

DECISION CTA Case No. 10394 In the Resolution dated August 26, 2022,34 the Court admitted petitioner's exhibits, except for the following: 1. "7E1P"5x'-"h2'"i5Pb""-Pi,8t-s"1a'6"nP""dP-' 1-""9"PP"'--'"12P"76P-""2-,'1""f0'oP""r-P'1f-"8a3P"i"-l''1u""1rPPe"--'2t4"o2"P"'s-'"1uP"2bP-"5m-'2"i"3'tP""-Pt'1h-"46eP""-d''2u""4PPl"y--' marked exhibits; and 2 . Exhibits "P-13", "P-19", "P-20", and "P-21", for failure to submit the duly marked exhibits and to present the originals for comparison. In the same Resolution, considering respondent counsel's previous manifestation that he will no longer present any evidence in this case, the Court gave the parties thirty (30) days within which to file their respective memorandum.35 However, on September 29, 2022, petitioner posted its Motion for Leave to File and Submit Formally Offered Exhibits Through Motion for Partial Reconsideration with attached Urgent Motion for Partial Reconsideration (With Prayer to Admit Documentary Exhibits),36 submitting therein the duly marked documents of the denied exhibits. Respondent failed to file his comment thereon.37 In the Resolution dated February 3, 2023,38 the Court resolved petitioner's Motions, and admitted Exhibits "P-1", "P- ""2"PPP, --'-121"21P3"""-3'' w"""'PPa"--sP212-s44t""i"''l'l"""PPdP--e-12n553i"e""''d' ""P"fPP-o6--r21"46f' a"""i''Plu-""7rPPe"--'21t"75oP""-'s8au""nPb' d-m"1P"8i-tP"9-"t2'h'6e"""PP�'d--1b1u90luy""t'' "P-11 " ' "P-20" t' Exhibi marked exhibit, and for failure to present the original for comparison. The Memorandum for Petitioner was posted on October 13, 2022;39 while r espondent filed a Manifestation on October 34 Id., Vol. II, pp. 552 to 553. 35 Docket, Vol. II, Resolution dated August 26, 2022, pp. 552 to 553. 36 Id ., Vol. II, pp. 568 to 579. 37 Id. , Vol. II, Records Verification Report dated November 28, 2022 issued by the Judicial Records Division of th is Court, p. 678. 38 Id., Vol. II, pp. 684 to 687. 39 Id., Vol. II, pp. 657 to 668. e::;..-

DECISION CTA Case No. 10394 6, 2022 and March 15, 2023,40 stating that he is adopting the arguments in his Answer as his Memorandum. The present case was submitted for decision on April 4, 2 0 2 3 . 41 ISSUES The issue to be resolved is as follows: "Whether petitioner is entitled to claim a tax credit for the alleged erroneously paid creditable withholding taxes, value-added tax, and percentage taxes for the month of September 2018 in the amount of Php2,447,669.39."42 Petitioner's Arguments Petitioner argues that since the excessively remitted amount of P2,447,669.39 was paid to the BIR on October 9, 2018, petitioner made a timely claim with respondent through his duly authorized representatives when it sent letters dated January 28, 2019, June 11, 2019, February 10, 2020, and September 21, 2020; that due to the inaction of respondent and his duly authorized representatives, petitioner was prompted to file a judicial claim for tax credit with this Court, pursuant to Section 229 of the 1997 National Internal Revenue Code (NIRC), as amended; that what is involved in this case is merely the inadvertence of petitioner in entering the am.ounts in the tax base section of the online returns for its remittances which led to erroneous inputs and computations, and ultimately, an excessive remittance in the aggregate amount of P2,447,669.39; and that this was due to those instances when technical problems in the internet caused glitches when the remittance returns were being filled- up online. 40 !d., VoL II, pp. 688 to 690 . 41 !d., VoL II , Minute Resolution d ated April 4, 2023, p . 692. 42 Docket, VoL I, Pre-Trial Order da ted May 11 , 2 022, p . 287. ~

DECISION CTA Case No. 10394 Respondent's Arguments Respondent contends that petitioner is not entitled to tax credit of the alleged erroneously paid CWT and VAT and other percentage taxes for September 2018 in the amount of P2,447,669.39; that proof of actual remittance of the taxes withheld to the BIR is indispensable in a claim for refund or tax credit of CWT, VAT, and other percentage taxes; that petitioner should have presented evidence to prove actual remittance of the same alleged taxes to the BIR since the burden of proving remittance of taxes rests on its shoulder; that petitioner's failure to allege that the purported withheld taxes were remitted to the BIR is fatal to its claim; and that failure of petitioner to submit relevant documents deprived respondent of the opportunity and time to study petitioner's claim for refund and to fully exercise its function. RULING OF THE COURT Jurisdiction on the instant p etition and timeliness of the filing of both the administrative and judicial claims for refund. This Court shall determine first whether it has jurisdiction on the instant petition and the timeliness of the claim. Sections 7(a) and 11 of Republic Act (RA) No. 11 2543, as amended by RA No. 928244, provides as follows : "SEC. 7. Jurisdiction.- The CTA shall exercise : (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: XXX XXX XXX 2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under 43 AN ACT CREATING THE COURT OF TAX APPEALS . 44 AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OR REPUBLIC ACT NO. 1125, AS AMENDED, OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES. a...--

DECISION CTA Case No. 10394 th e National Interna l Revenue Code or oth er laws administered by th e Bureau of Interna l Revenue, wh ere th e Nation a l Intern al Revenue Code provides a specific p eriod of action, in which case the inaction shall be deemed a denial; ..." (Emp has is s upplied) Based on the foregoing provision, this Court has exclusive appellate jurisdiction, inter alia, to take cognizance of inaction by the r esponden t involving claim for refund of any internal revenue taxes. Relative thereto, th e prescriptive periods for th e filing of claim for refund of erroneou sly paid or illegally collected taxes, are covered by Sections 2 04(C) and 229 of the 1997 NIRC , as amended. Section 204 applies to administrative claims, while Section 229 t o judicial claims,45 viz. : "Sec. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. - The Commission er may - XXX XXX XXX (C) Credit or refund taxes erroneously or illegally received or penalties imposed withou t au thority, refund th e value of in tern a l revenue stamps wh en th ey are returned in good condition by th e pu rch aser , a nd, in h is discretion, redeem or chan ge u nu sed stamps that h ave been rendered unfit fo r u se and r efu n d the ir value upon proof of destru ction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, that a return filed s h owin g an overpaymen t s h a ll be considered a s a written claim for credit or refund. (Emp hasis supplied) XXX XXX XXX Sec. 229. Recovery of Tax Erroneously or fllegally 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 pen a lty cla imed to h ave been collected with out auth ority, or of any sum alleged to h ave been excessively or in a ny m anner wrongfully collected , until a claim for refund or credit has been duly filed with the Commissioner; but su ch su it or proceedin g may be maintained, whether or not su ch tax, penalty or sum has been paid under protest or duress. 45 Refer to CBK Power Company Limited vs. Com missioner of Internal Revenue, G.R. Nos. 193383-84, January 14, 2015. ~

DECISION CTA Case No. 10394 Pa ge 10 of 18 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, Tha t the Commissioner m ay, even without a written claim t herefor, refund or credit a ny tax, where on the face of the return upon which payment wa s m ade, such paym ent appears clea rly to have been erroneously paid." (Emphasis supplied) Based on the afore-quoted provisions, to be entitled to a refund or credit of erroneously or illegally collected taxes , the following requisites must be satisfied: 1. The administrative and judicial claims for refund or credit have been filed within two (2) years from the date of payment of tax, or penalty, regardless of any supervening cause that may arise after payment; and 2 . The tax has been erroneously or illegally collecte d , or the p enalty has been collected without authority, and/ or any sum has been excessively or 1n any manner wrongfully collected. Section 229 of the 1997 NIRC, as amended , states that judicial claims for refund must be filed within two (2) years from the date of payment of the tax or penalty, providing further that the same may not be maintained until a claim for refund or credit has been duly filed with the respondent.46 As applied to the pres ent case, p etitioner remitted the following taxes to the BIRon October 9 , 2018: (1)!>749,992.47 - consisting of CWT (expanded);47 and (2)P3,934,697 .73 - consisting of final withholding VAT and other percentage taxes.48 46 Commissioner of Internal Re venue us . Goodyear Philippines, Inc., G.R. No. 2 16130, Augu st 3, 2 016. 47 Docket, Vol. II, Exhibits "P- 14", "P- 15", "P- 16", "P- 17", a nd "P-18", pp. 607 to 6 1 1. 48 Id., Vol. II, Exhibits "P-23", "P-2 4", "P-2 5", and "P-26", pp. 652 to 6 55. ~

DECISION CTA Case No. 10394 Counting two (2) years from the date of remittance of the subject taxes, petitioner had until October 9, 2020 within which to file a claim for refund or credit of its alleged overpayment or excess remittance of taxes in both administrative and judicial levels. Petitioner's administrative claim, through the letter dated January 28, 2019, was filed on February 1, 201949 and its judicial claim, through the instant Petitionfor Review , was posted on October 8, 2020,50 thus, it is clear that both claims were timely made. Petitioner having complied with the first requisite, this Court therefore has acquired jurisdiction to take cognizance of the present case. Petitioner has failed to show that the amount of ?2,447,669. 3 9 was erroneous ly or illegally remitted or collected. Anent the s econd requisite, petitioner claims that it r egularly withholds and r emits to the BIR creditable income taxes (expanded), VAT and other percentage taxes withheld pertaining to payments made to its suppliers of goods and services.51 Petitioner avers that upon careful review of their records, there wer e discrepancies between the amount of petitioner's remitte d withholding t axes to the BIR and the actual amount of withholding taxes with respect to creditable income taxes withheld (expanded) and VAT and other percentage taxes withheld under the General Fund for the month of September 2018. Petitioner alleges that the amount of remittances were highe r than wha t was withheld base d on the r ecord and r e c o m p u t a t i o n . 52 According to p etitioner , the discrepancies were inadvertently due to instances when the internet connection caused some glitches in entering the amounts in filling up the BIR online r eturns for the payment and/ or remittance of withholding taxes. 53 49 Id ., Vol. II, Exh ibit "P-2", p . 582 . 50 Id., Vol. I, pp. 8 to 25. 51 Docke t, Vol. II, S ta te m e nt of Fact s, Memorandum f or Petitioner, p . 6 59. s2 Id., Vol. I, Par. 16, The Ma terial Facts a n d Antecede n t Proceedings, Petition for Review , pp.ll to 12. 53 Id ., Vol. I, Par. 17 , The Ma te ria l Facts a nd Anteced e nt Proceedin gs, Petition fo r Review , p . l 2. ~

DECISION CTA Case No. 10394 Petitioner offered in evidence the following documents as proof of the above withheld and remitted taxes to respondent: 1. Quarterly Remittance Return of Creditable Income Taxes Withheld (BIR Form No. 1601-EQ) for the 3rd quarter of 20 18 with eFPS Filing Reference No . 401800027191149 dated October 9, 2018,54 eFPS Payment Form amounting to P749,992 .47,55 BIR system-generated eFPS Payment Details confirming the successful payment of the same,56 and screenshot from Land Bank of the Philippines website57; 2. Monthly Remittance Return of Value-Added Tax and Other Percentage Taies Withheld (BIR Form No. 1600) for the month of September 2018 with eFPS Filing Reference No. 171800027191781 dated October 9, 2018,58 eFPS Payment Form amounting to P3,934,697.73,59 BIR system generated eFPS Payment Details confirming the successful paym ent of the said amount,60 and BIR eFPS Home-eFiling and Payment System screenshot;61 and 3. Certification from Land Bank of the Philippines- Tagbilaran branch dated August 24, 202 1,62 signed by its branch head, Mr. Dexter Ray C. Ruiz, confirming petitioner's tax paym ents of P749,992.47 and P3,934,697.73 on October 9, 2018. From the foregoing, petitioner claims over -r emittance in the aggregate amount of P2 ,447 ,669 .39, broken down as follows: 63 54 Jd., Vol. II, Exhibits "P-14" and "P-18", pp. 607 and 611, respectively. 55 !d., Vol. II, Exhibit "P-15", p. 608. 56 Docket, Vol. II , Exhibit "P-16", p. 609. 57 !d. , Vol. II, Exhibit "P-17'', p. 610. 58 Id., Vol. II, Exhibits "P-22" and "P-26", pp. 65 1and 655, respectively. 59 !d., Vol. II, Exhibit "P-23", p. 652. 60 !d. , Vol. II, Exhibit "P-24", p . 653. 6 1 !d., Vol. II, Exhibit "P-25", p. 654. 62 !d., Vol. I, p. 273. 63 !d. , Vol. II , Exhibit "P-5", p. 588 . ~

DECISION p 280,996.82 CTA Case No. 10394 Page 13 of 18 2 , 1 6 6 ,6 7 2 . 5 7 p 2,447,669.39 Creditable Income Taxes (expanded) withheld VAT and other percentage taxes withheld Total over-remittance for September 2018 As will be discussed momentarily, however, petitioner has failed to show that the said amount was erroneously or illegally remitted or collected. Alleged erroneous payment of creditable withholding tax amounting to ?280}996.82 was not duly substantiated. Petitioner explains that there was an excess remittance of creditable expanded income taxes withheld because of the difference in the ((Total Amount Still Due}} per BIR Form No. 1601-EQ vis-a-vis the ((Total Amount Still Due}} per re- computation in BIR Form 160 1E - Schedule I for the month of September 2018, computed as follows: 64 Total Amount Still Due (Item 30 per 1601-EQ filed) -Amount p 749,992.47 Remitted Less: Total Amount Still Due (Per re-computation) 4 6 8 ,9 9 5 . 6 5 Amount of excess remittance p 280,996.82 In support of its position, petitioner's witness testified that the total taxes withheld on business under the General Fund for the month of September 2018 per BIR Form 1601E is P468,995.65, however, what was remitted to the BIR for the month of September 2018 was P749,992.47 based on the flied Form 1601-EQ under Line Item 30 - TOTAL AMOUNT STILL D U E . 6s Moreover, petitioner presented its alpha-list of payees for July 2018,66 August 201867 and September 2018. However, the Alphalist of payees for September 2018 cannot be considered in the determination of this case, as the same was denied admission by the Court in the Resolution dated August 26, 2022,68 for failure of petitioner to submit the duly marked exhibit and to present the original for comparison. Such denial 64 Docket , Vol. II, Pa r s . 24 and 27, Memorandum f or Petitioner, pp. 66 1 to 662 . 65 Id ., Vol. I, QI A No. 8 , Judicial Affidavit of Eus taquio A. Socorin, CPA, p. 3 0 66 Id., Vol. II , Exhibit "P- 19", pp. 6 12 to 625. 67 Id., Vol. II , Exhibit "P-20", pp. 626 to 638. 68 Id., Vol. II , pp. 552 to 553. ~

DECISION CTA Case No. 10394 was affirmed in the Resolution dated February 3, 2023.69 Noteworthy is that evidence which has not been admitted cannot be validly considered by the courts in arriving at their judgments.70 Since petitioner's supporting document was not admitted in evidence by the Court, the same cannot be given evidentiary value. With the denial of the Alphalist for September 2018 to support its explanation, petitioner's assertion remains self- serving and uncorroborated even if supported by testimonial evidence through the Judicial AffidaviF l and Supplemental Judicial Affidavit72 of Mr. Eusta quio A. Socorin which were admitted as evidence. Apparently, this Court has no point of reference in ascertaining or validating the veracity of petitioner's claim of excess remittance of creditable expanded income taxes withheld. Consequently, this Court is constrained to deny petitioner's claim for refund or tax credit in the amount of P2 8 0 ,9 9 6 . 8 2 . Alleged erroneous payment of VAT and other p ercentage taxes withheld in the amount of P2, 166,672.57 was likewise unsubstantiate d . Petitioner likewise avers that it inadvertently made an erroneous payment and exce ssively remitte d the amount of P2 , 166,672 .57 with r espect to VAT and other percentage taxes withheld pertaining to its Gen eral Fund for the month of September 2018.73 Moreover , p etitioner claims that it paid and r emitted the amount of P3,934,697.73 on October 9 , 2018 as evidenced by eFPS Payment Form with filing reference no. 17180002719178174, BIR eFPS payment confirmation7s, eFPS 69 Id., Vol. II, pp. 684 to 687. 70 Dra. Leila A. Dela Llano vs. Rebecca Biong, doing business under the name and style of Pongkay Trad ing, G. R. No. 182356, December 4 , 2013. 71 Id., Vol. I, Exhibit "P28", pp. 28 to 38. 72 Docket, Vol. I, Exhibit "P-29, pp. 269 to 272. 73 Id., Vol. II, Par. 8, Memorandum fo r Petitioner, pp. 662 to 663. 74 ld., Vol. II, Exhibit "P-23", p. 652. 75 Id., Vol. II, Exhibit "P-24", p. 653. ~

DECISION CTA Case No. 10394 Filing Reference76, and Certification issued by Landbank Tagbilaran Branch77. Petitioner contends that after careful review of their records and recomputation of the amount of VAT and other percentage taxes withheld, there was a difference amounting to P2, 166,672.5778 between the Monthly Remittance Return of VAT and Other Percentage Tax Withheld (BIR Form No. 1600)79 that was filed and the BIR Form 1600 Schedule II for the month of September 2018 (Alphalist)8o, computed as follows : Per BIR Form No . 160081 Filed Per Recomputation82 Difference in Tax Line ATC Tax Base Tax Tax Withheld ATC Tax Base Tax Tax Withheld Item (In Pesos) Rate (In Pesos) (consolidated Rate (In Pesos) Withheld8 3 No. P865, 104.56 WV010 quarter) In WV010 1'17,302,091.20 5% 2,986 574.34 WV020 5% - Over /(Underl 14 WV020 59,73 1,486.80 5% 1 362.97 WB040 Pesos 5% 15 WB040 68,148.50 2% 1 7 3 ,6 3 2 .7 7 WB080 - 2% t> 1 , 8 0 4 , 2 2 7 . 5 3 1'865, 104 .56 16 WB080 5 ,787,759.00 3% Total 3% 1,269.06 1,182,346.81 17 Total 4,026 674.64 Income P36,084,550.60 18 Income 1'82,889,485.50 Payment 63,453.00 54,505.48 93 .91 Payment - 119 127 .29 1'4,026 674.64 1,8 16 849.33 1,860,002.07 2, 166,672.57 - 1'37,964,8 52.93 - - Total Tax Required to be Withheld and P4 ,026,674 .64 Total Tax Required to be Withheld and 1'1,860,002.07 Remitted Remitted P2, 166,67 2.57 Less: Tax Remitted in Return Less: Tax Remitted in Return - - Previously filed , if this is an Previously ftled , if this is an 1'1,860,002 .07 Amended Return Amended Return P2, 166,672.57 Tax Still Du e Tax Still Due Add: Penalties Add: Penalties Total Amount Still Due Total Amount Still Due To support its claim, petitioner offered in evidence its (1) Monthly Remittance Return of VAT and Other Percentage Taxes Withheld (BIR Form No. 1600)84, and (2) BIR Form No. 1600 Schedule II for the month of September 2018 (Alphalist)85 An examination of the BIR Form No. 1600 Schedule II for the month of September 2018 (Alphalist)86 shows that the total withholding taxes amount to P3,744,021.68 of which the amount of P1,860,002.07 was under petitioner 's General Fund, and the remaining P 1,884,019.61 was under petitioner's 76 !d., Vol. II, Exhibit "P-26", p. 655. 77 !d. , Vol. I, Exhibit "P-27", p . 273. 78 !d., Vol. I, Question & Answe r Nos. 13 to 14 a nd 16 to 21 , Exhibit "P-28", pp. 32 to 34. 79 !d., Vol. II, Exhibit "P-22", p. 65 1. 8o !d., Vol. II, Exhibit "P-2 1", pp. 639 to 650. 8 1 Dock et , Vol. II, Exhibit "P-22", p. 651. 82 !d., Vol. I, Petition for Review, p . 18. 83 !d., Vol. I, Petition for R e vie w , p. 18. 84 !d., Vol. II , Exhibit "P-22", p. 65 1. 8s Id. , Vol. II , Exhibit "P-2 1", pp. 639 to 650. 86 Id., Vol. II, Exhibit "P-2 1", pp. 639 to 650 .~

DECISION CTA Case No. 10394 Trust Fund (T-Fund/TF) , the pertinent portion of which 1s reproduced below: SUMMARY 1600 P1,860,002.07 Gen. Fund T-Fund 329(2) 1,120,405.30 T-Fund P.A. 323(13) 6,889.71 TF 323(19GOP) TF 323(17) 469,835.89 Total 2 8 6 , 8 8 8 .7 1 P3,744,021.68 Petitioner arrived at the alleged excess payment of P2, 166,672.57 by comparing the tax still due per BIR Form No. 1600 amounting to P4,026,674.64, and tax still due per its recomputation amounting to P1,860,002.07, as shown in the table above. Verily, petitioner's presentation of its recomputation simply pointed out how the alleged excess payment of withholding tax was computed. Petitioner's explanation that the discrepancy was due to mere inadvertence in entering the amounts in the tax base section of the online returns for its remittances is self-serving, considering that it failed to present the source documents (i. e ., a pproved disbursement voucher, collection list, invoices or official receipts, or other adequate records) showing the purported correct tax base. The presentation of the source documents before this Court is important to determine whether or not there was indeed incorrect tax base that was entered into the returns when the same was filed online. Needless to say, the correct amount of tax base or income payment is the determinative factor in computing the correct withholding tax. The Alphalist alone, which is considered self- serving, without corroborating evidence, is not reflective of the correct amount of the income payment which could be the basis of the comparison. Absent such source documents, this Court cannot preclude the possibility that petitioner may have understated the amount of income payment/tax base reflected in the Alphalist to arrive at a lower withholding tax due. Consequently, the Court is not convinced by petitioner's m ere assumptions or allegations that the correct total income payment is P37,964,852.93 and the corresponding withholding 4--

DECISION CTA Case No. 10394 tax of P1 ,860,002.0787 is indeed the total amount of withholding that should have been remitted under the petitioner's General Fund. Moreover, although petitioner presented its BIR Form No. 1600 Schedule II for the month of September 2018 (Alphalist)88, the Court cannot ascertain which among the income payments enumerated therein (i.e.} ATC WV020 amounting to P36,084,550.60, ATC WB040 amounting to P63,453.00, and ATC WB080 amounting to P1,816,849.33) pertains to the amount of tax remitted under the petitioner's General Fund or Trust Fund. Thus, the Court cannot simply accept the recomputation made by the petitioner without its supporting source documents. Bare allegations, unsubstantiated by evidence, are not equivalent to proof; in short, mere allegations are not evidence. 89 Basic is the rule in taxation that tax refunds, being in the nature of tax exemptions, are construed in strictissimi juris against the taxpayer and liberally in favor of the government. Tax exemption can only be given effect when the grant is clear and categorical90 inasmuch as taxation is the rule and exemption is the exception.91 All doubts, therefore, must be resolved in favor of the taxing authority.92 Accordingly, it is a claimant's burden to prove the factual basis of a claim for refund or tax credit.93 On the basis of the foregoing, petitioner's claim that there was an erroneous or excessive payment of VAT and other percentage tax withheld amounting to P2, 166,672.52 1s likewise unfounded. 87 Docket , Vol. I, Petition for Review, p . 18. 88 Id. , Vol. II , Exhibit "P-2 1", pp. 639 to 650. 89 Erm.elinda C. Ma naloto, et al. us. Is mael Veloso III, G.R. No. 17 1365, October 6, 20 10. 90 Cyanamid Philippines, Inc. us. Court of App eals, et al., G.R. No. 108 067, Janu ary 20 , 2 000; Commissioner of Internal Revenue us. Rio Tu ba Nickel Mining Corporation, et al., G.R. Nos. 8 3583-84 September 30 , 199 1. 9 1 Cyanamide Philippines, Inc. us. Court of App eals, et al. , s up ra, citing Commissione r of Internal Revenue us. Mitsubis hi Metal Corp. , 18 1 SCRA 2 14, 223-224 (199 0). 92 Commissioner ofInternal Revenue us. Rio Tuba Nickel Mining Corporation, et al., supra. 93 Eas tern Telecommunications Philippines, Inc. us . Commissioner of Internal Revenue, G.R. No. 18353 1, Mar ch 25, 2 01 5. ~

DECISION CTA Case No. 10394 WHEREFORE, in light of the foregoing considerations, the present Petition for Review is DENIED for lack of merit. SO ORDERED. ~7-~ WE CONCUR: CATHERINE T. MANAHAN Associate Justice Presiding Justice ~ ~ r: ~ ~!�_�~ MARIAN n,& F. RE{,Eg-FAJARDO Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice