CTA Case No. 3232 (Decision)

.. REPUBLIC OF TI-lE Pl-tiLIPPINES COURT OF TAX APPEALS QUEZON ClTY ~OMMONWEALTH MANAGEMENT AND SERVICE CORPORATION, Petitioner, - ,versus - C.T.A. CASE NO. 3232 THE COMMISSIONER OF IN~ERNAL REVENUE, Respondent. X- - - - - - - - - - - - - X DEC I S I 0 N Before the Court is petitioner Commonwealth Manage- ment and Service Corporation ' s claim fo alleged excess~ome ta~ payments in the total amount. o f ~84,839 .24 f o r the years 1979, 1978, 1977 and 1 9 7 6 after no action was seasonably taken on it by respondent Commissioner of. Internal Revenue . The facts are not disputed, respondent having sub- mi tted this appeal f or dec is ion based on the pleading,s and the records of the case, after petitioner has pre- sented , and the Cour t has admitted, its evidence as to the truth of its allegations in its petition for review. As alleged in the pe tition for review and borne out by the records, includ i ng the evidence presented by peti- tioner: Petitioner is a corporation organized and existing under Philippine law with office at Philamlife Build.ing, U.N. Avenue, Ermita, Manila. 10

DECISION - CTA CASE NO. 3232 - 2- For the year 1 97 9, the amount of il73,256.29 was withheld from the service fees and interests on the savings deposits of petitioner, as withholding income tax. However, for the year 1979 , petitioner sustained a net loss of il25, 087.00 as shown by its i ncome tax return . For the year 1978, the amount of il8,040 .91 was withheld from the service fees and interests on savings deposit of petitioner as withholding, income tax. How- ever , for the year 1978 , petitioner sustained a net loss of �!22,228 . 00, as shown by the income tax re.turn. For the year 1977, the amount of il449 . 04 was with- held from pet.itioner 1 s i nterest on i ts savings deposit , as withholding income tax. Additionally, petiti o ner: paid the amount. of ill,040 . 00 as income tax. However, for the year 19 7 7, the i ncome tax due- from petit ioner was only ill45.00 as shown by its return. For the- year 1976, pet.itioner paid i ncome tax of il3,778 . 00. However, for the year 1976, the income tax due from petitioner was only ill,580.00 as shown by its income tax return. PEtitioner has brought its claim for. refund,of the foregoing overpayments of taxes to the attention of the Bureau of Internal Revenue Direct Taxes Division several times but no action was ever taken by t he latter .

DECISION - CTA CASE NO. 3232 - 3- So on 10 April 1981 , petitioneE was constrained to send a formal claim f or r efund wit::h respondent Com- mis sioner of Internal Revenue . Petitioner ' s claim for refund o f excess income tax payments in the total amount of �184,839 .2 4 , as can be gleaned from above , represents: 1. �173,256 .2 9 for t he year 1 979 ~ 2 . �18,040.91 f o r the year J.978~ 3 . �11,040 .00 and �1449 .04 f o r 1977 minus �1145.00, income tax du e for that year~ and 4 . �13,778 . 00 for 1976 minus �11,580 . 00 income tax due f or that year . To prove these excess income t ax payments, � peti- tioner presented in evidence its income tax r eturns f or the years involved , the corresponding official rece i pts f o r its income t ax payments, as well as the va ri ous withholding tax certificates is sued to pet.i- ti oner . No controverting evidence was presented by respondent. As a matter of fact, as stated above, respondent submitted this case f or decision on the basis of the pleadings and the records afte r pe ti- ' tioner has presen t ed and offered its evidence . Since one who prays f or j udgment on the pleadings withou t off e r ing proof as to the truth of his allegations, 1J

DECISION - CTA CASE NO. 3232 - 4- must be understood to have admitted! the truth of all the material and relevant allegations of the opposing party, and to rest his motion for judg,ment on t hese allegations taken together with such of his own as are admitted (Bauermann vs. Casas , 10 Phil . 386; Evangelista vs. DelaRosa, et al. , 76 Phil . 115) ~ respondent , as pointed out by petitioner, maybe con- sidered as not questioning ser i ou s ly petitioner ' s entitlement to i t s claim for refund . (p . 86 , CTA records .) More so when the evidence presented, which was no t disputed by respondent , sufficiently establiSles pet i tioner ' s right to the� refund . In f act, as the records show, respondent volun- . tarily refunded to petitioner , during the pendency of this appeal in this Court, the amount of ~895.00 under Treasury -Warrant No. B-04820554 dated 20 July 1982 representing excess payment Dr 1977 . (See pp . 8 6-87, CTA records.) Under Section 292 of the 1977 National Internal Revenue Code, r efund or credit of any tax may be made, even without a written claim therefor, where on f ace of the return upon which paymen t was made, such payment appears clearly to have been erroneouslf paid. As shown on the face of the income tax r eturns involved herein upon which payments by petitione r were made, such excess income tax payments in the amount of ~84 , 839.24 1 11

DECISION - CTA CASE NO. 3232 - 5- appear clearly to have been erroneously paid . We agree with respondent, howe ver , that peti- tioner ' s claim for tax refund for the pe r iod prio r to April 15, 1979 has prescribed. (Special and affirm- ative defenses, p. 13, CTA records.) Section 295 of the 1977 National Internal Revenue Code requires that the taxpayer should file a written claim for refund with the Bur e au of I n ternal Re ve n ue within two years af te r payment of an internal revenue t ax alleged to have been erroneously or i llegally paid and that the action for recovery must be instituted in this Court also within two years affer payment pursuant to Sec tion 292 of the same Code. The writte n claim for refund of excess income tax paymen ts in the total amount of ~8 4,839.2 4, stating the ground upon which it is based, was filed with the Bureau of I nternal Revenue on April 10, 1981 (Exhibits "A" & "A-1", p . 3, CTA r:ecords) '� and the petition for review for the recovery 6f said over- payments was instituted with this Court on April 15, 1981 (p. 1 , CTA records )~ Since the suit for recovery was instituted on April 15, 1981, it follows that peti- tioner ' s claim for tax re.f und for the period prior to " April 15, 1979 has prescr ibed. Accordingly, petitioner is entitled to a refund of ~69,297.79, as evidenced by its Exhibits "E-1" to "E-10", inclusive, found on pages 58 1 1~

DECISION - CTA CASE NO. 3232 - 6- to 63 , Court of Tax Appeals records. ~\THEREFORE, respondent Commissioner of I n ternal Revenue is hereby ordered to grant a tax credit to petitioner Commonwealth Management and Service Corpo- ration in the amount of P69 , 297.79 representing erro- neously paid income tax involved i n this case. With- out pronouncement as to costs. SO ORDERED . Quezon City, Metro Manila, June 26 , 1985. WE CONCUR: R~N Judge � X~ As sociate Judge � 1 ,)