CTA Case No. 4099 (Decision)

REPUBLIC OF THE PHILI P PIH�8 COURT OF TAX APPEALS QUEZON CITY CITYTRUST BANKING CORPOnATION, F'et.i.tionP-r , -ver s u s - C.T .A . CASE NO. 4099 COMMI SS IONER OF I NTERNAL RE VENU E , Rf.?spnn de nt. -� _.. -�� . _ -- ~�.. ~~ D E C I s :r 0 N This case invol ves a claim for ref u n d o f o verpaid income t a xes fo r cal e ndar years 198 3 , 1984, and 1985 amountinq to P1 9 ~ 97 1. 7 45. T hi s i'lmount is the cumuli:~ti v e total o �f the income ta H payments ma d e by pet i tioner on its quarter l y income tax returns, taJ�:es w.i thhe 1d on pt- o<:eeds �f r� om i t s i nvestments i n g ove rnment securities and on i ts i n co me. Hen:=.�: under is a of petitioner's final a d justment returns f o r the yea rs i nvolved: Nf:.~t Incore f::.-~~~ ,_�~9 ,;t�.l! Tax Due F' 7,640 , 7719 Previc:x..ts year ' s creditable arra..t.nt F' 2 ,ZZ9,060 ._(.1...:?. , .4.�._~-~~0f1 G~.tarterl y payments . J:.q,.4.39,.PZ4 ( 4,847,354) Balance of Ta>: due - (l;llli '~�>3,~JJ. F' (6 ' 61.1 '223 ) Tax Credits (WIT 01 incore from Gov ' t. 9?c:urities and rental incorne) Tax Refundable 11~

DEC I SION CTA CASE NO. 4099 -2 1984 Net � In<::I;:)'OO e.._J~., ~:1.-,.~~ Ta:{ D..1e 4~715~5.3"3 r:�r�ev.ic:us year's creditable cvro...tnt P 6~61:L~ :zz:~; Q..1art.er1y payments .....1:6.~.~1.4.., ~~ . .. . (Z2 ,,?.2~ ,,!~~). Balance of Te'l~: I:X.te ( 18~ 110,~"89) Ta>: Cred.i. t s ( ~J/T c:n .inc::C'.I'l"le fn;:)m C:Ov' t. Sec:ur.ities cmc:l r�en t;"'l inc:cxnc?) __..C l ! 91:17 ,l~~.l (20.098~041.) FCt:tJ p.i:\yC:\ble ��-��������� -�--. !~~) ~.?~~ Ta>: r �efundable e,.~<=l,~.~ ~z:t:~z~J., ~t Inc:one f . l46 '-~:l~, .~:t Tax DL1e p -- (l - Previa..t!i year ' s creditable amo...nt F'1 1i'~947,789 Q.tarb?rly payment~ .. ......... :- .q :::- .... _ -�.JJ2i'., 5.'4.Z.s.:Z..~1 Balance of Ta>t due p (19 ~947' 789) Tax Credits (WIT 01 incon~~ �fn:xn Gov' t. Securities and rental inccme) ....... ..L_......A.:? !.!2:-:;~u. ( 19 ' 1~7<) ~ 6 19 ) Fct:XJ payable .......J~.s.e.:z:4. Ta>: refundable t;,,,<.,.�~ !l.~!Z~~~- F'eti tioner f i 1ed a c 1 aim f or re �fund wit h the Commi ssione r of Internal Revenue o f Auqust 2 6, 1 9 8 6 c'i'\ nd instituted thi s p etition for r� eviev.J on Aug u st /- II I ( '1'� l986 i.n order to p i'"' event the tc1ll.inq of the ~ /" sta tute of limitation . Respondent, in its answe r, alleged that a mere averment that petitioner incurred a net l oss for 1985 does not ipso facto me r i t a refund J th~t the amounts of P6~611,223 (overpaid incom� t a x for 198 :5 )~ P1~959,514 and F'28~238 (wit hheld ta>: e s in 1984) were not prope rly docu me nt ed; and~ that the right to claim for a refund with respect to income 120

DECISION CTA CASE NO. 4099 -- 3 - pay men{:s prior to Augu st 28~ 1984 h as pn~sc ri.bed pursuant to Sections 292 and 295 of the 1977 Ta>: Code as amended (now Sections 230 and 204) � However~ i t did not present the BIR records nor any other evidence and instead submitted this case based on thf? p 1 ead inq s i':l nc:l peti tir.:mer�' ~~ ev idenc:e. Both p<':'rties agreed to submit the case for decilli on wit hout memoranda. The issues pre scr�.i b e d befot- e this Cour�t for resolution are as follows: (1) Whether or not claim for refund with respect to income payments prior to August 28, 1984 h<':'s prescribed; ( 2) Whether or not petitioner has substantiated its c 1aims for� re�fund for the period which has not pr�e~:; c r� i bed . Respondent 's conten tion that the claim for r�e 'fund o�f c"i\ IT\OUnts paid prior� to ('~uq u r,;t :;~8 ~ .19fl 4 has 11r�esc: r i bed because th e c 1 <'li m 'fm � n �?'f und thf?n?o �f wc.~s f iled beyond the two- year pres criptive period under t:-l ec:tion 230 o �f the Ta:: Code is unavai 1 inq. Wi.th r espect to the taxe s withheld at so urce~ the Supreme Court held in Gibbs v Coaaission�r of Internal R�venue (15 SCRA 318~ November 29. 1965). "A taxpii:\yer ~ resident or non -- the resident~ who contributes to not the withholding tax sys tem~ does so really to deposit an ii:\mount to I 1?.1.

DECISION CTA CASE NO. 4099 - 4- Commissioner of Inte rnal Rev enue, but, in truth, to p erfor� rn i:'\ nd e:.:-tingu.i s h his t .on: obligation for t h r-~ y e r.,\r concer� n ed . In o th er� wor� d s , hr;, i s paying his ta:�: liabiliti es f o r t h0 l year. Consequent l y , <.'":\ ta:-:payer who se i ncome is lfJit h held at ~;ource ~>Li.ll be de r -~ rn e d to h a ve pai d hi ~:; i nc ome tax liabili ty when t he same falls due at the t�md o �f the t .~x yea r. I t is from thi s l atter elate thF.m, or lfJhen the ta:-: J..iabil..ity falls due, t hat the hm-- year presc r iptive period under Secti on 3(16 of the Revenue Code s tarts to r�un with respect to payments effected through the withholding ta:-: system. It is of no consequence whatever t hat a claim for refund or credi t agains t the amount withheld ~t source may have bee n presentad and may have remained unresol ved sin c e the delay of the Collector in r ~.? nd1:>r .in9 dl?r:.:i :.:; ion doe s not ext e nd the perempto r y p e riod fi x ed by t he st� at~lt<.?." ~�.Jh il~ i n Com mi s io n er o f Internal Re~'en ue v. Asia Australia ~xpre s ( S up r eme Co ur t Re s olutio n, GR April a.t' 'f .i. min() t-hi s Court ��:.::: decisi on in Asia Aus tra l ia Express v. Commiss ioner of Internal Revenue ), the .High Court stated that, "[Court of Ta:-: Appea l's] ruling tht?.t the private res pondent's right to claim the refund of excess income taxes (paid by it in quarterly .i.n~stallments) for 198.1 and 1982, had not yet prescribed is supported by Our decision in Collector of Internal Revenue v. Prieto, 2 SCRA 1007 and Commissioner of In t er n a 1 R~;~v e nue v. Palanca, Jr., 18 SCRA 496~ wh e re we ruled that "When a ta:-: i�; paid in quar��t e rly installments~ the pn~scr� iptive period el f two years pr� ov id e d in Section 306 (now 1??

DEC ISI ON CTA CASE NO. 4099 - 5- Section 292) of the National Internal Revenue Code s hould be counted from t he date o �f f .i n al p e.\ yment." The "finc:\l payment" is the 1as t quarter payment at the end of the fi sc al year when it is fi.nally ascerta .in a b le t hat the ta:-:p;a y er eit her made prof its or suffered losses in i t s bLlS .iness clpt.~na t.i o ns." Fc.1llowing sai d prcmc:~ t.m c:e rn.e nt , thi s Cour�t held in Unibake Inc. v. Commis sioner of Internal Revenue (CT A Ca:.:::e No. 3987. July 31. that "the ta:-:paye r has un ti 1 the fourth mo nth 1' o 11 owing the c lose of the fiscal period within which to file a f inal adjustment return of the preceding fiscal y ear (Sec. 87 ~ Ta>: Code) which may well be the r eckoning date for the 2 -year prescriptive period." ThLlS ~ the presc r i pt.i v e per� iod for refund of ~ he o verpa id taxes for the years i n v ol v ed computed .i n ac c ord a nce with th l:! p r�o v i s i r.m o �f {-'l'" ti c l e 13 of t he New Civil Code are as follows: l 9B4 19B5 Final adjustment n:~turn f.i ln:1 on ..- 4/ 16/!34 '1/1~1/B'::.i IJ/ .1.5/ 86 ?�-year pericld e :�tp.ires on �- 4/.15/ l?.h 4 / .1.4/ 87 4/.13/88 Claim for� refund �f.i led c:n ... E3/26./!?�6 F'r:?t.i tic.n �for Fleview fil ed on ,_ Ell:'213/ 86 It is clearly seen that the claim for refund of overpaid taxes in 1984 and 1985 were timely filed whereas the claim for 1983 has already prescribed. Petitioner cited BIR Memorandum

DECISION CTA CASE NO. 4099 - 6- Circular '7-85 dated Apr� i l 1 ~ 1 9 85 a:~s au thor i ty to the effect that an income tax overpayment is not an er roneou sly o r illegally paid t a}: wi t hin the contempl ation of Sees. 230 and 204 of t he Tax Code. Pertinent: portions <Jf the Memorandum Circular is reproduced below: REVENUE MEMORANDUM CIRCULAR NO. '7 - 85 SUBJEC T: PROCESSING OF REFUND OR TAX CREDIT OF EXCESS CORPORATE I NCOME TAX RESULTING FROM THE FILING OF THE FINAL ADJUSTMENT RETUr<N TO: ?'11 In t t�~n \ i:!l l F<e v e n lte CJ �ff.ic:e?ns and Other s Concerned Sec t.ions 85 ancj 86 of the Na tiona 1 Internal Revenue Code provides: The �for eqo itl<.:l pr�ovisions an? implemented by Sec . 7 of Revenue Regulations No s. 10 - 77 which prov ide: ,., , ,, , \ ( \. 1 \ 1 It ha E; b een observed ~ howe ve t~ ~ th a t because of the excess tax payments~ corporations file c l aims for recovery of overpai d income tax with the Court of Tax Appea 1s within the two-year per .iod �f ,~ o rn the date of payme nt , in accordance ~<~i th Sections 292 and 295 of the National Internal Revenue Code . It is obvious that the f i 1ing of t he case in court is to preserve the judicial r ight of the corporation to c 1aim the refund or taH credit.

DECI S ION CTA CASE NO. 4099 - 7- It ~l d br' no t E.� d, l lOviE!'tc� r�, th at~ c ;,, ,,. r~� o f <�:? r � r: Cl n r.~q u ? l _y .. or. t h is i s not a t: ll r.> pt�--ov .is :i. c:m s ti�:t ~t t .H id c:~ r 1.. Ll .~~ g ~J 1Y.... ..P?J lj t h e T a ~: C od e . <:t lld 2 '?~ 5 o f of f:l ec tion s 2 9 2 In the abo v E~ P'~ C:f.i~; i cm o �f the F:;:e gul a tion s ~ t h e cor p Qr v i on ma y req u es t for� t h e . r.:~f !-:1.D.9. o �f H m overpe:dd i n come t a x o r� c 1"7:\ im for� ?t,tJ 91lie tJ.<:______t.~.~~ ...... !; .C~ 9J.:t. . To in s ur e prompt ac t i c.m o n c o rp ora te ann ua 1 income ta}: n~ tu r-- n \:; s ~ r e �f un d e:'l bl e a mounts ar i g;; in q fr o m --bv e rp .;i d q ua r ter� I y income ta xes~ thi s Of f . e has romu l gated Reve nU;! Mnmot�� a ndu m On :if:?r 3 2-�� 76 d e:, t e d au n e .tl ~ .1.9 7 6 ~ c:o n t.~:d. ning th e p r� oc!:?d l..H"e in pn.Jces s i n q s ai d n:~ tur� n s . Under� th e s e proc��?du res ~ t h e n?. t ur n s a t'"P rn e t,..e 1y p r-�e --- au d ite d wh i c h c on s is t ma i n l y of c h ec kin g ma th e m.;:t t i c a 1 c:l cc u r� t:~c y o�f the f :i. gure s in t h e n?turn . A fter wh .ic h ~ the re f Ltnd o r� tax credit is grt:~nted; a nd ~ t hi s procedure was a d opted to f a ci l ita t e immediate action o n c <:~s es l ik e thi s / In this rega r d~ t hen~ for e ~ ~en?. is no need to f i 1 e p etition s �f o r r �ev iew i n the Court of T ax A ppea l s i n ord e r t o preserve the r i ght to cla im refund o r tax credit with in th e two --yea t�� per�.io d. As a lready sta ted~ t:~r t ic n s h e reon b y t h e B ureau are im me di ~ t e a fter � o nl y a c ur s or y ' p re- audit o f t h e i n c ome t ax r eturn s . Mor e o v e r, a taxp ayer m ~v r �eco v e r f ro m t h e Bur eau of I n t f.?rn a 1 ne v e?nue e :-: c ec.; s in c o me t a x paid under the prev i s i o n s of Sect ion 8 6 of the T ax Code wi th i n 10 y ea r s f rom the date o 1' p .:,,y me nt c cm sid E!r-�i n q t h at i t i s a n obl i gation crea ted by l a w ( Ar t i c l e 1144 of the Civil Co d e) . -.. Tomas C. Toledo Acting Commissioner The above Memorandum CircLilar� is contra ry to

DEC ISI ON CTA CASE NO. 4099 - 8- law and thus has n o for ce and eff e ct. Althouqh the ra:-: E r-rone ously or Illeg <\lly Collected"~ the t itle a lone is not con trol l inq. By t hf? tenor.. o1' Sec. 2 30 ~ the t wo- year li mit applies to actions to r ecove r� .1. any na t:i.c:m a 1 .i r�, tf�) r�n<�\ 1 n2v �1nue tc:~ J( errc>neous 1y or illegally assessed or collected; 2. any pe n a lty c l a imed to have been co ll ected without a uthor ityJ or ..,.. any sum al l eged to have been ~'. excessive or in any manner wrongf u ll y col l e cted (Se e Huller & Ph i pp s ~'- Corttwlissioner of In ternal Reve nue , 1CI.3 Phil :..:: 1 �1!5 . Narch 2(}, The ove l~pal.d income tr.:u:es in this case "f'all under� # 3 f or although they were l8qally collected by vir tue of th e withholding ta:-: system and the r�equirement for qua rterly inc ome t.a :-: payments~ t 1�1ey wer�e n onetheless "e:-:cessive". Sections 85 and 86 (r1ow S ees. 68 and � 69 ) of t he Tax Code and Revenue Regu lation 10-77 gi ves the t axpayer the option~ in case of a t a:�: overpayme nt s hown in its final adjustment return to ask for a r e fund or to have the overpayment cred i ted agai nst t he estimated quarterly tax l ia bil ity for the l?h

DECISION CTA CASE NO. 4099 - 9- s ucceeding year. Nowhere i t i s stated therei n that the re is no longer any nee d t o fi l e a petit i on for r eview with respect to s u c h overpayment. Sec. 86 of t he Tax Code and Sec. 7 of Rev. Reg. 10-77 me r�e l y gives the p eti tiom.H" the right to sig nify his inte n t ion to opt f or a re fund or aLitomatic ta>: c t- e dit because "the a u thor�ization f or a k i nd of sP t- of f of creditabl e i ncom e t ax ~qainst f u ture t a x lia bilities con f e r red t h e co r p o rate ta xp ay e ~ in no II�J.is e lessens or muffl es th~:? r.. e s p o n de n t ' s p o 11-1 e r o �f as certaining the corr ect~n~s s of an y t. a:: r etur�n " �for "({.))ny e nt i tlement t h er�eof mus;L p i'OVE� complia n c e wit h the terms and c o ndit i on s perempto r i l y required by A fortiori, re s pond e nt mu s t have to ''~: :a min e th E:? r e turns a nd d e t e r. m.i ne th e taH x:< :�: 11 ( San Ca rlos Hilling v. Co��i s s ioner of Internal Revenu e , � Thu s the CT A Ca ;r;: e No * 3811 .� F t:bruar v :28.. 1 '?'} 0 1 ). t. .:n :pay ') r� is not ass111 �e ct that bv s i q nifyin q his .i. n te nt to have th e over p c:\ i d t a:�: c: red i ted in the s u cceeding year~ and eve n if h e d i d cr ed i t the the amount claimed a s refundable (or a portion thereof) would indeed be a llowed as a tin: credit for the succeeding year by the BIF<. More s o , if the refundable amount for one year was not 1 F'ending appeal in the CcxJr t of ApPf~a ls as of Mar ch :20 , 1991. 1?7

DECISION CTA CASE NO. 4099 -- 10 -� f ully cr- edite d in t h <?. s uc: c:E~edinq y r.-:-~ .:~~~ ~ t h e e>:c: ess u nc r-ed ited amoun t c a n n o l on g er- be cr-ed i t ed in the f ollowing year� bec e:\u se th r:) li::\ ~>J 1 i mi t.s the automatic t.::\x cred i t to th e " s u cc:E?f?d :ln q y r,� at" o 11l v. At t h e ver- y le;a st t h e n , th e a uto ma t ic ta~: c r e d i t pr-ovisi o n acts li k e a clai m �for- r- e fund for- t he yea r- o f o ver- paym ent because i t ser-ves the same p ur-pos e which is t o put t h e BIR o n n ot i ce t hat the c oll e c tion o �f the t .:n : i c;; being co n tes ted. But, s ett l e d is t h t~ I'"L.tl e rh.:d: E'.?Ven when a clai m fo r� or� c: r� ed i t pe nd i nq wi t h the C o mmi ssioner~ whe n the 2 y e a r p er- i o d fr- om t h e da te o f payme nt is about to e l a p~e the taxpaye r- need not a wait the Commis sioner ' s decis ion and i n stead must �f i 1e a petition for� n ?v i e \1�1 .in thi s c ourt pur-suant to Sec. 230 of the Tal�: Co de . To opine ther�efore t hat there is no need to fi l e a pe t i tion for r e view t o preser-ve the ri ght t o c l a im for a re fund or tax c r e dit is to go a gain s t th E? po s it i ve man dat e of S E-? C � 230. An admini str-ativ e interpretat i o n out of har-mony or- contr-ary t o the e ~:pr es s pr-ovision o �f a s tatute can not be given weight for- to do so would in effect amend the sta tute (Utah Hotel Co. v. Industri l Co�., 151 P 2d 46 7 , 153 ALR 1176 [1944]

DECISION CTA CASE NO. 4099 -- 11 - as c ited in footnote n o. 4 . 2 Am Jur 2d 76). Therefore, the t.a Npa yer s hould s till file a claim for a refund or ta}�: c: n ::- di t and the corres ponding petit i on for- t~evievJ 1-'J i thin the periods t~equir- ed in case of overpayment of i ncome tax reflected i n its returns ot h er wi se hi ~:; r� .i.ght. to c:laim �fot- a refund or tax credit will pr escribe. In Che�ical Bank HY Trust Co. v.. US, ( 275 r: S up p 26 art� ��d pe r cu riam .3 86 F .2d �.~�:~e;), i t was held that ">o:x em over p ay ment may not be credit ed .;:~ga.i.nst e s t i mated ta }{ �for the fol lowing year and be deemed to have paid in following year for th e pur� pose of t he s t a tute of limitations unl ess the c l aim for credit itse lf is asserted within the st a h 1t o r� y p e r�iocl." A 1~or t i or i ~ the s tate ment in the me mora ndum i ncome t.:u: paid und er� the pr�o v.i.s ions of S e c. 8 6 ' wi th.in 10 years f t- om da t.:~ o �f payment becau s e this is an obligation created by law" i s er�roneoL\S. The Tax Code being a special law~ its provisions prevail over those unde r the Civil Code. And since the overpayments arose out of t he a pplic a tion of the provisions of the Tc::,>: Co d e~ the provi sions of the same on prescriptive periods s hould necessarily govern. As held in Com�issioner of Internal

DECISION CTA CASE NO. 4099 - 12 - Revenue v. Insular Lumber Co. ( 2 1 S CRA 12.37, Dec � .t1 .� 19C..7J, "See s. 306 and ~':.09 o�f thP Natio nc::\l Internal Revenu e Code go ve~ n all kind s of refunds of internal revenue taxes - t h ose ta:�: es imposed and c:o 11 ec ted pur-suant to the National I nt�.e r�� n,"':\ 1 nevenue Code . Thus~ this Cou ,,. ,. <=.;tatecl th at " t his provision" r- efe t,.Ti. ng to Sec . 3 06 "w hi c h is manclato 1~ y ~ :t.s n o t s ubjec t to qua lif.ic ,::\t i on ~ ,;:1 nd, hencP~ it applies r �egar�dles s of thc co ndition <=; und e r� v-,,hi c h payment h as b een made ( Guagua Electric Light v. Collector of Internal Revenue and Court of Tax Appeal s L-.t 4421.. Ap ri.l 2 9 1961, 59 OG CS upp . 27 1 4207, 4210, cited in Gonzale s v. Court of Ta x Appeals and Collector of Internal Revenue , L-14532-33, Ha y 26, 1965J. M oreover-~ public policy demands that tax a djustme n ts be made as early a nd e::peditiously a s p oss ible. The r eason is th2.t i t i s on t;":.: e c.=; t ha t t h E? g o ver�nment clepenc:ls �fo r it <;~ o pe l~a t:ion 2.nd th at a ny uncf?.t-t a.inty or� n�nt.ro vf?t... sy on those m a ttr;� r ~; w .i l l <;;c)(n;:,-tluv.' .iiliP �'�' j '� thE-? s-. rnoo Lh fu n c tioning of thr oovernmenta l mac hinery. L e ngt h~ninq . theref or e~ of the period o �f J .i rn:.i t.,~.i� ion<; on t- e f und f n :l m two to ten ye ars would be adverso to pLtblic po l i cy .. ~~>!)~ .. 1"1on~ .i.mpor t a n t l y ~ ,:�IS thF~ r- i. r c ul a r s ta.tes th e which consists on 1 y in c: heck ing th f?. ma thematica 1 acc u!~acy of the figure s in the retur n. Ta:�: ation bein g v i t a l t o the s u stenan ce of gover nment~ claims for refund or tax c r e dit req uire mo re than a

DECISION CTA CASE NO. 409 9 - 13 - pre - aud i t" . 'J J,r;, of In t e rn .?. I Reve nue h a ~; t h e dut y t o d ete n n.in e no t o nly the mathe ma t i c al ac c uracy o f t h e fig ures in t h e return but al s o th e validit y uf th e cl a i me d d e du c t i on s and correctness of t h e e x p enses c l a i me d a s we l l as t he a mount o f income rep o r te d. Pu rs uant to s u c h duty, it must be noted that u n d er Sees. 2 35 and 203 of t h e Tax Code , t h e t ax p a ye r i s re quired t o ke ~ p h is t o 19f:l 4 ). T h r~ lt..J.i J 1 hav e clif 'f'ic: ul t.y in Vf..?l~ ii' y.i.ng a c l ai m f i l e d c':\ft e r the 3 rd y ea r- i f i n deed clai m-:::; for- n.1 fund we t~ e a l l C! Ir�H?. d to b~?.! filed wi th i n t e n y e ar�s . Th e =;e cond .i .ssL� n v.Jas ,:;\b l E� to ~:; ub st<.=~nt 'i. ~\ t r�� .i. t f', c J ,:, i m f ,..,r n ::��f �-t n c:l. F:e s p o nd e nt al l eq r.='� that th e w i th ho 1 d i. ng tax es On th e contra r y , p e t i t io n e r p re se nt e d s t a te me n t s an d c e r-ti �fic a tE?s of 1r~ .i t h h o 1 ding ta :'. f.i.'S ac:comp 1 is h e d by i ts w .i t. h h ol d i n q i0.<;! ~2!\ t s. {.) s h e ld .i.n At e neo de Man i la v. Co mmissione r of Interna l Reven ue (CTA Cas e No . :28,, .l ',:;/ 8 9 ) .� "pr-oo f of I \.>.J .i t h ho 1 d i ng .1. -:.; f..?~:; t. ai:Jl .i. ~:;l l '?d by c:: CJ p :i.. e ~:;; o f ,,; t.,?. t f2m��?n ts And in Ateneo de Manila v. Co mm i s s i on e r of I n ter n a l 1 ~ 1.

DECISION CTA CASE ~0. 4099 I IJ. - RePenue ( CTA Ca se No , J ,��..:, e:: _. October :::'.3� .t'?'? O.J ~ the ~'-li thho 1 ding t a~�: e s c: l ,':\j m r~ d al lowed because these b y h ~:; uc: n~quis i t e s our c es consistent w.i t i l the pres c r- .i bed regul<3t.io n s. " [Re ~spo n dPnt did not object to the ex istenc e o f statements and cer t ificates which were o ffered by pet i tionet�- a s proof of t h e withholdi ng taxes but took e:-:cep t .i or �1 to the.it- conte nt s a nd puq:JOse. <::,ub mi ss ion of t h is c-.=~ ~~ r�, few de c: .i. s.ion~ n ?spo ndent was not heard to c ompl ain about the veracity of the c ontents of these docum ents o r e~ hibits nor has i t s hown a ny irregular ity in the same which will taint t heir reliability or sui"ficiency as pt-oof~; of the ta:-: es withheld despi te the fact that it is well wi thin their c:.o mp eten c:c' to ri o so. Re~-;poncir? nt i s the rr eby c cmsid~~red t.P h �.\VE' t'\dmi t t e d t:h e t n .\ th of l.::he conte nt s of the~;p P:: ll.ib.it s. Henc e ~ those a mount s of withhe ld ta :-: p~:; ~--Jh.ich c:we suppor- te d by c orresponding statements c ertificates of withholding taxes admit ted in eviden ce shal l be J a llowed a s ta:< c:redi t s. Respondent's contention that a mere allegation o f los s in 1985 does not ipso facto mer i t a refund~ I~ � 'e ;, e . .�.� .��..�..I� , ;. <.. 1 ~? . ; .:. .. : ..:

DECISION CTA CASE NO. 4 099 - 15 - is likewise unmeritorious. As s t ate d~ res p ondent d i d no t p resent any ~vidence whic h wi l l ef fecti vel y dispute t h e co r-rec tn ps~; o�f th e retur n s and o th e r matt;? t~ial �facts t h~::>r-� ei t l � I'J e i. t �. hPr <:1 i cl r�� es po nd en t. .issue <.:\ n y c:le �f i c i en r:� y i" e:: '"'�E' ::-,<;mPrl t �fo r s-~\ :L c:l year. in thc7? ab�::;;:lnr: F� oi" C: Cl l"ltr<:t i'""Y ~:::!videnc e th e income ta :-: ret u rns -:;:. h nu l d be given cr-ecl�~nce a n d t h us~ coup l e d by the f~rt th at pe t i t ioner was a bl e r-c=tul' n ~ [.li'"Or:Ji' of C.\ s u stain e d b y pe t it i oner in 1985 . Mon~ i mpo r- t a n t l y, one t he e viden ces pre se n te d by th e pet.i. t.io n ��?r an audit r e port s ubmitt e d by t h e BTR As s ec.;srnen t Branch and r e t:o mmend E:?d by th e~ I :~c:~ q :i.on a l Din-:.'-'c tor~ F\e v e nue F\e~J .icln 4-B--~?~ .i.n c:orlll P c� t:.i on ~tJith tt1c:~ inv es t:i.q,:?~ ti on cc:mduc ted b y th E' RTF:;; r'ur�stiC:tl'l t-. pet:i. t.i.o n e r � s c laim~ r-e c o mm e nd ing t.h e r-�e �futlcl o "f overp ,"' :i.d taxf.-~S for the year s con c:e t��� n ec.1 ( E-~� h .i b .i t ::; y to )�'-3 .� . ~ Reco r d:.::;_, pp . 185 - 188 ) thi ~; re p o r- t app l i e s t h e pr e s u mpt ion o f n:o?g u l. ar i ty o f perfqrrna n cf~ of o f f i c i a l duty ( Ru l e s of Court~ Ru l e 131~ Sec. 3) whi c h h as not been d is puted by t he responde n t. T h erefore~ t he au d i t report give s per s ua si ve e ffect to p e tition er' s cl aim tn the refund . 1 ~.1

DECISION CTA CASE NO. 4099 - 16 - WHEREFORE, in view of the foregoing, p titioner is entitled to a refund but only far t~ overpaid tax&S incurred in 1984 and 1988. The re fundable amount as shown in its 1983 incom� taM return i s hereby d . nied on the ground of prescription. RespondPnt is hereby order d to grant a refund to petitioner Citytrust Banking Corp. in the amount of P13,314,506.14 represen ting the ov rpaid income t xes for 1984 and 19BS, recomputed as follows: 1984 Income tax O..e p 4,715,533.00 P16,214, '5i9 .00* l.essl 1994 Cllart:arly payn!nts 1,921,24!S.'S7* 1984 Tmc Credits- __A.._~'!.;'SQ* lQ...~~..~!!..4Z WIT CJ'l int. CJ'l gav� t . sa:. (13,446,91S.67) W/T CJ'l nntal inc. - �--- �1~...~.99. Tax~t P( 13,296,M3.67) l.&sea FtD.J pay.:able Aftl:u'\t I'W'fln::lable fer 1984 1qes lnc:an&P tax cl.m (ltli!SS) p -0- l.ses: WIT CJ'l rantals -��-��- ---�~-..ZJ-..6.!.~~ T&>< Dv&!rpaynl!!!nt (36,716.47)* Less� FtDJ payable Analnt FWfLndabl e for 1~ _________UMlZ4 ~.QQ p (17 ,942.47) Thlieose credits are smaller them the claimed amoLnt because a1ly th! above figures> are well SLtpported by the vario.ts exhibits presented dl.lring tte hearing. No pronounc. . .nt as to costs. SO ORDERED. 1~4

DECISION CTA CASE NO. 409 9 - 17 - Quezon City~ MP+r�n 1�1-?l�, i. J..-, , !�!.-�v �:�:� ~1, 19'7 :1. t.~ tQ. 0 ~ ERNESTO D. ACOSTA ?-~ssoci.a t e J u d ge WE CONCUR: c".'"'--R--O--A-QUIN Judge~ CERT IFICATION I hereby certif y that this decision was r.. eac h e d a f t e r due cons:.u l ti�'\ t ..inn F\monq the mPrnhers of .in Sect i o n 13 ~ Art i cl e VII I of the Constitution. ~~ Court of Tax Appeals �