CTA Case No. 3976 (Decision)

-- )1� REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ASIA AUSTRALIA EXPRESS, LTD., represented by SORIAMONT STEAMSHIP AGENCIES, INC., Petitioner�, �-- \1 P. t''' u ~-~ <,; -- C.T.A. CASE NO. 3976 COMMISSIONER OF INTERNAL REVENUE, Respondent. X- - - - - - - - - - - - - - X DEC I I0N In .i.ts letter dated April 23!1 1984 to respondent Commissioner o �f Internal. Revenue, p e t i t i o n e r� Asia Australia E:�: p r e s s , L. td . ' r-epresented by Sor iamon t. Steamship Agencies, Inc. , r-equested �for the refund of the amount of P3 5,516.00, representing alleged overpaid income tax for its taxable year ended September 30, 1983. Since no action was seasonably taken by respondent, peti t..ioner- �f i 1ed the instant petition for review 44 3

DECISION CTA CASE NO. 3976 2 praying that respondent be ordered to refund to petitioner the said amount of P35~516.00. The facts are not disputed, res pondent having submitted this case for decision on the bas is of the pleadings and after petitioner ha s pr-�ese n ted its evidence in support of its entitlement to its claim for-� r-�efund. As can be gl eaned the pleadings and the evidence pn~se nted: .1. Petitioner� is fot-eign corporation e ngaged .in the bu s iness of being a common carr�ier a uthori zed to call in Philippine ports to load and unload freight in the Philippines where it is represented by the Soriamont Steamship Agencies, Inc. , domestic l'li th off ices at Soriamont House, 801 United Nations Avenue~ MaHila; r��es ponden t is the duly appointed Commissioner of InterTlal F\evenue with offices at the BIR National Bldg., Diliman, Quezon City where he may be served with su mmon s. 2 . For� the first three quarters of its f i sea 1 year-� ending September� 30, 1983, petitioner�

DECISION -�- CTA CASE NO. 3 976 -- 3 - � filed its quarterly income tax returns and paid the taxes d0e thereon , as follows: B.m.g_qnt____ ____ g_~,.!.E.c.t..?.r- s.o_g~_g _ t F'<:~.ymen Confirm- ation ___ f~~.! _g_ g_r:._g_~..r:: !)j_g_.__ Receipt ________ltc.?_!'._ 31 Dec. 1982 p 330.00 0299132 0627930 31 Mar. 1983 21,657.00 0 9 9 7 9 0 :3 0948237 30 June 198:3 1513167 0955299 l-~-'-~;?._9.!..9.9 A photocopy each of the ta:-: r�eturns and the t.ax payment receipts are marked and described as fo 11 ovJs: A Income tax return for quarter ended 31 December 1982 B Payment Ordet- No. 0299132 dated 22 Febr-uar�y 1.983 c Con �f .i r�ma tion Receipt No. 0627930 dated 22 February 1983 D Income t.a:-: r�eturn for quarter- ended 31 March 1983 E Payment Order No. 0997903 dated 25 May 1983 F Confirmation Receipt No. dated 25 May 1.983 G Income tax return for quarter ended 30 June 1.983 44 :.>

DECISION ..... CTA CASE NO. 3976 - 4 �- H Payment Or-der No. 1513167 dated 26 August 1983 I Confirmation Receipt No. 0955299 dated 26 August 1983 ...,.. Petitioner �f i.l ed its final corporate ��-' annua 1 income t.on: r-eturn for- �f isca 1 year ending September 30, 1983 on Januar�y 13, 1984 (E>:h. J) which is be:dc.H.. e the 'f i 'f teen th day of the fourth month 'following the close of the 'f isca1 year as r.. equi r-ed by Section 86 of the app 1 i.cab 1 e Na tiona 1 Internal Revenue Code. Said 'final corporate income tax return showed a net loss of P215,399.81 and a refundable on the face of the return overpaid income tax of P35,516.00. 4. On Apr�il 26, 1984, petitioner filed a 1et tet-� dated April 23, .1984 with respondent requesting the refund of the overpaid income tax of P35,516.00. (E:�:h. E.) 5. And 'for the judicia 1 recovery of said overpaid income tax of P35,516.00, petitioner filed the instant peti ti.on for- review on September 26, 1985. 446

DECISION -- CTA CASE NO. 3976 -- 5 - Is petitioner entitled to the refund of alleged e:�:cessJ,. income paid for fiscal year ending September 30~ 1983 amounting to P35~516.00? On the special and affirmative defense of respondent that it is incumbent upon petitioner to show that it has complied \'lith the provisions of Sections 292 and 295 of the appl icab 1e Na tiona 1 In ter� na 1 Revenue Code, r�egar�d ing the f i 1 ing of a claim for refund with the Commissioner of Internal Revenue and commencement of the suit for� re �fund with this Court within two years from date of payment of the ta:�:, the r�ule is that a ta:�:payer whose income is withheld at source will be deemed to have paid his tax liability when the same falls due at the end of the tax year. (Gibbs vs. Commissioner of Internal Revenue~ L-17406, November 20, 1965, 15 SCRA 318.) And in this case where the is payable by the ta:�:payer in quarterly installments, the final payment is the last quarter payment at the end of the tax year when it is finally ascertainable that the taxpayer either made profits or suffered losses in the operations.

DECISION ��� CTA CASE NO. 3976 ... 6 -- (Commissioner� of Internal Revenue vs. Au s t r� alia E l�: pn~ss Ltd.~ G.R. No. 85956~ April 10, .1989. ) In the present case~ petitioner had until ,Januar- y 15 ~ 1984 the fifteenth day of the fourth man th fa 11 owing the c: 1ose of its f isca 1 year as r�equi r� ed by Sec t..i.on 86 of the app 1 icab 1 e Na tiona 1 In ten1a 1 Revenue Code, within which to f i 1e its adjustment or� final t- etur"n and make the �final payment. S <:\id final cot��par�ate income tal{ return filed on ,J .:.,.nuar�y 13, .1984 shmAJed a net loss of P215,399.81 and refundable excess payment of income tal�( in the amount of P35,516.00. Petitioner in sai d annual f"ettu� n opted to claim a refund of the over�paid income tal�( as presc:r� ibed by Section 7 of Re ve nue Regulation 10-� 77' othenAJ.ise known as Regulations the Method of Computing Corporate Quarterly Income Tax on a Cumulative Basis. Since the claim for refund in this case was filed with the Commissioner of Internal Revenue on Apr�iJ. 26, 1.984, it is thus clear that it was well within the two- year period provided for in Section 44 a

.. DECISION CTA CASE NO. 3976 - 7- 292 of the applicable Tax Code. The same is true with respect to the f i 1 ing of the petition for review with this Court on September 26, 1985. Then, too, f espondent contends as special and affirmative defense that the mere averment that petitioner suffered a loss does not ipso facto merit a tax refund. Petitioner, it should be noted, is not claiming a ta :�: refund on a mere avet- ment that it suffered a loss. The c:: 1 ai m for l~ efund is based on the f ina 1 corpor-ate income ta}: return which showed a net loss of P215,399.81 and a refundab 1e e:�:c:ess payment of income ta:< amounting to P35,516.00 2\S established by the evidence presented by petitioner. (Exhibits J, J - 1 to J-11, inclusive, p. 10, CTA records.) No controverting evi dence was presented by respondent. Neither was any evidence disputing petitioner's entitlement to its c 1 aim for. r-efund was pres en ted by respondent. And this case having been submitted for decision on the pleadings and on the face of the unrebutted evidence of petitioner showing that it is entitled to the refund of P35,516.00, respondent may be 44 3

DECISION -- CTA CASE NO. 3976 ... 8 ... consider�ed to have no serious objection or opposition to petitioner's entitlement to the t-efund. The circ umstances obtaining in the case at bar� compe 1 us therefore to sustain the tenabi 1 i ty of peti. ti.oner� ' s r i.ght to the r�e �fund of P35 ~ 516.00 based on the evidence and pleadings on which r�esponden t submit ted this case for dec ision. If respondent may~ even without a wr�i tten claim the r� efor, refund or� credit any tax~ where on the face of the r�� etut-n upon which payment was made~ such payment ap pears to have been erroneously paid (Sec. 292~ NIRC)~ we see no reason why respondent cannot. r�efund or�� credit the amount of P35 ~ 516.00 invo 1 ved het�� ei.n when the ret.ur�n upon which payment !l~as made, p 1 ead ings and the evidence c 1 ear 1 y show that it is refundable. / Petitioner's claim for refund has been pending 1"'-li th r�esponden t ' s Bur�eau for e>:amina tion, verificat ion and checking since April 26~ 1984. Through all the yea r::_s~ no action whatsoever was taken by r �esponden t. The records make i t c: 1ear that petitioner's income tax return for the taxable 450

DECISION -�- CTA CASE NO. 3976 - 9- year- in question has shown a net loss of P215~399.81 and a r-efundable excess payment of income tax in the amount of P35~516.00. Respondent has not issued any deficiency assessment nor- disputed the cor-r-ectness ther-eof. The requisite BIR payment ot-� ders and Central Bank confir-mation r-eceipts shm-Jing payments of the subject over-paid income tax had been presented and admitted in evidence. (Dataprep [Phils.]~ Inc. vs. Commissioner of Internal Revenue, CTA Case No. 3600, March 30, 1984; Sun Insurance Office Limited vs. The Acting Commissioner of In ter�na 1 Revenue, CTA Case No. :3205 ~ June 23, 1987. ) /R espondent has never placed in issue the correctness of the gross income reported, the legality of the deductions c 1 aimed, and the fa c: t of substantiation of such deductions. And respondent having submitted this cas e for judgment on the pleadings and after petitioner has presented its evidence in support of its entitlement to the refund, without offering rwoof as to the truth of his allegations in his answer, respondent must be ~nderstood to have 45 1

DECISION �� CTA CA S E NO. 3 976 �- 10 �- a dmitted the truth of all the material allegations of petitioner, and to rest his motion for judgment on these allegations. 1 (Bauermann v. Casas, 10 Phil. 386.) o t mu c h need be said on r�espondent � s other s p ec i a 1 and a f �f i r-�ma ti ve de �fense that the instant c a se does not involve illegally or erroneously c olle c ted ta:-:e s and therefore petition for review does n o t 1 i e. By Section 2 92 of the National Inten1 a l Rev e nue Co de (now Section 231), the ta x p a yer mu s t file a written claim for refund with th e But- e a u o �f In tern a 1 Revenue within twcl years a fte r payment of an internal revenue tax alleged to have been et- r� oneous 1 y or i 11 ega 11 y paid, or "g.f.__~.QY. and that the action for recovery must be instituted in Court also within two years after� payment. The applicable statute employs the term "ex c essive or� in any manner wrongfully collected". The law is clear. We are not to indulge in statutory construction. If the overpaid in c ome ta:{ in the amount of P35, 516.00 452

- DECISION -�- CTA CASE NO. 3976 - .11 �-- involved het- ein is not ~;:n:_<;;..!"?..?._?j,_y~- ~ it was at least I I'.'J_[_Q_Q_g .f.\.J.U.Y paid or- co 1 1 ec ted .!-> WHEREFORE~ r-espondent Commissioner- of Inter-nal Revenue is her-eby or-der-ed to gr-ant a r-efund and/or- ta>: cr-edit to petitioner- Asia Austr-alia E:<pr-ess, Ltd.~ r-epr-esented by Sor-iamont Steamship Agencies, Inc., in the amount of P35,516.00 r-epr-esenting overpaid income tax for- its taxable year- ended September- 30, 1983. No costs. SO ORDERED. Quezon City, Metr-o Manila, October- 18~ 1989. WE CONCUR: ---c. ROAQUIN 453

...- ._... DECISION -�� CTA CASE NO. 3976 - 12 - CERT I F I CAT I 0 N I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. F'r�esidir g Judge Court of Tax Appeals 4 54