CTA Case No. 3656 (Decision)

J REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ATENEO DE MANILA UNIVERSITY, Petitioner~ - v er�sus - C.T.A. CASE NO. 3656 COMMISSIONER OF INTERNAL REVENUE, Respondent. - - - --- >t D E C I S I .O N A s imple claim for refund of an alleged o ver pa id income ta>!es for the fiscal years ended Ma rch 3 1~ 1981 and March 31~ 1982. P e t i tion e r~ a domestic co r poration~ non-stock a nd n o n - pt- of it, and operated for e du c ational purposes~ for its income retu r n s the following declarations: Gross inc ome F'10,453,786.(10 To t a l d e ductions Amo unt s ubject to tax __JQ......4.5'.Z.,. ~~!.t~IO. In c ome tax due thereon Tax withheld at source None Amount refundable None ---�-�-..-~.~..!.~~~- ~.! 83,683.31 (Exh. H~ pp. 135 - 140~ CTA recs.) Gr�o s s income P11,088,971.00 To tal deductions Amount s ubject to tax _,.!,J,_, -~~.~. !.QQ_i.?.!..OQ. None

DECISION CTA CASE NO. 3656 2 Income tax due thereon None In co me ta>: ~<~i thheld at source --���--1~.1.!1.7_,1~_!...10 Amount refundable 191,716.40 (E~h. I-1, pp. 145-151, CTA recs.) On February 17, 1983, petitioner filed a claim for the refund of P275,399.71 representing the total refundable amounts for the fiscal years 1981 and 1982. (E >: h. K) No sooner than the respondent Commissioner of Interna l Revenue could act on the claim, petitioner fi led the pr-esen t petition �for review on JL1ly 7, 1983 to toll the two-year statutory period of 1 imi ~:ations . The issue under resolve is essentially addressed to whether� petitioner has established a valid claim to the refund of excess income tax payments for the taxable years in question. Respondent ~~ould have it impressed that the administ r-ative claim as well as the judicial suit must show compliance with the requisites prescribed under the pertinent provisions of the Ta>: Code. "In any case, no suit nf.)r proceeding shall be begun after the e xpiration of the two years from date of payment of the ta>: or, pen a 1 ty r�egard 1ess of the supervening cause that may arise after payment." (Section 292, Tax Code.) And, "No credit or refund o �f ta}{es or penal ties shall be allowed unless the

DECISION CTA CASE NO. 3656 ..,. �-' ta}: payer files in writing with the Commissioner a claim for credit or refund within two years after the payment of the ta >: or pen a 1 ty." (Sec:. 292, j _p_:(,:j_� ) Construed, "This apparent contentious quibble on computation of the two-year prescriptive period under Section 292 , [pj~, had been squarely resolved in earlier decisions of the Supreme Court which lend settling eloquence to the precise issue in the case at bar� . Thus, in a case where the tax is payable in quarterly installments the final payment i s the last qua rter payment at the end of the tax year 1-1he n i t is finally ascertained that the taxpayer� ei thr?r made a profit or suffered losses. (Comaissioner of Internal Revenue v. Asia Australia � .)(�press, Ltd., G.R. Ho. 85956, April 10~ 1989.) And ta>: payer� has until the fourth month following the close of the fiscal year period 11-lithin 1-'lhich to file a �final adjustment retLtrn of the preceding "fis cal year (Sec. 87, Tax Code), which may 11-1ell be the reckoning date for the two- year prescriptive period." ( Un i bake In corpora ted v. Coaaissioner of Internal Revenue~ CTA Case Ho.3987, �.1uly 31, 1989; Uniaart Incorporated v. The Coaaissioner of Internal Revenue~ CTA Case Ho. 3986, Septeaber 28, 1990.) 28J..

DECISION CTA CASE NO. 3656 - 4- Applied in the instant case~ petitioner had until July 15~ 1981 and ,July 15~ 1982 or the 15th day of the fourth month following the close of the respective fiscal periods within which to file the final adjustment return and pay whatever taxes that may be due. And the administrative claim as well as the judicial suit for refund were filed on ..., .1983 and July 7, 1983~ respectively~ I~ ~�1hlch t.o.Jell compm-t ~"'i thin the two-year statutory proscription tolled from the dates above indicated~ hence seasonably filed. It dm:~s appear that the petitioner ' s income r�etur�n s n?f 1ec: ted net losses with no c:orn-?sponcHng income t.:n:es due for the two f isca 1 years in question~ but showed creditable income ta xes withheld which cannot be applied for tax liabilities of the petitioner. The taxes withheld the petitioner�' s r��eceivable incomes were covered by s uch r�e qui si te statements and cet- t i f ici:\tions taxes withheld at source consiste nt with the pt-escr ibed t- evenue regulations ,;_~gg t-eg,::~tin g P83~683.31 for the FY 1981 (E:-:hs. F-1 to F - 39~ inclusive) and P191~716.40 for FY 1982 (E x hs. J - 1 to J - 15~ inclusive). It does not appear that the respondent any evidence controverting the

DECISION CTA CASE NO. 3656 - 5- corTec tness o f the r eturns an d other material fa c ts. As C:l. �f ,:\c tly matter~ res pondent submitted the case for decision o n the basis of the pleadings and the BIR records after petitioner had presented its evidence. "Since one who prays for judgment on tht.~ pleadings without offering proof as to the trut h of his ,:\ !l egatio ns, must be Llnderstood to have ad mitted the truth of all the material and r�e l eve1n t a 11 e~~a tions of the opposing party and to ,~ est h is motion for- judgment on the allegations taken together with s uch of hi s own as are admitted (Baueraann v. Casas, 10 Phil. 386; Evangelista v .. De la Rosa, et al .. , 76 Phil .. 115) respondent may be con si dered not ques tioning seriously peti.t.ioner's emtitlemen-t: to its claim for refund. More so when the evide n ces presented which were not di sputed by respondent, s ufficiently established petitioner's ,--ight to t he refund." Hanage~ent and Service Corporation v. Coa�issioner of Internal Revenue, CTA Case Ho. 3232, June 26, l�le hesitate to f urther fashion an issLie into this satisfactorily settled rule. All told, the case before Us hardly presents a gr i pping question. As t hus shown the basis for the c laim is not s hort of specific s upport i n terms of tracta b l e data openl y l aid and fully disclosed.

DECISION CTA CASE NO. 3656 - 6- Going by thf.? recor- d s ~ petitioner ' s income 1-etul'� n s for the ta>:able year� s have sho~�m losses and e>:cess ~�Jithheld income t.::n: payments. Respondent points to no factual errors nor su perfluities which be abl'� ic:lgt?d. Neither� were there .:my deficiency asse'?ssmen ts issued. Moreover~ the record s m ~ kP it c lear that the requisite statements or c er tification s of the income taxes withheld and d e duc ted by t.he withholding agents through which � . t ,. r�es pondent col lected the income te:n:es and upon ~'lhich tacked the claimed refund could fur-nish the basis for a definite resolve. As thus~ both circumstances obtaining and r�elevant legal standards compel the conclusion that p e titioner� has pr�oved e-mti tlement to a favor-able determination of the desired relief. IIIHEREFORE, respondent is hereby ordered to grant the refund of the total amount of P275,399.71 representing erroneously paid income taxes for the Fiscal Years 1981 and 1982. SO ORDERED. Que ~o n City~ Metro Manila~ October 31~ 1990. -~AR:E~aYeEJuSd I CONCUR: ROAQUIN Judge

DECISION - CTA CASE NO. 3656 - 7- CERTIFICATION I here by c e r tif y that this decision was reached af ter due con s ultation be tween the members o f the Co urt of Tax Appeal s in accordance with Sec tio n 13 , Article VIII of the Judge Court of Tax Appeals