COMMISSIONER OF INTERNAL REVENUE v. CITADEL HOLDINGS, INC.

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF CTA EB No. 1375 (CTA Case No. 8631) INTERNAL REVENUE, Present: Petitioner, -versus- DEL RO~SARIO I P.J. { CASTANEDA, JR., BAUTISTA, UY, CASANOVA, FASON-VICTORINO, MINDARO-GRULLA, RINGPIS-LIBAN, and MANAHAN I ]] � CITADEL HOLDINGS, INC., Promulgated: Respondent. NOV 0 8 2017 o< ~ ~R/'-~ � X- - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - ~ - - X RESOLUTION Fabon-Victorino, J.: On May 2, 2017, the Court En Bane rendered a Decision, disposing the case as follows: WHEREFORE, the Petition for Review filed by the Commissioner of Internal Revenue on November 6, 2015, is hereby DENIED, for lack of merit. Accordingly, the assailed Decision dated June 29, 2015 and the Resolution dated September 28, 2015 of the Court in Division in CTA Case No. 8631, are hereby AFFIRMED. SO ORDERED. 1 1 Rollo, pp. 88-89.

RESOLUTION CTA EB No. 1375 The assailed Decision sustained the ruling of the Court in Division, partially granting respondent's claim for refund or issuance of tax credit certificate (TCC) amounting to P2, 755,403.17, pertaining to its excess creditable withholding tax (CWT) for taxable year (TY) 2010. Unconvinced, petitioner filed the instant Motion for Reconsideration, anchored on the following premises, viz: I. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of TCC shall be allowed therefor; II. Proof of actual remittance to the BIR of the withheld taxes and testimonial evidence of the payers and withholding agents are required; and III. Exhibits of the respondent should not be given any probative value for being hearsay evidence. Petitioner admits that respondent has excess CWTs sufficient to cover the subject claim based on its 2011 Quarterly Income Tax Return (ITR) and Annual ITR of even year. He however argues it could not be ascertained if it was carried-over to the succeeding TY since respondent failed to present its 2012 ITRs. Petitioner insists that refund must be disallowed as respondent opted to constructively carry-over its excess creditable taxes. Relying on the principle that tax refunds are construed against claimant, petitioner faults respondent for its non- presentation of its income payers/withholding agents to prove that the taxes have been withheld and remitted to the Bureau of Internal Revenue (BIR). On account thereof, the claim for refund should be denied. In addition, petitioner believes that the testimonies of respondent's witnesses Rene C. Kabigting and Mary Avon T. Patingo are hearsay under Section 36, Rule 130 of the Rules of Court in view of their declaration that they lack personal

RESOLUTION CTA EB No. 1375 knowledge about the contents of the documents referred to in their judicial affidavits. By way of comment, respondent counters that: 1) the points raised by petitioner are not new for they were already amply addressed by the Court En Bane in the assailed Decision; 2) per jurisprudence, proof of actual remittance of the tax withheld to the BIR is not required; and 3) its exhibits were correctly identified, verified and admitted by the Court in Division. Petitioner's Motion for Reconsideration must fail. Anent petitioner's contention that respondent's witnesses were not competent to testify on the documents they identified in open court, suffice it to say that only in his Motion for Reconsideration that petitioner raised this issue. It was neither raised before the Court in Division nor was it alleged in his Petition for Review. The record revealed that petitioner never questioned the competence of respondent's witnesses to identify and verify the documents they referred to in their respective judicial affidavits. The Supreme Court clarified in Mendoza, eta!., vs. Bautista2 that issues not duly raised before the proceedings in the Court below may not be ventilated for the first time in a motion for reconsideration, thus: "Higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal." As for the remaining issues raised by petitioner, clear as day that they are mere reiteration of petitioner's arguments which have already been discussed at length in the assailed Decision of May 2, 2017, particularly in pages 5 to 11 thereof. No substantial argument was advanced by petitioner to merit a departure from, much less a modification of the Court En Bane's findings. Hence, the denial of the instant Motion is in order. 2 G.R. No. 143666, March 18, 2005.

RESOLUTION CTA EB No. 1375 WHEREFORE, the Motion for Reconsideration dated May 25, 2017, filed by petitioner Commissioner of Internal Revenue is DENIED, for lack of merit. SO ORDERED. We Concur: Presiding Justice 9-c.~~~.S. tf Asso~iate LOVEL R. BAUTISTA Justice JUANffo c. CASTANEoK, JR. Associate Justice (On Leave) CAESA~ASANOVA ERLINDA P. UY Associate Justice Associate Justice ~-~A'- c..itJ; lt M.~~6~ MA. BELEN M. RINGPIS-LIBAN CIELITO �~~ MINDARO-GRULLA Associate Justice Associate Justice C~';./11~~ CATHERINE T. MANAHAN Associate Justice