CTA Case No. 4255 (Decision)

RIPUBLIC Of THI PHILIPPIRIB COURT OF TAX APPEALS QUIZOR CITY SERVICEWIDE SPECIALISTS, INC., Petitioner, - versus - C.T.A. CASE NO. 42SS COMMISSIONER OF INTERNAL REVENUE, Respondent. ;o/17 >:---- ------)( :0 E C :J: S :J: Cl N This is a claim for the refund of the- prior year's excess credit of P30,829.89 and taxes withheld at source by various clients of petitioner in the sum of P25,979.00, or a total amount of P56,808.89. For the calendar year 1985, petitioner filed its income ta>: return showing a gross income of P4,958,611.00, deductions of P5,028,288.00 and a net loss of P69,677.00 and therefore no income tax was due. There was however, an e>:cess credit of income tax of P30,829.89 in the prior year (1984) and taxes withheld at source in the amount of P25,979.00. Total amount claimed as refundable is P56,808.89. By letter of October 9, 1986, petitioner wrote the Commissioner of Internal Revenue requesting for 2Uu

DECISION CTA CASE NO. 4255 - 2- the "t.:n: c recti t Q..f..._!.~_>t withheld by client for 1982 an.d 1985 an:!.9..!::~ t i f1_g___1Q_ P32 , 6 97..! 89~ The respondent Commissioner of Internal Revenue failed to act on petitioner's claim for ta>t credit. Hence, petitioner filed the instant petition for review. Instead of f i 1ing an Answer to the Pet! tion for Review, the respondent Commissioner of Internal Revenue filed a "Motion to Dismiss" on the ground that the instant Petition for Review was filed out of time and petitioner's claims for refund/credit had prescribed. We agree in toto with respondent Commissioner of Internal Revenue that the Petition for Review wa s filed out of time and the claim for ta>t refund/credit had prescribed and we quote at length his dissertation in his "Motion to Dismiss" filed on July 12, 1988. Section 243 of the National Internal Revenue Code provides: "Sec. 243. B..~cq~@J'"..J!..._ of_ ta>: erronJ!Ously o . r:-_,j.ll~...Q.e. liY . ~ollected !!.. No suit or pro- ceeding shall be maintained in any court for the recovery of any national internal revenue ta>: hereafter alleged to have been erroneously or illegally assessed or collected, or of any pena 1ty c 1aimed to I'

DECISION CTA CASE NO. 4255 - 3- have been collected without authority, or of any sum alleged t .o have been e>tecessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner� but such suit or proceeding may be maintained, whether or not such ta>:, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the ta>: or penalty regard- less of any supervening cause that may arise after payment� Provided, however, that the Commissioner may, even without a written claim therefore, refund or credit any tax, where on face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." (Underscoring for emphasis) Thus, any suit or proceeding to recover an amount c 1aimed to be paid in e>:cess of a ta>: due must be instituted within two ( 2) years from the payment. Otherwise, it is forever barred. In Gibbs vs. Collector of Internal Revenue and Court of tax Appeals, 107 Phil. 232, it was helda "A ta>tpayer who has paid the tax, whether under protest or not, and who is claiming a refund of the same, must comply with the requirements of both Section 306 (now Section 243 of the NLRC) and Section 11 of Republic Act No. 1125J thet is, he must file a claim for refund .' 2 '1U

DECISION CTA CASE NO. 4255 - 4- with the Collector (now Commissioner) of Internal Rev- enue within 2 years from the date of his payment of the tax, as required by said Section 306 of the National Revenue Code, an appeal to the Court of Tax Appeals within 30 days from the receipt of the Collector's dec ision or ru 1ing denying his c 1aim for refund, as required by said Section 11 of Republic Ac t No � 1125 � ~however, the Collector :!;.akes time in deciding the ~laim, a~9 the period of two y~ar~ is i"\bout to end, the su~t or proceeding must be started in._ _t.h~ Court of Tax ApR~S\1~ before the end of the two-year ~riod _ withgut waiting the gec_ision of the Collec~ This is so because the positive requirement of Section 306 and the doctrine that delay of the Collector in rendering decision does not extend the peremptory period fixed by the stature." (Underscoring for emphasis) Petitioner admits that the alleged excess tax payment of P39,829.89 was made in 1984, which amount it desires to be credited as payment of its income tax of 1985 (Petition, p.1, par. 2). In a letter dated October 9, 1986 (Petition, Anne>: B) petitioner asks that withheld ta>:es for years 1982 and 1985 in the amount of P32,697.80 (the amount stated in the Petition is P25,979.00) be credited as payment presumably for income tax due for 1986. Since the alleged e>:cess ta>: payments are claimed to have been made in 1982, 1984 and 1985, the action to recover these should have been filed not .. later than 1987. This Petit~on for

DECISION CTA CASE NO. 4255 - 5- Review, however, was filed on April 15, 198JL_ or Q,_e,wvwo...,n'-'-d~_t:::.:h...:e.>::_.r_.e=_g,...l.,__,=e-=m.....e=.!n..!_t,,.a,""r"_y'----_2,=---Y"=-e a"r'- period. Clearly, the i nstant Petition for Review was filed out of time. Petitioner 's claims have prescribed. (Underlining ours.) WHEREFORE, the judicial claim for refund/ta>e credit of the amount of P56,B09.99 should be, as it is hereby, DISMISSED. With costs aoainst petitioner. SO ORDERED. Que ~ on City, Me tro Manila, Octob 17' 1990 � � ROAQUIN Judge Judge CERTI:PICA.TIOH I hereby certify that this decision was reached after due consultation between the members of the Court of Tax Appeals in accordance With Section 13, Article VIII of the ~ C. ROAQUIN '' Associate Judge Appeals 2 '( loJ