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1. July 5, 2001-Rizal Commercial Banking Corporation received a Formal etter o! "emand dated
#ay 25, 2001 !rom t$e re%pondent Commi%%ioner o! &nternal Revenue !or it% ta' lia(ilitie%
particularly !or )ro%% *n%$ore +a' in t$e amount o! ,5-,../,02/.2. and "ocumentary 1tamp +a'
!or it% 1pecial 1aving% ,lacement% in t$e amount o! ,02,313,.52.32, !or t$e ta'a(le year 1..3.
2. July 20, 2001- petitioner !iled a prote%t letter4re5ue%t !or recon%ideration4reinve%tigation
pur%uant to 1ection 22/ o! t$e 6ational &nternal Revenue Code o! 1..3 76&RC8.
-. 9pril -0, 2002-petitioner !iled !or revie: :it$ t$e C+9 !or t$e cancellation o! t$e a%%e%%ment% a%
t$e prote%t :a% not acted upon (y t$e re%pondent
0. ,etitioner did not !ile a motion !or recon%ideration or an appeal to t$e C+9 ;n Banc !rom t$e
di%mi%%al o! it% petition !or revie:.Con%e5uently, t$e 1eptem(er 10, 200- Re%olution (ecame !inal
and e'ecutory on *cto(er 1, 200- and ;ntry o! Judgment :a% made on "ecem(er 1, 200-..
+$erea!ter, re%pondent %ent a "emand etter to petitioner !or t$e payment o! t$e de!iciency ta'
5. Fe(ruary 20, 2000- petitioner !iled a ,etition !or Relie! !rom Judgment10 on t$e ground o!
e'cu%a(le negligence o! it% coun%el<% %ecretary :$o allegedly mi%!iled and lo%t t$e 1eptem(er 10,
200- Re%olution.
2. #R denied $ence it !iled a petition !or revie:.
=*6 t$e !iling o! prote%t :a% made out o! time
>e%, ,etitioner prote%ted t$e a%%e%%ment% pur%uant to 1ection 22/ o! t$e 6&RC, :$ic$ provide%?
1;C. 22/. ,rote%ting o! 9%%e%%ment.- ' ' '.
' ' ' '
=it$in a period to (e pre%cri(ed (y implementing rule% and regulation%, t$e ta'payer %$all (e
re5uired to re%pond to %aid notice. &! t$e ta'payer !ail% to re%pond, t$e Commi%%ioner or $i% duly
aut$orized repre%entative %$all i%%ue an a%%e%%ment (a%ed on $i% !inding%.
1uc$ a%%e%%ment may (e prote%ted admini%tratively (y !iling a re5ue%t !or recon%ideration or
reinve%tigation :it$in t$irty 7-08 day% !rom receipt o! t$e a%%e%%ment in %uc$ !orm and manner a%
may (e pre%cri(ed (y implementing rule% and regulation%. =it$in %i'ty 7208 day% !rom !iling o! t$e
prote%t, all relevant %upporting document% %$all $ave (een %u(mitted@ ot$er:i%e, t$e a%%e%%ment
%$all (ecome !inal.
&! t$e prote%t i% denied in :$ole or in part, or i% not acted upon :it$in one $undred eig$ty 71/08
day% !rom %u(mi%%ion o! document%, t$e ta'payer adver%ely a!!ected (y t$e deci%ion or inaction
may appeal to t$e Court o! +a' 9ppeal% :it$in 7-08 day% !rom receipt o! t$e %aid deci%ion, or !rom
t$e lap%e o! t$e one $undred eig$ty 71/08-day period@ ot$er:i%e t$e deci%ion %$all (ecome !inal,
e'ecutory and demanda(le. 7;mp$a%i% %upplied8
+$e C+9 1econd "ivi%ion $eld?
Follo:ing t$e period% provided !or in t$e a!orementioned la:%, !rom July 20, 2001, t$at i%, t$e
date o! petitioner<% !iling o! prote%t, it $ad until 1eptem(er 1/, 2001 to %u(mit relevant document%
and !rom 1eptem(er 1/, 2001, t$e Commi%%ioner $ad until #arc$ 13, 2002 to i%%ue $i% deci%ion.
9% admitted (y petitioner, t$e prote%t remained unacted (y t$e Commi%%ioner o! &nternal
Revenue. +$ere!ore, it $ad until 9pril 12, 2002 :it$in :$ic$ to elevate t$e ca%e to t$i% court. +$u%,
:$en petitioner !iled it% ,etition !or Revie: on 9pril -0, 2002, t$e %ame i% out%ide t$e t$irty 7-08
9% provided in 1ection 22/, t$e !ailure o! a ta'payer to appeal !rom an a%%e%%ment on time
rendered t$e a%%e%%ment !inal, e'ecutory and demanda(le. Con%e5uently, petitioner i% precluded
!rom di%puting t$e correctne%% o! t$e a%%e%%ment.
&n Aer B Company, td. v. Court o! +a' 9ppeal%,2/ t$e Court $eld t$at :$ile t$e rig$t to appeal a
deci%ion o! t$e Commi%%ioner to t$e Court o! +a' 9ppeal% i% merely a %tatutory remedy,
nevert$ele%% t$e re5uirement t$at it mu%t (e (roug$t :it$in -0 day% i% Curi%dictional. &! a %tatutory
remedy provide% a% a condition precedent t$at t$e action to en!orce it mu%t (e commenced :it$in
a pre%cri(ed time, %uc$ re5uirement i% Curi%dictional and !ailure to comply t$ere:it$ may (e rai%ed
in a motion to di%mi%%.
&n !ine, t$e !ailure to comply :it$ t$e -0-day %tatutory period :ould (ar t$e appeal and deprive t$e
Court o! +a' 9ppeal% o! it% Curi%diction to entertain and determine t$e correctne%% o! t$e
CIR vs Perf
Re%pondent ,;RF i% a dome%tic corporation engaged in t$e (u%ine%% o! lea%ing propertie% to
variou% client% including t$e ,$ilippine 9merican i!e and )eneral &n%urance Company
7,$ilamli!e8 and Read-Rite ,$ilippine% 7Read-Rite8.
*n 9pril 10, 1../, ,;RF !iled it% 9nnual &ncome +a' Return 7&+R8 !or t$e year 1..3
9!ter deducting credita(le :it$$olding ta'e% in t$e total amount o! ,-,5-1,125.00 !rom it% total
income ta' due o! ,2,250,221.00, ,;RF %$o:ed in it% 1..3 &+R an overpayment o! income ta'e%
in t$e amount o! ,1,2/0,500.00.
*n 6ovem(er -, 1..., ,;RF !iled an admini%trative claim :it$ t$e appellate divi%ion o! t$e B&R
!or re!und o! overpaid income ta'e% in t$e amount o! ,1,2/0,500.00.
*n "ecem(er -, 1..., due to t$e inaction o! t$e B&R, ,;RF !iled a petition !or revie: :it$ t$e
Court o! +a' 9ppeal% 7C+98 %eeking !or t$e re!und o! t$e overpaid income ta'e% in t$e amount o!
C+9 denied t$e petition o! ,;RF on t$e ground o! in%u!!iciency o! evidence. +$e C+9 noted t$at
,;RF did not indicate in it% 1..3 &+R t$e option to eit$er claim t$e e'ce%% income ta' a% a re!und
or ta' credit pur%uant to 1ection 2.D2E 7no: 328 o! t$e 6ational &nternal Revenue Code 76&RC8
Furt$er, t$e C+9 like:i%e !ound t$at ,;RF !ailed to pre%ent in evidence it% 1../ annual &+R. &t
$eld t$at t$e !ailure o! ,;RF to %igni!y it% option on :$et$er to claim !or re!und or opt !or an
automatic ta' credit and to pre%ent it% 1../ &+R le!t t$e Court :it$ no :ay to determine :it$
certainty :$et$er or not ,;RF $a% applied or credited t$e re!unda(le amount %oug$t !or in it%
admini%trative and Cudicial claim% !or re!und.
C9 granted petition
9ccording to t$e appellate court, even i! t$e ta'payer $a% indicated it% option !or re!und or ta'
credit in it% &+R, it doe% not mean t$at it :ill automatically (e entitled to eit$er option %ince t$e
Commi%%ioner o! &nternal Revenue 7C&R8 mu%t (e given t$e opportunity to inve%tigate and con!irm
t$e veracity o! t$e claim. +$u%, t$ere i% %till a need to !ile a claim !or re!und.
9% to t$e !ailure o! ,;RF to pre%ent it% 1../ &+R, t$e C9 o(%erved t$at t$ere i% no need to rule on
it% admi%%i(ility %ince t$e C+9 already $eld t$at ,;RF $ad complied :it$ t$e re5ui%ite% !or
applying !or a ta' re!und. +$e %ole purpo%e o! re5uiring t$e pre%entation o! ,;RFF% 1../ &+R i% to
veri!y :$et$er or not ,;RF $ad carried over t$e 1..3 e'ce%% income ta' claimed !or re!und to
t$e year 1../. +$e veri!ication proce%% i% not incum(ent upon ,;RF@ rat$er, it i% t$e duty o! t$e
B&R to di%prove t$e ta'payerF% claim.
1. =*6 re!und %$ould (e granted
2. =*6 !ailure o! re%pondent to indicate it% option in it% annual &+R to avail it%el! o! eit$er t$e ta'
re!und or ta' credit i% !atal to it% claim !or re!und.
-. =*6 +$e !ailure o! re%pondent to pre%ent in evidence t$e 1../ &+R i% !atal to it% claim !or
1. >e%, Re%pondent %u(%tantially complied :it$ t$e re5ui%ite% !or claim o! re!und.
+$e C+9, citing 1ection 10 o! Revenue Regulation% 2-/5 and Citi(ank, 6.9. v. Court o! 9ppeal%,
D5E determined t$e re5ui%ite% !or a claim !or re!und, t$u%?
18 +$at t$e claim !or re!und :a% !iled :it$in t$e t:o 728 year period a% pre%cri(ed under 1ection
2-0 o! t$e 6ational &nternal Revenue Code@
28 +$at t$e income upon :$ic$ t$e ta'e% :ere :it$$eld :ere included in t$e return o! t$e
-8 +$at t$e !act o! :it$$olding i% e%ta(li%$ed (y a copy o! a %tatement 7B&R Form 130-.18 duly
i%%ued (y t$e payor 7:it$$olding agent8 to t$e payee, %$o:ing t$e amount paid and t$e amount o!
ta' :it$$eld t$ere!rom.D2E
=e !ind t$at ,;RF !iled it% admini%trative and Cudicial claim% !or re!und on 6ovem(er -, 1... and
"ecem(er -, 1..., re%pectively, :$ic$ are :it$in t$e t:o-year pre%criptive period under 1ection
2-0 7no: 22.8 o! t$e 6ational &nternal +a' Code.
+$e C+9 noted t$at (a%ed on t$e record%, ,;RF pre%ented certificates of creditable
withholding tax at source re!lecting credita(le :it$$olding ta'e% in t$e amount o! ,0,15-,200.1/
:it$$eld !rom ,;RFF% rental income o! ,/-,032,032./1 7;'$i(it% B, C, ", ;, and G8. &n addition, it
%u(mitted in evidence the Monthly Remittance Returns o! it% :it$$olding agent% to prove t$e
!act o! remittance o! %aid ta'e% to t$e B&R. 9lt$oug$ t$e certi!icate% o! credita(le :it$$olding ta' at
%ource !or 1..3 re!lected a total amount o! ,0,15-,200.1/ corre%ponding to t$e rental income o!
,/-,032,032./1, ,;RF i% claiming only t$e amount o! ,-,5-1,125.00 pertaining to a rental
income o! ,30,/1-,03..00. +$e amount o! ,-,5-1,125.00 le%% t$e income ta' due o! ,;RF o!
,2,250,221.00 leave% t$e re!unda(le amount o! ,1,2/0,500.00.
&t i% %ettled t$at !inding% o! !act o! t$e C+9 are entitled to great :eig$t and :ill not (e di%tur(ed on
appeal unle%% it i% %$o:n t$at t$e lo:er court% committed gro%% error in t$e appreciation o! !act%.
=e %ee no cogent rea%on not to apply t$e %ame principle $ere
! 6o. +$e !ailure o! re%pondent to pre%ent in evidence t$e 1../ &+R i% not !atal to it% claim !or
+$e%e t:o option% under 1ection 32 are alternative in nature. +$e c$oice o! one preclude% t$e
ot$er. &ndeed, in ,$ilippine Bank o! Communication% v. Commi%%ioner o! &nternal Revenue, t$e
Court ruled t$at a corporation mu%t %igni!y it% intention - :$et$er to re5ue%t a ta' re!und or claim
a ta' credit - (y marking t$e corre%ponding option (o' provided in t$e F9R. =$ile a ta'payer i%
re5uired to mark it% c$oice in t$e !orm provided (y t$e B&R, t$i% re5uirement i% only !or t$e
purpo%e o! !acilitating ta' collection.
*ne cannot get a ta' re!und and a ta' credit at t$e %ame time !or t$e %ame e'ce%% income ta'e%
paid. Failure to %igni!y oneF% intention in t$e F9R doe% not mean outrig$t (arring o! a valid re5ue%t
!or a re!und, %$ould one %till c$oo%e t$i% option later on. 9 ta' credit %$ould (e con%trued merely
a% an alternative remedy to a ta' re!und under 1ection 32, %u(Cect to prior veri!ication and
approval (y re%pondent.
+$e rea%on !or re5uiring t$at a c$oice (e made in t$e F9R upon it% !iling i% to ea%e ta'
admini%tration, particularly t$e %el!-a%%e%%ment and collection a%pect%. 9 ta'payer t$at make% a
c$oice e'pre%%e% certainty or pre!erence and t$u% demon%trate% clear diligence. Conver%ely, a
ta'payer t$at make% no c$oice e'pre%%e% uncertainty or lack o! pre!erence and $ence %$o:%
%imple negligence or plain over%ig$t.
-. 6o. +$e !ailure o! re%pondent to pre%ent in evidence t$e 1../ &+R i% not !atal to it% claim !or
&n Filinve%t "evelopment Corporation v. Commi%%ioner o! &nternal Revenue,D11E t$e Court $eld
t$at t$e 1..3 &+R attac$ed to t$e motion !or recon%ideration i% part o! t$e record% o! t$at ca%e
and cannot (e %imply ignored (y t$e C+9. #oreover, tec$nicalitie% %$ould not (e u%ed to de!eat
%u(%tantive rig$t%, e%pecially t$o%e t$at $ave (een $eld a% a matter o! rig$t. =e 5uote?
&n t$e proceeding% (e!ore t$e C+9, petitioner pre%ented in evidence it% letter o! claim !or re!und
(e!ore t$e B&R to %$o: t$at it :a% made :it$in t$e t:o-year reglementary period@ it% &ncome +a'
Return% !or t$e year% 1..5 and 1..2 to prove it% total credita(le :it$$olding ta' and t$e !act t$at
t$e amount% :ere declared a% part o! it% gro%% income@ and %everal certi!icate% o! income ta'
:it$$eld at %ource corre%ponding to t$e period o! claim to prove t$e total amount o! t$e ta'e%
erroneou%ly :it$$eld. #ore importantly, petitioner attac$ed it% 1..3 &ncome +a' Return to it%
#otion !or Recon%ideration, making t$e %ame part o! t$e record% o! t$e ca%e. +$e C+9 cannot
%imply ignore t$i% document.
+$u%, :e $old t$at petitioner $a% complied :it$ all t$e re5uirement% to prove it% claim !or ta'
re!und. +$e C9, t$ere!ore, erred in denying t$e petition !or revie: o! t$e C+9F% denial o!
petitionerF% claim !or ta' re!und on t$e ground t$at it !ailed to pre%ent it% 1..3 &ncome +a' Return.
+$e C9F% reliance on Rule 1-2, 1ection -0 22 o! t$e Rule% on ;vidence i% mi%placed. +$i%
provi%ion mu%t (e taken in t$e lig$t o! Repu(lic 9ct 6o. 1125, a% amended, t$e la: creating t$e
C+9, :$ic$ provide% t$at proceeding% t$erein %$all not (e governed %trictly (y tec$nical rule% o!
evidence. #oreover, t$i% Court $a% $eld time and again t$at tec$nicalitie% %$ould not (e u%ed to
de!eat %u(%tantive rig$t%, e%pecially t$o%e t$at $ave (een e%ta(li%$ed a% a matter o! !act.