Part III. IN CASE OF DENIAL OF PROTEST OR
Who May Appeal; Mode of Appeal;
INACTION, APPEAL TO CTA
A.
B.
C.
D. Period to Appeal/ Effect of Failure to Appeal
Sec.228 (2 last par. NIRC)
Such assessment may be protested
administratively by filing a request for
reconsideration or reinvestigation within thirty
(30) days from receipt of the assessment in such form
and manner as may be prescribed by implementing rules
and regulations. Within sixty (60) days from filing
of the protest, all relevant supporting documents shall
have been submitted; otherwise, the assessment shall
become final.
If the protest is denied in whole or in part, or is not acted
upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely
affected by the decision or inaction may appeal to the
Court of Tax Appeals within thirty (30) days
from receipt of the said decision, or from the lapse
of one hundred eighty (180)-day period;
otherwise, the decision shall become final, executory and
demandable.
Sec. 11 R.A 1125 as amended by R.A. 9282
1 |Solis Tax 2 Study Guide
SEC. 11.
Effect of Appeal. - Any party adversely affected by a
decision, ruling or inaction of the Commissioner of
Internal Revenue, the Commissioner of Customs, the
Secretary of Finance, the Secretary of Trade and
Industry or the Secretary of Agriculture or the Central
Board of Assessment Appeals or the Regional Trial
Courts may file an appeal with the CTA within thirty
(30) days after the receipt of such decision or ruling or
after the expiration of the period fixed by law for action
as referred to in Section 7(a)(2) herein (180 days;
inaction shall be deemed a denial).
"Appeal shall be made by filing a petition for
review under a procedure analogous to that provided
for under Rule 42 of the 1997 Rules of Civil Procedure
with the CTA within thirty (30) days from the
receipt of the decision or ruling or in the case of
inaction as herein provided, from the expiration of the
period fixed by law to act thereon. A Division of the
CTA shall hear the appeal: Provided, however, That
with respect to decisions or rulings of the Central Board
of Assessment Appeals and the Regional Trial Court in
the exercise of its appellate jurisdiction appeal shall be
made by filing a petition for review under a procedure
analogous to that provided for under rule 43 of the 1997
Rules of Civil Procedure with the CTA, which shall
hear the case en banc.
"All other cases involving rulings, orders or decisions
filed with the CTA as provided for in Section 7 shall be
raffled to its Divisions. A party adversely affected by a
ruling, order or decision of a Division of the CTA may file
a motion for reconsideration of new trial before
the same Division of the CTA within fifteens (15)
days from notice thereof: Provide, however, That in
criminal cases, the general rule applicable in regular
Courts on matters of prosecution and appeal shall
likewise apply.
"No appeal taken to the CTA from the decision of
the Commissioner of Internal Revenue or the
Commissioner of Customs or the Regional Trial Court,
provincial, city or municipal treasurer or the Secretary
of Finance, the Secretary of Trade and Industry and
Secretary of Agriculture, as the case may be shall
suspend the payment, levy, distraint, and/or sale
of any property of the taxpayer for the satisfaction
of his tax liability as provided by existing law: Provided,
however, That when in the opinion of the Court the
collection by the aforementioned government agencies
may jeopardize the interest of the Government
and/or the taxpayer the Court any stage of the
proceeding may suspend the said collection and
require the taxpayer either to deposit the amount
claimed or to file a surety bond for not more than
double the amount with the Court.
"In criminal and collection cases covered respectively by
Section 7(b) and (c) of this Act, the Government may
directly file the said cases with the CTA covering
amounts within its exclusive and original jurisdiction."
Case: Commissioner of the Internal Revenue vs.
Far East Bank G.R. No. 173854
Issues:
2 |Solis Tax 2 Study Guide
Whether the Bank was able to prove its entitlement to
the refund.
Whether the inaction of the Commissioner automatically
entitles the Bank to a refund.
Held: No to both.
The Bank’s 1994 Annual Income Tax Return shows that
the gross income was derived solely from sales of
services. In fact, the phrase "NOT APPLICABLE" was
printed on the schedules pertaining to rent, sale of real
property, and trust income. Thus, the income derived
from rentals and sales of real property upon which the
creditable taxes were withheld were not included in the
Bank’s gross income as reflected in its return.
Since no income was reported, it follows that no
tax was withheld. It is incumbent upon the taxpayer
to reflect in his return the income upon which any
creditable tax is required to be withheld at the source.
The Supreme Court added that the fact that the
Commissioner failed to present any evidence or
to refute the evidence presented by the Bank does
not automatically entitle the Bank to a tax
refund. It is not the duty of the government to
disprove a taxpayer’s claim for refund. Rather, the
burden of establishing the factual basis of a
claim for a refund rests on the taxpayer. And
while the petitioner has the power to make an
examination of the returns and to assess the correct
amount of tax, his failure to exercise such powers does
not create a presumption in favor of the correctness of
the returns. The taxpayer must still present
substantial evidence to prove his claim for
refund.
Hence, the Court concluded, for failing to prove its
entitlement to a tax refund, the Bank’s claim must be
denied. Since tax refunds partake of the nature of
tax exemptions, which are construed strictissimi
juris against the taxpayer, evidence in support of
a claim must likewise be strictissimi scrutinized
and duly proven.
*Class Discussion: CTA case 8185
Failure to submit relevant supporting documents within
60 days from petition for reinvestigation will not render
the assessment final and executory. The lack of
documentation will only matter when the BIR evaluates
the merits of the said protest but does not result in the
deficiency assessment being final.
In such a case the 180 days will no longer apply,
instead the taxpayer has to wait for the issuance
of FDDA then appeal with 30 days of receipt.
Case: St. Stephen’s Association vs. Collector of
Internal Revenue 104 Phil. 314
SYLLABUS
3 |Solis Tax 2 Study Guide
Facts:
On April 21, 1955, petitioners received a letter from the
Collector dated April 6, 1955, denying the request
embodied in their letter of November 13, 1954, and
insisting that the assessment in question be paid.
On July 25, 1955, petitioners received the letter of the
Collector dated July 11, 1955, again denying their request
that the assessment in question be cancelled and
withdrawn, and stating in its last paragraph that:
"This decision becomes final thirty days after
your receipt hereof unless an appeal is taken to the
Court of Tax Appeals within the same period, in
accordance with the provisions of Republic Act of 1125."
Issue: When did the period of 30 days begin to run?
Held: The period for appeal to the respondent court in
this case must, therefore, be computed from the time
petitioners received the decision of the respondent
Collector of Internal Revenue on the disputed
assessment, and not from the time they received
said assessment. Where a taxpayer questions an
assessment and asks the Collector to reconsider or
cancel the same because he (the taxpayer) believes he is
not liable therefor, the assessment becomes a "disputed
assessment" that the Collector must decide, and the
taxpayer can appeal to the Court of Tax Appeals
only upon receipt of the decision of the Collector
on the disputed assessment, in accordance with
paragraph (1) of section 7, Republic Act No. 1125,
conferring appellate jurisdiction upon the Court of Tax
Appeals to review "decisions of the Collector of Internal
Revenue in cases involving disputed assessment . . ."
The statement appearing in his letter of July 11, 1955, it
is evident that the respondent Collector himself
considered said letter as his final decision in the
case, hence his warning that the same would become
final in thirty days unless petitioners appealed to the
Court of Tax Appeals within the same period. Prior to his
letter-decision of July 11, 1955, then, the Collector must
have held the matter under advisement and considered
his preceding rulings as merely tentative in character,
pending his final determination and resolution of the
merits of the arguments of fact and law submitted by
petitioners in support of their requests for the
cancellation and withdrawal of the assessment.
Case: Roman Catholic Archbishop of Cebu vs
Collector 4 SCRA 279; G.R. No. L-16683  review should have been lodged with the Tax Court not
Facts: The petitioner requested for the reconsideration
and cancellation of the assessments three times; all of
which were denied. The denial on January 20, 1958,
came with a demand 'for the last time ... to pay the total
sum of P4,318.00 plus delinquency penalties incident to
late payment immediately upon receipt hereof in order
that no drastic action may be taken by this office on the
matter"
Held: The dismissal of petitioner's appeal to be
substantially correct, for the reason that said appeal
was not taken within the thirty (30) day period
prescribed by section 11 of Republic Act No. 1125. 
4 |Solis Tax 2 Study Guide
The petitioner has submitted not less than three (3)
motions of requests for the reconsideration of his Tax
Assessments. By these successive motions for
reconsideration, the petitioner managed to delay the
review of his case by the Tax Court for nearly two years.
Such delays are plainly inimical to the general interest,
ascertainment and collection of taxes being essential to
the maintenance of the State. The decision by the
Collector of Internal Revenue dated November 5,
1957, denying the second request for reconsideration of
the assessment, was certainly reviewable by the Court
of Tax Appeals. Hence, the 30-day appeal period
should be counted from November 21, 1957,
when the taxpayer received copy of the
Collector's ruling. The running of the period was not
interrupted by the filing of the third request for
reconsideration, because the latter did not advance new
grounds not previously alleged, and was, therefore,
merely pro forma. Therefore, petitioner's petition for
later than December 21, 1957, but it was actually filed
only on February 1, 1958.
The dismissal of the petitioner's appeal by the Court of
Tax Appeals is hereby affirmed.
Case: Pantranco vs. Blaquera 107 Phil. 975
Issue:
Whether or not Pantranco's failed to file its request
within the thirty-day period prescribed by law.
Ruling:
Yes. The letter of September 16, 1954 is the
decision of the Collector which the taxpayer had
to contest within thirty days; otherwise, it would
have become final and unappealable to the Court
of Tax Appeals, or to any other court. It was a definite
determination of Pantranco's tax accountability.
Pantranco could ask for reconsideration, of course; if
successful, well and good. If unsuccessful, it must
appeal within thirty days, discounting the time
within which its petition to reconsider had been
pending. This computation is nothing unusual: it is the
ordinary way the timeliness of appeals is determined.
As to the ten-day period "for consultation", we
discover no authority in support thereof. Counsel for
Pantranco had all the time from November 20, 1954 to
June 1955 within which to seek advice. Indeed, it was
unnecessary to consult: an attorney is ipso facto
authorized to appeal for his client.
Case: Basa vs. Republic 138 SCRA 34
The taxpayer did not contest the assessments in the Tax
Court. The Commissioner's letter-decision on the case
was dated December 6, 1974. On the assumption that the
assessments had become final and incontestable, the
Commissioner on September 3, 1975 sued the taxpayer
in the Manila Court of First Instance for the collection of
said amount.
5 |Solis Tax 2 Study Guide
The trial court in a decision dated April 20, 1976
affirmed the assessments and ordered Basa to pay
P16,353.12 plus 5% surcharge and one percent monthly
interest from August 31, 1967 to August 31, 1970.
Instead of appealing to this Court directly under
Republic Act No. 5440, in relation to Rules 41 and 45 of
the Rules of Court, since no factual issues are involved,
Basa tried to appeal to the Court of Appeals. He did
not perfect his appeal within the reglementary period.
The trial court dismissed it in its order dated October 1,
1976.
On December 23, 1976 Basa filed the instant special
civil action of certiorari wherein he assailed the trial
court's decision.
We hold that the petition is devoid of merit. The
trial court acted within its jurisdiction in rendering its
decision and dismissing Basa's appeal. He should
have appealed to this Court. His failure to do so
rendered the decision final and executory. He
has no cause of action for certiorari.
The decision is correct. If he wanted to contest the
assessments, he should have appealed to the Tax
Court. Not having done so, he could not contest
the same in the Court of First Instance.
The issue of prescription raised by him is baseless. The
assessments were predicated on the fact that his income
tax returns, if not fraudulent, were false because he
under-declared his income. In such a case, the
deficiency assessments may be made within ten
years after the discovery of the falsity or
omission. The court action should be instituted within
five years after the assessment but this period is
suspended during the time that the Commission is
prohibited from instituting a court action.**
As explained in the Solicitor General's memorandum,
Basa's requests for reinvestigation tolled the prescriptive
period of five years within which court action may be
brought.
Case: Mambulao Lumber vs CIR 132 SCRA 1(1984)
The letter of demand of the Acting Commissioner of
Internal Revenue dated August 29, 1958 was the basis of
respondent's complaint filed in this case and not the
demand letter of the Bureau of Forestry dated January
15, 1949. This must be so because forest charges are
internal revenue taxes  and the sole power and
duty to collect the same is lodged with the
Bureau of Internal Revenue  and not with the
Bureau of Forestry. The computation and/or
assessment of forest charges made by the Bureau of
Forestry may or may not be adopted by the
Commissioner of Internal Revenue and such
computation made by the Bureau of Forestry is
not appealable to the Court of Tax
Appeals.  Therefore, for the purpose of computing the
five-year period within which to file a complaint for
collection, the demand or even the assessment made by
the Bureau of Forestry is immaterial.
In the case at bar, the commencement of the five-
year period should be counted from August 29,
1958, the date of the letter of demand of the
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Acting Commissioner of Internal Revenue  to
petitioner Mambulao Lumber Company. It is this
demand or assessment that is appealable to the Court of
Tax Appeals. The complaint for collection was filed
in the Court of First Instance of Manila on August 25,
1961, very much within the five-year period
prescribed by Section 332 (c) of the Tax Code.
Consequently, the right of the Commissioner of Internal
Revenue to collect the forest charges and surcharges in
the amount of P15,443.55 has not prescribed.
E. Mode of Appeal and Effect of Appeal
1. Appeal to a Division of CTA
Sec. 11 R.A 1125 as amended by R.A. 9282
SEC. 11. Who May Appeal; Mode of Appeal;
Effect of Appeal. - Any party adversely affected by a
decision, ruling or inaction of the Commissioner of
Internal Revenue, the Commissioner of Customs, the
Secretary of Finance, the Secretary of Trade and
Industry or the Secretary of Agriculture or the Central
Board of Assessment Appeals or the Regional Trial
Courts may file an appeal with the CTA within thirty
(30) days after the receipt of such decision or ruling or
after the expiration of the period fixed by law for action
as referred to in Section 7(a)(2) herein (180 days;
inaction shall be deemed a denial).
"Appeal shall be made by filing a petition for
review under a procedure analogous to that provided
for under Rule 42 of the 1997 Rules of Civil Procedure
with the CTA within thirty (30) days from the
receipt of the decision or ruling or in the case of
inaction as herein provided, from the expiration of the
period fixed by law to act thereon. A Division of the
CTA shall hear the appeal: Provided, however, That
with respect to decisions or rulings of the Central Board
of Assessment Appeals and the Regional Trial Court in
the exercise of its appellate jurisdiction appeal shall be
made by filing a petition for review under a procedure
analogous to that provided for under rule 43 of the 1997
Rules of Civil Procedure with the CTA, which shall
hear the case en banc.
"All other cases involving rulings, orders or decisions
filed with the CTA as provided for in Section 7 shall be
raffled to its Divisions. A party adversely affected by a
ruling, order or decision of a Division of the CTA may file
a motion for reconsideration of new trial before
the same Division of the CTA within fifteens (15)
days from notice thereof: Provide, however, That in
criminal cases, the general rule applicable in regular
Courts on matters of prosecution and appeal shall
likewise apply.
"No appeal taken to the CTA from the decision of
the Commissioner of Internal Revenue or the
Commissioner of Customs or the Regional Trial Court,
provincial, city or municipal treasurer or the Secretary
of Finance, the Secretary of Trade and Industry and
Secretary of Agriculture, as the case may be shall
suspend the payment, levy, distraint, and/or sale
of any property of the taxpayer for the satisfaction
of his tax liability as provided by existing law: Provided,
however, That when in the opinion of the Court the
7 |Solis Tax 2 Study Guide
collection by the aforementioned government agencies
may jeopardize the interest of the Government
and/or the taxpayer the Court any stage of the
proceeding may suspend the said collection and
require the taxpayer either to deposit the amount
claimed or to file a surety bond for not more than
double the amount with the Court.
"In criminal and collection cases covered respectively by
Section 7(b) and (c) of this Act, the Government may
directly file the said cases with the CTA covering
amounts within its exclusive and original jurisdiction."
a.m.05-11-07
RULE 7
PROCEDURE IN THE COURT OF TAX APPEALS
SECTION 1. Applicability of the Rules of the
Court of Appeals, exception. – The procedure in the
Court en banc or in Divisions in original and in appealed
cases shall be the same as those in petitions for review
and appeals before the Court of Appeals pursuant to the
applicable provisions of Rules 42, 43, 44 and 46 of the
Rules of Court, except as otherwise provided for in these
Rules. (n)
RULE 15
MOTION FOR RECONSIDERATION OR NEW
TRIAL
SECTION 1. Who may and when to file motion. –
Any aggrieved party may seek a reconsideration or new
trial of any decision, resolution or order of the Court. He
shall file a motion for reconsideration or new trial
within fifteen days from the date he received
notice of the decision, resolution or order of the
Court in question. (RCTA, Rule 13, sec. 1a)
SEC. 4. Effect of filing the motion. – The filing of a
motion for reconsideration or new trial shall suspend
the running of the period within which an appeal
may be perfected. (RCTA, Rule 13, sec. 4a)
SEC. 5. Grounds of motion for new trial. – A
motion for new trial may be based on one or more of the
following causes materially affecting the substantial
rights of the movant:
(a) Fraud, accident, mistake or excusable negligence
which ordinary prudence could not have guarded against
and by reason of which such aggrieved party has
probably been impaired in his rights; or
(b) Newly discovered evidence, which he could not, with
reasonable diligence, have discovered and produced at
the trial and, which, if presented, would probably alter
the result.
A motion for new trial shall include all grounds then
available and those not included shall be deemed waived.
(Rules of Court, Rule 37, sec. 1a)
SEC. 6. Contents of motion for reconsideration or new
trial and notice. – The motion shall be in writing stating
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its grounds, a written notice of which shall be served by
the movant on the adverse party.
A motion for new trial shall be proved in the manner
provided for proof of motions. A motion for the cause
mentioned in subparagraph (a) of the preceding section
shall be supported by affidavits of merits which may be
rebutted by counter-affidavits. A motion for the cause
mentioned in subparagraph (b) of the preceding section
shall be supported by affidavits of the witnesses by
whom such evidence is expected to be given, or by duly
authenticated documents which are proposed to be
introduced in evidence.
A motion for reconsideration or new trial that does not
comply with the foregoing provisions shall be deemed
pro forma, which shall not toll the reglementary period
for appeal.
(Rules of Court, Rule 37, sec. 2a)
SEC. 7. No second motion for reconsideration or
for new trial. – No party shall be allowed to file a
second motion for reconsideration of a decision, final
resolution or order; or for new trial. (Rules of Court,
Rule 52, sec. 2a)
SEC. 8. Ruling. – The Court shall resolve the
motion for reconsideration or new trial within three
months from the time it is deemed submitted for
resolution. (Rules of Court, Rule 52, sec. 3a)
RULE 16
APPEAL
SECTION 1. Appeal to Supreme Court by
petition for review on certiorari. – A party
adversely affected by a decision or ruling of the Court en
banc may appeal therefrom by filing with the Supreme
Court a verified petition for review on certiorari within
fifteen days from receipt of a copy of the decision
or resolution, as provided in Rule 45 of the Rules of
Court. If such party has filed a motion for
reconsideration or for new trial, the period herein fixed
shall run from the party’s receipt of a copy of the
resolution denying the motion for reconsideration or for
new trial. (n)
SEC. 2. Effect of appeal. – The motion for
reconsideration or for new trial filed before the
Court shall be deemed abandoned if, during its
pendency, the movant shall appeal to the Supreme
Court pursuant to Section 1 of this Rule. (2002 Internal
Rules of the Court of Appeals, Rule VI, sec. 15a)
2. Appeal to CTA en Banc
SEC. 18. R.A 1125 as amended by R.A. 9282
Appeal to the Court of Tax Appeals En Banc. - No
civil proceeding involving matter arising under the
National Internal Revenue Code, the Tariff and Customs
Code or the Local Government Code shall be maintained,
except as herein provided, until and unless an
appeal has been previously filed with the CTA
and disposed of in accordance with the provisions of this
Act.
"A party adversely affected by a resolution of a Division
of the CTA on a motion for reconsideration or new
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trial, may file a petition for review with the CTA
en banc." - one day upon receipt of decision
IV. APPEAL TO THE SUPREME COURT
SEC. 19. R.A 1125 as amended by R.A. 9282
Review by Certiorari. - A party adversely affected by
a decision or ruling of the CTA en banc may file with
the Supreme Court a verified petition for review
on certiorari pursuant to Rule 45 of the 1997
Rules of Civil Procedure.
V.REFUND AND/OR TAX CREDIT OF
ERROUNEOUSLY PAID TAXES
A. What Constitutes an Erroneous Payment
There is erroneous payment of taxes when a tax payer
pays under a mistake of fact, as where he was not
aware of an existing exemption in his favor at a time
payment was made.
Erroneous or illegal tax – one levied without statutory
authority or upon property not subject to taxation or by
some person having no authority to levy the tax, or one
which in some similar respect is illegal.
Penalty is collected without authority
Sum collected is excessive or in any manner
wrongfully collected.
Why pay erroneous taxes?
Excise tax for spirits, because the goods will not be
allowed to leave the premises for delivery.
Case: CIR vs Central Azucarera Don Pedro 49
SCRA 474
Facts:  Central applied for tax exemption privileges
under Rep. Act No. 3127 in connection with its
importations of machineries, spare parts and other
equipment to be used in its central. On November 3,
1965 the Central informed the Commissioner of Internal
Revenue of the approval of its application for tax
exemption and claimed a tax credit for the entire amount
of P294,705.00.
CIR disallowed the sum of P48,302.00 on the ground
that the claim for tax credit with respect thereto was filed
only on July 22, 1965, or more than two (2) years after it
was paid, and therefore under Sec. 309 of the Tax Code
the right to recover the same had already prescribed.
Within thirty (30) days from receipt of the
Commissioner's ruling, it was elevated for review by the
Court of Tax Appeals, which thereafter rendered a
judgment of reversal.
Issue: Whether the statutory period of prescription
fixed in Sections 306 and 309 of the Internal Revenue
Code applies in this case.
Held:
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SEC. 306. Recovery of tax erroneously or
illegally collected. — No suit or proceeding shall be
maintained in any court for the recovery of any national
internal revenue tax hereafter alleged to have been
erroneously or illegally assessed or collected or of any
penalty claimed to have been collected without authority,
or of any sum alleged to have been excessive or in any
manner wrongfully collected, until a claim for refund or
credit has been duly filed with the Commissioner of
Internal Revenue, but such suit or proceeding may be
maintained, whether or not such tax penalty, or sum has
been paid under protest of 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 tax or penalty.
SEC. 309. Authority of Commissioner to make
compromises and to refund taxes. — The
Commissioner of Internal Revenue may compromise any
civil or other case arising under this Code or other law or
part of law administered by the Bureau of Internal
Revenue, may credit or refund taxes erroneously or
illegally received, or penalties imposed without
authority, and may remit before payment any tax that
appears to be unjustly assessed or excessive.
xxx xxx xxx
The authority of the Commissioner of Internal Revenue
to credit or refund taxes or penalties under this section
can only be exercised if the claim for credit or refund is
made to writing and filed with him within two years after
the payment of the tax or penalty.
Both shall not apply, since they refer to taxes
erroneously or illegally or in any manner wrongfully
collected, or penalties collected without authority.
That the period within which a claim for credit or
refund should be filed with the Commissioner of
Internal Revenue, or a suit or proceeding commenced in
court for the same purpose, should start from the
date of payment of the tax is logical in the cases
covered by the said provisions, inasmuch as the
collection is tainted with illegality or error from
the beginning and therefore it is from that
moment that the basis for the claim or the cause
of action in the suit may be said to have arisen.
The claim for tax credit filed by the respondent Central,
the basis thereof is the tax exemption granted by the
Board of Industries under Rep. Act No. 3127. Before
the application for such exemption was
approved there was absolutely no basis for the
Central to file a claim with the Commissioner or
to commence a suit in court.
Under Rep. Act No. 3127, Sec. 7, the granting of a tax
exemption to an applicant engaged in a basic
industry retroacts to the date of the filing of
application for exemption…. "since in those cases the
tax sought to be refunded was collected legally, the
running of the two-year prescriptive period
provided for in Section 306 should commence, not
from the date the tax was paid, but from the
happening of the supervening cause which entitled
the tax payer to a tax refund. "In fine, when the tax
sought to be refunded is illegally or erroneously
11 |Solis Tax 2 Study Guide
collected, the period of prescription starts from the
date the tax was paid; but when the tax is legally
collected, the prescriptive period commences to run
from the date of occurrence of the supervening cause
which gave rise to the right of refund. 
 in the present case the supervening cause from which
the right to the tax credit applied for arose was the
issuance of the certificate of tax exemption by
the Board of Industries on October 5, 1965 and the
Central filed its claim for tax credit with the
Commissioner of Internal Revenue on the following
November 3, or well within the two-year period, it is
clear that the said claim had not yet prescribed.
B. Requirement of Filing Administrative Claim
Sec. 229 NIRC
SEC. 229. Recovery of Tax Erroneously or
Illegally Collected. - no suit or proceeding shall be
maintained in any court for the recovery of any national
internal revenue tax hereafter alleged to have been
erroneously or illegally assessed or collected, or of any
penalty claimed to have been collected without authority,
of any sum alleged to have been excessively or in any
manner wrongfully collected without authority, or of any
sum alleged to have been excessively 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
tax, penalty, or sum has been paid under protest or
duress.
In any case, no such suit or proceeding shall be filed after
the expiration of two (2) years from the date of payment
of the tax or penalty regardless of any supervening cause
that may arise after payment: Provided, however, That
the Commissioner may, even without a written claim
therefor, refund or credit any tax, where on the face of
the return upon which payment was made, such
payment appears clearly to have been erroneously paid.
Sec. 204(C) NIRC
(C) Credit or refund taxes erroneously or illegally
received or penalties imposed without authority, refund
the value of internal revenue stamps when they are
returned in good condition by the purchaser, and, in his
discretion, redeem or change unused stamps that have
been rendered unfit for use and refund their value upon
proof of destruction. No credit or refund of taxes or
penalties shall be allowed unless the taxpayer files in
writing with the Commissioner a claim for credit or refund
within two (2) years after the payment of the tax or
penalty: Provided, however, That a return filed showing
an overpayment shall be considered as a written claim
for credit or refund.
A Tax Credit Certificate validly issued under the
provisions of this Code may be applied against any
internal revenue tax, excluding withholding taxes, for
which the taxpayer is directly liable. Any request for
conversion into refund of unutilized tax credits may be
12 |Solis Tax 2 Study Guide
allowed, subject to the provisions of Section 230 of this
Code: Provided, That the original copy of the Tax Credit
Certificate showing a creditable balance is surrendered
to the appropriate revenue officer for verification and
cancellation: Provided, further, That in no case shall a
tax refund be given resulting from availment of
incentives granted pursuant to special laws for which no
actual payment was made.
The Commissioner shall submit to the Chairmen of the
Committee on Ways and Means of both the Senate and
House of Representatives, every six (6) months, a report
on the exercise of his powers under this Section, stating
therein the following facts and information, among
others: names and addresses of taxpayers whose cases
have been the subject of abatement or compromise;
amount involved; amount compromised or abated; and
reasons for the exercise of power: Provided, That the
said report shall be presented to the Oversight
Committee in Congress that shall be constituted to
determine that said powers are reasonably exercised
and that the Government is not unduly deprived of
revenues.
Case: Bermejo vs. Collector, 87 Phil. 96 (1950)
The law clearly stipulates that after paying the tax, the
citizen must submit a claim for refund before
resorting to the courts. The idea probably is, first, to
afford the collector an opportunity to correct the action
of subordinate officers; and second, to notify the
Government that such taxes have been questioned, and
the notice should then be borne in mind in estimating
the revenue available for expenditure. Previous
objections to the tax may not take place of that
claim for refund, because there may be reason to
believe that, in paying, the tax payer has finally come to
realize the validity of assessment. Anyway, strict
compliance with the conditions imposed for the
return of revenue collected is a doctrine
consistently applied here and in the United States.
Case: Andrea Vda. De Aguinaldo vs CIR 13 SCRA
269 (1965)
Facts: The Collector of Internal Revenue, however, by
his letter dated October 28, 1957, assessed against
Leopoldo R. Aguinaldo the amount of P3,840.00 as
deficiency income tax for 1952, without crediting in his
favor the overpayment in 1953.
Issue: WON petitioner is entitled to tax credit for the
year 1953 pursuant to Section 309 of the Tax Code.
Held: The third paragraph of Section 309, National
Internal Revenue Code, clearly requires the filing by
the taxpayer of a written claim for credit or
refund within two years after payment of the tax,
before the Commissioner of Internal Revenue can
exercise his authority to grant the credit or refund. Such
requirement is therefore a condition precedent
and non- compliance therewith precludes the
Commissioner of Internal Revenue from
exercising the authority thereunder given.
13 |Solis Tax 2 Study Guide
Case: Chemical Industries of the Phil. Inc. vs.
CIR, CTA Case 5887 August 8 200
- Cannot find in the CTA site
C. Exception to Requirement of Filing
Administrative Claim
Sec.229 NIRC proviso (Last Paragraph)
Provided, however, That the Commissioner may, even
without a written claim therefor, refund or credit any
tax, where on the face of the return upon which payment
was made, such payment appears clearly to have been
erroneously paid.
Sec.204 (c) NIRC – see above
D. Effect of Supervening Event
Sec.229 NIRC – see above
Case: MERALCO vs. CIR CTA 7107 October 16, 2006
Facts: MERALCO filed for a request to declare
Nordeusche Bank as tax exempt. Two years later BIR
issued a ruling exempting NB from the final withholding
tax on interest payments. MERALCO filed a refund
based on the ruling.
Issue: Did MERALCO’s claim for refund prescribe for
being filed out of time?
Held: Yes. BIR ruling is not an operative act from
which an entitlement to refund is determined.
There is no requirement in law that the petitioner
must request first for a ruling from the BIR for
exemption before it can file a claim for refund. It
is the NIRC which provides for such exemptions as well
as the period to file not the BIR ruling.
The 2 year period found in Sec. 204 and 229 of NIRC
shall prevail over the principle of solution indebitii. It is
well settled that special law shall prevail over a general
law.
Case: CIR vs Central Azucarera Don Pedro 49
SCRA 474
"In fine, when the tax sought to be refunded is
illegally or erroneously collected, the period of
prescription starts from the date the tax was paid; but
when the tax is legally collected, the prescriptive
period commences to run from the date of occurrence of
the supervening cause which gave rise to the right of
refund.  law, Executive Order No. 273, which took effect on 1
 in the present case the supervening cause from which
the right to the tax credit applied for arose was the
issuance of the certificate of tax exemption by
the Board of Industries on October 5, 1965 and the
Central filed its claim for tax credit with the
Commissioner of Internal Revenue on the following
14 |Solis Tax 2 Study Guide
November 3, or well within the two-year period, it is
clear that the said claim had not yet prescribed.
Case: Consolidated Cases of CIR vs. San Roque
Power Corp. G.R. No. 187485 ; Taganito Mining Corp.
G.R. No. 196113 and Philex Mining Corp.
ISSUE: Whether or not the judicial claims for tax
refund or credit were filed within the mandatory
period prescribed by law?
HELD: Records show that a mere 13 days after it filed
its amended administrative claim with the
Commissioner on 28 March 2003, San Roque filed a
Petition for Review with the CTA docketed as CTA Case
No. 6647.
Clearly, San Roque failed to comply with the 120-
day waiting period, the time expressly given by
law to the Commissioner to decide whether to
grant or deny San Roque's application for tax refund
or credit. It is indisputable that compliance with the
120-day waiting period is mandatory and
jurisdictional. The waiting period, originally fixed at
60 days only, was part of the provisions of the first VAT
January 1988. The waiting period was extended to 120
days effective 1 January 1998 under RA 8424 or the Tax
Reform Act of 1997.
Failure to comply with the 120-day waiting period
violates a mandatory provision of law. It violates the
doctrine of exhaustion of administrative
remedies and renders the petition premature and
thus without a cause of action, with the effect that
the CTA does not acquire jurisdiction over the taxpayers
petition.
San Roque's failure to comply with the 120-day
mandatory period renders its petition for review with the
CTA void. San Roque's void petition for review cannot be
legitimized by the CTA or this Court because Article 5 of
the Civil Code states that such void petition cannot
be legitimized except when the law itself
authorizes its validity. There is no law authorizing
the petitions validity.
The taxpayer cannot simply file a petition with the CTA
without waiting for the Commissioners decision within
the 120-day mandatory and jurisdictional period. The
CTA will have no jurisdiction because there will be no
decision or deemed a denial decision of the
Commissioner for the CTA to review.  In short, the law states that the taxpayer may apply with
Section 112(C) also expressly grants the taxpayer a 30-
day period to appeal to the CTA the decision or inaction
of the Commissioner. As this law states, the taxpayer
may, if he wishes, appeal the decision of the
Commissioner to the CTA within 30 days from receipt of
the Commissioners decision, or if the Commissioner
does not act on the taxpayers claim within the 120-day
period, the taxpayer may appeal to the CTA within 30
days from the expiration of the 120-day period.
Taganito can invoke BIR Ruling No. DA-489-03
dated 10 December 2003, which expressly ruled that the
15 |Solis Tax 2 Study Guide
taxpayer-claimant need not wait for the lapse of the 120-
day period before it could seek judicial relief with the
CTA by way of Petition for Review. Thus, Taganito is
deemed to have filed its judicial claim with the CTA on
time.
There are three compelling reasons why the 30-
day period need not necessarily fall within the
two-year prescriptive period, as long as the
administrative claim is filed within the two-year
prescriptive period.
First, Section 112(A) clearly, plainly, and unequivocally
provides that the taxpayer may, within two (2) years
after the close of the taxable quarter when the sales were
made, apply for the issuance of a tax credit certificate or
refund of the creditable input tax due or paid to such
sales.
the Commissioner for a refund or credit within two (2)
years, which means at anytime within two years. Thus,
the application for refund or credit may be filed by the
taxpayer with the Commissioner on the last day
of the two-year prescriptive period and it will still
strictly comply with the law. The two-year prescriptive
period is a grace period in favor of the taxpayer and he
can avail of the full period before his right to apply for a
tax refund or credit is barred by prescription.
Second, Section 112(C) provides that the Commissioner
shall decide the application for refund or credit within
one hundred twenty (120) days from the date of
submission of complete documents in support of the
application filed in accordance with Subsection (A). The
reference in Section 112(C) of the submission of
documents in support of the application filed in
accordance with Subsection A means that the application
in Section 112(A) is the administrative claim that the
Commissioner must decide within the 120-day period.
Thus, the two-year prescriptive period does not
refer to the filing of the judicial claim with the CTA but
to the filing of the administrative claim with the
Commissioner.
Third, if the 30-day period, or any part of it, is required
to fall within the two-year prescriptive period
(equivalent to 730 days), then the taxpayer must file
his administrative claim for refund or credit
within the first 610 days of the two-year
prescriptive period. Otherwise, the filing of the
administrative claim beyond the first 610 days will result
in the appeal to the CTA being filed beyond the two-year
prescriptive period.
Thus, section 112(A) and (C) must be interpreted
according to its clear, plain, and unequivocal language.
The taxpayer can file his administrative claim for
refund or credit at anytime within the two-year
prescriptive period. If he files his claim on the last
day of the two-year prescriptive period, his claim is still
filed on time. The Commissioner will have 120 days
from such filing to decide the claim. If the
Commissioner decides the claim on the 120th day, or
does not decide it on that day, the taxpayer still has
30 days to file his judicial claim with the CTA.
16 |Solis Tax 2 Study Guide
This is not only the plain meaning but also the only
logical interpretation of Section 112(A) and (C).
---------------------------------------------------------------
Under Section 229, the prescriptive period for filing a
judicial claim for REFUND is two years reckoned
from the date the person liable for the tax pays
the tax. Thus, if the input VAT is in fact excessively
collected, that is, the person liable for the tax actually
pays more than what is legally due, the taxpayer must
file a judicial claim for refund within two years from his
date of payment. Only the person legally liable to
pay the tax can file the judicial claim for refund.
The person to whom the tax is passed on as part of the
purchase price has no personality to file the judicial
claim under Section 229.
Under Section 110(B) and Section 112(A), the
prescriptive period for filing a judicial claim for
EXCESS INPUT VAT is two years from the close
of the taxable quarter when the sale was made by the
person legally liable to pay the output VAT. This
prescriptive period has no relation to the date of
payment of the excess input VAT. The excess input VAT
may have been paid for more than two years but this
does not bar the filing of a judicial claim for excess VAT
under Section 112(A), which has a different reckoning
period from Section 229. Moreover, the person
claiming the refund or credit of the input VAT is
not the person who legally paid the input VAT. Such
person seeking the VAT refund or credit does not claim
that the input VAT was excessively collected from him,
or that he paid an input VAT that is more than what is
legally due. He is not the taxpayer who legally paid the
input VAT.
------------------------------------------------------------------
Under Section 110(B), a taxpayer can apply his
input VAT only against his output VAT. The only
EXCEPTION is when the taxpayer is expressly
zero-rated or effectively zero-rated under the
law, like companies generating power through
renewable sources of energy. Thus, a non zerorated VAT-
registered taxpayer who has no output VAT because he
has no sales cannot claim a tax refund or credit of his
unused input VAT under the VAT System. Even if the
taxpayer has sales but his input VAT exceeds his
output VAT, he cannot seek a tax refund or
credit of his excess input VAT under the VAT System.
He can only carry-over and apply his excess input
VAT against his future output VAT. If such excess
input VAT is an excessively collected tax, the taxpayer
should be able to seek a refund or credit for such excess
input VAT whether or not he has output VAT.
E. Offsetting Against Deficiency Tax Assessments
Case: CIR vs. Cebu Portland Cement 156 SCRA 535,
541 (1987)
The sales tax was properly imposed upon the private
respondent for the reason that cement has always been
considered a manufactured product and not a mineral
product.  6089 Aug.22 2002
17 |Solis Tax 2 Study Guide
*The argument that the assessment cannot as yet be
enforced because it is still being contested loses sight of
the urgency of the need to collect taxes as "the
lifeblood of the government." If the payment of
taxes could be postponed by simply questioning their
validity, the machinery of the state would grind
to a halt and all government functions would be
paralyzed. That is the reason why, save for the
exception already noted, the Tax Code provides:
Sec. 291. Injunction not available to restrain
collection of tax. — No court shall have authority to
grant an injunction to restrain the collection of any
national internal revenue tax, fee or charge imposed by
this Code.
This injunction is available when the challenge to the
assessment is still-and only-on the administrative level.
There is all the more reason to apply the rule here
because it appears that even after crediting of the refund
against the tax deficiency, a balance of more than P 4
million is still due from the private respondent.
To require the petitioner to actually refund to the
private respondent the amount of the judgment
debt, which he will later have the right to distrain
for payment of its sales tax liability is in our view
an Idle ritual. We hold that the respondent Court of
Tax Appeals erred in ordering such a charade.
Case: BPI Securities Corp. vs CIR CTA Case No.
Section 69. Final Adjustment Return- Every
corporation liable to tax under Section 24 shall file a
final adjustment return covering the total net income for
the preceding calendar or fiscal year. If the sum of the
quarterly tax payments made during the said taxable
year is not equal to the total tax due on the entire taxable
net income of that year the corporation shall either:
a. Pay the excess tax due; or
b. Be refunded the excess amount paid, as
the case may be.
In case the corporation is entitled to a refund
of the excess estimated quarterly income taxes paid, the
refundable amount shown on its final adjustment
return may be credited against the estimated
quarterly income tax liabilities for the taxable
quarters of the succeeding taxable year.
Petitioner is entitled to the refund. Petitioner filed its
1997 Annual Income Tax Return on April 15, 1998.
Consequently, the allowable period to file its claim for
refund is until April 14, 2000. Thus, when it filed its
claim for refund with the BIR on April 13, 2000 and
this Petition for Review on April 14, 2000, petitioner is
not yet barred by prescription.
CIR’s claim that the petitioner has some deficiencies in
tax payments will not be an obstacle to the grant of the
instant claim for refund because petitioner's alleged tax
deficiencies for the taxable year 1997 is not the issue
presented before the SC. The principle that *taxes are
18 |Solis Tax 2 Study Guide
not subject to set-off or legal compensation must
govern, especially in this case where the taxes and
the taxpayer's claim are not fully liquidated, due
and demandable
Case: FNCB Finance vs. CIR, CTA Case No. 3717 May
10, 1993
Facts: They found due from petitioner alleged
deficiency income tax which respondent automatically
set-off against the amount claimed as excess creditable
income tax. The result was that petitioner has no longer
any excess Creditable income tax but a deficiency tax
due.
Held: The act of respondent smacks of whim or caprice.
There was arbitrary disallowance of deductible expenses
to create a deficiency tax. No chance was even accorded
to petitioner to rebut the findings. The element of
substantial and procedural due process was sorely
lacking.
An assessment fixes and determines the liability of a tax
payer. Accordingly, CIR cannot be allowed to apply
the tax credit claimed against the alleged
deficiency tax when no assessment has been
made.
In like manner that a tax payer cannot refuse to pay a
tax on the ground that the government owes him an
amount equal to or greater than the tax being collected,
the government cannot automatically set-off an
alleged deficiency tax against a claim for tax
credit. What is sauce for the goose is also sauce for the
gander.
In CLAIMS FOR REFUND/TAX CREDIT of excess
withholding taxes, petitioner-taxpayer needs only the
following:
(1) that it filed a claim for refund within the two
year period as described under the Sec 230 of the
NIRC ;
(2) that the income upon which the taxes were
withheld were included in the return of the
recipient; and
(3) the fact of withholding is established by a copy
of statement (BIR Form 17431) duly issued by the
payor (withholding agent) to the payee, showing
the amount paid and the amount withheld
therefrom.
However, the petitioner failed to show enough evidence
to support its claim for refund and as such its claim must
be defeated.
F. Whether the Government is Liable for
Interest, Attorney’s Fees, etc.
Case: Philex Mining Corp. vs CIR 306 SCRA 126
“The rule is that no interest on refund of tax can be
awarded unless authorized by law or the
collection of the tax was attended by arbitrariness.
An action is not arbitrary when exercised honestly and
19 |Solis Tax 2 Study Guide
upon due consideration where there is room for two
opinions, however much of it may be believed that an
erroneous conclusion was reached. Arbitrariness
presupposes inexcusable or obstinate disregard of legal
provisions. None of the exceptions are presents in this
case. Respondent’s decision was based on an honest
interpretation of the law. We see no reason why there
should be payment of interest.”
G. Taxes Not Subject to Set Off
Case: Francia vs. IAC 162 SCRA 753
ISSUE: Whether or not the tax owed by Francia should
be set-off by the “debt” owed him by the government.
HELD: No. As a rule, set-off of taxes is not allowed.
There is no legal basis for the contention. By legal
compensation, obligations of persons, who in their
own right are reciprocally debtors and creditors
of each other, are extinguished (Art. 1278, Civil
Code). This is not applicable in taxes. There can be
no off-setting of taxes against the claims that the
taxpayer may have against the government. A person
cannot refuse to pay a tax on the ground that the
government owes him an amount equal to or greater
than the tax being collected. The collection of a tax
cannot await the results of a lawsuit against the
government.
The Supreme Court emphasized: A claim for taxes is
not such a debt, demand, contract or judgment
that is allowed to be set-off under the statutes of
set-off, which are construed uniformly, in the light of
public policy, to exclude the remedy in an action or any
indebtedness of the state or municipality to one who is
liable to the state or municipality for taxes. Neither are
they a proper subject of recoupment since they
do not arise out of the contract or transaction
sued on.
BIR Ruling 415-93 October 15 1993
CLAIM FOR TAX CREDIT/REFUND FOR ALLEGED
EXCESS INPUT TAX BY VAT-REGISTERED FIRM
DENIED
The Honorable
Undersecretary Tomas I. Alcantara
Department of Trade and Industry
385 Sen. Gil Puyat Avenue
Makati, Metro Manila
This refers to your request for confirmation and/or
issuance of guidelines for the automatic offsetting of
claims for VAT input tax by mining companies against
their excise tax liabilities.
I reply, I regret to inform you that the same cannot be
granted for lack of legal basis. Any claim for tax
credit or refund of alleged excess input tax by a
VAT registered taxpayer pursuant to Sections 104 and
106 both of the Tax Code, as amended by E.O. 273, shall
be subject to verification by this Office pursuant
to existing rules and regulations. Accordingly, until
20 |Solis Tax 2 Study Guide
after the amount claimed as input taxes attributable to
goods exported, or on sales which are zero-rated or
effectively zero-rated or input tax paid on capital goods
imported or locally purchased, to the extent that such
input taxes have not been applied against output taxes,
have been finally determined to be legally due to the
taxpayer, and a tax credit certificate issued therefor, no
automatic offsetting of the amount claimed as
input tax against the tax liability of the taxpayer
can be allowed.
However, a Tax Credit Certificate duly issued by this
Office shall, upon proper application, be allowed to be
used in payment of excise and other tax liabilities of
taxpayers, like the mining companies.
LIWAYWAY VINZONS-CHATO
Commissioner of Internal Revenue
VI. APPEAL IN CASE OF DENIAL OF REFUND/
TAX CREDIT CLAIM
A. CTA (Division and En Banc)
Sec. 4 Par. 2 NIRC
The power to decide disputed assessments, refunds of
internal revenue taxes, fees or other charges, penalties
imposed in relation thereto, or other matters arising
under this Code or other laws or portions thereof
administered by the Bureau of Internal Revenue is
vested in the Commissioner, subject to the exclusive
appellate jurisdiction of the Court of Tax Appeals.
Sec. 7 a(1)(2) of RA 1125 as amended by RA 9282
Sec. 7. Jurisdiction. - The CTA shall exercise:
"a. Exclusive appellate jurisdiction to review by
appeal, as herein provided:
"1. Decisions of the Commissioner of Internal Revenue in
cases involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties in relation
thereto, or other matters arising under the National
Internal Revenue or other laws administered by the
Bureau of Internal Revenue;
"2. Inaction by the Commissioner of Internal Revenue in
cases involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties in
relations thereto, or other matters arising under the
National Internal Revenue Code or other laws
administered by the Bureau of Internal Revenue, where
the National Internal Revenue Code provides a specific
period of action, in which case the inaction shall be
deemed a denial;
Sec. 11 of RA 1125 as amended by RA 9282
SEC. 11. Who May Appeal; Mode of Appeal;
Effect of Appeal. - Any party adversely affected by a
decision, ruling or inaction of the Commissioner of
Internal Revenue, the Commissioner of Customs, the
Secretary of Finance, the Secretary of Trade and
Industry or the Secretary of Agriculture or the Central
Board of Assessment Appeals or the Regional Trial
21 |Solis Tax 2 Study Guide
Courts may file an appeal with the CTA within thirty (30)
days after the receipt of such decision or ruling or after
the expiration of the period fixed by law for action as
referred to in Section 7(a)(2) herein.
"Appeal shall be made by filing a petition for review
under a procedure analogous to that provided for under
Rule 42 of the 1997 Rules of Civil Procedure with the
CTA within thirty (30) days from the receipt of the
decision or ruling or in the case of inaction as herein
provided, from the expiration of the period fixed by law
to act thereon. A Division of the CTA shall hear the
appeal: Provided, however, That with respect to
decisions or rulings of the Central Board of Assessment
Appeals and the Regional Trial Court in the exercise of
its appellate jurisdiction appeal shall be made by filing a
petition for review under a procedure analogous to that
provided for under rule 43 of the 1997 Rules of Civil
Procedure with the CTA, which shall hear the case en
banc.
"All other cases involving rulings, orders or decisions
filed with the CTA as provided for in Section 7 shall be
raffled to its Divisions. A party adversely affected by a
ruling, order or decision of a Division of the CTA may file
a motion for reconsideration of new trial before the same
Division of the CTA within fifteens (15) days from notice
thereof: Provide, however, That in criminal cases, the
general rule applicable in regular Courts on matters of
prosecution and appeal shall likewise apply.
"No appeal taken to the CTA from the decision of the
Commissioner of Internal Revenue or the Commissioner
of Customs or the Regional Trial Court, provincial, city
or municipal treasurer or the Secretary of Finance, the
Secretary of Trade and Industry and Secretary of
Agriculture, as the case may be shall suspend the
payment, levy, distraint, and/or sale of any property of
the taxpayer for the satisfaction of his tax liability as
provided by existing law: Provided, however, That when
in the opinion of the Court the collection by the
aforementioned government agencies may jeopardize
the interest of the Government and/or the taxpayer the
Court any stage of the proceeding may suspend the said
collection and require the taxpayer either to deposit the
amount claimed or to file a surety bond for not more
than double the amount with the Court.
"In criminal and collection cases covered respectively by
Section 7(b) and (c) of this Act, the Government may
directly file the said cases with the CTA covering
amounts within its exclusive and original jurisdiction."
Sec.18 supra
SEC. 18. Appeal to the Court of Tax Appeals En
Banc. - No civil proceeding involving matter arising
under the National Internal Revenue Code, the Tariff
and Customs Code or the Local Government Code shall
be maintained, except as herein provided, until and
unless an appeal has been previously filed with the CTA
and disposed of in accordance with the provisions of this
Act.
"A party adversely affected by a resolution of a Division
of the CTA on a motion for reconsideration or new trial,
may file a petition for review with the CTA en banc."
22 |Solis Tax 2 Study Guide
B. Supreme Court
Sec. 19 supra
"SEC. 19. Review by Certiorari. - A party adversely
affected by a decision or ruling of the CTA en banc may
file with the Supreme Court a verified petition for review
on certiorari pursuant to Rule 45 of the 1997 Rules of
Civil Procedure."
VII. STATUTE OF LIMITATIONS
A. Period to Assess
Sec. 203, 222, 223 NIRC
SEC. 203. Period of Limitation Upon
Assessment and Collection. - Except as provided in
Section 222, internal revenue taxes shall be assessed
within three (3) years after the last day prescribed by
law for the filing of the return, and no proceeding in
court without assessment for the collection of such taxes
shall be begun after the expiration of such
period: Provided, That in a case where a return is filed
beyond the period prescribed by law, the three (3)-year
period shall be counted from the day the return was
filed.
For purposes of this Section, a return filed before the
last day prescribed by law for the filing thereof shall be
considered as filed on such last day.
 SEC. 222. Exceptions as to Period of
Limitation of Assessment and Collection of
Taxes. –
(a) In the case of a false or fraudulent return with
intent to evade tax or of failure to file a return, the
tax may be assessed, or a proceeding in court for
the collection of such tax may be filed without
assessment, at any time within ten (10) years after
the discovery of the falsity, fraud or omission:
Provided, That in a fraud assessment which has
become final and executory, the fact of fraud shall
be judicially taken cognizance of in the civil or
criminal action for the collection thereof.
(b) If before the expiration of the time prescribed
in Section 203 for the assessment of the tax, both
the Commissioner and the taxpayer have agreed in
writing to its assessment after such time, the tax
may be assessed within the period agreed upon.
The period so agreed upon may be extended by
subsequent written agreement made before the
expiration of the period previously agreed upon.
(c) Any internal revenue tax which has been
assessed within the period of limitation as
prescribed in paragraph (a) hereof may be
collected by distraint or levy or by a proceeding in
court within five (5) years following the
assessment of the tax.
23 |Solis Tax 2 Study Guide
(d) Any internal revenue tax, which has been
assessed within the period agreed upon as
provided in paragraph (b) hereinabove, may be
collected by distraint or levy or by a proceeding in
court within the period agreed upon in writing
before the expiration of the five (5) -year period.
The period so agreed upon may be extended by
subsequent written agreements made before the
expiration of the period previously agreed upon.
(e) Provided, however, That nothing in the
immediately preceding and paragraph (a) hereof
shall be construed to authorize the examination
and investigation or inquiry into any tax return
filed in accordance with the provisions of any tax
amnesty law or decree.
SEC. 223. Suspension of Running of
Statute of Limitations. –
The running of the Statute of Limitations provided
in Sections 203 and 222 on the making of
assessment and the beginning of distraint or levy a
proceeding in court for collection, in respect of any
deficiency, shall be suspended for the period
during which the Commissioner is prohibited from
making the assessment or beginning distraint or
levy or a proceeding in court and for sixty (60)
days thereafter; when the taxpayer requests for a
reinvestigation which is granted by the
Commissioner; when the taxpayer cannot be
located in the address given by him in the return
filed upon which a tax is being assessed or
 collected: Provided, that, if the taxpayer informs
the Commissioner of any change in address, the
running of the Statute of Limitations will not be
suspended; when the warrant of distraint or levy is
duly served upon the taxpayer, his authorized
representative, or a member of his household with
sufficient discretion, and no property could be
located; and when the taxpayer is out of the
Philippines.
1. When is an Assessment deemed made?
corporation had until April 15, 1984 within which to file its
claim for refund. Considering that ACCRAIN filed its claim
for refund as early as December 29, 1983 with the respondent
Commissioner who failed to take any action thereon and
considering further that the non-resolution of its claim for
refund with the said Commissioner prompted ACCRAIN to
reiterate its claim before the Court of Tax Appeals through a
petition for review on April 13, 1984, the respondent
appellate court manifestly committed a reversible error in
affirming the holding of the tax court that ACCRAIN's claim
for refund was barred by prescription.

2. Effect of Filing an Amended Return

3. Effect of Filing Wrong Return When does the two period commence?

ACRRA vs. CA The day of the payment of tax or penalty.

Clearly, there is the need to file a return first before a claim CIR VS TMX Sales
for refund can prosper inasmuch as the respondent
Commissioner by his own rules and regulations mandates
that the corporate taxpayer opting to ask for a refund must
show in its final adjustment return the income it received
from all sources and the amount of withholding taxes
remitted by its withholding agents to the Bureau of Internal
Revenue.

In our Resolution dated April 10, 1989 in the case

of Commissioner of Internal Revenue v. Asia Australia
Express, Ltd. (G. R. No. 85956), we ruled that the two-year
prescriptive period within which to claim a refund
commences to run, at the earliest, on the date of the filing of
the adjusted final tax return. Hence, the petitioner

24 |Solis Tax 2 Study Guide