University Physicians Services Inc. vs.

CIR
GR No. 205955, March 7, 2018
Facts:
The petitioner filed its annual income tax return for the year 2006. There was
excess in the payment of tax. It indicated in its income tax return that it opted for a
refund or issuance of a tax credit certificate. Subsequently, it filed an annual income tax
return covering the short period from January to March 2007, it opted to carryover the
creditable withholding tax which include that of the unutilized creditable withholding tax
for the year 2006. Later on, it amended the recent income tax return excluding the
unutilized creditable withholding tax for the year 2006 from being carried over. For that
reason, it filed a refund with the BIR. Such claim remained unacted. Hence, the
petitioner filed with the CTA a petition. The CTA dismissed the petition for lack of merit.
It grounded its ruling that once the carryover is opted by the taxpayer, it is irrevocable.
The CTA En Banc affirmed the decision when it was raised to it for appeal.
Thus, the petitioner brought the case before the Supreme Court. It avers that the
irrevocability rule under Section 76 of the NIRC is applicable to both the carryover and
refund option. Therefore, in 2006, when it opted for a refund, a subsequent move to opt
for a carryover is barred. Hence, the claim for refund is proper.
Issue:
Whether or not the irrevocability rule applies either to the option of carryover or
refund.
Ruling:
It applies exclusively to the option of carryover.
 A perfunctory reading of the law unmistakably discloses that the irrevocable
option referred to is the carry-over option only. There appears nothing therein from
which to infer that the other choice, i.e., cash refund or tax credit certificate, is also
irrevocable. If the intention of the lawmakers was to make such option of cash refund or
tax credit certificate also irrevocable, then they would have clearly provided so.
In other words, the law does not prevent a taxpayer who originally opted for a
refund or tax credit certificate from shifting to the carry-over of the excess creditable
taxes to the taxable quarters of the succeeding taxable years. However, in case the
taxpayer decides to shift its option to carryover, it may no longer revert to its original
choice due to the irrevocability rule. As Section 76 unequivocally provides, once the
option to carry over has been made, it shall be irrevocable. Furthermore, the provision
seems to suggest that there are no qualifications or conditions attached to the rule on
irrevocability.