1.
RIZAL COMMERCIAL BANKING
CORPORATION vs. COMMISSIONER OF
INTERNAL REVENUE- Protest Tax Assessments
FACTS:
RCBC received the final assessment notice on
July 5, 2001. It filed a protest on July 20, 2001.
As the protest was not acted upon, it filed a
Petition for Review with the Court of Tax
Appeals (CTA) on April 30, 2002, or more than
30 days after the lapse of the 180-day period
reckoned from the submission of complete
documents. The CTA dismissed the Petition for
lack of jurisdiction since the appeal was filed out
of time.
ISSUE:
Has the action to protest the assessment
judicially prescribed?
HELD:
YES. The assessment has become final. The
jurisdiction of the CTA has been expanded to
include not only decision but also inactions and
both are jurisdictional such that failure to
observe either is fatal.
However, if there has been inaction, the
taxpayer can choose between (1) file a Petition
with the CTA within 30 days from the lapse of
the 180-day period OR (2) await the final
decision of the CIR and appeal such decision to
the CTA within 30 days after receipt of the
decision. These options are mutually exclusive
and resort to one bars the application of the
other. Thus, if petitioner belatedly filed an
action based on inaction, it can not
subsequently file another petition once the
decision comes out.
In fine, the failure to comply with the 30-day
statutory period would bar the appeal and
deprive the Court of Tax Appeals of its
jurisdiction to entertain and determine the
correctness of the assessment.
2.LASCONA LAND CO., INC., vs COMMISSIONER
OF INTERNAL REVENUE
G.R. No. 171251 March 5, 2012
Facts:
On March 27, 1998, the Commissioner of
Internal Revenue (CIR) issued Assessment
Notice against Lascona Land Co., Inc. (Lascona)
informing the latter of its alleged deficiency
income tax for the year 1993.
Consequently, on April 20, 1998, Lascona filed a
letter protest to the BIR, questioning the said
assessment.
On March 3, 1999, the Bureau of Internal
Revenue denied the protest on the ground that
it failed to elevated to the Court of Tax Appeals
within thirty (30) days from the lapse of the One
Hundred Eighty (180)-day period pursuant to
Section 228 of the NIRC.
On April 12, 1999, Lascona appealed the
decision before the Court of Tax Appeals.
Lascona alleged that the Regional Director erred
in ruling that the failure to appeal to the CTA
within thirty (30) days from the lapse of the
180-day period rendered the assessment final
and executory.
The CIR, however, maintained that Lascona’s
failure to timely file an appeal with the CTA
after the lapse of the 180-day reglementary
period provided under Section 228 of the
National Internal Revenue Code (NIRC) resulted
to the finality of the assessment.
Issue:
Whether the subject assessment has become
final, executory and demandable due to the
failure of petitioner to file an appeal before the
CTA within thirty (30) days from the lapse of the
One Hundred Eighty (180)-day period pursuant
to Section 228 of the NIRC.
Ruling:
BIR is not correct.
Section 228 of the NIRC is instructional as to the
remedies of a taxpayer in case of the inaction of
the Commissioner on the protested assessment,
to wit:
“SEC. 228. Protesting of Assessment. − x x x 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 (30) days from receipt of the said
decision, or from the lapse of the one hundred
eighty (180)-day period; otherwise the decision
shall become final, executory and demandable.
(Emphasis supplied).
In arguing that the assessment became final and
executory by the sole reason that petitioner
failed to appeal the inaction of the
Commissioner within 30 days after the 180-day
reglementary period, respondent, in effect,
limited the remedy of Lascona, as a taxpayer,
under Section 228 of the NIRC to just one, that
is – to appeal the inaction of the Commissioner
on its protested assessment after the lapse of
the 180-day period.
This is incorrect.
The taxpayer has two options, either: (1) file a
petition for review with the CTA within 30 days
after the expiration of the 180-day period; or
(2) await the final decision of the
Commissioner on the disputed assessment and
appeal such final decision to the CTA within 30
days after the receipt of a copy of such
decision, these options are mutually exclusive
and resort to one bars the application of the
other.
Accordingly, considering that Lascona opted to
await the final decision of the Commissioner on
the protested assessment, it then has the right
to appeal such final decision to the Court by
filing a petition for review within thirty days
after receipt of a copy of such decision or ruling,
even after the expiration of the 180-day period
fixed by law for the Commissioner of Internal
Revenue to act on the disputed assessments.
Thus, Lascona, when it filed an appeal on April
12, 1999 before the CTA, after its receipt of the
Letter dated March 3, 1999 on March 12, 1999,
the appeal was timely made as it was filed
within 30 days after receipt of the copy of the
decision.
3.Misnet, Inc. vs. Commissioner of Internal
Revenue
Supreme Court (Second Division) G.R. No.
210604 promulgated 3 June 2019
Facts:
Misnet, Inc. (Misnet) was assessed deficiency
Expanded Withholding Tax (EWT) and Final
Withholding Value-Added Tax (FVAT) for taxable
year 2003. It filed a protest against the
deficiency tax assessments. Almost three years
later, or on 28 March 2011, Misnet
simultaneously received an Amended
Assessment Notice (AAN), reflecting an
amended deficiency EWT after reinvestigation
and a Final Decision on Disputed Assessment
(FDDA) for both deficiency EWT and FVAT. On 8
April 2011, Misnet filed a letter-reply to the
AAN and FDDA, which was received by the BIR
on 11 April 2011. On 9 May 2011, the BIR sent a
letter to Misnet, claiming that Misnet’s letter-
reply produced no legal effect since it was the
improper remedy, as Misnet should have
appealed the final decision of the Commissioner
of Internal Revenue (CIR) to the Court of Tax
Appeals (CTA) within 30 days from receipt of
the CIR’s decision; otherwise, the assessment
became final, executory and demandable.
On 27 May 2011, Misnet filed a Petition for
Relief from Judgment with the CIR arguing that
it failed to file its proper appeal of the FDDA
due to its mistake and excusable negligence as
it was not assisted by counsel. On 29 June 2011,
Misnet received a Preliminary Collection Letter,
which was deemed a denial of Misnet’s Petition
for Relief from Judgment. On 26 July 2011,
Misnet filed a Petition for Review with the CTA,
which dismissed the case for lack of jurisdiction
due to the lapse of the statutory period to
appeal.
Misnet appealed to the Supreme Court.
Issue:
Did the CTA correctly dismiss Misnet’s Petition
for Review on the ground of lack of jurisdiction?
Ruling:
No. While a taxpayer has 30 days to appeal the
final decision of the BIR to the CTA, the rule
could not be applied in this case as the AAN
provides that: “IF YOU DISAGREE WITH THIS
ASSESSMENT, FILE YOUR PROTEST IN WRITING
INDICATING YOUR REASONS WITH THE
COMMISSIONER OF INTERNAL REVENUE, BIR
DILIMAN, QUEZON CITY OR THE REGIONAL
DIRECTOR WITHIN 30 DAYS FROM RECEIPT
HEREOF: xxx.”
Misnet’s letter-reply dated 8 April 2011 to the
Regional Director was a protest of both the AAN
and the FDDA. The AAN reflects the amended
deficiency EWT after reinvestigation, while the
FDDA reflects the Final Decision on the
deficiency EWT and FWVAT. Since the
deficiency EWT is a component of the aggregate
tax due reflected in the FDDA, the FDDA cannot
be considered as the final decision of the CIR as
one of its components – the amended
deficiency EWT - is still under protest.
Misnet was correct when it protested with the
Regional Director the deficiency EWT per the
AAN sent by the BIR. However, instead of
resolving the protest, the Regional Director
informed Misnet that it was an improper
remedy. This ruling is totally inconsistent with
the statement reflected in the AAN that a
protest must be filed with the CIR or the
Regional Director within 30 days from receipt.
With Misnet’s pending protest with the
Regional Director on the amended EWT, there
was yet no final decision that was issued by the
CIR that is appealable to the CTA. It is
incumbent upon the Regional Director to act
upon the protest on the amended EWT -
whether to grant or to deny it. Only when the
CIR has resolved the protest on the deficiency
EWT could there be a final decision on Misnet's
liabilities. And only when there is a final
decision of the CIR would the prescriptive
period to appeal with the CTA begin to run.
Under the circumstances of the case, the Court
opted not to apply the statutory period within
which to appeal with the CTA considering that
no final decision yet was issued by the CIR on
Misnet’s protest. The subsequent appeal taken
by Misnet is from the inaction of the CIR on its
protest. The case was remanded to the CTA to
determine whether Misnet is indeed liable to
pay the deficiency taxes.
4.Commissioner of Internal Revenue (CIR) V.
Philippine National Bank (PNB)
G.R. No. 212699, March 13, 2019.
SC Second Division
J. REYES, JR., J.:
Lessons Applicable: Duty of CIR, CTA's
jurisdiction is appellate
Laws Applicable:
FACTS:
April 17, 2006: PNB electronically filed its
Annual Income Tax Return (ITR) for taxable year
2005 with attachments dated February 12,
2007, June 22, 2007, and March 10, 2008, which
were received by the CIR on February 22, 2007,
June 25, 2007, and March 13, 2008,
respectively.
PNB filed its claim for refund or issuance of tax
credit certificate of its excess CWT in the
amount of P74,598,430.47
Due to the CIR's inaction to the said claim, PNB
filed a petition for review for its claim on April
11, 2008 before the CTA.
CTA Third Division: Denied the petition for
review and Motion for Reconsideration (MR).
PNB's evidence to be insufficient to support its
claim for refund or the issuance of a tax credit
certificate. Presentation of PNB's Annual ITR for
2006 is not enough to prove that it did not carry
over the claimed excess or unutilized CWT to
the subsequent quarters of 2006 and that
succeeding Quarterly ITRs is vital to its claim for
refund.
CTA En Banc: Affirmed CTA 3rd Division but
reversed and granted PNB’s MR as PNB
complied with all the requisites for the filing of
such claim: 1. Within the 2-year prescription
period 2. Income related to the CW formed part
of taxable income as evidenced by documents
presented: Original accounting tickets or input
sheets; original deeds of absolute/conditional
sale; general ledgers for the years 1999 to 2006;
audited financial statements; and ITRs for the
years 1999 to 2006 3. Supported by original
Certificates of Creditable Tax Withheld at
Source issued in the name of PNB and dated
within the calendar year 2005. It denied CIR’S
MR.
CIR filed a petition for review on certiorari
under Rule 45
ISSUE: W/N presentation of the subsequent
Quarterly ITRs (for 2006) is indispensable to the
claim of refund.
HELD:
NO. CTA correctly ruled that there is nothing
under the NIRC that requires the submission of
the Quarterly ITRs of the succeeding taxable
year in a claim for refund. Even the BIR's own
regulations do not provide for such
requirement.
Winebrenner & Iñigo Insurance Brokers, Inc. v.
Commissioner of Internal Revenue (GR No.
206526, January 28, 2015): presentation of the
claimant's quarterly returns is not a
requirement to prove entitlement to the
refund.
Republic v. Team Energy (Phils.) Corporation
(G.R. No. 188016, January 14, 2015)
BIR ought to have its own copies, originals at
that, of the claimant's quarterly returns on file,
on the basis of which it could have easily rebut
the claim that the excess or unutilized CWT
sought for refund were carried over to the
immediately succeeding taxable quarters.
Failure to present such document during the
trial is fatal against the BIR's case rather than
the claimant's.
It bears stressing that the power to decide
matters concerning refunds of internal revenue
taxes, among others, is vested in the CIR. It has
the duty to ascertain the veracity of such claims
and should not just wait and hope for the
burden to fall on the claimant when the issue
reaches the court.
Commissioner of Internal Revenue v. PERF
Realty Corporation (G.R. NO. 163345, July 4,
2008):
Duty of the CIR to verify whether or not the
claimant had carried over its excess CWT
CTA's jurisdiction is appellate. In the exercise of
its authority to review, the CTA cannot dictate
what particular evidence the parties must
present to prove their respective cases. The
means of ascertainment of a fact is best left to
the party that alleges the same. The court's
power is limited only to the appreciation of that
means pursuant to the prevailing rules of
evidence.
Despite PNB's failure to present at the onset its
Quarterly ITRs for 2006, its Annual ITR for 2006
is apt and sufficient to show that no CWT carry
over was made in 2006.
Factual findings of the CTA when supported by
substantial evidence, will not be disturbed on
appeal.
5.PHILEX MINING CORP. v. CIR
GR No. 125704, August 28, 1998
294 SCRA 687
FACTS: Petitioner Philex Mining Corp. assails the
decision of the Court of Appeals affirming the
Court of Tax Appeals decision ordering it to pay
the amount of P110.7 M as excise tax liability
for the period from the 2 nd quarter of 1991 to
the 2nd quarter of 1992 plus 20% annual
interest from 1994 until fully paid pursuant to
Sections 248 and 249 of the Tax Code of 1977.
Philex protested the demand for payment of
the tax liabilities stating that it has pending
claims for VAT input credit/refund for the taxes
it paid for the years 1989 to 1991 in the amount
of P120 M plus interest. Therefore these claims
for tax credit/refund should be applied against
the tax liabilities.
ISSUE:
Can there be an off-setting between the tax
liabilities vis-a-vis claims of tax refund of the
petitioner?
HELD:
No. Philex's claim is an outright disregard of the
basic principle in tax law that taxes are the
lifeblood of the government and so should be
collected without unnecessary hindrance.
Evidently, to countenance Philex's whimsical
reason would render ineffective our tax
collection system. Too simplistic, it finds no
support in law or in jurisprudence. To be sure,
Philex cannot be allowed to refuse the payment
of its tax liabilities on the ground that it has a
pending tax claim for refund or credit against
the government which has not yet been
granted. Taxes cannot be subject to
compensation for the simple reason that the
government and the taxpayer are not creditors
and debtors of each other. There is a material
distinction between a tax and debt. Debts are
due to the Government in its corporate
capacity, while taxes are due to the
Government in its sovereign capacity. xxx 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.
6.Court of Tax Appeals (CTA) En Banc Decision
V.Y. Domingo Jewellers, Inc.'s (V.Y. Domingo)
Commissioner of Internal Revenue's (CIR)
FACTS: The BIR issued a PAN against V.Y.
Domingo at P2,781,844.21 for deficiency
income tax and value-added tax, inclusive of
interest, for the taxable year 2006.
V.Y. Domingo filed a Request for Re-
evaluation/Re-investigation and
Reconsideration dated September 17, 2009
with the Regional Director of BIR - Revenue
Region No. 6.
V.Y. Domingo then received a Preliminary
Collection Letter (PCL) dated August 10, 2011
from the RDO No. 28 - Novaliches, at
P3,164,617.43.
On September 12, 2011, V.Y. Domingo sent a
letter to the BIR RDO in Quezon City, requesting
certified true copies of the assessment notices.
Upon receipt thereof on September 16, 2011, it
filed a Petition for Review with the CTA in
Division, to have the PCL and the assessment
notices declared null for allegedly having been
issued beyond the prescriptive period for
assessment and collection of internal revenue
taxes.
During trial, the CIR moved to dismiss for lack of
jurisdiction. She argued that under Republic Act
(R.A.) No. 1125, it is neither the assessment nor
the formal letter of demand that is appealable
to the CTA but the decision of the CIR on a
disputed assessment, arguing there was still no
such decision.
The CTA First Division granted the CIR's motion
and dismissed. It held that it was without
jurisdiction to entertain the petition, as the rule
is that for the CTA to acquire jurisdiction, as
assessment must first be disputed by the
taxpayer and either ruled upon by the CIR to
warrant a decision, or denied by the CIR
through inaction.
The CIR argues that assessment notices are not
appealable to the CTA as the power to decide
disputed assessments is vested in the CIR,
subject only to the exclusive appellate
jurisdiction of the CTA.
ISSUES:
Does the CIR have jurisdiction over V.Y.
Domingo's petition for review? In other words,
does its receipt of the PCL entitle the taxpayer
to go to the CTA?
HELD:
The Supreme Court ruled for CIR. No, the CTA
has no jurisdiction. No, receipt of the PCL does
not grant the CTA jurisdiction.
According to Section 7 of R.A. No. 1125, as
amended by R.A. No. 9282, a protesting
taxpayer like V.Y. Domingo has only three
options to dispute an assessment:
If the protest is wholly or partially denied by the
CIR or his authorized representative, then the
taxpayer may appeal to the CTA within 30 days
from receipt of the whole or partial denial of
the protest;
If the protest is wholly or partially denied by the
CIR's authorized representative, then the
taxpayer may appeal to the CIR within 30 days
from receipt of the whole or partial denial of
the protest; or
If the CIR or his authorized representative failed
to act upon the protest within 180 days from
submission of the required supporting
documents, then the taxpayer may appeal to
the CTA within 30 days from the lapse of the
180-day period.
Here, records show that on August 11, 2011,
V.Y. Domingo received the PCL issued by
petitioner CIR. However, instead of filing an
administrative protest against the assessment
notice within thirty (30) days from its receipt of
the Assessment Notices on September 15, 2011,
V.Y. Domingo elected to file its petition for
review before the CTA First Division on
September 16, 2011.
The word "decisions" in the aforementioned
provision of R.A. No. 9282 means the decisions
of the CIR on the protest of the taxpayer against
the assessments. It does not signify the
assessment itself. 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 CTA only upon
receipt of the decision of the Collector on the
disputed assessment.
Evidently, V.Y. Domingo's immediate recourse
to the CTA First Division was in violation of the
doctrine of exhaustion of administrative
remedies.
Under the doctrine of exhaustion of
administrative remedies, before a party is
allowed to seek the intervention of the court,
he or she should have availed himself or herself
of all the means of administrative processes
afforded him or her.
The records of the case show that V.Y. Domingo
did receive the certified true copies of the
Assessment Notices it requested on September
15, 2011, the day before it filed its petition for
review before the CTA First Division. V.Y.
Domingo cannot now assert that its recourse to
the court was based on its non-receipt of the
Assessment Notices that it requested.
Likewise, Allied Banking Corporation v. CIR does
not apply here because that decision was
grounded on the language used and the tenor
of the demand letter, which indicate that it was
the final decision of the CIR on the matter.
7.Commissioner Of Internal Revenue  v.
Univation Motor Philippines, Inc. (formerly
Nissan Motor Philippines, Inc.).
G.R. No. 231581, April 10, 2019.
Second Division
REYES, J. JR., J.:
Lessons Applicable:  2-year prescription period,
judicial claim, Factual Finding by the CTA
Laws Applicable: Sections 204 and 229 of NIRC,
Section 7 of Republic Act No. 9282, Sec. 8 of RA
1125
FACTS: 
 March 12, 2012: Univation Motor
Philippines, Inc. (UMP) filed its
administrative claim with the Bureau of
Internal Revenue (BIR) explaining that
the overpayment of P26,103,898.52
consists of prior year's excess credits in
the amount of P15,576,837.00 less
Minimum Corporate Income Tax
amounting to P2,341,683.48 and
creditable withholding taxes
accumulated during the four quarters of
2010 in the amount of P12,868,745.00.
 April 12, 2013: Since the BIR has not
acted upon the application for tax
credit, UMP filed a petition for review
with the CTA
 CTA En Banc  affirmed the CTA First
Division decision partially granting the
petition for Review and ordered the CIR
to issue a tax credit certificate and
denied CIR’s MR.
 CIR filed a Petition for Review on
Certiorari.
ISSUES:
1. W/N CTA has prematurely assumed
jurisdiction on judicial claim for tax refund or
credit without waiting for the decision of BIR.
2. W/N CTA en Banc erred in granting the claim
for refund despite its failure to substantiate its
claim by sufficient documentary proof.
HELD:
1.    NO. No violation of the doctrine of
exhaustion of administrative remedies.  The law
only requires that an administrative claim be
priorly filed.  As long as the administrative claim
and the judicial claim were filed within the two-
year prescriptive period, then there was
exhaustion of the administrative remedies.
  2-year prescriptive period to claim a
refund actually commences to run, at
the earliest, on the date of the filing of
the adjusted final tax return because
this is where the figures of the gross
receipts and deductions have been
audited and adjusted, reflective of the
results of the operations of a business
enterprise.  submitted to the CIR as the case is being
 2-year period to file a claim for refund is
reckoned from the date of filing its Final
Adjustment Return – April 15, 2011 –
both claims were filed on time:
 Administrative claim – March
12, 2012
 Judicial claim – April 12, 2013
  Under the circumstances, if respondent
awaited for the commissioner to act on
its administrative claim (before resort
to the Court), chances are, the two-year
prescriptive period will lapse effectively
resulting to the loss of respondent's
right to seek judicial recourse and
worse, its right to recover the taxes it
erroneously paid to the government.
2.    No.  CIR did not even render a Decision
denying respondent's administrative claim on
the ground that it had failed to submit all the
required documents.  Considering that the
administrative claim was never acted upon,
there was no decision for the CTA to review on
appeal per se. However, this does not preclude
the CTA from considering evidence that was not
presented in the administrative claim with the
BIR.
 Pilipinas Total Gas v. CIR (G.R. No.
207112, December 08, 2015): A
distinction must be made between
administrative cases (1) appealed due
to inaction and those (2) dismissed at
the administrative level due to the
failure of the taxpayer to submit
supporting documents. If an
administrative claim was dismissed by
the CIR due to the taxpayer's failure to
submit complete documents despite
notice/request, then the judicial claim
before the CTA would be dismissible,
not for lack of jurisdiction, but for the
taxpayer's failure to substantiate the
claim at the administrative level.  delay in collection of certain
Failure to submit a document requested
by the BIR at the administrative level
cannot be cured by filing before the
CTA.
 Cases filed in the CTA are litigated  de
novo  as such, respondent "should prove
every minute aspect of its case by
presenting, formally offering and
submitting x x x to the Court of Tax
Appeals all evidence x x x required for
the successful prosecution of its
administrative claim." Consequently,
the CTA may give credence to all
evidence presented by respondent,
including those that may not have been
essentially decided in the first instance.
 The issue of whether or not
respondent was able to prove
by preponderance of evidence
its entitlement to the issuance
of a Tax Credit certificate, the
same is a factual matter. "It is
doctrinal that the Court will not
lightly set aside the conclusions
reached by the CTA which, by
the very nature of its function
of being dedicated exclusively
to the resolution of tax
problems, has developed an
expertise on the subject, unless
there has been an abuse or
improvident exercise of
authority."
 Jurisprudence laid down the basic
requirements in order for a taxpayer to
claim tax credit or refund of creditable
withholding tax, thus: (1) The claim
must be filed with the CIR within the
two-year period from the date of
payment of the tax, as prescribed under
Section 229 of the NIRC of 1997; (2) The
fact of withholding is established by a
copy of a statement duly issued by the
payor to the payee showing the amount
paid and the amount of tax withheld;
and (3) It must be shown on the return
of the recipient that the income
received was declared as part of the
gross income.  The second and third
requirements are found under Section
2.58.3(B) of Revenue Regulation No. 2-
98, as amended.
 CTA En Banc correctly
appreciated that there were
certain income payments
which, although respondent
expected to receive in 2006,
2008 and 2009, were only
remitted to it in 2010.    The
income payments caused the
timing difference between the
actual reporting of the income
by respondent and the actual
withholding of the
corresponding creditable
income tax by its customers. 
What is important is that the
 creditable withholding taxes
corresponding to the related
income in the respondent's
books for CY's 2006, 2008 and
2009 were not yet claimed as
income tax credits in
respondent's annual ITRs
corresponding to the said
years.  It presented
Schedule/Summary of
Creditable Taxes Withheld for
the year 2010 and the related
Certificates of Creditable Taxes
Withheld at Source (BIR form
No. 2307) duly issued to it by
various withholding agents for
the year 2010xxx.  Court was
able to trace the income
payments related to the
substantiated CWT of
P12,868,745.87 (save for the
amount of P139,127.97 CWT) to
UMP’s General Ledger (GL) for
CY 2010, 2009, 2008 and 2006.
8.G.R. No. 207112, December 8, 2015
Pilipinas Total Gas, Inc.
vs CIR
Facts:
Total Gas is engaged in the business of selling,
transporting and distributing industrial gas, sale
of gas equipment and other related business.
For this purpose, Total Gas registered itself with
BIR as VAT taxpayer.
For the 1st and 2nd quarters of 2007, Total Gas
claimed VAT credits from its domestic
purchases of non capital goods and services.
Later, they filed an administrative claim for
refund of the unutilized VAT for the 1st two
quarters of 2007. Due to the inaction of CIR,
Total Gas elevated their claim to the CTA.
CTA dismissed the petition for being
prematurely filed, saying that Total Gas failed to
complete necessary documents to substantiate
a claim for refund. Motion for reconsideration
was denied too by the CTA.
CTA En Banc also denied the petition to review.
It ruled that CTA division had no jurisdiction
over the case because Total Gas failed to
seasonably file its petition.
Issues:
(a) whether the judicial claim for refund was
belatedly filed on 23 January 2009, or way
beyond the 30-day period to appeal as provided
in Section 112(c) of the Tax Code, as amended;
and
(b) whether the submission of incomplete
documents at the administrative level (BIR)
renders the judicial claim premature and
dismissible for lack of jurisdiction.
Ruling:
Petition has merit.
Judicial claim timely filed. CIR has 120 days from
the date of submission of complete documents
to decide a claim for tax credit or refund. CTA
counted the period from May 15, 2008.
Indeed, the 120-day period granted to the CIR
to decide the administrative claim under the
Section 112 is primarily intended to benefit the
taxpayer, to ensure that his claim is decided
judiciously and expeditiously. After all, the
sooner the taxpayer successfully processes his
refund, the sooner can such resources be
further reinvested to the business translating to
greater efficiencies and productivities that
would ultimately uplift the general welfare. To
allow the CIR to determine the completeness of
the documents submitted and, thus, dictate the
running of the 120-day period, would
undermine these objectives, as it would provide
the CIR the unbridled power to indefinitely
delay the administrative claim, which would
ultimately prevent the filing of a judicial claim
with the CTA.
9.CE CASECNAN WATER AND ENERGY
COMPANY, INC, Petitioner VS. COMMISSIONER
OF INTERNAL REVENUE, Respondent. (G.R. No.
203928, July 22, 2015)
FACTS:
CE Casecnan was incorporated on September
21, 1994. Its primary purpose was “to design,
develop, construct, assemble, commission and
operate hydro-electric power plants related
facilities: for government or any of its
subdivisions, instrumentalities, or agencies, as
well as for any government-owned and
controlled corporation engaged in energy,
development, supply, or distribution.
CE Casecnan filed its quarterly VAT returns for
the first to fourth quarters of 2006 on April 25,
2006, July 25, 2006, October 25, 2006 and
January 25, 2006. Subsequently, it filed
amended VAT returns for these taxable
quarters on February 22, 2007 and July 25,
2007. For the first to fourth quarters quarters of
2006, CE Casecnan had unutilized input VAT
credits from its domestic purchases of goods,
services rendered by non-residents, and
importation of non-capital goods in the total
amount of P45,445,453.76 Of the total
accumulated VAT, the amount of
P26,066,286.96 was attributable to CE
Casecnan’s zerorated sales of power generation
services to the National Irrigation
Administration for the first to fourth quarters of
2006.
On September 26, 2007, CE Casecnan filed
before the BIR an administrative claim for
refund or issuance of tax credit certificate for
the excess or unutilized input VAT. On March
14, 2008, CE Casecnan filed its Petition for
Review, due to the inaction of the
Commissioner of Internal Revenue on its
administrative claim. CTA 2nd Division Ruling –
denied judicial claim for having been filed
beyond the thirty (30) day period prescribed in
Sec. 112 of the Tax Code. CTA En Banc Ruling –
appeal was denied relying upon the ruling in
Aichi case which provides that: “The 120 and 30
day periods under Section 112 (c) of the Tax
Code are mandatory, and noncompliance is
fatal to a judicial claim for refund.
ISSUE/S:
a. Whether the Court of Tax Appeals En Banc
erred in denying petitioner CE Casecnan claim
for refund due to prescription.
RULING:
Petitioner’s judicial claim was filed beyond the
thirty-day period required in Section 112 (c) of
the Tax Code. The administrative claim for
refund was filed on September 26, 2007. Thus,
the 120 day perio for the BIR to act on the claim
lapsed on January 24, 2008. Petitioner had until
February 23, 2008 to file a petition before the
CTA, but it filed only on March 14, 2008.
Petitioner was late by 19 days.
Similarly, this court rejects petitioner’s claim
that Aichi and San Roque should not be applied
retroactively as it would be unjust to the other
claimants who relied on the old doctrine (that
both administrative and judicial claims should
be filed before the lapse of the two-year
period). The claims in Aichi and San Roque were
filed before this case. In Aichi, this court first
squarely addressed the particular issue on
prematurity of a judicial claim based on its
interpretation of the language of the Tax Code.
In that case, this court did not defer application
of the rule laid down. Rather, it ordered the CTA
to dismiss Aichi’s appeal due to the premature
filing of its claim for refund or credit of input
VAT. Clearly, the thirty-day statutory period
within which to file a petition for review is
jurisdictional. Noncompliance bars the Court of
Tax Appeals from taking cognizance of the
appeal and determining the veracity of the tax
refund or credit claim.
10.Visayas Geothermal Power Company vs CIR
G.R. No. 197525, 4 June 2014
Facts:
On December 6, 2006, VGPC filed an
administrative claim for refund with the BIR
District Office. And on January 3, 2007, while
the administrative claim was pending, VGPC
filed its judicial claim via petition for review with
the CTA praying for a refund or the issuance of a
tax credit certificate.
CTA En Banc dismissed the petition on the
ground that the judicial claim was prematurely
filed because according to it, 120-day has to
expire first before it can be appealed.
Issue:
WON VGPC’s judicial claim for refund was
prematurely filed.
Ruling:
No. The general rule is that the 120+30 day
period is mandatory and jurisdictional from the
effectivity of the 1997 NIRC on January 1, 1998
up to present. As an exception, judicial claims
filed from December 10, 2003, in view of the
BIR Ruling No. DA-489-03, to October 6, 2010,
when it was reversed by the Supreme Court in
Aichion Case, need not wait for the exhaustion
of the 120-day period.
In the case at bar, VGPC filed its administrative
claim with the CIR on December 6, 2006 and
later, its judicial claim with the CTA on January
3, 2007. The judicial claim was clearly filed
within the period of exception and was,
therefore, not premature and should not have
been dismissed by the CTA En Banc.
11. READ FULL TEXT
12.City of Davao v. Randy Allied Ventures, Inc.
G.R. No. 241697, July 29, 2019.
Second Division
PERLAS-BERNABE, J.:
Lessons Applicable: non-bank financial
intermediary, local business tax
Laws Applicable:
FACTS:
Randy Allied Ventures, Inc. (RAVI) is one of the
Coconut Industry Investment Fund (CIIF)
holding companies established to own and hold
the shares of stock of San Miguel Corporation
(SMC).
January 24, 2012: Supreme Court decision in
Philippine Coconut Producers Federation, Inc. v.
Republic (COCOFED), G.R. Nos. 177857-58 and
178793, declared the CIIF companies, including
RAVI, and the CIIF block of SMC shares as
"public funds necessarily owned by the
Government”.
January 17, 2013: RAVI filed with the Regional
Trial Court (RTC), a claim for refund or credit of
erroneously and illegally collected LBT for the
taxable year 2010 in the amount of
P503,346.00, corresponding to its dividends
from its SMC preferred shares, on the mistaken
assumption that it is a non-bank financial
intermediary (NBFI).
RTC: Denied the claim for refund or credit.
Being a financial intermediary, RAVI's income
from dividends and interests is subject to LBT
under Section 143 (f) of Republic Act (RA) No.
7160, or the Local Government Code of 1991
(LGC). It is its principal source of income, in line
with the primary purpose stated in its Amended
AOI.
RAVI filed a Petition for Review with the CTA
First Division.
CTA First Division granted the petition and held
that RAVI is a holding company and not an NBFI
subject to LBT and denied City of Davao’s
Motion for Reconsideration (MR)
CTA EB: Denied City of Davao’s petition for lack
of merit. RAVI cannot be considered an NBFI
for failing to meet the requisites provided under
the General Banking Law, Manual of
Regulations for Non-Bank Financial Institutions,
and the National Internal Revenue Code, i.e., it
is not authorized to act as an NBFI by the
Bangko Sentral ng Pilipinas (BSP); its principal
function does not relate to NBFI activities; and
that while its primary purpose may involve one
of the activities enumerated in the BSP Manual,
there was no proof that it performed such
activities as its principal function and on a
regular and recurring basis.
ISSUE: W/N CTA EB erred in finding that RAVI is
not an NBFI subject to LBT under Section 143 (f)
of the LGC
HELD: Petition is denied.
Essentially, LBT are taxes imposed by local
government units on the privilege of doing
business within their jurisdictions. "Doing
business" means some "trade or commercial
activity regularly engaged in as a means of
livelihood or with a view to profit." LBT
imposed pursuant to Section 143 (f) is premised
on the fact that the persons made liable for
such tax are banks or other financial institutions
by virtue of their being engaged in the business
as such. This is why the LBT are imposed on
their gross receipts from "interest, commissions
and discounts from lending activities, income
from financial leasing, dividends, rentals on
property and profit from exchange or sale of
property, insurance premium."
In order to be considered as an NBFI under the
National Internal Revenue Code, banking laws,
and pertinent regulations, the following must
concur:
a. The person or entity is authorized by the
BSP to perform quasi-banking functions;
b. The principal functions of said person or
entity include the lending, investing or
placement of funds or evidences of
indebtedness or equity deposited to them,
acquired by them, or otherwise coursed
through them, either for their own account or
for the account of others;
c. The person or entity must perform any of
the following functions on a regular and
recurring, not on an isolated basis, to wit:
i. Receive funds from 1 group of persons,
irrespective of number, through traditional
deposits, or issuance of debt or equity
securities; and make available/lend these funds
to another person or entity, and in the process
acquire debt or equity securities;
ii. Use principally the funds received for
acquiring various types of debt or equity
securities
iii. Borrow against, or lend on, or buy or sell
debt or equity securities.
A "'holding company' is 'organized' and is
basically conducting its business by investing
substantially in the equity securities of another
company for the purpose of controlling their
policies (as opposed to directly engaging in
operating activities) and 'holding' them in a
conglomerate or umbrella structure along with
other subsidiaries."While holding companies
may partake in investment activities, this does
not per se qualify them as financial
intermediaries that are actively dealing in the
same. Financial intermediaries are regulated by
the BSP because they deal with public funds
when they offer quasi-banking functions. On the
other hand, a holding company is not similarly
regulated because any investment activities it
conducts are mere incidental operations, since
its main purpose is to hold shares for policy-
controlling purposes