ov 2022 02. t0. eA (CTA Forsa No. 8 Route to: BDB/RDDA aN REPUBLIC OF THE PHILIPPINE S®"l Coco: APce = PAR = 12-01 COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION CTA CASE NO. 10008 AECOM PHILIPPINES CONSULTANTS CORPORATION, Petitioner, ~ Versus ~ NOTICE OF DECISION COMMISSIONER OF INTERNAL. REVENUE. To: Respondent. The Solicitor General Office ofthe Solicitor General 134 Amorsolo St, Legaspi Village Makati City ‘Alty. Wilmer B. Dekit Ady. Albee C. Agpon Atty. Joana Q Bilongilot Bureau of Internal Revenue Legal Division, Revenue Region No, $B 2UF BIR Bldg, 313 Sen, Gil Puyat Ave, Makati City Ay, Fulvio D. Pawilan Ay, JomelN, Mansig ‘Ay, Keisaan F. Manipon Du-Baladad & Associates 20th Floor, Chatham House, Rufino cor Valero Street Saloed Village, Makati City GREETINGS: ‘You are notified by these presents that on the 7th day of December 2021, a Decision was rendered in the above-entitled case, attached hereto. Quezon City, Phi ine C. Maza-Guarin Executive Clerk of Court IIIREPUBLIC OF THE PHILIPPIN Court of Tax Appeals QUEZON CITY Third Division AECOM PHILIPPINES CTA CASE NO. 10008 CONSULTANTS CORPORATION, Petitioner, Members: UY, Chairperson, RINGPIS-LIBAN, and -versus- MODESTO-SAN PEDRO, JJ. Promulgated: COMMISSIONER OF INTERNAL py, REVENUE, DEC 07 2024_-~ Respondent. ¥¥ pm ™ DECISION MODESTO-SAN PEDRO, J.: This is a Petition for Review (“Petition”), filed by petitioner, AECOM PHILIPPINES CONSULTANTS CORPORATION, against respondent, COMMISSIONER OF INTERNAL REVENUE (“CIR”), praying that this Court render judgment ordering the respondent to refund, in favor of petitioner, the amount of Seventeen Million One Hundred Eighty-Four ‘Thousand Nine Hundred Fifty-Eight Pesos (Php17,184,958.00), representing petitioner’s excess and unutilized creditable income taxes withheld (“CWT”) for the fiscal year ended 30 September 2016.! The Parties Petitioner is a corporation duly registered with the Securities and Exchange Commission (“SEC”) with Company Registration No. A200009369. It is registered with Bureau of Internal Revenue (“BIR”) as shown in its BIR Certificate of Registration No. OCN 9RC0000335819 and was igned with laxpayer’s Identification Number (“LIN”) 208-134-558- 000. tv ' See Statement of the Case in the PfeA Hat FUR ReLRE)B. 69 Ws CHRISTINE C. MAZA-GUARIN Executive Clerk of Court III Comrt af Tax AnnealsDECISION CCTACASE No. 10008, Page 20f9 Respondent is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, including, among others, the duty to act and approve claims for refunds as provided by law. He may be served with summons, notices, and other processes of this Court at the BIR National Office Building, Agham Road, Diliman, Quezon City. The Facts On 16 January 2017, petitioner electronically filed, through the BIR’s Electronic Filing and Payment System (“eFPS”), its original Annual Income Tax Return (ITR”) for the fiscal year ended 30 September 20162 On 30 January 2017, petitioner filed, through the eFPS, an Amended Annual ITR for the same period? On 15 January 2019, petitioner filed before BIR Revenue District Office No. (“RDO”) 44 an administrative claim for refund of its excess and unutilized CWT for the fiscal year ended 30 September 2016 in the amount of. Seventeen Million One Hundred Eighty-Four Thousand Nine Hundred Fifty- Eight Pesos (Php17,184,958.00).4 In view of respondent’s inaction, petitioner filed the instant Petition before this Court on 16 January 2019.5 On 28 January 2019, Summons was issued to respondent. © On 12 February 2019, respondent filed through registered mail a Motion for Extension of Time to File Answer,? which was granted in a Resolution, dated 6 March 2019.8 On 14 March 2019, respondent once more filed a Motion for Extension of Time to File Answer, which was granted in a Resolution, dated 25 March 2019."° Finally, on 4 April 2019, respondent filed his Answer.!" On 10 April 2019, this Court issued a Notice of Pre- Conference, setting the Pre-Trial Conference on 25 July 2019, at 9:00 a.m." © id, pp. 436-443, "id, pp. 444-451. “PA. 13-B", “P-14", “P-14-A", “P-14-B", id, pp. 486-492, Id, pp. 84-85, Id, pp. 86-89. Id, pp. 90-91 Id, pp. 92-95, © 1d, pp. 96-97, "1d, pp. 98-101. Id, pp. 102-103, 5 Id, pp. 10-83. CRRTIMIED THUT Seine: — CHRISTINE C. MAZA-GUARIM B e Clerk of Court IIE rox AR, ‘ourt ofDECISION CTA CASE NO, 10008 Page 3 of Following the Pre-Trial Conference on 25 July 2019," trial ensued, with petitioner presenting two witnesses: Janis Myrtle Delos Reyes and Independent Certified Public Accountant (“ICPA”) Atty. Clifford E. Chua." On 20 January 2021, petitioner filed its Memorandum." Respondent, however, did not file a Memorandum.'* On 28 January 2021, this Court issued a Resolution submitting the instant Petition for decision.'” Hence, this Decision. The Issue'® WHETHER OR NOT PETITIONER IS ENTITLED TO ITS CLAIM FOR REFUND OF ITS UNUTILIZED CWT FOR THE FISCAL YEAR ENDED 30 SEPTEMBER 2016 IN THE. AMOUNT OF SEVENTEEN MILLION ONE HUNDRED EIGHTY-FOUR THOUSAND NINE HUNDRED FIFTY- EIGHT PESOS (PHP17,184,958.00). Arguments of the Parties Petitioner’s Arguments'” Petitioner averred the following in its Memorandum: a) Petitioner’s claim for refund/issuance of Tax Credit Certificate (“TCC”) was filed within two (2) years prescribed under the National Internal Revenue Code, as amended (“NIRC”); b) The income upon which the taxes were withheld was included as part of the gross income declared in income tax returns of petitioner; ©) Petitioner’s unutilized CWT for fiscal year 2016 are duly substantiated by documentary evidence; andy, 1d, pp. 224-229, Id, pp. 348-350. Id., pp. 500-525. Id. p. 526 "1d. pp. 527-528. See Issues inthe Pre-Trial Order, id, p. 266. PP FREE HOH See Memorandum, id, pp. S0S-521 > " CHRISTINE C. MAZA-GUL Executive Clerk of Court II ‘Court of Tax AppealsDECISION CTACASE No. 10008, Page 4 of9 d) The amount claimed by petitioner was neither carried over nor applied to the succeeding year. 20 Respondent’s Counter-Argument Respondent alleged the following in his Answer: a) Petitioner’s claim for tax refund is subject to administrative investigation and/or examination by respondent; b) Taxes paid and collected are presumed to have been paid in accordance with law and regulations and are, hence, not refundable; ¢) Moreover, in order to validly claim for tax refund, it is imperative for petitioner to prove compliance with the following: a) that the claim for refund was filed within the two (2) year reglementary period under the IRC; b) when it is shown on the income tax return that the income payment received is being decked as part of the taxpayer's gross income; ¢) when the fact of withholding is established by a copy of the withholding tax statement, duly issued by the payor / withholding agent to the payee / recipient, known as the Certificate of Creditable Tax Withheld at Source or BIR Korm No. 2307, which should show the amount paid and income tax withheld therefrom, and d) The CWT shall be allowed as a tax credit against the income tax liability of the payee in the quarter of the taxable year in which income was eared or received; 4) Accordingly, the claimants of tax refunds bear the burden of proving the factual basis of their claims; and e) Basic is the rule that tax refuunds are in the nature of tax exemptions and are to be construed strictissimi juris against the taxpayer claiming such refund. ‘The Ruling of the Court Y the instant Petition for Review. Ly eererinia TASS < CHRISTINE C. MAZA-GUAP Executive Clerk of Court It Court of Tax Appeals ® See Answer, id. pp. 99-100.DECISION CTACASE NO. 10008 Petitioner did sufficient opportunity to decide the administrative claim for refund/TCC. not give respondent ‘The procedure for filing of administrative and judicial claims for refund is governed by Sections 204(C) and 229 of the NIRC, respectively. Section 204 (C) of the NIRC provides: “SEC 204. Authority of the Commis and Refund or Credit 1 jioner to Compromise, Abate axes, ~The Commissioner may (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 unlit for use and refund their value upon proof of destruction, No eredit 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 Ovo (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. ...” (Emphasis and underscoring, Ours.) Meanwhile, Section 229 of the NIRC states: “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.” (Emphasis and underscoring, Ours.) wv canTiminD TAWE o> CHRISTINE MIKE Executive Clerk of Court IT ‘Court of Tax AppealsDECISION CTACASE NO. 10008, Page 6 of As may be gleaned from the foregoing provisions, a taxpayer-claimant must first file an administrative claim for refund before respondent prior to filing a judicial claim before this Court.”! Both the administrative and judicial claims for refund should be filed within the two (2) year prescriptive period, and the claimant is allowed to file the latter even without waiting for the resolution of the former in order to prevent the forfeiture of its claim through prescription.” Moreover, in ACCRA Investments Corporation v. The Honorable Court of Appeals, et al.,” the Supreme Court ruled that the two (2) year prescriptive period for claiming a refund commences to run from the date of filing of the final adjusted retum or the Annual ITR. The two (2) year period starts to run from the filing of the Annual ITR since it is only the time when the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures. In the present case, petitioner filed its original Annual ITR for the fiscal year ended 30 September 2016 via the eFPS on 16 January 20178 and subsequently filed an Amended Annual ITR for the same period via the eFPS on 30 January 2017.% Starting from 30 January 2017 (which is considered the final adjustment return), petitioner then had until 30 January 2019 within which to file both its administrative and judicial claims for refund/PCC. Evidence shows that petitioner filed its administrative claim before BIR RDO 44 on 15 January 2019." This was immediately followed by its judicial claim for refund via the instant Petition, filed on 16 January 201928 Although both the administrative claim and the judicial claim were filed within the two (2) year prescriptive period, it cannot escape this Court’s attention that petitioner did not give respondent full opportunity to decide the administrative claim. After petitioner filed the administrative claim for refund/TCC before respondent, it immediately filed the judicial claim before this Court just after the lapse of one (1) day. Certainly, a period of one (1) day is insufficient for respondent to decide the administrative claim for refund considering that the instant claim for refund has voluminous supporting documents. In fact, during, tral, petitioner even had to commission the services of an ICPA to assist this/{ 2! Metropolitan Bank & Trust Co. v. Commissioner of Internal Revenue, G.R. No. 182582, 17 April 2017, 2 Ibid ® GR. No. 96322, December 20, 1991 Commissioner of Intemal Revenue v. TMX Sales, Inc., et al, G.R. No. 83736, 15 January 1992; ‘Metropolitan Bank & Trust Company v. Commissioner of Internal Revenue, G.R. No. 1825 2017. . 17 April "id, pp. 486-492, <—— CHRISTINE C. MAZA-GU. Executive Clerk of Court © Court of Tax AppealsDecIsION CTACASE NO. 10008, Page 7 of Court in sorting out and summarizing the voluminous documents necessary for the resolution of the instant case. These actions displayed a stark disregard of the rule requiring the exhaustion of administrative remedies. The rationale for the rule was elucidated in Ejera v. Merto2® as follows: “Thirdly, the rule requiring the exhaustion of administrative remedies rests on the principle that the administrative agency, if afforded a complete chance to pass upon the matter again, will decide the same correetly. There are both legal and practical reasons for the rule. ‘The administrative process is intended to provide less expensive and speedier solutions to disputes. Where the enabling statute indicates a procedure for administrative review and provides a system of administrative appeal or reconsideration, therefore, the courts — for reasons of law, comity and convenience — will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum.” (Emphasis and underscoring, Ours.) Certainly, with just one (1) day given to respondent to resolve a claim for refund that involves voluminous supporting documents, he was not “afforded a complete chance to pass upon the matter” nor “given an opportunity to act and correct the errors committed in the administrative forum.” In the recent case of Chin v. Maersk-Filipinas Crewing, Inc., et al.2% the Supreme Court even cautioned, to wit: “The requirement that administrative remedies be exhausted is based on the doctrine that in providing for a remedy before an administrative agency, every opportunity must be given to the agency to resolve the matter and to exhaust all opportunities for a resolution under the given remedy before bringing an action in, or resorting to, the courts of <= imphasis and underscoring, Ours) Judging from any perspective, with that measly one (1) day given to him, respondent cannot be said to have been given “every opportunity” “to resolve the matter and to exhaust all opportunities for a resolution” on the claim for refund/TCC of petitioner gy % G.R.No. 163109, 22 January 2014, 131729, May 19, 1998 % GR No, 247338, 2 September 2020, CERTIFIED TRU Cory: ing Union Bank of the Philippines v. Court of Appeals, G.R, No. c _ CHRISTINE C. MAZA-GUARIN Executive Clerk of Court It Cant né Tay AnnoaleDECISION CTA CASE NO. 10008 Page 8 of Obviously, the filing of the claim with respondent and giving him just one (1) day within which to decide the same before the judicial claim was filed was simply to meet the two (2) year prescriptive period deadline, The filing of the administrative claim in the instant case appears to be merely pro forma, without any intent to avail of the remedy before respondent. Indeed, the filing of the judicial claim with the Court soon thereafter is a clear indication of blatant disregard of respondent’s administrative powers. This Court cannot turn a blind eye to the procedural infirmity extant in the instant case, much less be a partner in petitioner’s disregard of the concept of exhaustion of administrative remedies. Under the circumstances, then, this Court finds that petitioner’s case should be barred for failure to exhaust administrative remedies. WHEREFORE, in view of the foregoing, the present Petition for Review is hereby DENIED for lack of merit. SO ORDERED. oNA MOWES Assotiate fustice -SAN PEDRO WE CONCUR: (With due respect, please see Dissenting Opinion.) MA. BELEN M. RINGPIS-LIBAN Associate Justice CEXTIMED TRUE Cory: a CHRISTINE C. MAZA-GUARIN Executive Clerk of Court IIT Coust of Tax AppealsDECISION CTACASE NO, 10008 Page 9 of ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. rer uy Associate Justice Chairperson CERTIFICATION Pursuant to Section 13 of Article VIII of the Constitution and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. G. DEK ROSARIO Presiding Susticed, eatin TAUT © CHRISTINE C. MAZA-GUARIN Executive Clerk of Court III ‘Court of Tax AppealsREPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City Third Division AECOM PHILIPPINES CONSULTANTS CORPORATION CTA CASE NO. 10008 Petitioner, Members: + versus ~ UY, Chairperson RINGPIS-LIBAN, and MODESTO-SAN PEDRO, JJ. COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. DISSENTING OPINION RINGPIS-LIBAN, With due respect, I disagree with the denial of Petitioner’s claim for refund on the basis of non-exhaustion of available administrative remedies. It is a basic rule of interpretation that words and phrases used in the statute, in the absence of a clear legislative intent to the contrary, should be given their pin, ordinary and common usage ot meaning,’ The “plain meaning rule” ot terba legis in statutory construction is that if the statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without interpretation. This rule derived from the maxim Indexc anini sermo est (speech is the index of intention) rests on the valid presumption that the words employed by the legislature in a statute correctly express its intention or will and preclude the court from construing it differently. The legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent by use of such words as are found in the statute. Verba logis non est reedendua ot from the words of a statute there should be no depagture?, + Commissioner of Internal Revenue vs. The Court of Appeals, et al., G.R. No. 107135, February 23, 1999. 2 Republic of the Philippines vs. Lacap, G.R. No. 158253, March 2, 2007. CERTIFIED TRUE COPY: curistine& MAZA-GUARIN Executive Clerk of Court IIICiissenting Opinion CTA Case No. 10008 Page 2 of 3 Sections 204(C) and 229 of the National Internal Revenue Code (“NIRC”) of 1997, as amended, provides in clear, unambiguous and unequivocal terms that in order to claim a tax credit or refund of erroneously paid taxes, both the administrative and judicial claim must be filed within the two (2) year prescriptive period from date of payment of the tax, to wit: “SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. —' The Commissioner may — xxx Xxx XXX (© 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 of penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund...” “SEC. 229, Recovery of Tae Erroneously or Tilegally 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 wrongfally 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 ication of from the date yment 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.”* 2 Emphasis and underscoring supplied. Emphasis and underscoring supplied. CERTIFIED TRUE COPY: caristine &MAZA-GUARIN Executive Clerk of Court III Cont af Tax AnnealssDissenting Opinion CTA Case No. 10008 Page 3 of 3 Moreover, unlike for refund of unutilized input Value-Added ‘Tax (VAT) undet Section 112 of the NIRC of 1997, as amended, the provisions do not supply a period within which the Bureau of Internal Revenue (“BIR”) should act on the claim, the lapse of which constitutes inaction appealable to the Court of ‘Tax Appeals (“CTA”). Indeed, the Supreme Court, in interpreting Section 306 (now Sections 204(C) and 229) of the NIRC of 1997, as amended, held in Collector af Internal Revenue ». J. N. Sweeney, Ez AIS that “taxpayers need not wait for the action of the CIR on the request for refund before taking the matter to Court” Since the only requisite under the law is to file the refund claim with the BIR and the CTA within two (2) years from the date of payment, the same is already complied with when Petitioner filed its administrative claim on January 15, 2019, and its judicial claim on January 16, 2019 Tt must be emphasized that nowhere in the law prohibits the filing of the administrative and judicial claims on the same day or one (1) day after the other. To reiterate, the law only requires that the taxpayer file both an administrative and judicial claim within the two (2) yeat prescriptive period. Incidentally, there may be scant merit to wait for the BIR’s action on the matter. Two (2) years after the payment of the tax, a taxpayer is already barred from the recovery of the same, irrespective of whether a claim for the refund of such taxes filed with the Commissioner of Internal Revenue is still pending action of the latter. Lastly, the determination of whether the CIR was given sufficient time to resolve the refund claim would amount to judicial legislation, which is beyond this court’s power. Is thirty (30) or sixty (60) days between the administrative claim and judicial claim be enough to satisfy the issue on exhaustion of administrative remedies? What if the filing was made mete three (3) ot five (5) days apart and the two (2) year prescriptive period is already about to lapse? ‘Thus, in my opinion, to rule in the instant case that there was non- exhaustion of administrative remedies would open the floodgate to various possible interpretations of the law which is a dangerous precedent. From the foregoing, I vote that Petitioner's administrative and judicial claim were timely filed, and that there is a need to determine Petitioner's compliance with the other requisites for its refund claim of excess creditable withholding taxes (CWT). er heb 7 MA. BELEN M. RINGPIS-LIBAN Associate Justice 5 GR.No. 178, August 21, 1959. CERTIFIED TRUE COPY: CHRISTINE C. MAZA-GUARIN Executive Clerk of Court IIT Court of Tax Appeals