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Definition of a Certificate of Deposit.

A certificate of deposit is defined as “a written acknowledgment by a bank or banker of the receipt of a

sum of money on deposit which the bank or banker promises to pay to the depositor, to the order of the
depositor, or to some other person or his order, whereby the relation of debtor and creditor between the
bank and the depositor is created.” (Prudential Bank vs. Commissioner of Internal Revenue, 654 SCRA 702,
G.R. No. 180390 July 27, 2011)

A document to be considered a certificate of deposit need not be in a specific form.

In this case, petitioner claims that its SAP is not a certificate of deposit bearing interest because
unlike a time deposit, its SAP is payable on demand and is evidenced by a passbook and not by a
certificate of deposit.

We do not agree.

In China Banking Corporation v. Commissioner of Internal Revenue,35 we held that the Savings
Plus Deposit Account, which has the following features:
1. Amount deposited is withdrawable anytime;
2. The same is evidenced by a passbook;
3. The rate of interest offered is the prevailing market rate, provided the depositor would
maintain his minimum balance in thirty (30) days at the minimum, and should he withdraw
before the period, his deposit would earn the regular savings deposit rate;

is subject to DST as it is essentially the same as the Special/Super Savings Deposit Account
in Philippine Banking Corporation v. Commissioner of Internal Revenue, and the Savings Account-
Fixed Savings Deposit in International Exchange Bank v. Commissioner of Internal Revenue, which
are considered certificates of deposit drawing interests.

Similarly, in this case, although the money deposited in a SAP is payable anytime, the withdrawal of the
money before the expiration of 30 days results in the reduction of the interest rate.39 In the same way, a
time deposit withdrawn before its maturity results to a lower interest rate and payment of bank charges
or penalties.

The fact that the SAP is evidenced by a passbook likewise cannot remove its coverage from Section 180
of the old NIRC, as amended. A document to be considered a certificate of deposit need not be in a specific
form. Thus, a passbook issued by a bank qualifies as a certificate of deposit drawing interest because it is
considered a written acknowledgement by a bank that it has accepted a deposit of a sum of money from
a depositor.

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In view of the foregoing, we find that the CTA En Banc correctly affirmed the ruling of its First Division that
petitioner’s SAP is a certificate of deposit bearing interest and that the same is subject to DST. (Prudential
Bank vs. Commissioner of Internal Revenue, 654 SCRA 702, G.R. No. 180390 July 27, 2011)

Cooperatives are not required to withhold taxes on interest from savings and time deposits of their
members.

On November 16, 1988, the BIR declared in BIR Ruling No. 551-888 that cooperatives are not required to
withhold taxes on interest from savings and time deposits of their members. (Dumaguete Cathedral Credit
Cooperative (DCCCO) vs. Commissioner of Internal Revenue, 610 SCRA 652, G.R. No. 182722 January 22,
2010)

To encourage the formation of cooperatives and to create an atmosphere conducive to their growth
and development, the State extends all forms of assistance to them, one of which is providing
cooperatives a preferential tax treatment.

Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster the
creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing
people power towards the attainment of economic development and social justice. Thus, to encourage
the formation of cooperatives and to create an atmosphere conducive to their growth and development,
the State extends all forms of assistance to them, one of which is providing cooperatives a preferential
tax treatment. (Dumaguete Cathedral Credit Cooperative (DCCCO) vs. Commissioner of Internal Revenue,
610 SCRA 652, G.R. No. 182722 January 22, 2010)

Although the tax exemption only mentions cooperatives, this should be construed to include the
members pursuant to Article 126 of Republic Act No. 6938.

This exemption extends to members of cooperatives. It must be emphasized that cooperatives exist for
the benefit of their members. In fact, the primary objective of every cooperative is to provide goods and
services to its members to enable them to attain increased income, savings, investments, and
productivity. Therefore, limiting the application of the tax exemption to cooperatives would go against
the very purpose of a credit cooperative. Extending the exemption to members of cooperatives, on the
other hand, would be consistent with the intent of the legislature. Thus, although the tax exemption only
mentions cooperatives, this should be construed to include the members, pursuant to Article 126 of RA
6938. (Dumaguete Cathedral Credit Cooperative (DCCCO) vs. Commissioner of Internal Revenue, 610 SCRA
652, G.R. No. 182722 January 22, 2010)

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To encourage the formation of cooperatives and to create an atmosphere conducive to their growth
and development, the State extends all forms of assistance to them, one of which is providing
cooperatives a preferential tax treatment.

Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster the
creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing
people power towards the attainment of economic development and social justice. Thus, to encourage
the formation of cooperatives and to create an atmosphere conducive to their growth and development,
the State extends all forms of assistance to them, one of which is providing cooperatives a preferential
tax treatment. (Dumaguete Cathedral Credit Cooperative (DCCCO) vs. Commissioner of Internal Revenue,
610 SCRA 652, G.R. No. 182722 January 22, 2010)

The doctrine of estoppel is predicated on, and has its origin in equity which, broadly defined, is justice
according to natural law and right. As such, the doctrine of estoppel cannot give validity to an act that
is prohibited by law or one that is against public policy.

The doctrine of estoppel cannot be applied in this case as an exception to the statute of limitations on the
assessment of taxes considering that there is a detailed procedure for the proper execution of the waiver,
which the BIR must strictly follow. As we have often said, the doctrine of estoppel is predicated on, and
has its origin in, equity which, broadly defined, is justice according to natural law and right. As such, the
doctrine of estoppel cannot give validity to an act that is prohibited by law or one that is against public
policy. It should be resorted to solely as a means of preventing injustice and should not be permitted to
defeat the administration of the law, or to accomplish a wrong or secure an undue advantage, or to extend
beyond them requirements of the transactions in which they originate. Simply put, the doctrine of estoppel
must be sparingly applied. (Commissioner of Internal Revenue vs. Kudos Metal Corporation , 620 SCRA
232, G.R. No. 178087 May 5, 2010)

Moreover, the BIR cannot hide behind the doctrine of estoppel to cover its failure to comply with RMO
20-90 and RDAO 05-01, which the BIR itself issued. As stated earlier, the BIR failed to verify whether a
notarized written authority was given by the respondent to its accountant, and to indicate the date of
acceptance and the receipt by the respondent of the waivers. Having caused the defects in the waivers,
the BIR must bear the consequence. It cannot shift the blame to the taxpayer. To stress, a waiver of the
statute of limitations, being a derogation of the taxpayer’s right to security against prolonged and
unscrupulous investigations, must be carefully and strictly construed. (Commissioner of Internal Revenue
vs. Kudos Metal Corporation , 620 SCRA 232, G.R. No. 178087 May 5, 2010)

As to the alleged delay of the respondent to furnish the BIR of the required documents, this cannot be
taken against respondent. Neither can the BIR use this as an excuse for issuing the assessments beyond
the three-year period because with or without the required documents, the CIR has the power to make

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assessments based on the best evidence obtainable. (Commissioner of Internal Revenue vs. Kudos Metal
Corporation, 620 SCRA 232, G.R. No. 178087 May 5, 2010)

The person entitled to claim a tax refund is the taxpayer, but in case the taxpayer does not file a claim
for refund, the withholding agent may file the claim.

In Commissioner of Internal Revenue v. Procter & Gamble Philippine Manufacturing Corporation, 204
SCRA 377 (1991), a withholding agent was considered a proper party to file a claim for refund of the
withheld taxes of its foreign parent company. (Commissioner of Internal Revenue vs. Smart
Communication, Inc., 629 SCRA 342, G.R. Nos. 179045-46 August 25, 2010)

Although the fact that the taxpayer and the withholding agent are related parties is a factor that
increases the latter’s legal interest to file a claim for refund, there is nothing in Commissioner of Internal
Revenue v. Procter & Gamble Philippines Manufacturing Corporation, 204 SCRA 377 (1991), to suggest
that such relationship is required or that the lack of such relation deprives the withholding agent of the
right to file a claim for refund—what is clear in the decision is that a withholding agent has a legal right
to file a claim for refund.

Petitioner, however, submits that this ruling applies only when the withholding agent and the taxpayer
are related parties, i.e., where the withholding agent is a wholly owned subsidiary of the taxpayer.

We do not agree. Although such relation between the taxpayer and the withholding agent is a factor that
increases the latter’s legal interest to file a claim for refund, there is nothing in the decision to suggest
that such relationship is required or that the lack of such relation deprives the withholding agent of the
right to file a claim for refund. Rather, what is clear in the decision is that a withholding agent has a legal
right to file a claim for refund for two reasons. First, he is considered a “taxpayer” under the NIRC as he is
personally liable for the withholding tax as well as for deficiency assessments, surcharges, and penalties,
should the amount of the tax withheld be finally found to be less than the amount that should have been
withheld under law. Second, as an agent of the taxpayer, his authority to file the necessary income tax
return and to remit the tax withheld to the government impliedly includes the authority to file a claim for
refund and to bring an action for recovery of such claim. (Commissioner of Internal Revenue vs. Smart
Communication, Inc., 629 SCRA 342, G.R. Nos. 179045-46 August 25, 2010)

While the withholding agent has the right to recover the taxes erroneously or illegally collected, he
nevertheless has the obligation to remit the same to the principal taxpayer.

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In this connection, it is however significant to add that while the withholding agent has the right to recover
the taxes erroneously or illegally collected, he nevertheless has the obligation to remit the same to the
principal taxpayer. As an agent of the taxpayer, it is his duty to return what he has recovered; otherwise,
he would be unjustly enriching himself at the expense of the principal taxpayer from whom the taxes were
withheld, and from whom he derives his legal right to file a claim for refund. (Commissioner of Internal
Revenue vs. Smart Communication, Inc., 629 SCRA 342, G.R. Nos. 179045-46 August 25, 2010)

“Royalties,” and “Permanent Establishment,” Defined.

Under the RP-Malaysia Tax Treaty, the term royalties is defined as payments of any kind received
as consideration for: “(i) the use of, or the right to use, any patent, trade mark, design or model,
plan, secret formula or process, any copyright of literary, artistic or scientific work, or for the use
of, or the right to use, industrial, commercial, or scientific equipment, or for information
concerning industrial, commercial or scientific experience; (ii) the use of, or the right to use,
cinematograph films, or tapes for radio or television broadcasting.” These are taxed at the rate
of 25% of the gross amount. Under the same Treaty, the “business profits” of an enterprise of a
Contracting State is taxable only in that State, unless the enterprise carries on business in the
other Contracting State through a permanent establishment. The term “permanent
establishment” is defined as a fixed place of business where the enterprise is wholly or partly
carried on. However, even if there is no fixed place of business, an enterprise of a Contracting
State is deemed to have a permanent establishment in the other Contracting State if it carries on
supervisory activities in that other State for more than six months in connection with a
construction, installation or assembly project which is being undertaken in that other State. In
the instant case, it was established during the trial that Prism does not have a permanent
establishment in the Philippines. Hence, “business profits” derived from Prism’s dealings with
respondent are not taxable. The question is whether the payments made to Prism under the
SDM, CM, and SIM Application agreements are “business profits” and not royalties.
(Commissioner of Internal Revenue vs. Smart Communication, Inc., 629 SCRA 342, G.R. Nos.
179045-46 August 25, 2010)

Section 112(A) of the National Internal Revenue Code (NIRC) is the applicable provision in determining
the start of the two-year period for claiming a refund/credit of unutilized input Value Added Tax (VAT),
and that Sections 204(C) and 229 of the NIRC are inapplicable as “both provisions apply only to instances
of erroneous payment or illegal collection of internal revenue taxes.”

The pivotal question of when to reckon the running of the two-year prescriptive period, however, has
already been resolved in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation, 565 SCRA 154

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(2008), where we ruled that Section 112(A) of the NIRC is the applicable provision in determining the start
of the two-year period for claiming a refund/credit of unutilized input VAT, and that Sections 204(C) and
229 of the NIRC are inapplicable as “both provisions apply only to instances of erroneous payment or
illegal collection of internal revenue taxes.” (Commissioner of Internal Revenue vs. Aichi Forging Company
of Asia, Inc., 632 SCRA 422, G.R. No. 184823 October 6, 2010)

As between the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative
Code of 1987, which states that a year is composed of 12 calendar months, it is the latter that must
prevail following the legal maxim, Lex posteriori derogat priori.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc., 531 SCRA 436 (2007), we said that
as between the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative
Code of 1987, which states that a year is composed of 12 calendar months, it is the latter that must prevail
following the legal maxim, Lex posteriori derogat priori. Thus: Both Article 13 of the Civil Code and Section
31, Chapter VIII, Book I of the Administrative Code of 1987 deal with the same subject matter—the
computation of legal periods. Under the Civil Code, a year is equivalent to 365 days whether it be a regular
year or a leap year. Under the Administrative Code of 1987, however, a year is composed of 12 calendar
months. Needless to state, under the Administrative Code of 1987, the number of days is irrelevant. There
obviously exists a manifest incompatibility in the manner of computing legal periods under the Civil Code
and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the more recent law, governs the computation of legal periods. Lex
posteriori derogat priori. (Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc., 632
SCRA 422, G.R. No. 184823 October 6, 2010)

Where the taxpayer did not wait for the decision of the Commission of Internal Revenue or the
lapse of the 120-day period, it having simultaneously filed the administrative and the judicial
claims, the filing of said judicial claim with the Court of Tax Appeals is premature.

Section 112(D) of the NIRC clearly provides that the CIR has “120 days, from the date of the
submission of the complete documents in support of the application [for tax refund/credit],”
within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer’s
recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR.
However, if after the 120-day period the CIR fails to act on the application for tax refund/credit,
the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days. In this case,
the administrative and the judicial claims were simultaneously filed on September 30, 2004.
Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day period.
For this reason, we find the filing of the judicial claim with the CTA premature. (Commissioner of

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Internal Revenue vs. Aichi Forging Company of Asia, Inc., 632 SCRA 422, G.R. No. 184823 October
6, 2010)

The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund”
in Section 112(A) of the National Internal Revenue Code (NIRC) refers to applications for
refund/credit filed with the Commission of Internal Revenue (CIR) and not to appeals made to
the Court of Tax Appeals (CTA)—applying the two-year period to judicial claims would render
nugatory Section 112(D) of the NIRC, which already provides for a specific period within which
a taxpayer should appeal the decision or inaction of the CIR.

There is nothing in Section 112 of the NIRC to support respondent’s view. Subsection (A) of the
said provision states that “any VAT-registered person, whose sales are zero-rated or effectively
zero-rated may, within two 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 creditable input tax due or
paid attributable to such sales.” The phrase “within two (2) years x x x apply for the issuance of a
tax credit certificate or refund” refers to applications for refund/credit filed with the CIR and not
to appeals made to the CTA. This is apparent in the first paragraph of subsection (D) of the same
provision, which states that the CIR has “120 days from the submission of complete documents
in support of the application filed in accordance with Subsections (A) and (B)” within which to
decide on the claim. In fact, applying the two-year period to judicial claims would render nugatory
Section 112(D) of the NIRC, which already provides for a specific period within which a taxpayer
should appeal the decision or inaction of the CIR. The second paragraph of Section 112(D) of the
NIRC envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the
120-day period; and (2) when no decision is made after the 120-day period. In both instances,
the taxpayer has 30 days within which to file an appeal with the CTA. As we see it then, the 120-
day period is crucial in filing an appeal with the CTA. (Commissioner of Internal Revenue vs. Aichi
Forging Company of Asia, Inc., 632 SCRA 422, G.R. No. 184823 October 6, 2010)

Taxes being the lifeblood of the government should be collected promptly; No court shall have the
authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or
charge imposed by the National Internal Revenue Code.

A principle deeply embedded in our jurisprudence is that taxes being the lifeblood of the government
should be collected promptly, without unnecessary hindrance or delay. In line with this principle, the
National Internal Revenue Code of 1997 (NIRC) expressly provides that no court shall have the authority
to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed
by the code. An exception to this rule obtains only when in the opinion of the Court of Tax Appeals (CTA)
the collection thereof may jeopardize the interest of the government and/or the taxpayer. (Angeles City
vs. Angeles Electric Corporation, 622 SCRA 43, G.R. No. 166134 June 29, 2010)

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In the case of the collection of local xes, there is no express provision in the Local Government Code
(LGC) prohibiting courts from issuing an injunction to restrain local governments from collecting taxes.

The situation, however, is different in the case of the collection of local taxes as there is no express
provision in the LGC prohibiting courts from issuing an injunction to restrain local governments from
collecting taxes. Thus, in the case of Valley Trading Co., Inc. v. Court of First Instance of Isabela, Branch II,
171 SCRA 501 (1989), cited by the petitioner, we ruled that: Unlike the National Internal Revenue Code,
the Local Tax Code does not contain any specific provision prohibiting courts from enjoining the collection
of local taxes. Such statutory lapse or intent, however it may be viewed, may have allowed preliminary
injunction where local taxes are involved but cannot negate the procedural rules and requirements under
Rule 58. (Angeles City vs. Angeles Electric Corporation, 622 SCRA 43, G.R. No. 166134 June 29, 2010)

Requisites for taxpayer claiming for a tax credit or refund of creditable withholding tax.

A taxpayer claiming for a tax credit or refund of creditable withholding tax must comply with the following
requisites: 1) The claim must be filed with the CIR within the two-year period from the date of payment
of the tax; 2) It must be shown on the return that the income received was declared as part of the gross
income; and 3) The fact of withholding must be established by a copy of a statement duly issued by the
payor to the payee showing the amount paid and the amount of the tax withheld. (Commissioner of
Internal Revenue vs. Far East Bank & Trust Company (now Bank of the Philippine Island), 615 SCRA 417,
G.R. No. 173854 March 15, 2010)

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.

Based on the entries in the return, the income derived from rentals and sales of real property upon which
the creditable taxes were withheld were not included in respondent’s gross income as reflected in its
return. Since no income was reported, it follows that no tax was withheld. To reiterate, 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. (Commissioner of Internal Revenue vs. Far East Bank & Trust Company (now Bank
of the Philippine Island), 615 SCRA 417, G.R. No. 173854 March 15, 2010)

It is not the duty of the government to disprove a taxpayer’s claim for refund; the burden of establishing
the factual basis of a claim for a refund rests on the taxpayer.—The fact that the petitioner failed to
present any evidence or to refute the evidence presented by respondent does not ipso facto entitle the
respondent 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.

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(Commissioner of Internal Revenue vs. Far East Bank & Trust Company (now Bank of the Philippine Island),
615 SCRA 417, G.R. No. 173854 March 15, 2010)

There is no automatic grant of a tax refund.

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. As we have said, there is no automatic grant of a tax refund. (Commissioner of Internal Revenue
vs. Far East Bank & Trust Company (now Bank of the Philippine Island), 615 SCRA 417, G.R. No. 173854
March 15, 2010)

Pursuant to Section 228 of the National Internal Revenue Code (NIRC), the proper recourse of
petitioners was to dispute the assessment by filing an administrative protest within 30 days
from receipt thereof.

In the instant case, petitioner timely filed a protest after receiving the PAN. In response thereto,
the BIR issued a Formal Letter of Demand with Assessment Notices. Pursuant to Section 228 of
the NIRC, the proper recourse of petitioner was to dispute the assessments by filing an
administrative protest within 30 days from receipt thereof. Petitioner, however, did not protest
the final assessment notices. Instead, it filed a Petition for Review with the CTA. Thus, if we strictly
apply the rules, the dismissal of the Petition for Review by the CTA was proper. (Allied Banking
Corporation vs. Commissioner of Internal Revenue, 611 SCRA 692, G.R. No. 175097 February 5,
2010)

Court have time and again reminded the Commissioner of Internal Revenue (CIR) to indicate in
a clear and unequivocal language whether his action on a disputed assessment constitute his
final determination thereon in order for the taxpayer concerned to determined when his or her
right to appeal to tax count accrues.

In this case, records show that petitioner disputed the PAN but not the Formal Letter of Demand
with Assessment Notices. Nevertheless, we cannot blame petitioner for not filing a protest
against the Formal Letter of Demand with Assessment Notices since the language used and the
tenor of the demand letter indicate that it is the final decision of the respondent on the matter.
We have time and again reminded the CIR to indicate, in a clear and unequivocal language,
whether his action on a disputed assessment constitutes his final determination thereon in order
for the taxpayer concerned to determine when his or her right to appeal to the tax court accrues.
Viewed in the light of the foregoing, respondent is now estopped from claiming that he did not
intend the Formal Letter of Demand with Assessment Notices to be a final decision. (Allied

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Banking Corporation vs. Commissioner of Internal Revenue, 611 SCRA 692, G.R. No. 175097
February 5, 2010)

It is the Formal Letter of Demand and Assessment Notice that must be administratively
protested or disputed within 30 days and not the Preliminary Assessment Notice (PAN).

We are not disregarding the rules of procedure under Section 228 of the NIRC, as implemented
by Section 3 of BIR Revenue Regulations No. 12-99. It is the Formal Letter of Demand and
Assessment Notice that must be administratively protested or disputed within 30 days, and not
the PAN. Neither are we deviating from our pronouncement in St. Stephen’s Chinese Girl’s School
v. Collector of Internal Revenue, 104 Phil. 314 (1958) that the counting of the 30 days within
which to institute an appeal in the CTA commences from the date of receipt of the decision of
the CIR on the disputed assessment, not from the date the assessment was issued. (Allied
Banking Corporation vs. Commissioner of Internal Revenue, 611 SCRA 692, G.R. No. 175097
February 5, 2010)

Pursuant to Section 112(A)and (D) of the National Internal Revenue Code (NIRC), a taxpayer has two (2)
years from the close of the taxable quarter when the zero-rated sales were made within which to file
with the Commissioner of Internal Revenue (CIR) an administrative claim for refund or credit of
unutilized input Value-Added Tax (VAT) attributable to such sales.

The CIR, on the other hand, has 120 days from receipt of the complete documents within which to act on
the administrative claim. Upon receipt of the decision, a taxpayer has 30 days within which to appeal the
decision to the CTA. However, if the 120-day period expires without any decision from the CIR, the
taxpayer may appeal the inaction to the CTA within 30 days from the expiration of the 120-day period.
(Commissioner of Internal Revenue vs. Toledo Power Company, 775 SCRA 709, G.R. No. 196415, G.R. No.
196451 December 2, 2015)

Section 6 of the Electric Power Industry Reform Act of 2001 (EPIRA) provides that the sale of generated
power by generation companies shall be zero-rated.

Section 4(x) of the same law states that a generation company “refers to any person or entity authorized
by the ERC to operate facilities used in the generation of electricity.” Corollarily, to be entitled to a refund
or credit of unutilized input VAT attributable to the sale of electricity under the EPIRA, a taxpayer must
establish: (1) that it is a generation company, and (2) that it derived sales from power generation.
(Commissioner of Internal Revenue vs. Toledo Power Company, 775 SCRA 709, G.R. No. 196415, G.R. No.
196451 December 2, 2015)

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“Generation Facility” and “Generation Company,” Distinguished.

At this point, a distinction must be made between a generation facility and a generation company. A
generation facility is defined under the EPIRA Rules and Regulations as “a facility for the production of
electricity.” While a generation company, as previously mentioned, “refers to any person or entity
authorized by the ERC to operate facilities used in the generation of electricity.” Based on the foregoing
definitions, what differentiates a generation facility from a generation company is that the latter is
authorized by the ERC to operate, as evidenced by a COC. Under the EPIRA, all new generation companies
and existing generation facilities are required to obtain a COC from the ERC. New generation companies
must show that they have complied with the requirements, standards, and guidelines of the ERC before
they can operate. As for existing generation facilities, they must submit to the ERC an application for a
COC together with the required documents within ninety (90) days from the effectivity of the EPIRA Rules
and Regulations. Based on the documents submitted, the ERC will determine whether the applicant has
complied with the standards and requirements for operating a generation company. If the applicant is
found compliant, only then will the ERC issue a COC. (Commissioner of Internal Revenue vs. Toledo Power
Company, 775 SCRA 709, G.R. No. 196415, G.R. No. 196451 December 2, 2015)

As a rule, taxes cannot be subject to compensation because the government and the taxpayer are not
creditors and debtors of each other.

However, we are aware that in several cases, we have allowed the determination of a taxpayer’s liability
in a refund case, thereby allowing the offsetting of taxes.

xxxxxx
But in all these cases, we allowed offsetting of taxes only because the determination of the
taxpayer’s liability is intertwined with the resolution of the claim for tax refund of erroneously or
illegally collected taxes under Section 22965 of the NIRC. A situation that is not present in the
instant case.

In this case, TPC filed a claim for tax refund or credit under Section 112 of the NIRC, where the issue to be
resolved is whether TPC is entitled to a refund or credit of its unutilized input VAT for the taxable year
2002. And since it is not a claim for refund under Section 229 of the NIRC, the correctness of TPC’s VAT
returns is not an issue. Thus, there is no need for the court to determine whether TPC is liable for
deficiency VAT.

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Besides, it would be unfair to allow the CIR to use a claim for refund under Section 112 of the NIRC as a
means to assess a taxpayer for any deficiency VAT, especially if the period to assess had already
prescribed. As we have said, the courts have no assessment powers, and therefore, cannot issue
assessments against taxpayers.66 The courts can only review the assessments issued by the CIR, who under
the law is vested with the powers to assess and collect taxes and the duty to issue tax assessments within
the prescribed period. (Commissioner of Internal Revenue vs. Toledo Power Company, 775 SCRA 709, G.R.
No. 196415, G.R. No. 196451 December 2, 2015)

Senior Citizen Discount

The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less likely to
be gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of subsidy in
purchasing basic commodities. It may not be amiss to mention also that the discount serves to honor
senior citizens who presumably spent the productive years of their lives on contributing to the
development and progress of the nation. This distinct cultural Filipino practice of honoring the elderly is
an integral part of this law. As to its nature and effects, the 20% discount is a regulation affecting the
ability of private establishments to price their products and services relative to a special class of
individuals, senior citizens, for which the Constitution affords preferential concern. In turn, this affects the
amount of profits or income/gross sales that a private establishment can derive from senior citizens. In
other words, the subject regulation affects the pricing, and, hence, the profitability of a private
establishment. However, it does not purport to appropriate or burden specific properties, used in the
operation or conduct of the business of private establishments, for the use or benefit of the public, or
senior citizens for that matter, but merely regulates the pricing of goods and services relative to, and the
amount of profits or income/gross sales that such private establishments may derive from, senior citizens.

(Manila Memorial Park, Inc. vs. Secretary of the Department of Social Welfare and Development, 711 SCRA
302, G.R. No. 175356 December 3, 2013)

Because all laws enjoy the presumption of constitutionality, courts will uphold a law’s validity if any set
of facts may be conceived to sustain it.

Because all laws enjoy the presumption of constitutionality, courts will uphold a law’s validity if any set of
facts may be conceived to sustain it. On its face, we find that there are at least two conceivable bases to
sustain the subject regulation’s validity absent clear and convincing proof that it is unreasonable,
oppressive or confiscatory. Congress may have legitimately concluded that business establishments have
the capacity to absorb a decrease in profits or income/gross sales due to the 20% discount without
substantially affecting the reasonable rate of return on their investments considering (1) not all customers
of a business establishment are senior citizens and (2) the level of its profit margins on goods and services

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offered to the general public. Concurrently, Congress may have, likewise, legitimately concluded that the
establishments, which will be required to extend the 20% discount, have the capacity to revise their
pricing strategy so that whatever reduction in profits or income/gross sales that they may sustain because
of sales to senior citizens, can be recouped through higher mark-ups or from other products not subject
of discounts. As a result, the discounts resulting from sales to senior citizens will not be confiscatory or
unduly oppressive. (Manila Memorial Park, Inc. vs. Secretary of the Department of Social Welfare and
Development, 711 SCRA 302, G.R. No. 175356 December 3, 2013)

Prior to the sale of goods or services, a business establishment may be subject to State regulations, such
as the 20% senior citizen discount, which may impact the level or amount of profits or income/gross
sales that can be generated by such establishment.

For this reason, the validity of the discount is to be determined based on its overall effects on the
operations of the business establishment. (Manila Memorial Park, Inc. vs. Secretary of the Department of
Social Welfare and Development, 711 SCRA 302, G.R. No. 175356 December 3, 2013)

Unlike Section 69 of the old National Internal Revenue Code, the carry-over of excess income tax
payments is no longer limited to the succeeding taxable year—unutilized excess income tax payments
may now be carried over to the succeeding taxable years until fully utilized.

Under the new law, in case of overpayment of income taxes, the remedies are still the same; and the
availment of one remedy still precludes the other. But unlike Section 69 of the old NIRC, the carry-over of
excess income tax payments is no longer limited to the succeeding taxable year. Unutilized excess income
tax payments may now be carried over to the succeeding taxable years until fully utilized. In addition, the
option to carry-over excess income tax payments is now irrevocable. Hence, unutilized excess income tax
payments may no longer be refunded. In the instant case, both the CTA and the CA applied Section 69 of
the old NIRC in denying the claim for refund. We find, however, that the applicable provision should be
Section 76 of the 1997 NIRC because at the time petitioner filed its 1997 final ITR, the old NIRC was no
longer in force. (Belle Corporation vs. Commissioner of Internal Revenue, 639 SCRA 108, G.R. No. 181298
January 10, 2011)

Section 76 of the 1997 National Internal Revenue Code provides that a taxpayer has the option to file a
claim for refund or to carry-over its excess income tax payments.

Section 76 provides that a taxpayer has the option to file a claim for refund or to carry-over its excess
income tax payments. The option to carry-over, however, is irrevocable. Thus, once a taxpayer opted to
carry-over its excess income tax payments, it can no longer seek refund of the unutilized excess income
tax payments. The taxpayer, however, may apply the unutilized excess income tax payments as a tax credit

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to the succeeding taxable years until such has been fully applied pursuant to Section 76 of the NIRC. (Belle
Corporation vs. Commissioner of Internal Revenue, 644 SCRA 433, G.R. No. 181298 March 2, 2011)

The Bureau of Internal Revenue (BIR), in BIR Ruling No. 476-2013 dated December 18, 2013, has
constituted the Department of Public Works and Highways (DPWH) as a withholding agent
tasked to withhold the six percent (6%) final withholding tax in the expropriation of real
property for infrastructure projects.

Thus, as far as the government is concerned, the capital gains tax in expropriation proceedings
remains a liability of the seller, as it is a tax on the seller’s gain from the sale of real property.
Besides, as previously explained, consequential damages are only awarded if as a result of the
expropriation, the remaining property of the owner suffers from an impairment or decrease in
value. In this case, no evidence was submitted to prove any impairment or decrease in value of
the subject property as a result of the expropriation. More significantly, given that the payment
of capital gains tax on the transfer of the subject property has no effect on the increase or
decrease in value of the remaining property, it can hardly be considered as consequential
damages that may be awarded to respondents. (Republic vs. Salvador, 826 SCRA 492, G.R. No.
205428 June 7, 2017)

A cursory reading of Section 108 of the National Internal Revenue Code of 1997 clearly shows
that the enumeration of the “sale or exchange of services” subject to Value-Added Tax (VAT) is
not exhaustive—the words, “including,” “similar services,” and “shall likewise include,”
indicate that the enumeration is by way of example only.

Among those included in the enumeration is the “lease of motion picture films, films, tapes and
discs.” This, however, is not the same as the showing or exhibition of motion pictures or films. As
pointed out by the CTA En Banc: “Exhibition” in Black’s Law Dictionary is defined as “To show or
display. x x x To produce anything in public so that it may be taken into possession” (6th ed., p.
573). While the word “lease” is defined as “a contract by which one owning such property grants
to another the right to possess, use and enjoy it on specified period of time in exchange for
periodic payment of a stipulated price, referred to as rent (Black’s Law Dictionary, 6th ed., p.
889). x x x Since the activity of showing motion pictures, films or movies by cinema/theater
operators or proprietors is not included in the enumeration, it is incumbent upon the court to
the determine whether such activity falls under the phrase “similar services.” The intent of the
legislature must therefore be ascertained. (Commissioner of Internal Revenue vs. SM Prime
Holdings, Inc., 613 SCRA 774, G.R. No. 183505 February 26, 2010)

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Several amendments were made to expand the coverage of Value Added Tax but none pertain
to cinema/theater operators or proprietors—at present, only lessors or distributors of
cinematographic films are subject to Value-Added Tax (VAT).

In 1994, RA 7716 restructured the VAT system by widening its tax base and enhancing its
administration. Three years later, RA 7716 was amended by RA 8241. Shortly thereafter, the NIRC
of 1997 was signed into law. Several amendments were made to expand the coverage of VAT.
However, none pertain to cinema/theater operators or proprietors. At present, only lessors or
distributors of cinematographic films are subject to VAT. While persons subject to amusement
tax under the NIRC of 1997 are exempt from the coverage of VAT. (Commissioner of Internal
Revenue vs. SM Prime Holdings, Inc., 613 SCRA 774, G.R. No. 183505 February 26, 2010)

Historically, the activity of showing motion pictures, films or movies by cinema/theater

operators or proprietors has always been considered as a form of entertainment subject to
amusement tax; Only lessors or distributors of cinematographic films are included in the
coverage of Value-Added Tax (VAT).

Based on the foregoing, the following facts can be established: (1) Historically, the activity of
showing motion pictures, films or movies by cinema/theater operators or proprietors has always
been considered as a form of entertainment subject to amusement tax. (2) Prior to the Local Tax
Code, all forms of amusement tax were imposed by the national government. (3) When the Local
Tax Code was enacted, amusement tax on admission tickets from theaters, cinematographs,
concert halls, circuses and other places of amusements were transferred to the local government.
(4) Under the NIRC of 1977, the national government imposed amusement tax only on
proprietors, lessees or operators of cabarets, day and night clubs, Jai-Alai and race tracks. (5) The
VAT law was enacted to replace the tax on original and subsequent sales tax and percentage tax
on certain services. (6) When the VAT law was implemented, it exempted persons subject to
amusement tax under the NIRC from the coverage of VAT. (7) When the Local Tax Code was
repealed by the LGC of 1991, the local government continued to impose amusement tax on
admission tickets from theaters, cinematographs, concert halls, circuses and other places of
amusements. (8) Amendments to the VAT law have been consistent in exempting persons subject
to amusement tax under the NIRC from the coverage of VAT. (9) Only lessors or distributors of
cinematographic films are included in the coverage of VAT. These reveal the legislative intent not
to impose VAT on persons already covered by the amusement tax. This holds true even in the
case of cinema/theater operators taxed under the LGC of 1991 precisely because the VAT law
was intended to replace the percentage tax on certain services. The mere fact that they are taxed
by the local government unit and not by the national government is immaterial. The Local Tax
Code, in transferring the power to tax gross receipts derived by cinema/theater operators or
proprietor from admission tickets to the local government, did not intend to treat
cinema/theater houses as a separate class. No distinction must, therefore, be made between the
places of amusement taxed by the national government and those taxed by the local

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government. (Commissioner of Internal Revenue vs. SM Prime Holdings, Inc., 613 SCRA 774, G.R.
No. 183505 February 26, 2010)

The power of taxation is sometimes called also the power to destroy, therefore, it should be
exercised with caution to minimize injury to the proprietary rights of a taxpayer—it must be
exercised fairly, equally and uniformly, lest the tax collector kill the “hen that lays the golden
egg.”

To hold otherwise would impose an unreasonable burden on cinema/theater houses operators

or proprietors, who would be paying an additional 10% VAT on top of the 30% amusement tax
imposed by Section 140 of the LGC of 1991, or a total of 40% tax. Such imposition would result
in injustice, as persons taxed under the NIRC of 1997 would be in a better position than those
taxed under the LGC of 1991. We need not belabor that a literal application of a law must be
rejected if it will operate unjustly or lead to absurd results. Thus, we are convinced that the
legislature never intended to include cinema/theater operators or proprietors in the coverage of
VAT. On this point, it is apropos to quote the case of Roxas v. Court of Tax Appeals, 23 SCRA 276
(168) to wit: The power of taxation is sometimes called also the power to destroy. Therefore, it
should be exercised with caution to minimize injury to the proprietary rights of a taxpayer. It
must be exercised fairly, equally and uniformly, lest the tax collector kill the “hen that lays the
golden egg.” And, in order to maintain the general public’s trust and confidence in the
Government this power must be used justly and not treacherously. (Commissioner of Internal
Revenue vs. SM Prime Holdings, Inc., 613 SCRA 774, G.R. No. 183505 February 26, 2010)

The repeal of the Local Tax Code by the Local Government Code (LGC) of 1991 is not a legal
basis for the imposition of Value-Added Tax (VAT) on the gross receipts of cinema/theater
operators or proprietors derived from admission tickets; A law will not be construed as
imposing a tax unless it does so clearly, expressly, and unambiguously; The power to impose
amusement tax on cinema/theater operators or proprietors remains with the local
government.

The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the imposition of VAT
on the gross receipts of cinema/theater operators or proprietors derived from admission tickets.
The removal of the prohibition under the Local Tax Code did not grant nor restore to the national
government the power to impose amusement tax on cinema/theater operators or proprietors.
Neither did it expand the coverage of VAT. Since the imposition of a tax is a burden on the
taxpayer, it cannot be presumed nor can it be extended by implication. A law will not be
construed as imposing a tax unless it does so clearly, expressly, and unambiguously. As it is, the
power to impose amusement tax on cinema/theater operators or proprietors remains with the
local government. (Commissioner of Internal Revenue vs. SM Prime Holdings, Inc., 613 SCRA 774,
G.R. No. 183505 February 26, 2010)

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Revenue Memorandum Circulars (RMCs) must not override, supplant, or modify the law, but
must remain consistent and in harmony with, the law they seek to apply and implement.

Considering that there is no provision of law imposing VAT on the gross receipts of
cinema/theater operators or proprietors derived from admission tickets, RMC No. 28-2001 which
imposes VAT on the gross receipts from admission to cinema houses must be struck down. We
cannot overemphasize that RMCs must not override, supplant, or modify the law, but must
remain consistent and in harmony with, the law they seek to apply and implement.
(Commissioner of Internal Revenue vs. SM Prime Holdings, Inc., 613 SCRA 774, G.R. No. 183505
February 26, 2010)

The rule that tax exemptions should be construed strictly against the taxpayer presupposes
that the taxpayer is clearly subject to the tax being levied against him—unless a statute
imposes a tax clearly, expressly and unambiguously, what applies is the equally well-settled
rule that the imposition of a tax cannot be presumed.

Contrary to the view of petitioner, respondents need not prove their entitlement to an
exemption from the coverage of VAT. The rule that tax exemptions should be construed strictly
against the taxpayer presupposes that the taxpayer is clearly subject to the tax being levied
against him. The reason is obvious: it is both illogical and impractical to determine who are
exempted without first determining who are covered by the provision. Thus, unless a statute
imposes a tax clearly, expressly and unambiguously, what applies is the equally well-settled rule
that the imposition of a tax cannot be presumed. In fact, in case of doubt, tax laws must be
construed strictly against the government and in favor of the taxpayer. (Commissioner of Internal
Revenue vs. SM Prime Holdings, Inc., 613 SCRA 774, G.R. No. 183505 February 26, 2010)

Jurisdiction to review decisions or resolutions issued by the Division of the Court of Tax Appeals is no
longer with the Court of Appeals but with the Court of Tax Appeals En Banc.

This rule is embodied in Section 11 of RA 9282, which provides that: “SECTION 11. Section 18 of the same
Act is hereby amended as follows: SEC. 18. Appeal to the Court of Tax Appeals En Banc. No civil
proceeding involving matters 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. (TFS, Incorporated vs. Commissioner of
Internal Revenue, 618 SCRA 346, G.R. No. 166829, April 19, 2010)

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There are two types of input Value Added Tax (VAT) credits. One is a credit/refund of input VAT
attributable to zero-rated sales under Section 112 (A) of the National Internal Revenue Code (NIRC), and
the other is a credit/refund of input Value Added Tax (VAT) on capital goods pursuant to Section 112 (B)
of the same Code.

In a claim for credit/refund of input VAT attributable to zero-rated sales, Section 112 (A) of the NIRC lays
down four requisites, to wit: 1) the taxpayer must be VAT-registered; 2) the taxpayer must be engaged in
sales which are zero-rated or effectively zero-rated; 3) the claim must be filed within two years after the
close of the taxable quarter when such sales were made; and 4) the creditable input tax due or paid must
be attributable to such sales, except the transitional input tax, to the extent that such input tax has not
been applied against the output tax. (Silicon Philippines, Inc. vs. Commissioner Internal Revenue, 639 SCRA
521, G.R. No. 172378 January 17, 2011)

Failure to print the word “zero-rated” on the sales invoices or receipts is fatal to a claim for credit/refund
of input Value Added Tax (VAT) on zero-rated sales.

All told, the non-presentation of the ATP and the failure to indicate the word “zero-rated” in the invoices
or receipts are fatal to a claim for credit/refund of input VAT on zero-rated sales. The failure to indicate
the ATP in the sales invoices or receipts, on the other hand, is not. In this case, petitioner failed to present
its ATP and to print the word “zero-rated” on its export sales invoices. Thus, we find no error on the part
of the CTA in denying outright petitioner’s claim for credit/refund of input VAT attributable to its zero-
rated sales. (Silicon Philippines, Inc. vs. Commissioner Internal Revenue, 639 SCRA 521, G.R. No. 172378
January 17, 2011)

“Capital goods or properties” refer to goods or properties with estimated useful life greater that one
year and which are treated as depreciable assets.

To claim a refund of input VAT on capital goods, Section 112 (B) of the NIRC requires that: 1. the claimant
must be a VAT registered person; 2. the input taxes claimed must have been paid on capital goods; 3. the
input taxes must not have been applied against any output tax liability; and 4. the administrative claim for
refund must have been filed within two (2) years after the close of the taxable quarter when the
importation or purchase was made.

Corollarily, Section 4.106-1 (b) of RR No. 7-95 defines capital goods as follows: “Capital goods or
properties” refer to goods or properties with estimated useful life greater that one year and which are
treated as depreciable assets under Section 29 (f), used directly or indirectly in the production or sale of
taxable goods or services. (Silicon Philippines, Inc. vs. Commissioner Internal Revenue, 639 SCRA 521, G.R.
No. 172378 January 17, 2011)

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Prior payment of taxes is not required to avail of the transitional input tax credit because it is not a tax
refund per se but a tax credit.

Tax credit is not synonymous to tax refund. Tax refund is defined as the money that a taxpayer overpaid
and is thus returned by the taxing authority. Tax credit, on the other hand, is an amount subtracted
directly from one’s total tax liability. It is any amount given to a taxpayer as a subsidy, a refund, or an
incentive to encourage investment. Thus, unlike a tax refund, prior payment of taxes is not a prerequisite
to avail of a tax credit. In fact, in Commissioner of Internal Revenue v. Central Luzon Drug Corp., 456 SCRA
414 (2005), we declared that prior payment of taxes is not required in order to avail of a tax credit. (Fort
Bonifacio Development Corp. vs. Commissioner of Internal Revenue, 679 SCRA 566, G.R. No. 173425
September 4, 2012)

This expanded jurisdiction of the Court of Tax Appeals (CTA) includes its exclusive appellate jurisdiction
to review by appeal the decisions, orders or resolutions of the Regional Trial Court (RTC) in local tax
cases originally decided or resolved by the RTC in the exercise of its original or appellate jurisdiction.

With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court
with special jurisdiction by virtue of Republic Act No. 9282. This expanded jurisdiction of the CTA includes
its exclusive appellate jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in
local tax cases originally decided or resolved by the RTC in the exercise of its original or appellate
jurisdiction. (CE Casecnan Water and Energy Company, Inc. vs. Province of Nueva Ecija, 759 SCRA 180, G.R.
No. 196278 June 17, 2015) In the recent case of City of Manila v. Grecia-Cuerdo, 715 SCRA 182 (2014), the
Supreme Court (SC) ruled that the Court of Tax Appeals (CTA) likewise has the jurisdiction to issue writs
of certiorari or to determine whether there has been grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of the Regional Trial Court (RTC) in issuing an interlocutory order in cases falling
within the CTA’s exclusive appellate jurisdiction. (Id)

A certiorari petition questioning an interlocutory order issued in a local tax case falls under the
jurisdiction of the Court of Tax Appeals (CTA).

No doubt, the injunction case before the RTC is a local tax case. And as earlier discussed, a
certiorari petition questioning an interlocutory order issued in a local tax case falls under the
jurisdiction of the CTA. Thus, the CA correctly dismissed the Petition for Certiorari before it for
lack of jurisdiction. (CE Casecnan Water and Energy Company, Inc. vs. Province of Nueva Ecija,
759 SCRA 180, G.R. No. 196278 June 17, 2015)

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The government is allowed to resort to all evidence or resources available to determine a
taxpayer’s income and to use methods to reconstruct his income. A method commonly used by
the government is the expenditure method, which is a method of reconstructing a taxpayer’s
income by deducting the aggregate yearly expenditures from the declared yearly income.

In the case of income, for it to be taxable, there must be a gain realized or received by the
taxpayer, which is not excluded by law or treaty from taxation. The government is allowed to
resort to all evidence or resources available to determine a taxpayer’s income and to use
methods to reconstruct his income. A method commonly used by the government is the
expenditure method, which is a method of reconstructing a taxpayer’s income by deducting the
aggregate yearly expenditures from the declared yearly income. The theory of this method is that
when the amount of the money that a taxpayer spends during a given year exceeds his reported
or declared income and the source of such money is unexplained, it may be inferred that such
expenditures represent unreported or undeclared income. (Bureau of Internal Revenue vs. Court
of Appeals, 741 SCRA 536, G.R. No. 197590 November 24, 2014)

It is a basic concept in taxation that income denotes a flow of wealth during a definite period
of time, while capital is a fund or property existing at one distinct point in time.

Respondent spouses’ defense that they had sufficient savings to purchase the properties remains
self-serving at this point since they have not yet presented any evidence to support this. And
since there is no evidence yet to suggest that the money they used to buy the properties was
from an existing fund, it is safe to assume that that money is income or a flow of wealth other
than a mere return on capital. It is a basic concept in taxation that income denotes a flow of
wealth during a definite period of time, while capital is a fund or property existing at one distinct
point in time. Moreover, by just looking at the tables presented by petitioner, there is a manifest
showing that respondent spouses had underdeclared their income. The huge disparity between
respondent Antonio’s reported or declared annual income for the past several years and
respondent spouses’ cash acquisitions for the years 2000, 2001, and 2003 cannot be ignored. In
fact, it makes us wonder how they were able to purchase the properties in cash given respondent
Antonio’s meager income. (Bureau of Internal Revenue vs. Court of Appeals, 741 SCRA 536, G.R.
No. 197590 November 24, 2014)

Tax laws must be construed strictly against the State and liberally in favor of the taxpayer.

In closing, we must stress that taxes must not be imposed beyond what the law expressly and clearly
declares as tax laws must be construed strictly against the State and liberally in favor of the taxpayer.
(Commissioner of Internal Revenue vs. La Tañeda Distillers, Inc. (LTDI [now Ginebra San Miguel, 762 SCRA
636, G.R. No. 175188 July 15, 2015)

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