Facts:

The case involves ACCRA Investments Corporation (petitioner) against the Honorable Court of Appeals, the Commissioner of Internal Revenue, and the Court of Tax Appeals (respondents). The events leading to this case began when ACCRA, a domestic corporation engaged in real estate investment and management consultancy, filed its annual corporate income tax return for the calendar year ending December 31, 1981, on April 15, 1982. In this return, ACCRA reported a net loss of P2,957,142.00 and declared creditable taxes withheld at source amounting to P82,751.91 from various withholding agents, including Malayan Insurance Co., Inc., Angara Concepcion Regala & Cruz Law Offices, MJ Development Corp., and Philippine Global Communications, Inc. These amounts were remitted to the Bureau of Internal Revenue (BIR) from February to December 1981.

On December 29, 1983, ACCRA filed a claim for refund with the BIR, asserting that it had no tax liability against which to credit the withhe...

Facts:

Parties and Nature of the Case

• Petitioner: ACCRA Investments Corporation, a domestic corporation engaged in real estate investment and management consultancy.
• Respondents: The Honorable Court of Appeals, the Commissioner of Internal Revenue, and the Court of Tax Appeals.

Tax Return and Withholding Taxes

• For the taxable year 1981 (calendar year basis), ACCRA filed its annual corporate income tax return on April 15, 1982.
• In the return, the corporation declared a net loss of P2,957,142.00.
• The corporation credited all taxes withheld by various withholding agents:
• Malayan Insurance Co., Inc. – P1,429.97
• Angara Concepcion Regala & Cruz Law Offices – P73,588.00
• MJ Development Corp. – P1,155.00
• Philippine Global Communications, Inc. – P6,578.94
• Total tax withheld and remitted to the Bureau of Internal Revenue amounted to P82,751.91.

Claim for Refund and Filing Timeline

• Since the corporation had no tax liability for 1981, it sought to recover the amount of P82,751.91 representing overpaid taxes withheld at source.
• On December 29, 1983, ACCRA filed a claim for refund in a letter addressed to the Commissioner of Internal Revenue.
• While the claim was still pending with the Commissioner, ACCRA also filed a petition for review with the Court of Tax Appeals (CTA) on April 13, 1984.

Procedural Developments and Preclusive Issues

• The CTA dismissed the petition for review on January 27, 1988, finding that the claim had been filed out of time under Section 292 of the National Internal Revenue Code of 1977, as amended.
• A motion for reconsideration before the CTA was also denied in a resolution dated September 27, 1988, upholding the view that the prescriptive period commenced on December 31, 1981 (the remittance date by the withholding agents).
• The issue was further elevated when ACCRA filed its petition for review with the Court of Appeals on January 14, 1989, which was then referred back to the CTA for proper determination.

Appellate Court Determination and Contentions Raised

• On May 28, 1990, the Court of Appeals affirmed the CTA’s decision, basing the reckoning of the two-year prescriptive period on the premise that it starts “from the date of payment of the tax,” interpreted as "the end of the tax year" when the withholding tax was remitted.
• ACCRA contended two main points:
• Its judicial action to recover the tax was filed on time.
• The reckoning date for the commencement of the two-year prescriptive period should be the date when its final adjustment return was filed (April 15, 1982), not the end of the tax year (December 31, 1981).

Statutory and Jurisprudential Background

• Section 230 (formerly Section 292) of the National Internal Revenue Code of 1986, as amended, governs the recovery of taxes erroneously collected.
• The interpretation of the phrase “from the date of payment of the tax” is key to determining when the prescriptive period begins.
• The Court cited the Gibbs case for its explanation regarding the concept of “payment” as the performance of a tax obligation and noted that for taxpayers whose taxes are withheld, payment is deemed to occur when the tax liability falls due.

Issue:

Whether the claim for refund of P82,751.91 for overpaid withholding taxes for the taxable year 1981 is barred by prescription under the applicable tax laws.

• Does the two-year prescriptive period commence from the end of the tax year (December 31, 1981) due to the remittance of taxes withheld?
• Alternatively, should the prescriptive period commence from the filing of the final adjustment return (April 15, 1982) when the taxpayer’s actual tax liability is determined?

• Whether ACCRA Investments Corporation properly filed its claim for refund in light of the statutory requirements and the proper interpretation of “date of payment of the tax” as it applies to the withholding tax system.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)