Facts:

This case revolves around the petitioner, Asiaworld Properties Philippine Corporation (Asiaworld), a domestic corporation engaged in real estate development with its principal office located at Asiaworld City, Aguinaldo Boulevard, Parañaque, Metro Manila. The matter at hand concerns the petitioner’s Annual Income Tax Return (ITR) filed for the calendar year ending December 31, 2001, which was submitted on April 5, 2002. In this ITR, Asiaworld declared a minimum corporate income tax (MCIT) of PHP 1,222,066.00 and reported a refundable income tax payment totaling PHP 6,473,959.00. The petitioner outlined the computations leading to this overpayment, indicating a gross income of PHP 49,234,453.00 and totaling deductions leading to a tax due computed under the MCIT.

Significantly, Asiaworld claimed in its 2001 ITR that it had an amount of PHP 7,468,061.00 as a "Prior Year's Excess Credits," noting it was net of an excess creditable withholding tax from 1999, which amou

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Facts:

Parties and Background

• Asiaworld Properties Philippine Corporation is a domestic corporation primarily engaged in real estate development.
• The corporation filed its Annual Income Tax Return (ITR) for the calendar year ending December 31, 2001, on April 5, 2002.

Tax Computation and Refund Claim

• In its 2001 ITR, petitioner computed its tax liabilities showing a minimum corporate income tax (MCIT) of P1,222,066.00 alongside a refundable income tax payment of P6,473,959.00.
• The computations involved several detailed components including realized gross profit, other income, deductions, tax credits/payments, and a noted excess credit from prior years amounting to P7,468,061.00.
• Petitioner stated that the P7,468,061.00 representing prior year’s excess credits was net of a year 1999 excess creditable withholding tax that was refundable in the amount of P18,477,144.00.
• Additionally, petitioner elected to carry-over the overpayment of P6,473,959.00 as tax credit for subsequent taxable periods.

Filing of Refund Request and Subsequent Petitions

• On April 9, 2002, petitioner filed a request for a refund of P18,477,144.00 with the Revenue District Office No. 52, BIR Region VIII, alleging unapplied creditable withholding taxes.
• Before the refund claim could be acted upon by the BIR, petitioner filed a Petition for Review with the Court of Tax Appeals on April 12, 2002 to toll the two-year prescriptive period under Section 229 of the National Internal Revenue Code (NIRC) of 1997.
• The Court of Tax Appeals, in its Decision dated September 11, 2003, and subsequent Resolution dated December 17, 2003, denied the petition, holding that petitioner opted to carry-over the excess credit and under Section 76 of the Tax Code, the excess payment could not be refunded once the carry-over option was chosen.

Appeals and Affirmation

• Petitioner subsequently appealed to the Court of Appeals, which affirmed the denial rendered by the Court of Tax Appeals.
• On April 27, 2006, petitioner filed a petition for review with the Supreme Court seeking reconsideration of the Court of Appeals’ decision.

Issue:

Main Legal Issue

• Whether the exercise of the option to carry-over excess income tax credits under Section 76 of the NIRC of 1997, once elected, is irrevocable for the succeeding taxable years.
• Whether such irrevocability prohibits the taxpayer from subsequently claiming a cash refund for the unused portion of the carried-over excess tax credits.

Sub-Issue Raised by the Petitioner

• Petitioner argues that the irrevocability of the carry-over option is limited only to the immediately succeeding taxable year (i.e., taxable year 2000), thereby implying that for taxable year 2001, a refund could still be sought for the remaining unused tax credits.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)