Facts:

The case involves the Commissioner of Internal Revenue (CIR) as the petitioner and the Bases Conversion and Development Authority (BCDA) as the respondent. The events leading to the dispute occurred primarily at Bonifacio Global City, Taguig City, where the BCDA owned four real properties measuring a total of 12,036 square meters, referred to as the "Expanded Big Delta Lots." In 2007, the BCDA entered into a contract to sell these lots to the "Net Group," an unincorporated joint venture composed of four corporations, for a total price of Php2,032,749,327.96. The Net Group agreed to withhold a Creditable Withholding Tax (CWT) amounting to Php101,637,466.40, pending the issuance of a tax exemption certification by the BIR before June 9, 2008.

On May 28, 2008, the BCDA requested this certification from the CIR but received no response. Despite the lack of certification, the Deeds of Absolute Sale were executed on July 31, 2008, whereupon the Net Group deducted t

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Facts:

Parties and Transaction Background

• The petitioner, Commissioner of Internal Revenue (CIR), challenged the Court of Tax Appeals (CTA) decisions regarding a tax refund claim.
• The respondent, Bases Conversion and Development Authority (BCDA), owned four real properties in Bonifacio Global City, Taguig City, collectively known as the “Expanded Big Delta Lots,” totaling 12,036 sq. m.
• BCDA entered into a contract to sell the properties to an unincorporated joint venture called the “Net Group” (comprised of four corporations), for a total purchase price of Php2,032,749,327.96.

Withholding Tax and Certification of Tax Exemption

• As part of the sale agreement, the “Net Group” was instructed not to remit Php101,637,466.40 as Creditable Tax Withheld at Source (CWT) to the Bureau of Internal Revenue (BIR) until BCDA presented a certification of tax exemption on or before June 9, 2008.
• On May 28, 2008, BCDA sought the required certification from the CIR, but the CIR did not respond.
• Consequently, on July 31, 2008, BCDA and the “Net Group” executed the Deeds of Absolute Sale.
• Due to BCDA’s failure to present the certification, the “Net Group” deducted the amount as CWT, issued the corresponding certificates to BCDA, and remitted the sum to the BIR Regional District Office No. 44.

Subsequent Refund Claim and Procedural History

• On March 9, 2009, BCDA requested a refund of the withheld tax, but the CIR did not act on the claim.
• BCDA later pursued affirmative relief from the CTA on July 29, 2010, claiming tax exemption on the proceeds of the sale under its charter, specifically under Republic Act (RA) 7227, as amended by RA 7917.
• The CIR, in its answer, argued that BCDA failed to produce competent evidence to prove that the tax was erroneously withheld and that the refund claim did not comply with procedural requirements.
• The CTA First Division initially ruled in favor of BCDA in a Decision dated September 13, 2013, ordering a refund of the withheld amount.
• This decision was later affirmed by the CTA En Banc in Decision dated December 16, 2014, with the CIR’s subsequent motion for reconsideration (Resolution dated April 15, 2015) being denied.

Legislative and Legal Issues in the Transaction

• BCDA relied on Section 8 of RA 7227, as amended by RA 7917, which provides that the sale proceeds of certain government properties are deemed appropriated for specific purposes and are exempt from all forms of taxes and fees.
• The CIR contended that the provisions of Section 27 of the 1997 National Internal Revenue Code (NIRC) should prevail, arguing that the NIRC, being a later general law, should repeal or modify earlier special law provisions regarding tax exemption.
• BCDA maintained that RA 7227, as amended, is a special law that expressly exempts its sale proceeds from tax, and that the general law (NIRC) does not impliedly repeal such special exemption.

Issue:

Tax Exemption Eligibility

• Whether BCDA is exempt from Creditable Withholding Tax (CWT) on the sale of its properties in Bonifacio Global City.
• Whether the proceeds from the sale can be characterized as BCDA income or as public funds appropriated for specific governmental purposes.

Legal Conflict Between Statutory Provisions

• Whether Section 27 of the NIRC, as a general law, supersedes or impliedly repeals the tax exemption under Section 8 of RA 7227, as amended by RA 7917, which is a special law.
• Whether the procedural and documentary requirements for tax refund claims applicable to government-owned or controlled corporations (GOCCs) should apply in this transaction.

Compliance with Procedural Requirements for Refund Claims

• Whether BCDA met the necessary requirements for claiming a tax refund in terms of inclusion of the income in its gross income and compliance with Revenue Regulation No. 6-85 and other procedural norms.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)