Case Digest (G.R. No. 178797)
Facts:
- The case "Metropolitan Bank and Trust Co. v. Commissioner of Internal Revenue" (G.R. No. 178797) was decided by the Supreme Court of the Philippines on August 4, 2009.
- Petitioner Metropolitan Bank and Trust Co. (Metrobank) contested a deficiency Documentary Stamp Tax (DST) assessment for the taxable year 1999.
- Metrobank is a domestic corporation and licensed banking institution offering a Universal Savings Account (UNISA).
- The UNISA allows depositors to maintain a savings deposit with a substantial average daily balance, earning higher interest based on specific minimum deposit and holding period requirements.
- The Bureau of Internal Revenue (BIR) initiated an investigation and issued a Pre-Assessment Notice on September 30, 2002, claiming a deficiency DST of approximately P473 million.
- Metrobank protested the assessment, arguing that the UNISA should not be subject to DST.
- The BIR issued a formal demand for payment, which Metrobank protested, but the BIR denied the protest on March 2, 2004.
- Metrobank filed a Petition for Review with the Court of Tax Appeals (CTA), which dismissed the petition and upheld the BIR's assessment.
- The CTA en banc affirmed this decision, leading Metrobank to appeal to the Supreme Court.
Issue:
- (Unlock)
Ruling:
- The Supreme Court ruled in favor of Metrobank, granting the petition and reversing the decisions of the Court of Tax Appeals.
- The Court held that Metrobank was entitled to immunity from the payment of the defici...(Unlock)
Ratio:
- The Court reasoned that the UNISA, evidenced by a passbook, functioned similarly to a certificate of deposit, which is subject to DST under Section 180 of the NIRC.
- The BIR's assessment was based on the premise that the UNISA had characteristics akin to time deposits, which are subject to DST.
- The Court emphasized that the nature of the document (passbook versus certificate of deposit) is less significant than the substance of the transaction i...continue reading
Case Digest (G.R. No. 178797)
Facts:
The case "Metropolitan Bank and Trust Co. v. Commissioner of Internal Revenue" (G.R. No. 178797) was decided by the Supreme Court of the Philippines on August 4, 2009. The petitioner, Metropolitan Bank and Trust Co. (Metrobank), contested an assessment of a deficiency Documentary Stamp Tax (DST) imposed by the Bureau of Internal Revenue (BIR) for the taxable year 1999. Metrobank is a domestic corporation and a licensed banking institution that offers a product known as the Universal Savings Account (UNISA). This account allows depositors to maintain a savings deposit with a substantial average daily balance, earning a higher interest rate than a standard savings account, contingent upon meeting specific minimum deposit and holding period requirements.
The BIR initiated an investigation into Metrobank's tax liabilities through a Letter of Authority and issued a Pre-Assessment Notice on September 30, 2002, claiming a deficiency DST amounting to approximately P473 million. In response, Metrobank protested the assessment, arguing that the UNISA should not be subject to DST. Following this, the BIR issued a formal demand for payment, which Metrobank again protested. However, the BIR denied the protest in a decision dated March 2, 2004. Consequently, Metrobank fi...