Case Digest (G.R. No. 232968) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine Airlines, Inc. v. Commissioner of Internal Revenue, decided January 17, 2018 under G.R. Nos. 206079-80 and 206309, petitioner Philippine Airlines, Inc. (“PAL”) lodged peso and US dollar time deposits in China Banking Corporation, JP Morgan Chase Bank, Philippine Bank of Communications and Standard Chartered Bank during 2002. These “Agent Banks” withheld final tax at 20% (seven and one-half percent for dollar deposits under the Expanded Foreign Currency Deposit System) from PAL’s interest income. Invoking its exemption under Presidential Decree No. 1590, PAL filed an administrative claim for refund on November 3, 2003, seeking P1,747,869.59 and US$65,877.07 (including P1,237,646.43 withheld by JPMorgan and P510,223.16 plus US$65,877.07 withheld by the other banks). The Commissioner of Internal Revenue refused, citing PAL’s failure to prove actual remittance of withheld taxes and alleged documentary deficiencies and prescription issues. On February 24, 2004, PAL elev Case Digest (G.R. No. 232968) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Background
- Philippine Airlines, Inc. (PAL) made peso and dollar time deposits in China Banking Corp. (Chinabank), JP Morgan Chase Bank (JPMorgan), Philippine Bank of Communications (PBCom), and Standard Chartered Bank (Standard Chartered).
- PAL claimed exemption under its franchise (Presidential Decree No. 1590) from the 20% final withholding tax on interest income and sought refunds for taxes withheld:
- P1,237,646.43 withheld and remitted by JPMorgan.
- P510,233.16 and US$65,877.07 withheld by Chinabank, PBCom, and Standard Chartered (allegedly remitted).
- Procedural History
- Administrative Claim (Nov 3, 2003): PAL’s refund request deemed denied by Commissioner’s inaction (Feb 2004).
- CTA Special First Division (Nov 9, 2010):
- Granted refund of P1,237,646.43 (JPMorgan).
- Denied refund for other banks—insufficient proof of remittance.
- CTA En Banc (Aug 14, 2012; Mar 17, 2013): Affirmed Division decision; held remittance proof required.
- Supreme Court Rule 45 Petitions (Jan 17, 2018):
- G.R. Nos. 206079-80 (PAL challenges denial).
- G.R. No. 206309 (Commissioner challenges grant).
Issues:
- May claimants present new or additional evidence before the Court of Tax Appeals beyond the administrative level?
- Did PAL adequately prove that the Agent Banks remitted the final withholding taxes to the Bureau of Internal Revenue?
- Is proof of remittance to the BIR a prerequisite for PAL’s refund under its tax‐exempt franchise (PD 1590)?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)