Case Digest (G.R. No. 112024)
Facts:
Philippine Bank of Communications v. Commissioner of Internal Revenue, G.R. No. 112024, January 28, 1999, Supreme Court Second Division, Quisumbing, J., writing for the Court.Petitioner Philippine Bank of Communications (PBCom) paid total quarterly income taxes for the first and second quarters of 1985 amounting to P5,016,954.00, the payments being settled by application of tax credit memos and recorded by the Bureau of Internal Revenue (BIR) through Tax Debit Memos Nos. 0746-85 and 0747-85. When PBCom later filed its Final Adjustment Return for 1985 it declared a net loss (P25,317,228.00) and likewise reported a net loss for 1986 (P14,129,602.00), showing no tax payable for those years. PBCom also had withholding taxes remitted by lessees on rental income: P282,795.50 for 1985 and P234,077.69 for 1986.
On August 7, 1987 PBCom requested a tax credit of P5,016,954.00 for the 1985 overpayments; on July 25, 1988 it filed a claim for refund of the withholding taxes for 1985 (P282,795.50) and 1986 (P234,077.69). While the BIR investigated, PBCom filed a Petition for Review with the Court of Tax Appeals (CTA) on November 18, 1988 (CTA Case No. 4309). The CTA, by Decision dated May 20, 1993, denied PBCom’s 1985 refund/tax credit claim (P5,299,749.95 as calculated in the CTA records) on the ground that the claim was filed beyond the two-year reglementary period; it denied the 1986 claim (P234,077.69) on the basis that PBCom had opted, and in all likelihood automatically credited, the amount to the succeeding year. PBCom’s motion for reconsideration was denied by CTA resolution dated July 20, 1993.
PBCom elevated the CTA judgment to the Court of Appeals, which, by Resolution dated September 22, 1993, affirmed the CTA decision in toto. PBCom then brought a petition for review to the Supreme Court assailing the Court of Appeals’ resolution. The petition principally argued that Revenue Memorandum Circular No. 7-85 (RMC No. 7-85), which stated that claims for refund of excess corporate quarterly income tax payments are recoverable within...(Subscriber-Only)
Issues:
- Whether the taxpayer’s reliance on Revenue Memorandum Circular No. 7-85 prevents application of the two-year prescriptive period under Section 230, 1977 NIRC, so that PBCom’s refund/tax credit claims for 1985–1986 are not time-barred.
- Whether the Court of Appeals erred in affirming the CTA’s denial of PBCom’s 1986 claim (P234,077.69) on the finding that PBCom had opted for an automatic tax credit for the succeeding year without requiring...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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