Facts:

The case involves United Coconut Planters Bank (UCPB) as the petitioner and the Commissioner of Internal Revenue (CIR) as the respondent. The events leading to this case began in 2004 when UCPB, engaged in banking, disposed of real properties acquired from defaulting clients. These transactions were subject to creditable withholding taxes, which UCPB could not utilize due to posting net losses for that year. On April 15, 2005, UCPB filed its original Annual Income Tax Return (ITR) for the year ending December 31, 2004, but encountered difficulties completing the form through the Bureau of Internal Revenue's (BIR) Electronic Filing and Payment System (EFPS). Consequently, UCPB refiled the ITR, which was captured as an amended return. UCPB subsequently filed two amended ITRs on May 19, 2005, and October 13, 2006, both reflecting losses and excess tax credits. On March 20, 2007, UCPB filed a claim for a tax refund or tax credit certificate for unutilized creditable withholdi...

Facts:

1. Background of the Case:
   The petitioner, United Coconut Planters Bank (UCPB), is a banking institution that disposed of real properties acquired from defaulting clients during the taxable year 2004. These sales were subject to creditable withholding taxes. UCPB also had clients designated by the BIR as Top Ten Thousand Corporations, which were required to deduct 2% creditable withholding tax on income payments. Additionally, rental income from UCPB's properties was subject to 5% withholding tax.

2. Tax Filing and Errors:
   On April 15, 2005, UCPB filed its original Annual Income Tax Return (ITR) for 2004 through the BIR's Electronic Filing and Payment System (EFPS). Due to difficulties in completing the ITR, UCPB refiled it on the same day, which the BIR system recorded as an amended return. UCPB later filed amended ITRs on May 19, 2005, and October 13, 2006, reflecting losses and excess tax credits.

3. Claim for Refund:
   UCPB claimed that it had no taxable income for 2004 and sought a refund or tax credit certificate for unutilized creditable withholding taxes amounting to P43,484,162.00. The claim was filed with the BIR on March 20, 2007. Due to the BIR's inaction, UCPB filed a Petition for Review with the Court of Tax Appeals (CTA) on April 16, 2007.

4. BIR's Arguments:
   The BIR argued that UCPB's claim was premature, lacked proper documentation, and that UCPB had carried over its excess tax credits to 2005, negating its claim for a refund.

5. CTA Division Ruling:
   The CTA Division denied UCPB's claim, ruling that the irrevocability rule under Section 76 of the NIRC applied, and UCPB's act of carrying over excess credits to 2005 precluded a refund.

6. CTA En Banc Ruling:
   The CTA En Banc affirmed the Division's decision, holding that UCPB's choice to carry over excess credits was irrevocable and that its claim for a refund was invalid.

Issue:

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Ruling:

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Ratio:

1. Irrevocability Rule Under Section 76 of the NIRC:
   Section 76 of the NIRC provides that once a taxpayer opts to carry over excess tax credits to the succeeding taxable years, that option is irrevocable. The taxpayer cannot later apply for a refund or tax credit certificate for the same excess credits.

2. Application to UCPB's Case:
   UCPB initially marked the option to "be issued a tax credit certificate" in its amended ITRs for 2004. However, it later carried over the excess credits to its 2005 ITRs. This act of carrying over the credits negated its earlier choice for a refund, and the irrevocability rule precluded UCPB from reverting to its initial option.

3. Strict Construction of Tax Refunds:
   Tax refunds are construed strictly against the taxpayer and liberally in favor of the State. UCPB failed to meet the burden of proving its entitlement to a refund, as it did not sufficiently establish that the income payments subjected to withholding tax were declared as part of its gross income in its 2004 ITR.

4. Jurisprudence on Irrevocability:
   The Court cited precedents, including Asiaworld Properties Philippine Corporation v. CIR and Rhombus Energy, Inc. v. CIR, which held that the irrevocability rule applies only to the carry-over option and not to the option for a refund. However, once the carry-over option is exercised, it cannot be reversed.

5. Final Decision:
   The Court concluded that UCPB's claim for a refund or tax credit certificate was invalid due to its irrevocable choice to carry over the excess credits to 2005. The CTA En Banc's decision was affirmed, and UCPB's petition was denied.