Republic of The Philippines Quezon City: Court of Tax Appeals

REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS

QUEZON CITY
EN BANC
COMMISSIONER OF CTA EB NO. 1241

INTERNAL REVENUE, (CTA Case No. 8304)
Petitioner,
- versus -
NOKIA (PHILIPPINES), INC.,

Respondent.
x---------------------------------------x
CTA EB NO. 1243
NOKIA (PHILIPPINES), INC., (CTA Case No. 8304)
Petitioner,
Present:
DEL ROSARIO, PJ
CASTANEDA, JR.,
BAUTISTA,
- versus - UY,
CASANOVA,
FASON-VICTORINO,
MINDARO-GRULLA,
COTANGCO-MANALASTAS,and
RINGPIS-LIBAN, JJ.
COMMISSIONER OF Promulgated:
INTERNAL REVENUE,
Respondent. MAR3 ~ 2016 /.'I5 ~-,.,.. .
)(- - - -- - - - - - - - - - - - - - - ----------- ~ -~ X
DECISION
Fabon-Victorino, J.:
In these consolidated Petitions for Review, both Nokia

(Philippines), Inc. and the Commissioner of Internal
Revenue assail the Decision' dated August 12, 2014 and the J
1
En Bane Docket, CTA EB No. 1241, pp . 27-56.
DECISION
CTA EB NOS. 1241 & 1243
Page 2 of 20
Resolution 2 dated October 14, 2014, promulgated by the

Court in Division in CTA Case No. 8304 entitled Nokia
(Philippines), Inc. vs. Commissioner of Internal Revenue.
The dispositive portion of the assailed Decision and
Resolution read as follows:
Assailed Decision of August 12, 2014:
WHEREFORE, premises considered,

the Petition for Review is PARTIALLY
GRANTED. Accordingly, respondent is
hereby ORDERED to REFUND or to ISSUE
A TAX CREDIT CERTIFICATE to
petitioner in the reduced amount of THREE
MILLION TWO HUNDRED SIXTY-FIVE
THOUSAND THREE HUNDRED SEVENTY-
EIGHT and 98/100 PESOS (P3,265,378.98)
representing its unutilized excess input VAT
attributable to zero-rated sales for the
second quarter of 2009.
SO ORDERED.
Assailed Resolution of October 14, 2014:
WHEREFORE, premises considered,

both Motions for Partial Reconsideration are
DENIED for lack of merit.
SO ORDERED.
In her Petition for Review 3 filed on October 29, 2014,

docketed as CTA EB No. 1241, the Commissioner of Internal
Revenue (CIR) prays to reverse and set aside the assailed
Decision and Resolution and ultimately deny in its entirety
the claim for refund filed by Nokia (Philippines), Inc.
On the other hand, the Petition for Review 4 filed by

Nokia (Philippines), Inc. (Nokia) on November 3, 2014,
docketed as CTA EB No. 1243, seeks only partial nullification
of the assailed Decision insisting that it is entitled to refund /
2
Id., pp. 57-60.
3
Id., pp. 1-22.
4
En Bane docket, CTA EB No. 1243, pp. 1-16.
DECISION
CTA EB NOS. 1241 & 1243
Page 3 of 20
or issuance of a Tax Credit Certificate (TCC) of the entire

amount of P8,598,240. 73 prayed for in its Petition for
Review.
THE FACTS AND THE PROCEEDINGS
The CIR, as head of the Bureau of Internal Revenue

(BIR), has the authority to decide claims for refund/tax
credit of internal revenue taxes as provided under the
National Internal Revenue Code (NIRC), as amended. She
holds office at the BIR National Office Building, BIR Road,
Diliman, Quezon City.
Nokia, on the other hand, is a duly organized domestic

corporation with principal office located at the 40th Floor,
Philamlife Tower, 8767 Paseo de Roxas Street, Salcedo
Village, Makati City. It is engaged in the business of
providing marketing support and other allied services to its
parent company Nokia Corporation, Finland (Nokia Finland).
It is a registered value-added tax (VAT) entity with BIR
Certificate of Registration No. OCN 8RC0000019384.
For the 2nd Quarter of taxable year 2009, Nokia

rendered marketing support and other services to its parent
company Nokia Finland, a non-resident foreign corporation
not registered to engage in business in the Philippines.
During the same period, it incurred/paid input taxes on its
purchases and/or importations of VATable goods and
services.
On July 24, 2009, Nokia filed its Quarterly VAT Return

for the second quarter of taxable year 2009 reporting an
unutilized creditable input VAT of P12,098,285.06. Allegedly,
the said amount was neither directly nor entirely attributed
to its zero-rated sales or to its sales subject to VAT.
On March 1, 2011, Nokia filed with the BIR an

administrative claim for refund or issuance of TCC for its
unutilized excess input VAT attributable to its zero-rated
sales for the second quarter of 2009.
DECISION
CTA EB NOS. 1241 & 1243
Page 4 of 20
Due to CIR's inaction, Nokia elevated the matter to the

Court in Division via a Petition for Review on June 30, 2011.
In her Answer filed on September 9, 2011, the CIR

mainly argues that Nokia failed to substantiate its
entitlement to the refund sought. For one, Nokia failed to
comply with the invoicing requirements laid down in
Sections 113, 114 ad 236 of the NIRC of 1997, as amended,
and its implementing regulations under Revenue Regulations
(RR) No. 16-2005. For another, Nokia failed to submit the
required complete supporting documents per Revenue
Memorandum Order (RMO) No. 53-98, rendering its Petition
for Review prematurely filed.
During the trial, the parties presented their evidence in

support of their respective positions.
On August 12, 2014, the Court in Division rendered the

assailed Decision granting Nokia's Petition for Review but in
the reduced amount of P3,265,378.98. In finding for Nokia,
the Court in Division ruled that Nokia was able to
substantiate, albeit partially, its claim for refund through
various VAT official receipts (ORs) and invoices, Import
Entry Internal Revenue Declaration (IEIRD) and Bureau of
Customs (BOC) ORs it presented during the trial of the case.
Following the long established principle, the Court in Division
also ruled that Nokia's non-submission of complete
supporting documents in the administrative claim for VAT
refund was NOT fatal to its subsequent action for court's
intervention.
Not satisfied, both Nokia and the CIR filed their

respective Motions for Partial Reconsideration, which the
Court in Division denied in the equally assailed Resolution of
October 14, 2014.
Hence, the present consolidated appeals.

DECISION
CTA EB NOS. 1241 & 1243
Page 5 of20
THE ISSUES
From the CIR's Petition for Review, docketed as CTA EB No.

1241:
WHETHER OR NOT THE SECOND DIVISION OF

THE HONORABLE COURT ERRED IN PARTIALLY
GRANTING RESPONDENT'S CLAIM FOR REFUND
IN THE AMOUNT OF PHP3,265,378.98
ALLEGEDLY REPRESENTING UNUTILIZED
EXCESS INPUT VAT ATTRIBUTABLE TO ZERO-
RATED SALES FOR THE SECOND QUARTER OF
2009.
From Nokia-Philippines' Petition for Review docketed as

CTA EB No. 1243:
WHETHER PETITIONER NOKIA (PHILIPPINES),

INC. IS ENTITLED TO A TAX REFUND OR A TAX
CREDIT CERTIFICATE FOR THE INPUT VAT
PAYMENTS ALLOCATED TO ITS ZERO-RATED
SALES FOR THE 2ND QUARTER OF TAXABLE YEAR
2009 IN THE AGGREGATE AMOUNT OF FIVE
MILLION THREE HUNDRED THIRTY TWO
THOUSAND EIGHT HUNDRED SIXTY ONE and
75/100 (PHP5,332,861. 75).
In her petition, CIR maintains that Nokia is not entitled

to a refund or tax credit even in the reduced amount of
P3,265,378.98 since it failed to comply with the invoicing and
accounting requirements laid down in Sections 113, 114 and
236 of the NIRC of 1997, as amended, and its implementing
regulations under RR No. 16-2005.
In addition, Nokia failed to submit all supporting and

relevant documents in its administrative claim for
refund/TCC as required under RMO No. 53-98 and other
existing rules and regulations to justify the grant of its
application for refund. Due to Nokia's non-compliance with
the said substantiation requirements, she was deprived of
the opportunity to examine and investigate its claim for
refund rendering its judicial recourse premature. J
DECISION
CTA EB NOS. 1241 & 1243
Page 6 of 20
In its Comment 5 filed on December 5, 2014, Nokia

argues that the Court in Division did not err in partially
granting its claim for refund albeit in the reduced amount of
P3,265,378.98. Contrary to the CIR's asseveration, it was
able to prove compliance with the invoicing requirements
laid down in Sections 113, 114 and 236 of the Tax Code. In
any event and as ruled by the Court in Division, its alleged
failure to submit other requested documents is not fatal to
its case. Besides, the CIR never required Nokia to submit
additional documents within the 120-day period granted her
under the NIRC, as amended. The request for submission of
additional documents was sent to Nokia on September 20,
2014 or months after it filed its Petition for Review with the
Court in Division on June 30, 2014. Citing a number of
cases, Nokia states the CIR cannot demand what type of
supporting documents should be submitted, lest the
taxpayer shall be at her mercy, as she may require
documents which the taxpayer cannot possibly produce.
Nokia also finds misplaced the CIR's contention that it

failed to exhaust administrative remedies due to its failure to
submit documents in accordance with RMO No. 53-98, which
rendered its Petition for Review prematurely filed thereby
depriving the Court in Division of jurisdiction over the case.
Allegedly, there is no quarrel that Section 229 of the Tax
Code requires that an administrative claim for refund/TCC
must be filed first before a taxpayer may seek judicial
intervention, there is however nothing in said provision that
requires that the administrative remedy be first resolved
before elevating the matter to the CTA. And since its case is
urgent for it must be filed within the two-year prescriptive
period under the Tax Code, it is an exemption to the
application of the Doctrine of Exhaustion of Administrative
Remedies.
In its Petition for Review, Nokia states that the Court in

Division erred when it disallowed the amount of
P5,332,861. 75, representing its input VAT attributable to
zero-rated sales for the 2nd quarter of 2009. It presented
sufficient evidence in support of its claim for refund/TCC
covering not only the amount of P3,265,378.98 but also the
disallowed amount of P5,332,861. 75. Moreover, the
amounts in its claim for refund were verified and confirmed /
5
En Bane docket, CTA EB No. 1241, pp. 69-75.
DECISION
CTA EB NOS. 1241 & 1243
Page 7 of20
as accurate by the Court-commissioned Independent

Certified Public Accountant (ICPA), thereby supplying the
information required to determine the tax liabilities due and
input tax to be credited. Nokia believes that it is entitled to
the additional amount of P5,332,861. 75, especially
considering that the CTA is not strictly governed by technical
rules of evidence. In relation to the foregoing, Nokia
invokes the principle of solutio indebiti claiming that
technicalities and legalism should not be misused by the
government to keep money not belonging to it thereby
enriching itself at the expense of its law-abiding citizens.
In her Comment6 , the CIR stressed that the claimant

has the burden of proof to establish the factual basis of his
claim for tax credit or refund. After all, tax refunds, like tax
exemptions, are strictly construed against the taxpayer.
RULING OF THE COURT EN BANC
Both Petitions for Review lack merit.
On CIR's Petition for Review (CTA EB No. 1241 ):
CIR claims that the Court in Division has no jurisdiction

to entertain Nokia's Petition for Review since it was
prematurely filed due to its inability to submit complete
documents in the administrative level as required under
RMO No. 53-98, in relation to Section 112(C) of the NIRC of
1997, as amended.
The Court En Bane is not convinced.
The issue on submission of complete documents in the

administrative level pursuant to RMO No. 53-98 has long
been settled by the Supreme Court in the case of
Commissioner of Internal Revenue vs. Team Sua/
Corporation (formerly Mirant Sua/ Corporation)/ viz:
6
Id., pp. 79-85.
7
G.R. No. 205055, July 18, 2014.
DECISION
CTA EB NOS. 1241 & 1243
Page 8 of20
The CIR's reliance on RMO 53-98 is

misplaced. There is nothing in Section
112 of the NIRC, RR 3-88 or RMO 53-98
itself that requires submission of the
complete documents enumerated in
RMO 53-98 for a grant of a refund or
credit of input VAT. The subject of RMO
53-98 states that it is a "Checklist of
Documents to be Submitted by a Taxpayer
upon Audit of his Tax Liabilities ... " In this
case, TSC was applying for a grant of
refund or credit of its input tax. There was
no allegation of an audit being conducted
by the CIR. Even assuming that RMO
53-98 applies, it specifically states
that some documents are required to
be submitted by the taxpayer "if
applicable". (Boldfacing ours)
Moreover, it is the taxpayer and not the CIR, who

determines what constitutes as relevant supporting
documents for purposes of substantiation of the claim for
refund/TCC, as ruled by the Supreme Court in the following
manner:
The term "relevant supporting

documents" should be understood as
those documents necessary to support the
legal basis in disputing a tax assessment as
determined by the taxpayer. The BIR can
only inform the taxpayer to submit
additional documents. The BIR cannot
demand what tvoe of supporting
documents should be submitted.
Otherwise, a taxpayer will be at the
mercy of the BIR, which may require
the production of documents that a
taxpayer cannot submit. 8 (Emphases
ours)
In fine, the determination of what relevant supporting

documents should be submitted by the taxpayer to establish
its entitlement to refund/TCC does not belong to the CIR. To
rule otherwise will render the 120-day period for the CIR t : ;
8
CIR v. First Express Pawnshop Company, Inc., G.R. Nos. 172045-46, June 16, 2009.
DECISION
CTA EB NOS. 1241 & 1243
Page 9 of20
decide on the claims for tax refund or credit indeterminate if

not indefinite.
In a number of cases 9 , this Court has clarified that

failure to comply with the requirements listed under RMO No.
53-98 is not fatal to a claim for tax credit or refund of
excess unutilized excess VAT. This holds especially true
when the case has been elevated to the Court. After all,
when the case is elevated to the Court, the Rules of Court
governs. 10 In other words, the question of whether the
evidence submitted by a party is sufficient to warrant the
grant of its prayer lies within the sound discretion and
judgment of the Court. 11
Further, Section 112(C) of the NIRC of 1997, as

amended, provides that the CIR has 120 days from the date
of submission of complete documents in support of the
application for refund/TCC within which to grant or deny the
claim. In case of full or partial denial by the CIR or the
inability of the CIR to act on the claim within the 120-day
period, the taxpayer may appeal with the CTA within 30
days from receipt of the adverse decision or the expiration
of the 120-day period without any action on the part of the
CIR.
It has been ruled that the 120+30-day periods

provided under Section 112(C) of the NIRC of 1997, as
amended, is not only mandatory but also jurisdictional and
non-observance thereof is fatal to the filing of a judicial
claim with this Court. 12 The High Court explained that if the
CIR fails to act on the application for tax refund/TCC of
creditable input VAT within the 120-day mandatory period
reckoned from the date of submission of the complete
documents in support of the application, the taxpayer, may
within 30 days, appeal the inaction of the CIR to the CTA.
9
CIR v. Team Energy Corporation, CTA EB Case No. 652, October 4, 2011; and Commissioner
of Internal Revenue vs. CE Luzon Geothermal Power Company, Inc, CTA EB No. 474,
September 1, 2009.
1
° Commissioner of Internal Revenue v. Visayas Geothermal Power Company, Inc., C.T.A. EB
11
Case No. 282 (C.T.A. Case Nos. 6790 & 6838), November 20, 2007, citing Jideco
Manufacturing Corporation v. Commissioner of Internal Revenue, C.T.A. Case No. 6552,
September 16, 2004.
El Greco Ship Manning and Management Corporation v. Commissioner of Customs, C.T.A.
EB No. 172 (C.T.A. Case No. 6618), March 14, 2007.
J
12
CIR v. Aichi Forging Company, Inc., G.R. No. 184823, October 6, 2010.
DECISION
CTA EB NOS. 1241 & 1243
Page 10 of 20
But when will the submission of documents be deemed

completed for purposes of determining the running of the
120-day period?
In the very recent case of Pilipinas Total Gas, Inc. vs.

Commissioner of Internal Revenue 13 (Total Gas), the
Supreme Court elucidated on the matter, in this wise:
xxx Thus, taking the foregoing

changes to the law altogether, it becomes
apparent that, for purposes of determining
when the supporting documents have
been completed - it is the taxpayer who
ultimately determines when complete
documents have been submitted for the
purpose of commencing and continuing the
running of the 120-day period. After all, he
may have already completed the necessary
documents the moment he filed his
administrative claim, in which case, the
120-day period is reckoned from the date
of filing. The taxpayer may have also filed
the complete documents on the 30th day
from filing of his application, pursuant to
RMC No. 49-2003. He may very well have
filed his supporting documents on the first
day he was notified by the BIR of the lack
of the necessary documents. In such cases,
the 120-day period is computed from the
date the taxpayer is able to submit the
complete documents in support of his
application.
Then, except in those instances where

the BIR would require additional documents
in order to fully appreciate a claim for tax
credit or refund, in terms what additional
document must be presented in support of
a claim for tax credit or refund - it is the
taxpayer who has the right and the burden
of providing any and all documents that
would support his claim for tax credit or
refund. After all, in a claim for tax credit or
refund, it is the taxpayer who has the
burden to prove his cause of action. As
j
13
G.R. No. 207112, December 8, 2015.
DECISION
CTA EB NOS. 1241 & 1243
Page 11 of 20
such, he enjoys relative freedom to submit

such evidence to prove his claim.
The foregoing conclusion is but a

logical consequence of the due process
guarantee under the Constitution. Corollary
to the guarantee that one be afforded the
opportunity to be heard, it goes without
saying that the applicant should be allowed
reasonable freedom as to when and how to
present his claim within the allowable
period.
Thereafter, whether these

documents are actually complete as
required by law - is for the CIR and
the courts to determine. Besides, as
between the taxpayer-applicant, who seeks
the refund of his creditable input tax and
the CIR, it cannot be denied that the
former has greater interest in ensuring that
the complete set of documentary evidence
is provided for proper evaluation of the
State.
Lest it be misunderstood, the benefit

given to the taxpayer to determine when it
should complete its submission of
documents is not unbridled. Under RMC No.
49-2003, if in the course of the
investigation and processing of the claim,
additional documents are required for the
proper determination of the legitimacy of
the claim, the taxpayer-claimants shall
submit such documents within thirty (30)
days from request of the
investigating/processing office. Again,
notice, by way of a request from the
tax collection authority to produce the
complete documents in these cases, is
essential.
Moreover, under Section 112(A) of

the NIRC, as amended by RA 9337, a
taxpayer has two (2) years, after the close
of the taxable quarter when the sales were
made, to apply for the issuance of a tax
credit certificate or refund of creditable
DECISION
CTA EB NOS. 1241 & 1243
Page 12 of 20
input tax due or paid attributable to such

sales. Thus, before the administrative claim
is barred by prescription, the taxpayer
must be able to submit his complete
documents in support of the application
filed. This is because, it is upon the
complete submission of his documents in
support of his application that it can be said
that the application was, "officially
received" as provided under RMC No. 49-
2003.
In the instant case, there is no dispute that Nokia

timely filed its administrative claim for refund on March 1,
2011 as evidenced by the stamped "RECEIVED" by the BIR
on Nokia's application letter. Further, record reveals that
Nokia simultaneously submitted supporting documents upon
the filing of its administrative claim on March 1, 2011.
Following the ruling laid down by the Supreme Court in

the Total Gas case, Nokia filed its administrative claim for
refund/TCC and simultaneously submitted complete
supporting documents on March 1, 2011. This is evident
from the fact that no additional documents were submitted
by Nokia within the 30-day period reckoned from the filing of
its administrative claim. Besides, it is Nokia who determines
when complete documents have been submitted for the
purpose of commencing and continuing the running of the
120-day period. However, it must be clarified that this in no
way precludes the CIR from requiring additional documents
necessary to decide the claim, or even denying the claim if
taxpayer fails to submit additional documents requested, as
pointed out by the Supreme Court in the Total Gas case.
In the case at bar, it was only on September 20, 2011

that the first notification for the presentation of additional
documents was sent by the CIR to Nokia. It was obviously
long after the 120-day period expired on June 29, 2011; and
after the judicial claim was already filed on June 30, 2011.
Pursuant to Revenue Memorandum Circular (RMC) No. 49-
2003 dated August 15, 2003, such request should be made
within the 120-day period and not beyond. The pertinent /
portion of the said issuance reads: wJ
DECISION
CTA EB NOS. 1241 & 1243
Page 13 of 20
Q-18: For pending claims with

incomplete documents, what is the period
within which to submit the supporting
documents required by the
investigating/processing office? When
should the investigating/processing office
officially receive claims for tax
credit/refund and what is the period
required to process such claims?
A-18: For pending claims which have

not been acted upon by the
investigating/processing office due to
incomplete documentation, the taxpayer-
claimants are given thirty (30) days within
which to submit the documentary
requirements unless given further
extension by the head of the processing
unit, but such extension should not exceed
thirty (30) days.
For claims to be filed by claimants

with the respective investigating/
processing office of the administrative
agency, the same shall be officially
received only upon submission of complete
documents.
For current and future claims for tax

credit/refund, the same shall be processed
within one hundred twenty (120) days from
receipt of the complete documents. If, in
the course of the investigation and
processing of the claim, additional
documents are required for the proper
determination of the legitimate
amount of claim, the taxpayer-
claimants shall submit such documents
within thirty (30) days from request of
the investigating/ processing office,
which shall be construed as within the
one hundred twenty (120) day period.
(Emphases ours)
Thus, the Court in Division is correct when it held that

Nokia timely filed its appeal by way of a Petition for Review
on June 30, 2011, as the same was filed well within the 30-
j
DECISION
CTA EB NOS. 1241 & 1243
Page 14 of 20
day period after the 120-day period of the CIR expired on

June 29, 2011.
Anent CIR's argument that Nokia is not entitled to a

refund or tax credit of the amount prayed for due to its
failure to comply with the invoicing and accounting
requirements laid down in Sections 113, 114 and 236 of the
NIRC of 1997, as amended, and its implementing
regulations under RR No. 16-2005, the Court En Bane is one
with the Court in Division in ruling that Nokia was able to
substantiate its claim for refund/TCC of its unutilized input
VAT for the 2nd quarter of taxable year 2009 in the amount
of P3,265,378.98.
Nokia's Petition for Review (CTA EB No. 1243)
A review of the arguments raised by Nokia in the

instant petition shows that they were the very same flawed
arguments which had been thoroughly discussed and passed
upon by the Court in Division in the assailed Resolution of
October 14, 2014. Be that as it may and if only to reinforce
the findings of the Court in Division, the salient points shall
be discussed anew.
The Court in Division correctly

disallowed the amount of
1'5,332,861. 75
Section 113 of the NIRC of 1997, as amended,

pertinently provides, thus:
SEC. 113. Invoicing and Accounting

Requirements for VAT-registered Persons.
XXX XXX XXX
(B) Information Contained in the

VAT Invoice or VAT Official Receipt. -
The following information shall be indicated
in the VAT invoice or VAT official receipt:
/
DECISION
CTA EB NOS. 1241 & 1243
Page 15 of 20
(1) A statement that the seller is a

VAT-registered person, followed
by his Taxpayer's Identification
Number (TIN);
(2) The total amount which the

purchaser pays or is obligated to
pay to the seller with the
indication that such amount
includes the value-added tax:
Provided, That:
(a) The amount of the tax

shall be shown as a separate
item in the invoice or receipt;
(Boldfacing supplied)
XXX XXX XXX
In the case of Kepco Philippines Corporation vs.

Commissioner of Internal Revenue, 14 the Supreme Court
enjoins strict compliance with the invo1cmg and
substantiation requirements as provided by law in claims for
refund or credit, to wit:
Although it is true that the CTA is not

strictly governed by technical rules of
evidence, the invoicing and
substantiation requirements must,
nevertheless, be followed because it is
the only way to determine the veracity
of Kepco's claims. Verily, the CTA En
Bane correctly disallowed the input VAT
that did not meet the required standard of
substantiation. (Boldfacing supplied)
Otherwise stated, failure on the part of Nokia to prove

that all the requirements for entitlement have been met will
merit a denial of the claim in whole or in part.
Thus, the Court En Bane agrees with the Court in

Division when it disallowed the amount of P5,332,861. 75,
representing Nokia's input VAT credit attributable to zero-/
14
G.R. No. 181858, November 24, 2010.
DECISION
CTA EB NOS. 1241 & 1243
Page 16 of 20
rated sales for the 2nd quarter of taxable year 2009, as

follows:
In addition, petitioner's input VAT

claim in the amount of P5,332,861. 75
should, likewise, be disallowed for failure to
meet the substantiation requirements
under the aforesaid VAT law and
regulations. Below is the breakdown of the
amount of P5,332,861. 75:
Reason for Disallowance Reference Amount

Purchase of goods
VAT amount was not separately indicated in the
Exhibit Q-2 (pp. 382-384) p
InVOICe 17,380.62
the address shown on the "sold to" portion of the
invoice was different from Nokia Phil's registered Exhibit Q-2 (pp. 389-390)
address 840.00
Purchase of services
VAT amount was not separately indicated in the OR Exhibit Q-1 (pp. 3-11) 142,466.91
VAT amount was not separately indicated iri the OR Exhibit Q-1 (pp. 12-13) 22,500.00
VAT amount was not separately indicated in the OR Exhibit Q-1 (pp. 46-63) 1,204,769.44
VAT amount was not separately indicated in the OR Exhibit Q-1 (pp. 64-65) 121.71
The amount per OR (P360.62) is lower than the
Exhibit Q-1 (pp. 188-189)
amount per claim (397.49) 36.87
DECISION
CTA EB NOS. 1241 & 1243
Page 17 of 20
The amount per OR (P304.96) is lower than the

amount per claim (344.23) 39.27
VAT amount was not separately indicated in the OR Exhibit Q-2 (pp. 417 -418) 14,008.32
VAT amount was not separately indicated in the OR Exhibit Q-2 (pp. 446-44 7) 18,750.00
The amount per OR ( 4,403 .68) is lower than the
amount per claim (5,903.16.) 1,499.48
The amount per OR (5,331.86) is lower than the
amount per claim (5,885.82) 553.96
The amount per OR (5,052.57) is lower than the
amount per claim (6,159.45) 1,106.88
./
DECISION
CTA EB NOS. 1241 & 1243
Page 18 of 20
VAT amount was not separately indicated in the OR
Exhibit Q-2 (p. 507)
and the authority to print is dated later than OR date 2,410.71
Not sold in the name ofNokia Phils.and the TIN
indicated is different from the company's TIN 1,982.68
Not sold in the name of Nokia Phils. and the TIN of
the company was not indicated 468.74
IMPORTATION
The amount per IEIRD/OR (23,0 10) is lower than the
Exhibit Q-3 (pp.737-740)
amount per claim(43,730) 20,720.00
Not supported by IEIRD Exhibit Q-3 (p.741) 44,098.00
Not supported by IEIRD Exhibit Q-3 (p.743) 147.00
Not supported by IEIRD Exhibit Q-3 (p.744) 125.00
The amount per IEIRD/OR( 16, 119) is lower than the
amount per claim(56,416) 40,297.00
Total Disallowed Input VAT p 5,332,861.75 15
Time and again, the Court has ruled that tax refunds
are in the nature of tax exemptions which result to loss of
revenue for the government. Upon the person claiming an
exemption from tax payments rests the burden of justifying
the exemption by words too plain to be mistaken and too
categorical to be mis-interpreted, 16 it is never presumed 17
nor be allowed solely on the ground of equity. 18 These
exemptions, therefore, must not rest on vague, uncertain or
indefinite inference, but should be granted only by a clear
and unequivocal provision of law on the basis of language
15
See Note 1, Supra, pp. 52-54.
16
Michel J. Lhuillier Pawnshop, Inc. v. Commissioner of Internal Revenue, G.R. No. 166786,
May 3, 2006, 489 SCRA 147, 155, citing Commissioner of Internal Revenue v. Philippine
Long Distance Telephone Company, G.R. No. 140230, December 15, 2005 and
Commissioner of Internal Revenue v. Mitsubishi Metal Corporation, G.R. Nos. 54908 &
80041, January 22, 1990, 181 SCRA 214, 224.
17
Province of Abra v. Hernando, No. L-49336, August 31, 1981, 107 SCRA 104, 109.
18
Commissioner of Internal Revenue v. Court of Appeals, G.R. Nos. 122161 & 120991,
February 1, 1999, 302 SCRA 442, 453, citing Davao Gulf Lumber Corporation v. /
Commissioner of Internal Revenue, G.R. No. 117359, July 23, 1998, 293 SCRA 76, 91. jM./
DECISION
CTA EB NOS. 1241 & 1243
Page 19 of 20
too plain to be mistaken. Such exemptions must be strictly

construed against the taxpayer, as taxes are the lifeblood of
the government. 19
WHEREFORE, the Petitions for Review filed on October

29, 2014 and November 3, 2014 by the Commissioner of
Internal Revenue and Nokia (Philippines), Inc., respectively,
are hereby DENIED, for lack of merit. Accordingly, the
assailed Decision and Resolution dated August 12, 2014 and
October 14, 2014, respectively, are AFFIRMED.
SO ORDERED.
We Concur:
ROMAN G. DEL OSARIO

Presiding Justice
~~c, a.:Y'~a. ~ Q.
J&'AN-ft-6 C. CASTANED~JR.
Associate Justice
~UTISTA
Associa~ :u~~ice
LOVELL
ERL~P. UY
Associate Justice
CAESAR~ANOVA
Associate Justice
~N.M~.b~ ~j./-vj~/-
CIELITO N. MINDARO-GRULLA AMELIA R. COTANGCO-MANALASTAS
Associate Justice Associate Justice
,
~- ~ ~· '--
MA. BELEN RINGPIS-LIBAN
Associate Justice
19
Silkair (Singapore) PTE. Ltd. v. Commissioner of Internal Revenue, G.R. No. 184398,
February 25, 2010, citing Commissioner of Internal Revenue v. Solidbank Corporation, G.R.
No. 148191, November 25, 2003, 416 SCRA 436, 461.
DECISION
CTA EB NOS. 1241 & 1243
Page 20 of20
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution,

it is hereby certified that the above Decision has been
reached in consultation with the members of the Court En
Bane before the case was assigned to the writer of the
opinion of the Court.
Presiding Justice

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REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

COMMISSIONER OF CTA EB NO. 1241

NOKIA (PHILIPPINES), INC.,

In these consolidated Petitions for Review, both Nokia

Resolution 2 dated October 14, 2014, promulgated by the

Assailed Decision of August 12, 2014:

WHEREFORE, premises considered,

Assailed Resolution of October 14, 2014:

WHEREFORE, premises considered,

In her Petition for Review 3 filed on October 29, 2014,

On the other hand, the Petition for Review 4 filed by

or issuance of a Tax Credit Certificate (TCC) of the entire

THE FACTS AND THE PROCEEDINGS

The CIR, as head of the Bureau of Internal Revenue

Nokia, on the other hand, is a duly organized domestic

For the 2nd Quarter of taxable year 2009, Nokia

On July 24, 2009, Nokia filed its Quarterly VAT Return

On March 1, 2011, Nokia filed with the BIR an

Due to CIR's inaction, Nokia elevated the matter to the

In her Answer filed on September 9, 2011, the CIR

During the trial, the parties presented their evidence in

On August 12, 2014, the Court in Division rendered the

Not satisfied, both Nokia and the CIR filed their

Hence, the present consolidated appeals.

From the CIR's Petition for Review, docketed as CTA EB No.

WHETHER OR NOT THE SECOND DIVISION OF

From Nokia-Philippines' Petition for Review docketed as

WHETHER PETITIONER NOKIA (PHILIPPINES),

In her petition, CIR maintains that Nokia is not entitled

In addition, Nokia failed to submit all supporting and

In its Comment 5 filed on December 5, 2014, Nokia

Nokia also finds misplaced the CIR's contention that it

In its Petition for Review, Nokia states that the Court in

as accurate by the Court-commissioned Independent

In her Comment6 , the CIR stressed that the claimant

RULING OF THE COURT EN BANC

Both Petitions for Review lack merit.

On CIR's Petition for Review (CTA EB No. 1241 ):

CIR claims that the Court in Division has no jurisdiction

The Court En Bane is not convinced.

The issue on submission of complete documents in the

The CIR's reliance on RMO 53-98 is

Moreover, it is the taxpayer and not the CIR, who

The term "relevant supporting

In fine, the determination of what relevant supporting

decide on the claims for tax refund or credit indeterminate if

In a number of cases 9 , this Court has clarified that

Further, Section 112(C) of the NIRC of 1997, as

It has been ruled that the 120+30-day periods

But when will the submission of documents be deemed

In the very recent case of Pilipinas Total Gas, Inc. vs.

xxx Thus, taking the foregoing

Then, except in those instances where

such, he enjoys relative freedom to submit

The foregoing conclusion is but a

Thereafter, whether these

Lest it be misunderstood, the benefit