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    CIR vs. Philamlife

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    lucky
    This case involves a dispute over the reckoning date of the two-year prescriptive period to claim a tax refund according to Section 230 of the tax code. The Court held that: [1] For corporate taxpayers filing quarterly tax returns, the date of payment in Section 230 refers to the final adjustment return, not quarterly payments; [2] Private respondent could not have ascertained their tax refund on the dates of quarterly payments, only after filing the final adjustment return; [3] Therefore, the two-year period began on the date of the final adjustment return, making the refund claim and petition for review timely.

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    CIR vs. Philamlife

    Uploaded by

    lucky
    12 views2 pages
    This case involves a dispute over the reckoning date of the two-year prescriptive period to claim a tax refund according to Section 230 of the tax code. The Court held that: [1] For corporate taxpayers filing quarterly tax returns, the date of payment in Section 230 refers to the final adjustment return, not quarterly payments; [2] Private respondent could not have ascertained their tax refund on the dates of quarterly payments, only after filing the final adjustment return; [3] Therefore, the two-year period began on the date of the final adjustment return, making the refund claim and petition for review timely.

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    CIR vs. Philamlife

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    This case involves a dispute over the reckoning date of the two-year prescriptive period to claim a tax refund according to Section 230 of the tax code. The Court held that: [1] For corporate taxpayers filing quarterly tax returns, the date of payment in Section 230 refers to the final adjustment return, not quarterly payments; [2] Private respondent could not have ascertained their tax refund on the dates of quarterly payments, only after filing the final adjustment return; [3] Therefore, the two-year period began on the date of the final adjustment return, making the refund claim and petition for review timely.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    12 views2 pages

    CIR vs. Philamlife

    Uploaded by

    lucky
    This case involves a dispute over the reckoning date of the two-year prescriptive period to claim a tax refund according to Section 230 of the tax code. The Court held that: [1] For corporate taxpayers filing quarterly tax returns, the date of payment in Section 230 refers to the final adjustment return, not quarterly payments; [2] Private respondent could not have ascertained their tax refund on the dates of quarterly payments, only after filing the final adjustment return; [3] Therefore, the two-year period began on the date of the final adjustment return, making the refund claim and petition for review timely.

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    of 2

    CIR vs. Philamlife (G.R. No.

    105208 May 29, 1995)

    FACTS:

     On May 30, 1983, private respondent Philamlife, For its Third Quarter of 1983, declared a net taxable income of P2,515,671.00
    and a tax due of P708,464.00. After crediting the amount of P3,899,525.00 it declared a refundable amount of P3,158,061.00.
     For its Fourth and final quarter ending December 31, private respondent suffered a loss and thereby had no income tax liability.

     In the return for that quarter, it declared a refund of P3,991,841.00 representing the first and second quarterly payments:
    P215,742.00 as withholding taxes on rental income for 1983 and P133,084.00 representing 1982 income tax refund applied as
    1983 tax credit.

     In 1984, private respondent again suffered a loss and declared no income tax liability. However, it applied as tax credit for 1984,
    the amount of P3,991,841.00 representing its 1982 and 1983 overpaid income taxes and the amount of P250,867.00 as
    withholding tax on rental income for 1984.

     On September 26, 1984, private respondent filed a claim for its 1982 income tax refund of P133,084.00.

     On November 22, 1984, it filed a petition for review with the Court of Tax Appeals with respect to its 1982 claim for refund. On
    December 16, 1985, it filed another claim for refund On January 2, 1986, private respondent filed a petition for review with the
    CTA, docketed as CTA Case No. 4018 regarding its 1983 and 1984 claims for refund in the above-stated amount. Later, it
    amended its petition by limiting its claim for refund to only P3,858,757.00

    ISSUE: In a case such as this, where a corporate taxpayer remits/pays to the BIR tax withheld on income for the first quarter but
    whose business operations actually resulted in a loss for that year, as reflected in the Corporate Final Adjustment Return
    subsequently filed with the BIR, should not the running of the prescriptive period commence from the remittance/payment at the
    end of the first quarter of the tax withheldinstead of from the filing of the Final Adjustment Return?

    HELD:

     The issue in this case is the reckoning date of the two-year prescriptive period provided in Section 230 of the National
    Internal Revenue Code (formerly Section 292) which states that: Recovery of tax erroneously or illegally collected. — No
    suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged
    to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without
    authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or
    credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such
    tax, penalty, or sum has been paid under protest or duress.

    In any case, no such suit or proceeding shall be begun after the expiration of two years from the date of payment of
    the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the
    Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon
    which payment was made, such payment appears clearly to have been erroneously paid.
    Forfeiture of refund. — A refund check or warrant issued in accordance with the pertinent provisions of this Code
    which shall remain unclaimed or uncashed within five (5) years from the date the said warrant or check was mailed or
    delivered shall be forfeited in favor of the government and the amount thereof shall revert to the General Fund.

     Section 292 (now Section 230) stipulates that the two-year prescriptive period to claim refunds should be counted from
    date of payment of the tax sought to be refunded. When applied to tax payers filing income tax returns on a quarterly
    basis, the date of payment mentioned in Section 292 (now Section 230) must be deemed to be qualified by Sections 68
    and 69 of the present Tax Code
     It may be observed that although quarterly taxes due are required to be paid within sixty days from the close of each
    quarter, the fact that the amount shall be deducted from the tax due for the succeeding quarter shows that until a final
    adjustment return shall have been filed, the taxes paid in the preceding quarters are merely partial taxes due from a
    corporation. Neither amount can serve as the final figure to quantity what is due the government nor what should be
    refunded to the corporation.

     This interpretation may be gleaned from the last paragraph of Section 69 of the Tax Code which provides that the
    refundable amount, in case a refund is due a corporation, is that amount which is shown on its final adjustment return
    and not on its quarterly returns.
     Therefore, when private respondent paid P3,246,141.00 on May 30, 1983, it would not have been able to ascertain on
    that date, that the said amount was refundable. The same applies with cogency to the payment of P396,874.00 on
    August 29, 1983.

    Clearly, the prescriptive period of two years should commence to run only from the time that the refund is
    ascertained, which can only be determined after a final adjustment return is accomplished. In the present
    case, this date is April 16, 1984, and two years from this date would be April 16, 1986. The record shows that
    the claim for refund was filed on December 10, 1985 and the petition for review was brought before the CTA on January
    2, 1986. Both dates are within the two-year reglementary period. Private respondent being a corporation, Section 292
    (now Section 230) cannot serve as the sole basis for determining the two-year prescriptive period for refunds. As we have
    earlier said in the TMX Sales case, Sections 68, 69, and 70 on Quarterly Corporate Income Tax Payment and Section 321
    should be considered in conjunction with it.
    Moreover, even if the two-year period had already lapsed, the same is not jurisdictional   and may be suspended for
    reasons of equity and other special circumstances.  

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