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GR No. 206526

2015-01-28

WINEBRENNER v. CIR

MENDOZA, J.

SO ORDERED.[5]

GR No. 206526

2015-01-28

WINEBRENNER v. CIR

MENDOZA, J.

In this case, it confounds the Court why the CTA did not recognize and discuss in detail the sufficiency of the annual ITR for 2004,[21] which was submitted by the petitioner. The CTA in fact said: In the present case, while petitioner did offer its Annual ITR/Final Adjustment Return for taxable year 2004, it appears that petitioner miserably failed to submit and offer as part of its evidence the first, second, and third Quarterly ITRs for the year 2004. Consequently, petitioner was not able to prove that it did not exercise its option to carry-over its excess CWT.[22]

GR No. 206526

2015-01-28

WINEBRENNER v. CIR

MENDOZA, J.

In the present case, while petitioner did offer its Annual ITR/Final Adjustment Return for taxable year 2004, it appears that petitioner miserably failed to submit and offer as part of its evidence the first, second, and third Quarterly ITRs for the year 2004. Consequently, petitioner was not able to prove that it did not exercise its option to carry-over its excess CWT.[22]

GR No. 188016

2015-01-14

REPUBLIC v. TEAM

BERSAMIN, J.

The two options are alternative and not cumulative in nature, that is, the choice of one precludes the other. The logic behind the rule, according to Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[14] is to ease tax administration, particularly the self-assessment and collection aspects. In Philam Asset Management, Inc., the Court expounds on the two alternative options of a corporate taxpayer on how the choice of one option precludes the other, viz: The first option is relatively simple. Any tax on income that is paid in excess of the amount due the government may be refunded, provided that a taxpayer properly applies for the refund.

GR No. 197561

2014-04-07

COCA-COLA BOTTLERS PHILIPPINES v. CITY OF MANILA

PERALTA, J.

Under the first option, any tax on income that is paid in excess of the amount due the government may be refunded, provided that a taxpayer properly applies for the refund.[19] On the other hand, the second option works by applying the refundable amount against the tax liabilities of the petitioner in the succeeding taxable years.[20]

GR No. 174157

2010-10-20

CIR v. MCGEORGE FOOD INDUSTRIES

CARPIO, J.

We are not unaware of our ruling in another case allowing refund for excess tax payment in 1997 despite the taxpayer's selection of the carry-over and credit option, following Section 69 of the 1977 NIRC.[15] However, the issue of the applicability of the 1997 NIRC was never raised in that case. In the present case, the applicability of Section 76 of the 1997 NIRC over Section 69 of the 1977 NIRC was squarely raised as the core issue. In two other cases where the applicability of Section 76 of the 1997 NIRC was also squarely raised, the Court applied the irrevocability of the option clause under Section 76 to deny, as here, claims for refund without prejudice to the application of the overpayments to the taxpayers' liability in the succeeding tax cycles.[16] We held in the leading case of Philam Asset Management, Inc. v. Commissioner of Internal Revenue:[17]

GR No. 173854

2010-03-15

CIR v. FAR EAST BANK

DEL CASTILLO, J.

And while the petitioner has the power to make an examination of the returns and to assess the correct amount of tax, his failure to exercise such powers does not create a presumption in favor of the correctness of the returns. The taxpayer must still present substantial evidence to prove his claim for refund. As we have said, there is no automatic grant of a tax refund.[21]

GR No. 178490

2009-07-07

CIR v. BANK OF PHILIPPINE ISLANDS

CHICO-NAZARIO, J.

The factual background of Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[12] cited by the CIR, is closer to the instant Petition. Both involve tax credits acquired and claims for refund filed more than a decade after those in BPI-Family, to which Section 76 of the NIRC of 1997 already apply.

GR No. 163345

2008-07-04

CIR v. PERF REALTY CORPORATION

REYES, R.T., J.

In Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[7] the Court had occasion to trace the history of the Final Adjustment Return found in Section 69 (now 76) of the NIRC. Thus:The provision on the final adjustment return (FAR) was originally found in Section 69 of Presidential Decree (PD) No. 1158, otherwise known as the "National Internal Revenue Code of 1977." On August 1, 1980, this provision was restated as Section 86 in PD 1705.

GR No. 171956

2008-01-18

STATE LAND INVESTMENT CORPORATION v. CIR

SANDOVAL-GUTIERREZ, J.

Both the CTA and the Court of Appeals failed to consider that petitioner's intention was to apply the tax credit corresponding to taxable year 1997 to its income tax due in 1998. As previously mentioned, after paying P4,187,523.00 as income tax due in 1998, there remained an unutilized tax credit of P9,742,270.51. It was not necessary on the part of petitioner to file with the BIR its income tax return for 1999. In Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[7] we held that the Tax Code merely requires the filing of the final adjustment return for the preceding not the succeeding taxable year. Indeed, any refundable amount indicated therein corresponding to the preceding taxable year may be credited against the estimated income tax liabilities for the taxable quarters of the succeeding taxable year. Requiring that the income tax return or the final adjustment return of the succeeding year be presented to the BIR in requesting a tax refund has no basis in law and jurisprudence.

GR NO. 176290

2007-09-21

SYSTRA PHILIPPINES v. CIR

CORONA, J.

Furthermore, this case is closely similar to Philam Asset Management, Inc. v. Commissioner of Internal Revenue.[22] In that case, Philam Asset Management, Inc. had an unapplied creditable withholding tax in the amount of P459,756.07 for the year 1998. It carried over the said excess tax to the following taxable year, 1999. In the next succeeding year, it had a tax due in the amount of P80,042 and a creditable withholding tax in the amount of P915,995. As such, the amount due for the year 1999 (P80,042) was credited to its P915,995 creditable withholding tax for that year. Thus, its 1998 creditable withholding tax in the amount of P459,756.07 remained unutilized. Thereafter, it filed a claim for refund with respect to the unapplied creditable withholding tax of P459,756.07 for the year 1998. The Court denied the claim and ruled:Section 76 [is] clear and unequivocal. Once the carry-over option is taken, actually or constructively, it becomes irrevocable. Petitioner has chosen that option for its 1998 creditable withholding taxes. Thus, it is no longer entitled to a tax refund of P459,756.07, which corresponds to its 1998 excess tax credit. Nonetheless, the amount will not be forfeited in the government's favor, because it may be claimed by petitioner as tax credits in the succeeding taxable years. (emphasis supplied)

	GR No. 206526 2015-01-28	WINEBRENNER v. CIR MENDOZA, J.
SO ORDERED.[5]
	GR No. 206526 2015-01-28	WINEBRENNER v. CIR MENDOZA, J.
In this case, it confounds the Court why the CTA did not recognize and discuss in detail the sufficiency of the annual ITR for 2004,[21] which was submitted by the petitioner. The CTA in fact said: In the present case, while petitioner did offer its Annual ITR/Final Adjustment Return for taxable year 2004, it appears that petitioner miserably failed to submit and offer as part of its evidence the first, second, and third Quarterly ITRs for the year 2004. Consequently, petitioner was not able to prove that it did not exercise its option to carry-over its excess CWT.[22]
	GR No. 206526 2015-01-28	WINEBRENNER v. CIR MENDOZA, J.
In the present case, while petitioner did offer its Annual ITR/Final Adjustment Return for taxable year 2004, it appears that petitioner miserably failed to submit and offer as part of its evidence the first, second, and third Quarterly ITRs for the year 2004. Consequently, petitioner was not able to prove that it did not exercise its option to carry-over its excess CWT.[22]
	GR No. 188016 2015-01-14	REPUBLIC v. TEAM BERSAMIN, J.
The two options are alternative and not cumulative in nature, that is, the choice of one precludes the other. The logic behind the rule, according to Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[14] is to ease tax administration, particularly the self-assessment and collection aspects. In Philam Asset Management, Inc., the Court expounds on the two alternative options of a corporate taxpayer on how the choice of one option precludes the other, viz: The first option is relatively simple. Any tax on income that is paid in excess of the amount due the government may be refunded, provided that a taxpayer properly applies for the refund.
	GR No. 197561 2014-04-07	COCA-COLA BOTTLERS PHILIPPINES v. CITY OF MANILA PERALTA, J.
Under the first option, any tax on income that is paid in excess of the amount due the government may be refunded, provided that a taxpayer properly applies for the refund.[19] On the other hand, the second option works by applying the refundable amount against the tax liabilities of the petitioner in the succeeding taxable years.[20]
	GR No. 174157 2010-10-20	CIR v. MCGEORGE FOOD INDUSTRIES CARPIO, J.
We are not unaware of our ruling in another case allowing refund for excess tax payment in 1997 despite the taxpayer's selection of the carry-over and credit option, following Section 69 of the 1977 NIRC.[15] However, the issue of the applicability of the 1997 NIRC was never raised in that case. In the present case, the applicability of Section 76 of the 1997 NIRC over Section 69 of the 1977 NIRC was squarely raised as the core issue. In two other cases where the applicability of Section 76 of the 1997 NIRC was also squarely raised, the Court applied the irrevocability of the option clause under Section 76 to deny, as here, claims for refund without prejudice to the application of the overpayments to the taxpayers' liability in the succeeding tax cycles.[16] We held in the leading case of Philam Asset Management, Inc. v. Commissioner of Internal Revenue:[17]
	GR No. 173854 2010-03-15	CIR v. FAR EAST BANK DEL CASTILLO, J.
And while the petitioner has the power to make an examination of the returns and to assess the correct amount of tax, his failure to exercise such powers does not create a presumption in favor of the correctness of the returns. The taxpayer must still present substantial evidence to prove his claim for refund. As we have said, there is no automatic grant of a tax refund.[21]
	GR No. 178490 2009-07-07	CIR v. BANK OF PHILIPPINE ISLANDS CHICO-NAZARIO, J.
The factual background of Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[12] cited by the CIR, is closer to the instant Petition. Both involve tax credits acquired and claims for refund filed more than a decade after those in BPI-Family, to which Section 76 of the NIRC of 1997 already apply.
	GR No. 163345 2008-07-04	CIR v. PERF REALTY CORPORATION REYES, R.T., J.
In Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[7] the Court had occasion to trace the history of the Final Adjustment Return found in Section 69 (now 76) of the NIRC. Thus:The provision on the final adjustment return (FAR) was originally found in Section 69 of Presidential Decree (PD) No. 1158, otherwise known as the "National Internal Revenue Code of 1977." On August 1, 1980, this provision was restated as Section 86 in PD 1705.
	GR No. 171956 2008-01-18	STATE LAND INVESTMENT CORPORATION v. CIR SANDOVAL-GUTIERREZ, J.
Both the CTA and the Court of Appeals failed to consider that petitioner's intention was to apply the tax credit corresponding to taxable year 1997 to its income tax due in 1998. As previously mentioned, after paying P4,187,523.00 as income tax due in 1998, there remained an unutilized tax credit of P9,742,270.51. It was not necessary on the part of petitioner to file with the BIR its income tax return for 1999. In Philam Asset Management, Inc. v. Commissioner of Internal Revenue,[7] we held that the Tax Code merely requires the filing of the final adjustment return for the preceding not the succeeding taxable year. Indeed, any refundable amount indicated therein corresponding to the preceding taxable year may be credited against the estimated income tax liabilities for the taxable quarters of the succeeding taxable year. Requiring that the income tax return or the final adjustment return of the succeeding year be presented to the BIR in requesting a tax refund has no basis in law and jurisprudence.
	GR NO. 176290 2007-09-21	SYSTRA PHILIPPINES v. CIR CORONA, J.
Furthermore, this case is closely similar to Philam Asset Management, Inc. v. Commissioner of Internal Revenue.[22] In that case, Philam Asset Management, Inc. had an unapplied creditable withholding tax in the amount of P459,756.07 for the year 1998. It carried over the said excess tax to the following taxable year, 1999. In the next succeeding year, it had a tax due in the amount of P80,042 and a creditable withholding tax in the amount of P915,995. As such, the amount due for the year 1999 (P80,042) was credited to its P915,995 creditable withholding tax for that year. Thus, its 1998 creditable withholding tax in the amount of P459,756.07 remained unutilized. Thereafter, it filed a claim for refund with respect to the unapplied creditable withholding tax of P459,756.07 for the year 1998. The Court denied the claim and ruled:Section 76 [is] clear and unequivocal. Once the carry-over option is taken, actually or constructively, it becomes irrevocable. Petitioner has chosen that option for its 1998 creditable withholding taxes. Thus, it is no longer entitled to a tax refund of P459,756.07, which corresponds to its 1998 excess tax credit. Nonetheless, the amount will not be forfeited in the government's favor, because it may be claimed by petitioner as tax credits in the succeeding taxable years. (emphasis supplied)

PHILAM ASSET MANAGEMENT v. CIR