Case Digest - Taxation

Taxation

Philam Asset vs CTA

G.R. 156637 / 62004 Dec. 14, 2005

Facts:

Petitioner acts as invesment manager of PFI &PBFI. It provides management &technical services and thus respectively paid for it’s services. PFI & PBFI withhold the amount of equivalent to 5% creditable tax regulation. On April 3, 1998, filed itr with a net loss thus incurred with holding tax. Petitioner filed for refund from BIR but was unanswered . CTA denied the petition for review. CA held that to request for either a refund or credit of income taxpaid, a corporation must signify it’s intention by marking the corresponding box on it’s annual corporate adjustment return.

Issue:

Whether or not petitioner is entitled to a refund of it’s creditible taxes.

Ruling:

Any tax income that is paid in excess of it’s amount due to the government may be refunded, provided that a taxpayer properly applies for the refund. One can not get a tax refund and a tax credit at the same time for the same excess to income taxes paid. Failure to signify one’s intention in Final Assessment Return (FAR) does not mean outright barring of a valid request for a refund

Requiring that the ITR on the FAR of the succeeding year be presented to the BIR in requesting a tax refund has no basis in law and jurisprudence. The Tax Code likewise allows the refund of taxes to taxpayer that claims it in writing within 2 years after payment of the taxes. Technicalities and legalism should not be misused by the government to keep money not belonging to it, and thereby enriched itself at the expense of it’s law-abiding citizens.

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