gibbs vs court of tax appeals

7/25/2019 Gibbs vs Court of Tax Appeals

http://slidepdf.com/reader/full/gibbs-vs-court-of-tax-appeals 1/4

Gibbs vs Court of Tax Appeals

1. TAXATION; APPEAL FROM DECISION OF COLLECTOR OF INTERNAL REVENUE, WHEN PERFECTED. —

Under Sect!n 11 !" Re#$%&c Act 11'(, )n* #er+!n )der+e&* )""ected %* ) dec+!n !r r$&n- !" te C!&&ect!r

!" Intern)& Reen$e, /)* "&e )n )##e)& n te C!$rt !" T)0 A##e)&+ tn 23 d)*+ )"ter te rece#t !" +$c

dec+!n !r r$&n-. In te c)+e )t %)r +nce #ett!ner+ )d "&ed ter )##e)& 4#ett!n "!r ree )nd re"$nd5

%e*!nd te )"!re/ent!ned 236d)* #er!d, te re+#!ndent C!$rt !" T)0 A##e)&+ )d )c7$red n! 8$r+dct!n

t! entert)n +)d )##e)&, )nd te d+/++)& !" te +)/e )+ #r!#er.

'. ID.; CLAIM FOR REFUND; TAXPA9ER MUST COMPL9 WITH RE:UIREMENTS OF OTH SECTION 23< OF THE

NATIONAL INTERNAL REVENUE CODE AND SECTION 11 OF REPULIC ACT NO. 11'(. — A t)0#)*er ! )+

#)d te t)0, eter $nder #r!te+t !r n!t, )nd ! + c&)/n- ) re"$nd !" te +)/e, /$+t c!/#&* t te

re7$re/ent+ !" %!t Sect!n 23< !" te N)t!n)& Intern)& Reen$e C!de )nd Sect!n 11 !" Re#$%&c Act N!.

11'(; t)t +, e /$+t "&e ) c&)/ "!r re"$nd t te C!&&ect!r !" Intern)& Reen$e tn ' *e)r+ "r!/ te

d)te !" + #)*/ent !" te t)0, )+ re7$red %* +)d Sect!n 23< !" te N)t!n)& Reen$e C!de, )nd )##e)& t!

te C!$rt !" T)0 A##e)&+ tn 23 d)*+ "r!/ rece#t !" te C!&&ect!r=+ dec+!n !r r$&n- den*n- + c&)/

"!r re"$nd, )+ re7$red %* +)d Sect!n 11 !" Re#$%&c Act N!. 11'(. I", !eer, te C!&&ect!r t)>e+ t/e n

decdn- te c&)/, )nd te #er!d !" t! *e)r+ + )%!$t t! end, te +$t !r #r!ceedn- /$+t %e +t)rted n te

C!$rt !" T)0 A##e)&+ %e"!re te end !" te t!6*e)r #er!d t!$t ))tn- te dec+!n !" te C!&&ect!r.

T+ + +! %ec)$+e !" te #!+te re7$re/ent !" Sect!n 23< )nd te d!ctrne t)t de&)* !" te C!&&ect!r n

rendern- dec+!n d!e+ n!t e0tend te #ere/#t!r* #er!d "0ed %* te +t)t$te. 4See U.S. . Mce&, '?' U.S.

<(<, (1 C. Ct. '?@; P. . Bener C!., Ltd. . D)d, ' P&., @(, @ O"". ). G( 1?(' C!&&e-e !" Or)&

Dent)& S$r-er* . C!$rt !" T)0 A##e)&+, 13' P&., 1', (@ O"". ). G' 3((.

2. ID.; TAX ASSESSMENT; APPEAL MUST E FILED WITHIN 23 DA9S FROM RECEIPT OF COLLECTOR=S

ASSESSMENT. — In te c)+e !" ) t)0#)*er ! )+ n!t *et #)d te t)0 )nd ! + #r!te+tn- te

)++e++/ent /)de %* te C!&&ect!r !" Intern)& Reen$e, e /$+t "&e + )##e)& t te C!$rt !" T)0 A##e)&+

tn 23 d)*+ "r!/ + rece#t !" te C!&&ect!r=+ )++e++/ent, )+ re7$red %* Sect!n 11 !" Re#$%&c Act N!.

11'(. Oter+e, + ")&$re t! c!/#&* t +)d +t)t$t!r* re7$re/ent !$&d %)r + )##e)& )nd de#re te

C!$rt !" T)0 A##e)&+ !" t+ 8$r+dct!n t! entert)n !r deter/ne te +)/e.

@. ID.; AUTHORIT9 OF THE DEPUT9 COLLECTOR OF INTERNAL REVENUE TO DEAL ON REFUND CASE. —

Sect!n 23 !" te N)t!n)& Intern)& Reen$e C!de )nd P)r. @ 45, Sect!n , )+ )/ended, !" te Intern)&

Reen$e M)n$)& !n A$dt )nd Ine+t-)t!n Pr!ced$re )nd ener)& Crc$&)r N!. V61?', e+t e0c&$+e&* n

te C!&&ect!r !" Intern)& Reen$e te )$t!rt* t! c!/#r!/+e, !r t! credt !r re"$nd t)0e+ err!ne!$+&* !r

&&e-)&&* receed, t)t +, en te )ct!n, n ) /)nner !" +#e)>n-, + )-)n+t te !ern/ent. Te #$r#!+e

+ t! )++$re t)t n! /#r!#er c!/#r!/+e, credt, !r re"$nd + /)de t! te #re8$dce !" te !ern/ent. $t

ere te )ct!n t! %e t)>en + t! den* te re7$e+t "!r re"$nd )nd de/)nd te #)*/ent !" te de"cenc*

t)0 "r!/ te t)0#)*er, te +)/e + e&& tn te )$t!rt* !" te De#$t* C!&&ect!r )nd + "n)& )nd %ndn-

$n&e++ re!>ed %* te C!&&ect!r.

CIR v BPI

Section 76. Final Adjustment Return. - Every corporation liable to tax

under Section 24 shall file a final adjustment return covering the total net incomefor the preceding calendar or fiscal year. f the sum of the !uarterly tax payments

made during the said taxable year is not e!ual to the total tax due on the entiretaxable net income of that year the corporation shall either"

#a$ %ay the excess tax still due& or

#b$ 'e refunded the excess amount paid( as the case may be.



n case the corporation is entitled to a refund of the excess estimated

!uarterly income taxes paid( the refundable amount sho)n on its final adjustmentreturn may be credited against the estimated !uarterly income tax liabilities for

the taxable !uarters of the succeeding taxable years. Once the option to carry-

over and apply the excess quarterly income tax against income tax due forthe taxable quarters of the succeeding taxable years has been made, such

option shall be considered irrevocable for that taxable period and no

application for tax refund or issuance of a tax credit certificate shall be

allowed therefor. #Emphases ours.$

*ence( the controlling factor for the operation of the irrevocability rule is

that the taxpayer chose an option& and once it had already done so( it could no

longer ma+e another one. ,onse!uently( after the taxpayer opts to carry-over its

excess tax credit to the follo)ing taxable period( the !uestion of )hether or not it

actually gets to apply said tax credit is irrelevant. Section 76 of the , of /007

is explicit in stating that once the option to carry over has been made( no

application for tax refund or issuance of a tax credit certificate shall be allo)ed

therefor.

1he ,ourt similarly disagrees in the declaration of the ,ourt of ppeals thatto deny the claim for refund of '%( because of the irrevocability rule( )ould be

tantamount to unjust enrichment on the part of the government. 1he ,ourt

addressed the very same argument in Philam( )here it elucidated that there )ould

be no unjust enrichment in the event of denial of the claim for refund under such

circumstances( because there )ould be no forfeiture of any amount in favor of the

government. 1he amount being claimed as a refund )ould remain in the account of

the taxpayer until utili3ed in succeeding taxable years(/ as provided in Section 76

of the , of /007. t is )orthy to note that unli+e the option for refund of excess

income tax( )hich prescribes after t)o years from the filing of the ( there is no

1



prescriptive period for the carrying over of the same. 1herefore( the excess income

tax credit of '%( )hich it ac!uired in /005 and opted to carry over( may be

repeatedly carried over to succeeding taxable years( i.e.( to /000( 2( 2/( and

so on and so forth( until actually applied or credited to a tax liability of '%.

ne cannot get a tax refund and a tax credit at the same time for the same

excess income taxes paid. Failure to signify ones intention in the FAR does not

mean outright barring of a valid request for a refund, should one still choose

this option later on. tax credit should be construed merely as an alternative

remedy to a tax refund under Section 76( subject to prior verification and approval

by respondent.

he reason for requiring that a choice be made in the FAR upon its

filing is to ease tax administration( particularly the self-assessment andcollection aspects. taxpayer that ma+es a choice expresses certainty or

preference and thus demonstrates clear diligence. ,onversely( a taxpayer that

ma+es no choice expresses uncertainty or lac+ of preference and hence sho)s

simple negligence or plain oversight.

x x x x

x x x 8espite the failure of 9%hilam: to ma+e the appropriate mar+ing in

the ' form( the filing of its written claim effectively serves as an expression

of its choice to request a tax refund( instead of a tax credit. 1o assert that any

future claim for a tax refund )ill be instantly hindered by a failure to signify onesintention in the is to render nugatory the clear provision that allo)s for a

t)o-year prescriptive period.2 #Emphases ours.$

!"R v #A$

2



inally( petitioner contends that according to )ell-established doctrine( a tax

refund( )hich is in the nature of a tax exemption( should be construed strictissimi

juris against the taxpayer. *o)ever( )hen the claim for refund has clear legal basis

and is sufficiently supported by evidence( as in the present case( then the ,ourt

shall not hesitate to grant the same.

gibbs vs court of tax appeals

Documents