Facts:
On May 30, 1983, Philamlife paid its 1983 1st Quarter income tax of P3,246,141. On August 29, 1983, it paid P396,874 for the 2nd Quarter and also paid P708,464 for the3rd Quarter. In the 4th Quarter however, it suffered loss and thereby had no income tax liability. It therefore declared refund of the 1st and 2nd Quarter payments. In 198r, Philamlife suffered loss again and applied for tax credit of its overpaid taxes in 1983 and 1982. ON December 16, 1985, it filed another claim for refund with the CIR’s appellate division for an amended and increased amount. On January 2, 1986, it filed petition for review with the CTA.
CIR claims that the running of the prescriptive period commences from the remittance/payment at the end of the first quarter of the tax withheld instead of from the filing of the Final Adjustment Return. In such a case, Philamlife is not entitled for refund.
Issue:
Whether or not the reckoning date of the two-year prescriptive period provided in Section 230 of the NIRC for the recovery of tax erroneously or illegally collected commences from the remittance/payment at the end of the first quarter of the tax withheld instead of from the filing of the Final Adjustment Return
Ruling:
No. CIR is wrong. 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 19, 1986. The record shows that the claim for refund was field 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. Even if the two-year prescriptive period had already lapsed, the same is not jurisdictional and may be suspended for reasons of equity and other special circumstances.
On May 30, 1983, Philamlife paid its 1983 1st Quarter income tax of P3,246,141. On August 29, 1983, it paid P396,874 for the 2nd Quarter and also paid P708,464 for the3rd Quarter. In the 4th Quarter however, it suffered loss and thereby had no income tax liability. It therefore declared refund of the 1st and 2nd Quarter payments. In 198r, Philamlife suffered loss again and applied for tax credit of its overpaid taxes in 1983 and 1982. ON December 16, 1985, it filed another claim for refund with the CIR’s appellate division for an amended and increased amount. On January 2, 1986, it filed petition for review with the CTA.
CIR claims that the running of the prescriptive period commences from the remittance/payment at the end of the first quarter of the tax withheld instead of from the filing of the Final Adjustment Return. In such a case, Philamlife is not entitled for refund.
Issue:
Whether or not the reckoning date of the two-year prescriptive period provided in Section 230 of the NIRC for the recovery of tax erroneously or illegally collected commences from the remittance/payment at the end of the first quarter of the tax withheld instead of from the filing of the Final Adjustment Return
Ruling:
No. CIR is wrong. 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 19, 1986. The record shows that the claim for refund was field 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. Even if the two-year prescriptive 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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