Emerson Electric (Asia) Limited-ROHQ v. Commissioner of Internal Revenue

FIRST DIVISION [C.T.A. CASE NO. 8583. February 23, 2017.] For: Refund EMERSON ELECTRIC (ASIA) LIMITED-ROHQ , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . [C.T.A. CASE NO. 8584. February 23, 2017.] For: Refund EMERSON ELECTRIC (ASIA) LIMITED-ROHQ , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION MINDARO-GRULL A, J p : These are two (2) consolidated Petitions for Review 1 filed separately on November 29, 2012 by Emerson Electric (Asia) Limited-ROHQ as petitioner, against the Commissioner of Internal Revenue as respondent, before the Court in Division, pursuant to Section 7 (a) (2) of Republic Act (RA) No. 1125, An Act Creating the Court of Tax Appeals, as, amended, 2 as well as Rule 4, Section 3 (a) (2), in relation to Rule 8, Section 4 (a) of the Revised Rules of the Court of Tax Appeals (RRCTA), 3 as amended. HTcADC Petitioner seeks for a refund or issuance of a tax credit certificate ("TCC") in the total amount of Php42,512,999.31 representing unutilized input value-added tax (VAT) arising from petitioner's domestic purchases of goods and services, as well as input VAT from purchases/importations of capital goods, which are attributable to zero-rated transactions, or more specifically as follows: 1. CTA Case No. 8583 in the amount of Php29,236,530.31 for the period April 2008 to December 2008 (3rd and 4th Quarters of Fiscal Year 2008 and 1st Quarter of Fiscal Year 2009); and 2. CTA Case No. 8584 in the amount of Php13,276,469.00 for the period January to March 2008. Petitioner is a corporation duly organized and existing under the laws of Hongkong with license to transact business in the Philippines and with office address at 7/F Robinson Cybergate Plaza Bldg., EDSA, Mandaluyong City. Respondent Commissioner of Internal Revenue is the head of the Bureau of Internal Revenue acting through the Department of Finance One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center ("DOF-OSS"), and who holds office at the BIR National Office Building located at Agham Road, Diliman, Quezon City. She is vested with authority to administer all laws pertaining to internal revenue taxes and has jurisdiction to decide disputed tax assessments. Petitioner is duly registered with the Securities and Exchange Commission and is licensed as a regional operating headquarters (ROHQ) in the Philippines to provide qualifying services of general administration and planning, business planning and coordination, sourcing/procurement of raw materials and components, corporate finance and advisory services, marketing control and sales promotion, training, and personnel management, logistics services and product development, technical support and maintenance, data processing and communication, and business development to its affiliates in the Philippines and abroad. 4 Petitioner is also registered with the Bureau of Internal Revenue ("BIR") as a VAT taxpayer with TIN/VAT Registration No. 252-158-539-000 as of May 30, 2007 as shown in BIR Certificate of Registration No. 41 following petitioner's transfer from RDO 43A (Pasig) due to change of address. Petitioner adopts the fiscal year of October 1 of the prior year to September 30 of the current year. For the period from January to December 2008, petitioner filed with BIR its Quarterly VAT Returns 5 as follows: CAIHTE Period Covered Quarter Date Filed Jan-Mar 2008 2nd Quarter FY 2008 April 22, 2008 April-June 2008 3rd Quarter FY 2008 July 25, 2008 July-Sept 2008 4th Quarter FY 2008 October 27, 2008 October-December 2008 1st Quarter FY 2009 January 26, 2009 For the period from January to December 2008, petitioner rendered services to non-resident entities. It, likewise, paid input taxes on its purchases of goods and services attributable to its VATable and zero-rated sales. Input taxes in the amount of Php42,512,999.31 came from purchases/importations of capital goods. As shown in petitioner's Quarterly VAT Returns for the 2nd to 4th Quarters of FY 2008, and the 1st Quarter of FY 2009, the input taxes attributable to petitioner's zero-rated transactions and purchases/importations of capital goods in the total amount of Php42,512,999.31. The amount of input VAT attributable to its zero-rated sales incurred and paid in the 2nd to 4th quarters of FY 2008, and 1st quarter of FY 2009 were not offset against any output VAT liability during and in succeeding quarters. Petitioner's Quarterly VAT Returns for the 2nd to 4th Quarters of fiscal year 2010 however reflected that the input VAT in the amounts of Php13,276,469 and Php29,236,530.31 were deducted from the total available input tax respectively. 6 Consequently, petitioner's administrative claims for refund for the 2nd to 4th quarters of FY 2008 in the amount of Php13,276,469.00 and for the 1st quarter of FY 2009 in the amount of Php29,236,530.31 were filed with the DOF-OSS on March 31, 2010 and June 29, 2010 respectively. On July 5, 2012, petitioner submitted two letters 7 with supporting documents to the DOF-OSS in support of its claim for refund for the periods January to March 2008 and April to December 2008 respectively. On account of the BIR's inaction on its administrative claims within the mandatory period of 120-days, petitioner filed, on November 29, 2012, its judicial claim for refund with this Court via the instant Petition for Review. After asking for an extension of time, respondent filed her Answer on January 18, 2013, raising therein the following special and affirmative defenses: aScITE xxx xxx xxx "4. She reiterates and re-pleads the preceding paragraphs of this Answer as part of her Special and Affirmative Defenses; 5. Petitioner's claim refund/tax credit certificate for the issuance of tax is subject to administrative investigation/examination by respondent's Bureau; 6. Taxes paid and collected by the BIR are presumed to have been paid in accordance with law, rules and regulations and the burden to prove otherwise is incumbent upon the petitioner; 7. It is incumbent upon taxpayer to prove its compliance with the pertinent provisions of the NIRC, particularly Sections 112, 113, AND 114 to validly claim for a tax credit/refund; 8. Taxpayer must establish by sufficient and competent evidence that it is entitled to a tax refund/credit. In fact, Petitioner should be deemed to have abandoned its claim when it failed to submit its supporting documents within a reasonable time from the filing of its claim; 9. Claims for refund are strictly construed against the taxpayer as the same partakes the nature of the tax exemption; 10. The petitioner should prove its legal basis for claiming the amount to be refunded." On January 23, 2013, a Notice of Pre-Trial Conference issued by this Court setting the case for the pre-trial conference on February 28, 2013 at 1:30 p.m. On April 24, 2013, this Court issued an Order granting petitioner's "Motion for Consolidation with Motion for Deferment of Pre-Trial," thus, CTA Case No. 8584 was consolidated with CTA Case No. 8583. On June 14, 2013, petitioner filed its Pre-Trial Brief, while respondent filed his Pre-Trial Brief for Petitioner on June 21, 2013. Thereafter, the parties submitted their Joint Stipulation of Facts and Issues on July 25, 2013. After finding everything in order, this Court issued a Pre-Trial Order on October 22, 2013, thereby declaring the pre-trial terminated and ordering petitioner to proceed with the initial presentation of its evidence. Petitioner presented and offered the testimony of its Tax Accountant, Ms. Pamela B. Ariaga, Accounting Manager, Ms. Anna Mae Santos, and Tax and Compliance Manager, Atty. Raquel Dujunco. DETACa Acting on petitioner's Motion to Commission an ICPA, the same was granted and ordered the ICPA to submit his ICPA report within thirty (30) days therefrom. In compliance, the ICPA submitted his report on June 17, 2013. On April 30, 2014, petitioner filed its Formal Offer of Evidence with Omnibus Motion, describing in detail the various documents supporting petitioner's herein claim for refund or the issuance of a tax credit certificate. On December 16, 2014, this Court issued a resolution admitting the exhibits offered except for the Judicial Affidavit of Mr. Emmanuel Mendoza dated November 13, 2013 marked as Exhibit "BB". Consequently, petitioner filed a Motion for Reconsideration with Motion to Admit attached documents thereto praying that the Judicial Affidavit of Mr. Mendoza be admitted subject to his identification, as well as a Supplemental Motion for Reconsideration with Motion to Admit Submission of the Independent Certified Public Accountant. This Court granted petitioner's Motions by admitting the previously denied exhibits. Petitioner's documentary exhibits are as follows: Exhibit Document A Not offered. A-1 Not offered. A-2 Not offered. B Not offered. C Authority to Print No. 3AU0000622750 dated July 22, 2008 D Hong Kong Departmental Interpretation and Practice Notes No. 44 E Quarterly VAT Return for 2nd quarter of fiscal year ("FY") 2008 E-1 Quarterly VAT Return for the 3rd quarter of FY 2008 E-2 Quarterly VAT Return for the 4th quarter of FY 2008 E-3 Quarterly VAT Return for the 1st quarter of FY 2009 E-4 to E-10 Quarterly VAT Return for the 2nd quarter of FY 2009 to the 4th quarter of FY 2010 F Sales Invoice No. 3814 issued to petitioner by Federal Protection Systems, Inc. F-1 Official Receipt No. 4020 issued to petitioner by Federal Protection Systems, Inc. F-2 Not offered. F-3 Not offered. G Schedule of purchases for the 2nd quarter of FY 2008 G-1 Schedule of purchases for the 3rd quarter of FY 2008 G-2 Schedule of purchases for the 4th quarter of FY 2008 G-3 Schedule of purchases for the 1st quarter of FY 2009 H Audited Financial Statements ("AFS") of petitioner for FY 2008 H-1 AFS of petitioner for FY 2009 I Service Agreement between petitioner and Asco Power Technologies, LP J Intercompany Debit Note issued to Copeland Corporation dated January 26, 2008 J-1 Sales Invoice No. 00348 dated January 25, 2008 issued by petitioner to Emerson Asia Pacific Procurement Office K Schedule of petitioner's zero-rated sales for the 2nd quarter of FY 2008 K-1 Schedule of petitioner's zero-rated sales for the 3rd quarter of FY 2008 K-2 Schedule of petitioner's zero-rated sales for the 4th quarter of FY 2008 K-3 Schedule of petitioner's zero-rated sales for the 1st quarter of FY 2009 L Certificate of Inward Remittance issued by Standard Chartered Bank dated July 17, 2009 L-1 Certification issued by Standard Chartered Bank dated February 5, 2014 L-2 Not offered. L-3 Credit Advice issued by Standard Chartered Bank dated March 29, 2010 M SEC Certificate of Non-Registration issued to Emerson Power Transmission M-1 Articles of Amendment of Closetmaid Corporation M-2 Tax Residency Certificate of Closetmaid Corporation M-3 Tax Assessment of Emerson Electric (Asia) Limited M-4 to M-44 SEC Certificates of Non-Registration N Not offered. N-1 Not offered. O Certificate of no pending input VAT refund claim issued to petitioner for the period January to March 2008 O-1 Certificate of no pending input VAT refund claim issued to petitioner for the period April to December 2008 P Letter dated July 5, 2012 addressed to Ms. Nelia Castillo for the period 2nd to 4th quarter of 2008 P-1 Letter dated July 5, 2012 addressed to Ms. Nelia Castillo for the period 1st quarter of 2008 Q-1 to Q-4495 Official Receipts, Sales Invoices and similar documents in support of petitioner's purchases of goods, other than capital goods, and services R-1 to R-1080 Supporting documents/Sales Invoices for zero-rated sales for the 2nd to 4th quarter of FY 2008 and 1st quarter FY 2009 S-1 to S-6 Supporting invoices for VAT-able sales for the period 2nd to 4th quarter of FY 2008 and 1st quarter of FY 2009 T-1 to T-576 Certificates of inward remittances for the period 2nd to 4th quarter of FY 2008 and 1st quarter of FY 2009 V-1 to V-29 Service agreements between petitioner and its various non-resident clients W-1 to W-21 Articles of Incorporation, Certificates of Residency and/or Tax Assessments and Certificate of Corporate Records of petitioner's non-resident clients X Schedule of purchases and input VAT for the 2nd to 4th quarters of FY 2008 and 1st quarter of FY 2009 AA General ledger of Property, Plant and Equipment BB Report of the independent Certified Public Accountant dated June 17, 2013 including the Annexes thereof BB-1 Signature of the independent CPA On March 21, 2016, petitioner submitted its Memorandum, 8 while respondent failed to file her memorandum despite notice, as per records verification dated April 6, 2016. Thereafter, this Court, in the Resolution dated April 14, 2016, considered the instant case submitted for decision. HEITAD The sole issue stipulated upon by the parties for this Court's resolution is whether or not petitioner is entitled to a refund or tax credit of its unutilized input VAT arising from purchases of goods and services, as well as purchases/importations of capital goods, attributable to zero-rated sales for the 2nd quarter until the 4th quarter of its fiscal year 2008, or first quarter of the fiscal year 2009 in the amount of Php42,512,999.31. After consideration of all the arguments and evidence presented, this Court finds that the instant petition lacks merit. In claiming input VAT refund or tax credits for zero-rated or effectively zero-rated VAT, Section 112 (A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended, respectively provide that: "SEC. 112. Refunds or Tax Credits of Input Tax. (A) Zero-Rated or Effectively Zero-Rated Sales . Any VAT registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) Section 108 (B)(1) n and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108 (B)(6), n the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. xxx xxx xxx (C) Period within which Refund or Tax Credit of Input Taxes shall be Made . In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one-hundred-twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals." aDSIHc Based on the above provision and pertinent jurisprudence over the matter, a taxpayer engaged in zero-rated or effectively zero-rated transactions is entitled to claim a refund or tax credit of input taxes attributable to such sales upon compliance with the following requisites: 1. there must be zero-rated sales or effectively zero-rated sales; 2. input taxes were incurred or paid; 3. that such input taxes are attributable to zero-rated or effectively zero-rated sales; 4. that the input taxes were not applied against any output VAT liability during and in the succeeding quarters; and 5. the claim for refund was filed within the two (2)-year prescriptive period. Considering that the instant case essentially involves technical substantiation, this Court deems it best to first discuss the timeliness of petitioner's claim both in the administrative and judicial levels. Needless to state, to inquire into the existence of jurisdiction over the subject matter is the primary concern of the court, for thereon would depend the validity of its entire proceedings. In applying Section 112 (C) of the NIRC of 1997, as amended, the Supreme Court, in the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. , 9 exhaustively explained the significance of the period mentioned therein in relation to the validity of filing administrative and judicial claims for refund. It elucidated as follows: "The pivotal question of when to reckon the running of the two-year prescriptive period, however, has already been resolved in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation , where we ruled that Section 112(A) of the NIRC is the applicable provision in determining the start of the two-year period for claiming a refund/credit of unutilized input VAT, and that Section 204 (C) and Section 229 of the NIRC are inapplicable as both provisions apply only to instances of erroneous payment or illegal collection of internal revenue taxes. We explained that: The above proviso [Section 112 (A) of the NIRC] clearly provides in no uncertain terms that unutilized input VAT payments not otherwise used for any internal revenue tax due the taxpayer must be claimed within two years reckoned from the close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said tax was paid or not. x x x. ATICcS xxx xxx xxx Section 112(D) of the NIRC clearly provides that the CIR has '120 days, from the date of the submission of the complete documents in support of the application [for tax refund/credit],' within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer's recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days. xxx xxx xxx" Based on the above-mentioned case, the two (2)-year prescriptive period is reckoned from the close of the taxable quarter when the sales were made, regardless of when the input VAT was paid. In the instant case, the administrative claims for refund for the period of January to March 2008 and April to December 2008 were filed with the DOF-OSS on March 31, 2010 and June 29, 2010 respectively. 10 Counting two (2) years from March 30 and December 31, 2008, representing the 2nd to 4th fourth n quarters of FY 2008 and the 1st quarter of FY 2009, respectively, the administrative claims would seem to have been filed well within the two (2)-year prescriptive period. The Court, however, deems it necessary to stress out that the term "filing" accompanies with it the term "complete documents" under Section 112 (C) of the NIRC of 1997, as amended. It should be understood to refer to those documents that are necessary to support the application for refund or tax credit certificate, as determined by the taxpayer. The BIR examiner can require the taxpayer to submit additional documents but the examiner cannot demand what type of supporting documents should be submitted. Section 112 (D) further provides that the CIR has to decide on an administrative claim within one hundred twenty (120) days from the date of submission of complete documents in support thereof. Thereafter, the taxpayer affected by the CIR's decision or inaction may appeal to the CTA within thirty (30) days from receipt of the decision or from the expiration of the 120-day period within which the claim has not been acted upon. ETHIDa Bearing in mind that the burden to prove entitlement to a tax refund is on the taxpayer, it is presumed that in order to discharge its burden, petitioner had attached complete supporting documents necessary to prove its entitlement to a refund in its application. Under the premises, Section 112 is primarily intended to benefit the taxpayer, to ensure that his claim is decided judiciously and expeditiously. To allow the CIR to determine the completeness of the documents submitted, and dictate the running period would place the taxpayer at the mercy of the examiner who may require the production of documents that the taxpayer cannot submit. Further, it gives him the power to unduly delay the administrative claim, and prevent filing of the judicial claim in the CTA. Anent the issue as to when should the submission of documents be deemed "completed" for purposes of determining the running of the 120-day period was addressed in the case of Pilipinas Total Gas, Inc. vs. Commissioner of Internal Revenue , 11 the Supreme Court ruled in this wise: "xxx upon filing of his application for tax credit or refund for excess creditable input taxes, the taxpayer-claimant is given thirty (30) days within which to complete the required documents, unless given further extension by the head of the processing unit . If, in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimate amount of claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigating/processing office. Notice, by way of a request from the tax collection authority to produce the complete documents in these cases, became essential. It is only upon the submission of these documents that the 120-day period would begin to run. " (Emphasis Supplied) xxx xxx xxx Based on the foregoing, the taxpayer is the one who ultimately determines what type of documents to submit, as well as given reasonable freedom when the complete documents have been submitted for the purpose of commencing and continuing of the running of the 120-day period. Nevertheless, this benefit given to the taxpayer is not unbridled. Under RMC No. 49-2003, 12 it provides as follows: xxx xxx xxx "For pending claims which have not been acted upon by the investigating/processing office due to incomplete documentation, the taxpayer-claimants are given thirty (30) days within which to submit the documentary requirements unless given further extension by the head of the processing unit, but such extension should not exceed thirty (30) days. " TIADCc xxx xxx xxx For current and future claims for tax credit/refund, the same shall be processed within one hundred twenty (120) days from receipt of the complete documents. If, in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimate amount of claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigating/processing office, which shall be construed as within the one hundred twenty (120)-day period. " (Emphasis Supplied) In sum, the rule is that from the date that an administrative claim for excess unutilized VAT is filed, a taxpayer only has thirty (30) days within which to submit all the documentary requirements that would substantiate his claim, unless the CIR gives further extension. In this case, records 13 disclose that in response to a second notice issued by the DOF-OSS, petitioner submitted additional supporting documents as per its letter-transmittal signed by Arnel Reyes containing a statement that the pertinent documents are transmitted to the DOF-OSS that such particular documents, along with those earlier submitted, completes the mandatory requirements for VAT refund/credit claims. Subsequently, however, on July 5, 2012, petitioner submitted two letters 14 with supporting documents to the DOF-OSS in support of its claim for refund for the periods January to March 2008 and April to December 2008 respectively. Considering that the records do not show that a third written notice was sent by the DOF-OSS to inform petitioner that the supporting documents are incomplete or to require petitioner to submit additional documents, it can be surmised that petitioner had already submitted the complete documents required by respondent in order for petitioner to claim a refund or tax credit on October 14, 2011. From the date of submission of petitioner's documents in support of its claim, respondent had one hundred twenty (120) days or until February 11, 2012 to act on petitioner's administrative claim. Adding thirty (30) days thereon, which shall be until March 12, 2012 pursuant to Section 1 of Rule 22 of the Revised Rules of Court, 15 within which to appeal its judicial claim via the instant Petitions for Review. Undoubtedly, petitioner's act of filing the Petitions for Review on November 29, 2012, were indisputably filed beyond the prescriptive period provided under Section 112 (D) of the NIRC of 1997, as amended. Thus, due to the late filing of the Petitions for Review, the Court of Tax Appeals is therefore, bereft of jurisdiction to act on the said judicial claim. cSEDTC While it is true that taxpayers are given such freedom to determine when documents submitted are deemed "complete", it is also true that when a law or rule mandates that a party must comply with a specific obligation for the benefit of another, the non-compliance by the former should not operate to prejudice the latter. As in this case, petitioner's obligation was to submit the required documents within thirty (30) days only from October 14, 2011. Let it be stressed that the right to appeal to the CTA is a mere statutory privilege, thus, the exercise of such statutory privilege requires strict compliance with the conditions attached by the statute for its exercise. We reiterate that the law is explicit on the mandatory and jurisdictional nature of the 120+30 days period. 16 Consequently, for failure of petitioner to comply with the period, petitioner lost its right to claim a refund on its alleged excess input VAT. Tax refunds or credits, just like tax exemptions, are strictly construed against the taxpayer. The burden is on the taxpayer to show strict compliance with the conditions for the grant of tax refund or credit. Finding that this Court has no jurisdiction, We shall no longer proceed to determine the merit of petitioner's claim for refund/tax credit. WHEREFORE , premises considered, the Petitions for Review are hereby DENIED for having been belatedly filed. SO ORDERED. (SGD.) CIELITO N. MINDARO-GRULLA Associate Justice Erlinda P. Uy, J. , concurs . Roman G. del Rosario, P.J. , see Concurring Opinion. Separate Opinions DEL ROSARIO , P.J., concurring opinion : I concur with the ponencia in denying the Petitions for Review for the same were filed beyond the prescriptive period under Section 112 (D) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 9337. At this point, I would like to expound on the concept of a "deemed denial decision" of the Commissioner of Internal Revenue (CIR) on the taxpayer's claim for refund of input tax attributable to zero-rated sales, including the reckoning point of the one-hundred-twenty-day (120-day) period in this case which is crucial in filing an appeal with the CTA. 1 AIDSTE In Chemrez, Inc. vs. Commissioner of Internal Revenue , 2 the Court En Banc articulated on the concept of a "deemed denial decision" after the lapse of the 120-day period without the BIR's action on the claim, which "deemed denial" if not timely appealed with the CTA becomes final and unappealable, viz .: "Section 112(C) 3 of the NIRC, as amended 4 provides judicial remedy relative to taxpayers' claim for refund of input VAT attributable to zero-rated sales, viz. : "SEC. 112. Refunds or Tax Credits of Input Tax. xxx (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one-hundred-twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals ." (Boldfacing supplied) In CIR vs. Aichi Forging Company of Asia, Inc. , 5 the Supreme Court clarified the two scenarios contemplated under Section 112(D) of the NIRC [now Sec. 112(C)] which are appealable to the CTA within the 30-day period, viz. : "In fact, applying the two-year period to judicial claims would render nugatory Section 112 (D) of the NIRC, which already provides for a specific period within which a taxpayer should appeal the decision or inaction of the CIR. The second paragraph of Section 112 (D) of the NIRC envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day period ; and (2) when no decision is made after the 120-day period . In both instances, the taxpayer has 30 days within which to file an appeal with the CTA . As we see it then, the 120-day period is crucial in filing an appeal with the CTA." (Boldfacing and underscoring supplied) SDAaTC Petitioner obviously fails to consider the concept of a "deemed a denial decision" of a claim for VAT refund after the lapse of the 120-day period under Section 112 (C) of the 1997 NIRC, as amended, which if not timely appealed with the CTA becomes final and unappealable as elucidated in San Roque, supra , 6 viz .: "The Atlas doctrine cannot save Philex from the late filing of its judicial claim. The inaction of the Commissioner on Philex's claim during the 120-day period is, by express provision of law, 'deemed a denial' of Philex's claim. Philex had 30 days from the expiration of the 120-day period to file its judicial claim with the CTA. Philex's failure to do so rendered the 'deemed a denial' decision of the Commissioner final and inappealable . The right to appeal to the CTA from a decision or 'deemed a denial' decision of the Commissioner is merely a statutory privilege, not a constitutional right. The exercise of such statutory privilege requires strict compliance with the conditions attached by the statute for its exercise. Philex failed to comply with the statutory conditions and must thus bear the consequences." (Boldfacing supplied) In other words, a decision made by the BIR after the 120+30-day period like in the appealed case, is therefore inconsequential as the inaction of the CIR during the 120-day period is "deemed a denial" of a claim for refund, and without a timely appeal filed by the taxpayer, the "deemed a denial" decision of the CIR becomes final and unappealable. The 120-day period is said to be crucial in filing an appeal with the CTA. 7 In order for the Court to conclude that there is "deemed a denial decision" due to inaction during the 120-day period, a correct reckoning point of the 120-day period is imperative. In this regard, the pronouncement in Pilipinas Total Gas, Inc. 8 is instructive: "Thus, the question must be asked: In an administrative claim for tax credit or refund of creditable input VAT, from what point does the law allow the CIR to determine when it should decide an application for refund? Or stated differently: Under present law, when should the submission of documents be deemed "completed" for purposes of determining the running of the 120-day period? AaCTcI Ideally, upon filing his administrative claim, a taxpayer should complete the necessary documents to support his claim for tax credit or refund or for excess utilized VAT. After all, should the taxpayer decide to submit additional documents and effectively extend the 120-period, it grants the CIR more time to decide the claim. Moreover, it would be prejudicial to the interest of a taxpayer to prolong the period of processing of his application before he may reap the benefits of his claim. Therefore, ideally, the CIR has a period of 120 days from the date an administrative claim is filed within which to decide if a claim for tax credit or refund of excess unutilized VAT has merit . xxx xxx xxx With the amendments only with respect to its place under Section 112, the Court finds that RMC No. 49-2003 should still be observed. Thus, taking the foregoing changes to the law altogether, it becomes apparent that, for purposes of determining when the supporting documents have been completed it is the taxpayer who ultimately determines when complete documents have been submitted for the purpose of commencing and continuing the running of the 120-day period . After all, he may have already completed the necessary documents the moment he filed his administrative claim, in which case, the 120-day period is reckoned from the date of filing. The taxpayer may have also filed the complete documents on the 30th day from filing of his application, pursuant to RMC No. 49-2003. He may very well have filed his supporting documents on the first day he was notified by the BIR of the lack of the necessary documents. In such cases, the 120-day period is computed from the date the taxpayer is able to submit the complete documents in support of his application . Then, except in those instances where the BIR would require additional documents in order to fully appreciate a claim for tax credit or refund, in terms what additional document must be presented in support of a claim for tax credit or refund it is the taxpayer who has that right and the burden of providing any and all documents that would support his claim for tax credit or refund . After all, in a claim for tax credit or refund, it is the taxpayer who has the burden to prove his cause of action. As such, he enjoys relative freedom to submit such evidence to prove his claim. acEHCD The foregoing conclusion is but a logical consequence of the due process guarantee under the Constitution. Corollary to the guarantee that one be afforded the opportunity to be heard, it goes without saying that the applicant should be allowed reasonable freedom as to when and how to present his claim within the allowable period. Thereafter, whether these documents are actually complete as required by law is for the CIR and the courts to determine. Besides, as between a taxpayer-applicant, who seeks the refund of his creditable input tax and the CIR, it cannot be denied that the former has greater interest in ensuring that the complete set of documentary evidence is provided for proper evaluation of the State. Lest it be misunderstood, the benefit given to the taxpayer to determine when it should complete its submission of documents is not unbridled. Under RMC No. 49-2003, if in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimacy of the claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigating/processing office . Again, notice, by way of a request from the tax collection authority to produce the complete documents in these cases, is essential. Moreover, under Section 112(A) of the NIRC, as amended by RA 9337, a taxpayer has two (2) years, after the close of the taxable quarter when the sales were made, to apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales. Thus, before the administrative claim is barred by prescription, the taxpayer must be able to submit his complete documents in support of the application filed. This is because, it is upon the complete submission of his documents in support of his application that it can be said that the application was, "officially received" as provided under RMC No. 49-2003. EcTCAD To summarize, for the just disposition of the subject controversy, the rule is that from the date an administrative claim for excess unutilized VAT is filed, a taxpayer has thirty (30) days within which to submit the documentary requirements sufficient to support his claim, unless given further extension by the CIR. Then, upon filing by the taxpayer of his complete documents to support his application, or expiration of the period given, the CIR has 120 days within which to decide the claim for tax credit or refund. Should the taxpayer, on the date of his filing, manifest that he no longer wishes to submit any other addition documents to complete his administrative claim, the 120-day period allowed to the CIR begins to run from the date of filing . In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the two-year period under Section 112(A) of the NIRC. The 30-day period from denial of the claim or from the expiration of the 120-day period within which to appeal the denial or inaction of the CIR to the CTA must also be respected." (Boldfacing & underscoring supplied) Elsewise stated, the 120-day period may be reckoned from either of the following dates, whichever may be applicable: 1. Date of filing of the administrative claim if necessary documents were already completed the moment the taxpayer filed the administrative claim, or the taxpayer plainly manifests that he no longer wishes to submit any other additional documents to complete his administrative claim; or 2. Date of submission of documents, which may be made within 30 days from the date of filing of administrative claim, unless given further extension by the CIR. Based from the foregoing discussion, the Court in Division correctly counted the 120-day period from the date of filing of petitioner's administrative claim for refund on December 26, 2007 as the Petition for Review does not disclose any allegation and supporting proof that petitioner submitted additional documents within 30 days from the date of filing of its administrative claim; or that petitioner was given further extension by the CIR to submit documents in support of its administrative claim for refund; or that the BIR made a request for petitioner to produce documents in the course of the investigation and processing of petitioner's claim. SDHTEC Counting the 120-day period from December 26, 2007, the CIR, therefore, had until April 24, 2008 to act on petitioner's administrative claim for refund. As there was "inaction" on the part of the CIR during the 120-day period, such inaction is "deemed a denial decision" of the CIR which is ripe for appeal with the Court within 30 days from the lapse of such period. Petitioner's failure to appeal the "inaction" or "deemed a denial decision" of the CIR with the Court within 30 days from the lapse of the 120-day period or until May 24, 2008 , the CIR's "deemed a denial decision" becomes final and unappealable following San Roque ." 9 (Additional emphasis of words in italics with boldfacing supplied) Applying the foregoing ruling, the present Petitions for Review both filed on November 29, 2012 10 would necessarily be denied as there exists a "deemed denial decision" on petitioner's administrative claims for refund of unutilized input tax for January to March 2008 and April to December 2008 which were filed on March 31, 2010 and June 29, 2010, respectively. 11 The ponencia correctly reckoned the 120-day period from October 14, 2011 as it is clear that petitioner submitted additional supporting documents on said date as per transmittal letter of Arnel Reyel in response to the Second Notice issued by the DOF-OSS. As stipulated by the parties, the letter-transmittal contains a statement that the particular submitted documents and other documents earlier submitted complete the requirements. 12 The BIR had 120 days from October 14, 2011 or until February 11, 2012 within which to act on petitioner's administrative claim for refund. In view of respondent's inaction within the said period, which inaction is tantamount to a "denial" of petitioner's administrative claim, petitioner had thirty (30) days from the lapse of the 120-day period on February 11, 2012 or until March 12, 2012 within which to file an appeal before the Court. Petitioner's Petitions for Review, filed before the Court on November 29, 2012 , were filed out of time. While the parties also stipulated that petitioner submitted two letters with supporting documents to DOF-OSS in support of its claim for refund on July 5, 2012, 13 such date could not be used as the reckoning point of the 120-day period. There was no admission, stipulation or evidence that would show that petitioner was constrained to submit additional supporting documents on July 5, 2012 pursuant to a request of the BIR. Failure to prove that the BIR made a request is fatal to petitioner's cause as it is settled that a taxpayer is allowed to submit additional documents only within 30 days from request of the investigating or processing office of the BIR pursuant to RMC No. 49-2003. HSAcaE Thus, the claim for refund should appropriately be denied as the "deemed denial decision" of the BIR already attained finality for petitioner's failure to make a timely appeal before the Court. All told, I VOTE to deny the present Petitions for Review. Footnotes 1. Docket, CTA Case No. 8583, Vol. I, pp. 6-15 and CTA Case No. 8584, Vol. I, pp. 6-15. 2. Sec. 7. Jurisdiction . The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: xxx xxx xxx (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds or internal revenue taxes, fees or n other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period for action, in which case the inaction shall be deemed a denial; xxx xxx xxx 3. Rule 4, Sec. 3. Cases within the jurisdiction of the Court in Division . The Court in Division shall exercise: (a) Exclusive original over or appellate jurisdiction to review by appeal the following: xxx xxx xxx (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code or other applicable law provides a specific period for action: Provided , that in case of disputed assessments, the inaction of the Commissioner of Internal Revenue within the one-hundred-eighty-day period under Section 228 of the National Internal Revenue Code shall be deemed a denial for purposes of allowing the taxpayer to appeal his case to the Court and does not necessarily constitute a formal decision of the Commissioner of Internal Revenue on the tax case; Provided, further , that should the taxpayer opt to await the final decision of the Commissioner of Internal Revenue on the disputed assessments beyond the one-hundred-eighty-day period abovementioned, the taxpayer may appeal such final decision to the Court under Section 3 (a), Rule 8 of these Rules; xxx xxx xxx Rule 8, Sec. 4. Where to appeal; mode of appeal . (a) An appeal from a decision or ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claim for refund of internal revenue taxes erroneously or illegally collected, the decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade & Industry, the Secretary of Agriculture, and the Regional Trial Court in the exercise of their original jurisdiction, shall be taken to the Court by filing before it a petition for review as provided in Rule 42 of the Rules of Court. The Court in Division shall act on the appeal. xxx xxx xxx 4. Joint Stipulation of Facts and Issues (JSFI), Vol. II, CTA Case No. 8583, p. 624. 5. Summary of Facts Admitted by Respondent, Vol. I, CTA Case No. 8583, p. 94. 6. Exhibits "E" to "E-10", "BB", "P-2-b" to "P-2-g", "P-15". 7. Par. 9, Ibid . 8. Docket, CTA Case No. 8583, Vol. III, pp. 1417-1445. 9. Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. , G.R. No. 184823, October 6, 2010. 10. Exhibits "N" to "O-1", CTA Case No. 8583, Vol. I, pp. 586-588. 11. Pilipinas Total Gas, Inc. vs. Commissioner of Internal Revenue , G.R. No. 207112, December 8, 2015. 12. Revenue Memorandum Circular No. 49-2003. "Amending Answer to Question Number 17 of Revenue Memorandum Circular No. 42-2003 and Providing Additional Guidelines on Issues Relative to the Processing of Claims for Value-Added Tax (VAT) Credit/Refund, Including Those Filed with the Tax and Revenue Group, One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS-DOF) by Direct Exporters," August 15, 2003. 13. Par. 8, JSFI, CTA Case No. 8583, Vol. II, p. 625. 14. Par. 9, Ibid . 15. Section 1, RULE 22. Revised Rules of Court. Section 1. How to compute time . In computing any period of time prescribed or allowed by these Rules, or by order of the court, or by any applicable statute, the day of the act or event from which the designated period of time begins to run is to be excluded and the date of performance included. If the last day of the period, as thus computed, falls on a Saturday and Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day. 16. Commissioner of Internal Revenue vs. San Roque Power Corporation, et al. , G.R. No. 187485, February 12, 2013. DEL ROSARIO, P.J., concurring opinion: 1. CIR vs. Aichi Forging Company of Asia, Inc. , G.R. No. 184823, October 6, 2010. 2. CTA EB No. 1448, May 30, 2016. 3. Formerly Section 112 (D) of the NIRC (Republic Act No. 8424). 4. Republic Act No. 9337. 5. G.R. No. 184823, October 6, 2010. 6. G.R. Nos. 187485, 196113 and 197156, February 12, 2013. 7. Note 19, supra . 8. Pilipinas Total Gas, Inc. vs. Commissioner of Internal Revenue , G.R. No. 207112, December 8, 2015 (footnote supplied) . 9. Note 20, supra . 10. CTA Case No. 8583 Docket, p. 6; CTA Case No. 8584 Docket, p. 6. 11. Par. 5, Stipulation of Facts, Joint Stipulation of Facts and Issue; CTA Case No. 8583 Docket, p. 625. 12. Par. 8, Stipulation of Facts, Joint Stipulation of Facts and Issue; CTA Case No. 8583 Docket, p. 625. 13. Par. 9, Stipulation of Facts, Joint Stipulation of Facts and Issue; CTA Docket, p. 625. n Note from the Publisher: Written as "Section 108 (8)(1)" in the original document. n Note from the Publisher: Written as "Section 108 (8)(6)" in the original document. n Note from the Publisher: Copied verbatim from the official copy.