Orix Auto Leasing Phils. Corp. v. Commissioner of Internal Revenue

EN BANC [C.T.A. EB CASE NO. 1016. May 2, 2014.] (C.T.A. Case No. 8001) ORIX AUTO LEASING PHILIPPINES CORPORATION , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION CASANOVA , J p : For resolution before this Honorable Court is petitioner's Motion for Reconsideration, 1 filed on January 24, 2014 praying that the Decision dated December 9, 2013 2 (Assailed Decision) be reconsidered, and a new one be issued ordering respondent to refund or issue tax credit certificate in favor of petitioner in the total amount of P10,232,898.33 representing its unutilized excess creditable withholding taxes for the taxable year 2007. Petitioner anchored its Motion on the following grounds: I. Failure to fill up the entry in the "Creditable Withholding Tax" column in Schedule I of Petitioner's 2007 Annual Income Tax Return is not fatal to its claim for refund or issuance of tax credit certificate. II. Petitioner is entitled to its claim for refund or issuance of TCC for its unutilized creditable withholding taxes for taxable year ended September 30, 2007 in the total amount of Ten Million Two Hundred Thirty Two Thousand Eight Hundred Ninety Eight and 33/100 Pesos (P10,232,898.33). cCSDaI To support its Motion, petitioner argues that its claim for refund cannot be denied on the ground that there is no entry in the "Creditable Tax Withheld" column in Schedule 1 of the annual ITR. It further argues that the third requisite does not require that creditable taxes withheld be declared in Schedule 1 of the income tax return as a condition for the grant of a refund of unutilized creditable withholding taxes to prosper. Petitioner submits that it complied with the three requisites for the claim for refund. It posits that it had complied with the third requirement as it declared in its 2007 Annual Income Tax Return the total amount of gross income from which the unutilized creditable withholding taxes being claimed relate, as validated and confirmed by the ICPA Enrico Pizarro in his Supplemental Judicial Affidavit 3 and Supplemental Report. 4 After a careful study of the arguments proffered by the petitioner in its Motion, this Court finds that the matters raised therein had already been thoroughly discussed and disposed of in the Assailed Decision. What the instant Motion seeks is for the Court to view and appreciate the evidence in its own perspective of things, which unfortunately had already been considered and passed upon. We affirm our ruling in the Assailed Decision denying petitioner's instant claim for the issuance of a tax credit certificate in relation to its alleged excess creditable withholding taxes for the taxable year 2007 on the ground that petitioner failed to comply with the third requisite in the claim for refund or issuance of TCC for unutilized creditable withholding tax. We reiterate our finding that petitioner failed to adequately prove that the income payment received subjected to the claimed unutilized creditable withholding tax was declared as part of its gross income. SCDaET We thus quote the relevant portions of the Assailed Decision: "Contrary to the position taken by petitioner, this Honorable Court finds the fact that the "Creditable Tax Withheld" portion of the Annual Income Tax Return of petitioner which was left blank should not be taken lightly. It is well-settled that much credence is imbued in the Annual Income Tax Return. The taxpayer asserts the truth and correctness in the declarations made therein, explicitly stating that the same are made under the penalties of perjury. Such declaration is made pursuant to the provisions of Section 267 of the 1997 NIRC which states: 'SEC. 267. Declaration under Penalties of Perjury . Any declaration, return and other statement required under this Code, shall, in lieu of an oath, contain a written statement that they are made under the penalties of perjury. Any person who willfully files a declaration, return or statement containing information which is not true and correct as to every material matter shall, upon conviction, be subject to the penalties prescribed for perjury under the Revised Penal Code.' aSTcCE Applying the abovequoted provision to the instant petition, petitioner's failure to fill up the 'Creditable Tax Withheld' portion, coupled by the inability of the pieces of evidence it submitted to prove that the income subjected to the claimed unutilized creditable withholding tax was declared as part of its gross income, led to its non-compliance with the third requisite. This proved to be fatal to its claim for issuance of TCC on its unutilized creditable withholding tax. At the risk of being repetitive, We reiterate the pertinent portions of the Assailed Division, to wit: 'It is observed that in petitioner's Annual ITR for fiscal year 2007, . . ., there is no corresponding entry whatsoever in the 'Creditable Tax Withheld' column. This declaration, at the very least, can be taken to mean, that no part of the gross income reported therein were ever subjected to creditable withholding tax. Correspondingly, the supposed income payments to which taxes were allegedly withheld (in the total amount of P10,232,898.33), cannot be said to have been declared as part of the gross income for fiscal year ended September 30, 2007. Moreover, the Court finds petitioner's submitted Summary of Matching of Official Receipts against Creditable Withholding Taxes (BIR Form No. 2307), Summary of Matching of Official Receipts against the Recorded Statement of Account, various official receipts and statements of account, insufficient to establish petitioner's compliance with the third requisite. Petitioner should have presented proofs such as detailed general ledger, sales register, reconciliation schedules or any other document whereby the Court can trace if the income payments related to the claimed creditable taxes withheld indeed formed part of its gross income reflected in its Annual ITR for fiscal year ended September 30, 2007. TaDAIS As cases filed before this Court are litigated de novo party-litigants should prove every minute aspect of their cases. In view of petitioner's failure to comply with the third requisite for the refund or issuance of TCC for unutilized creditable withholding taxes as provided by law and jurisprudence, the Court is left with no recourse but to deny the instant claim for issuance of TCC. We reiterate our consistent ruling that actions for tax refund, as in the instant case, are in the nature of a claim for exemption and the law is not only construed strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven." 5 WHEREFORE , there being no new matters or issues advanced by petitioner in its Motion which may compel this Court to reverse, modify or amend the Assailed Decision, the instant Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED . (SGD.) CAESAR A. CASANOVA Associate Justice Juanito C. Castaeda, Jr., Lovell R. Bautista, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., concur. Roman G. del Rosario, P.J., I maintain my Concurring & Dissenting Opinion dated 9 December 2013. Erlinda P. Uy and Ma. Belen M. Ringpis-Liban, JJ., are on leave. Footnotes 1. En Banc Rollo , pp. 85-97. 2. Ibid. , pp. 64-75. 3. Annex "A", Motion for Reconsideration dated December 21, 2012, Division Docket, pp. 000486-000487. 4. Annex "B", Motion for Reconsideration dated December 21, 2012, Division Docket, pp. 000488-000491. 5. En Banc Rollo , pp. 70-72.