Commissioner of Internal Revenue v. Procter & Gamble Asia, Pte. Ltd.

EN BANC [C.T.A. EB CASE NO. 1576. July 24, 2018.] (C.T.A. Case Nos. 7523 & 7556) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . PROCTER & GAMBLE ASIA, PTE. LTD. , respondent . DECISION CASTAEDA, JR. , J p : Before the Court En Banc is a Petition for Review filed by the Commissioner of Internal Revenue (CIR) pursuant to Sections 11 and 18 of Republic Act No. 1125, as amended, 1 and to Sections 3 (b) and 4 (b), Rule 8 of the Revised Rules of the Court of Tax Appeals (RRCTA) in relation to Rule 43 of the Rules of Court seeking the reversal of the following: 1. May 17, 2016 Amended Decision 2 of the CTA Special First Division 3 the dispositive portion of which reads: " WHEREFORE , premises considered, the instant Petitions for Review are hereby PARTIALLY GRANTED . Accordingly, respondent is hereby ORDERED TO REFUND OR TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of TWENTY MILLION THREE HUNDRED EIGHTY-EIGHT THOUSAND EIGHT HUNDRED EIGHTY-FOUR PESOS AND 24/100 (P20,388,884.24) , representing petitioner's unutilized input VAT for the periods July 1 to September 30, 2004 and October 1 to December 31, 2004. SO ORDERED. " 2. November 22, 2016 Resolution 4 denying the CIR's Motion for Partial Reconsideration for lack of merit. THE FACTS The facts, condensed from the records, are as follows: Petitioner Commissioner of Internal Revenue (CIR), with main office at the BIR National Office Building, Agham Road, Diliman, Quezon City, is vested by law in general to implement and enforce the provisions of the National Internal Revenue Code (NIRC) and other tax laws, and in particular, decide claims for refund or tax credit of internal revenue taxes. 5 Respondent Procter & Gamble Asia Pte. Ltd. (P&GAPL) is a foreign corporation organized and existing under the laws of Singapore and maintains a Regional Operating Headquarter (ROHQ) in the Philippines, with office address at the 18th Floor Petron Megaplaza, 358 Sen. Gil Puyat Avenue, Makati City. 6 P&GAPL provides management, marketing, technical and financial advisory, and other qualified services to related companies as specified in its Certificate of Registration and License issued by the Securities and Exchange Commission. It is a VAT-registered taxpayer, covered by a Bureau of Internal Revenue (BIR) Certificate of Registration No. 9RC0000071787. 7 For the periods from July to September 2004 and from October to December 2004, P&GAPL rendered services to its affiliates in the Philippines and abroad pursuant to its Service Agreements. For its services abroad, it was paid in the form of foreign currency, which was allegedly accounted for in accordance with the rules of the Bangko Sentral ng Pilipinas (BSP). During the same period, petitioner purchased goods and services from VAT-registered suppliers and services providers, supported by invoices and official receipts, with input VAT in the following amounts: 8 Period Goods Input VAT Services Input VAT July-September 2004 P8,836,426.36 P883,642.64 P291,883,815.09 P29,188,381.51 October-December 2004 P3,676,074.12 P367,607.41 P273,651,709.60 P27,365,170.96 On the belief that it is entitled to a refund of its alleged unutilized input VAT, P&GAPL filed applications and letter-requests with the BIR Revenue District Office (RDO) No. 49 for the refund or tax credit of its input tax attributable to its zero-rated sales, covering the periods of July to September 2004 and October to December 2004, on the following dates: 9 Period of Claim Filing Date of Administrative Claim Input Tax July-September 2004 September 26, 2006 P17,117,309.41 October-December 2004 December 13, 2006 P15,589,137.30 CTA First Division Because the CIR has not yet issued any decision regarding its refund claims, P&GAPL filed with the CTA the Petitions for Review for the periods covering July to September 2004 and October to December 2004 on the following dates: 10 CTA Case No. Period of Claim Filing Date of Petition for Review Amount of Claim 7523 July-September 2004 October 2, 2006 P17,117,309.41 7556 October-December 2004 December 29, 2006 P15,589,137.30 In the separate Answers filed in C.T.A. Case No. 7523 on November 27, 2006, 11 and in C.T.A. Case No. 7556 on February 27, 2007, 12 the CIR interposed the following Special and Affirmative Defenses: "1. Respondent reiterates and repleads the preceding paragraphs of this answer as part of his Special and Affirmative Defenses; 2. Petitioner's alleged claim for refund or issuance of tax credit certificate is still subject to administrative routinary investigation/examination by the respondent Bureau; 3. Taxes paid and collected are presumed to have been made in accordance with law, hence, not refundable. 4. Petitioner's claim for refund or issuance of tax credit certificate in the amounts of: P17,117,309.41 for CTA Case No. 7523 and P15,589,137.30 for CTA Case No. 7556, as alleged unutilized input VAT attributable to its zero-rated sales of goods and services for the periods covering: July 2004 to September 2004, and October to December 2004, respectively, were not fully substantiated by proper documents. 5. In an action for refund/credit, the burden of proof is on the petitioner to establish its right to refund and failure to adduce sufficient proof is fatal to the claim for tax refund/credit. 6. Petitioner's sales of goods and services to various alleged clients/affiliates do not qualify as zero-rate VAT. 7. The amount subject of the claim for refund of petitioner do not pertain in full to its input VAT paid attributable to its zero-rated sales of goods and services for the periods covering July 2004 to September 2004 in CTA Case No. 7523 and October to December 2004 in CTA Case No. 7556. 8. Petitioner's right to claim for refund/tax credit of the alleged unutilized input VAT attributable to its zero-rated sales of goods and services for the period covering July 2004 to September 2004 have already prescribed pursuant to Section 112 of the NIRC. 9. Petitioner failed to comply with the substantiation requirements under Revenue Regulations No. 7-95 in relation to Section 113 and 237 of the 1997 Tax Code. 10. It is incumbent upon the latter to show that it has complied with the provisions under Section 204 (c) in relation to Section 229 of the Tax Code. Otherwise, its failure to prove the same is fatal to its claim for refund. 11. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95) and as such, they are looked upon with disfavor (Western Minolco Corp. vs. Commissioner of Internal Revenue, 124 SCRA 1211). " In a July 9, 2007 Resolution, the CTA First Division granted petitioner P&GAPL's motion to consolidate these two cases to expedite their resolution and to serve the interest of justice. 13 During trial, both parties presented their respective documentary and testimonial evidence. Thereafter, upon submission of both parties' respective Memorandum, these consolidated cases were submitted for decision on July 12, 2010. 14 On January 17, 2011, the CTA First Division rendered its Decision dismissing the instant Petitions for Review for having been prematurely filed, the dispositive portion of which reads: 15 "In other words, petitioner was not allowed to resort to judicial action prior to the following periods: January 24, 2007 in C.T.A. Case No. 7523, and April 12, 2007 in C.T.A. Case No. 7556. Unfortunately, C.T.A. Case No. 7523 was filed before this Court on October 2, 2006 while C.T.A. Case No. 7556 was filed on December 29, 2006, clearly without waiting for the expiration of the 120-day period given to respondent within which to decide petitioner's administrative claims . Evidently, petitioner's failure to observe the 120-day period prescribed under Section 112(D) of the NIRC of 1997, the filing of the Petitions for Review in C.T.A. Cases Nos. 7523 and 7556 are deemed to be premature . Consequently, this Court has no jurisdiction to entertain the instant cases. Thus, resolution of the other issues raised herein becomes unnecessary. WHEREFORE , the instant Petitions for Review are hereby DISMISSED for being prematurely filed. SO ORDERED ." (Underscoring supplied) On January 27, 2011, P&GAPL filed Motion for Reconsideration, 16 which was denied by the Court a quo in a Resolution dated March 15, 2011. 17 CTA En Banc On March 30, 2011, P&GAPL appealed to the CTA En Banc , which docketed the case as CTA EB No. 746. 18 On May 13, 2011, the CIR filed a Comment/Opposition (To Petitioner's Petition for Review) by registered mail 19 to which P&GAPL filed a Reply on May 23, 2011. 20 The CTA En Banc , affirmed the ruling of the CTA First Division in the Decision dated December 20, 2011: 21 "Finding no reversible error, we affirm the assailed Decision dated January 17, 2011 and Resolution dated March 15, 2011 rendered by the First Division of this Court. WHEREFORE, premises considered, the present Petition for Review is hereby DENIED DUE COURSE, and, accordingly, DISMISSED for lack of merit. SO ORDERED." In a May 24, 2012 Resolution, the CTA En Banc denied for lack of merit P&GAPL's Motion for Reconsideration without comment from the CIR. 22 Supreme Court On July 18, 2012, P&GAPL's filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court, which was docketed as G.R. No. 202071 entitled "Procter & Gamble Asia Pte. Ltd., Petitioner v. Commissioner of Internal Revenue, Respondent." 23 On February 19, 2014, the Supreme Court issued the Resolution 24 granting P&GAPL's petition and remanding the case to the CTA First Division for further proceedings and determination of the validity of petitioner's claims for refund or tax credit of unutilized input VAT. The dispositive portion of the Resolution states: "On 3 June 2013, we required respondent to submit its Comment, which it filed on 4 December 2013. Citing the recent case CIR v. San Roque Power Corporation , respondent counters that the 120-day period to file judicial claims for a refund or tax credit is mandatory and jurisdictional. Failure to comply with the waiting period violates the doctrine of exhaustion of administrative remedies, rendering the judicial claim premature. Thus, the CTA does not acquire jurisdiction over the judicial claim. Respondent is correct on this score. However, it fails to mention that San Roque also recognized the validity of BIR Ruling No. DA-489-03. The ruling expressly states that the 'taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review.' The Court, in San Roque , ruled that equitable estoppel had set in when respondent issued BIR Ruling No. DA-489-03. This was a general interpretative rule, which effectively misled all taxpayers into filing premature judicial claims with the CTA. Thus, taxpayers could rely on the ruling from its issuance on 10 December 2003 up to its reversal on 6 October 2010, when CIR v. Aichi Forging Company of Asia, Inc. was promulgated. The judicial claims in the instant petition were filed on 2 October and 29 December 2006, well within the ruling's period of validity. Petitioner is in a position to 'claim the benefit of BIR Ruling No. DA-489-03, which shields the filing of its judicial claim from the vice of prematurity .' WHEREFORE, the petition is GRANTED . The Decision and Resolution of the Court of Tax Appeals En Banc in CTA EB No. 746 are REVERSED and SET ASIDE . This case is hereby REMANDED to the CTA First Division for further proceedings and a determination of whether the claims of petitioner for refund or tax credit of unutilized input value-added tax are valid. SO ORDERED. " Subsequently, the Supreme Court issued an Entry of Judgment, declaring that its Resolution dated February 19, 2014 in G.R. No. 202071 became final and executory on July 9, 2014. 25 CTA Special First Division In view of the foregoing and taking into consideration the period of time that elapsed from the January 17, 2011 Decision and the February 19, 2014 remand of the consolidated cases, the CTA Special First Division issued a Resolution on February 23, 2015 directing both parties to submit a Manifestation informing the Court of any supervening event that may affect the final resolution of the consolidated cases and to determine whether there is a need to conduct further proceedings. 26 On March 16, 2015, petitioner P&GAPL submitted a Manifestation 27 stating that it will submit within thirty (30) days a supplemental memorandum to discuss its entitlement to the refund claims for the periods. On May 19, 2015, 28 the consolidated cases were submitted for decision after P&GAPL filed the Supplemental Memorandum 29 on April 29, 2015 while no compliance was filed by respondent. aScITE On May 17, 2016, the CTA Special First Division promulgated an Amended Decision in favor of P&GAPL which reads in pertinent part: "In fine, petitioner has sufficiently proven its entitlement to a refund or issuance of tax credit certificate in the amount of P20,388,884.24 representing its unutilized excess input VAT for the periods covering July 1 to December 31, 2004 attributable to its zero-rated receipts for the same period. WHEREFORE , premises considered, the instant Petitions for Review are hereby PARTIALLY GRANTED . Accordingly, respondent is hereby ORDERED TO REFUND OR TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of TWENTY MILLION THREE HUNDRED EIGHTY-EIGHT THOUSAND EIGHT HUNDRED EIGHTY-FOUR PESOS AND 24/100 (P20,388,884.24) , representing petitioner's unutilized input VAT for the periods July 1 to September 30, 2004 and October 1 to December 31, 2004. SO ORDERED. " On November 22, 2016, the Court a quo denied CIR's Motion for Partial Reconsideration for lack of merit. 30 CTA En Banc On December 12, 2016, the CIR filed a Motion for Extension for Time to File Petition for Review 31 which the Court En Banc deemed granted in a Minute Resolution. 32 On December 27, 2016, the CIR filed a Petition for Review by registered mail. 33 In a January 19, 2017 Resolution, respondent P&GAPL was ordered to file its comment on the petition. 34 On March 6, 2017, after an extension granted by the Court, 35 P&GAPL filed its Comment (Re: Petition for Review). 36 In a Resolution dated March 24, 2017, the Court gave due course to CIR's Petition for Review and required the parties to submit their memoranda. 37 On July 24, 2017, with the filing of P&GAPL's Memorandum on May 8, 2017 38 and considering the failure of the CIR to file its memorandum despite notice, the Court submitted the case for decision. 39 THE ISSUE The CIR petitions the Court En Banc to reverse and set aside the May 17, 2016 Amended Decision of the CTA Special First Division and raises a single assignment of error or issue for resolution: "Whether or not the Special First Division of this Honorable Court erred in holding that respondent is partially entitled to its claim for tax refund/tax credit in the amount of P20,388,884.24, representing its unutilized input VAT attributable to its zero-rated receipts for the periods covering July 1 to September 30, 2004 and October 1 to December 31, 2004." 40 THIS COURT'S RULING We deny the CIR's petition for lack of merit. Petitioner asks the Court to evaluate anew the documentary evidence of P&GAPL in its refund claim. Specifically, CIR raises two arguments pertaining to the documents P&GAPL presented: First, the invoices and official receipts for the unutilized input VAT attributable to P&GAPL's zero-rated sales to its affiliates allegedly failed to comply with the mandatory invoicing requirements under Section 113 of the tax code as implemented by Revenue Regulations No. 16-2005 and Revenue Memorandum Circular No. 42-2003. 41 Second, P&GAPL's invoices, official receipts, certificates of inward remittance, service agreements and other documents are allegedly hearsay evidence and, thus, have no probative value. 42 A close reading of the CIR's line of reasoning will reveal that the same is a mere rehash or a substantial repetition of its June 3, 2016 Motion for Partial Reconsideration 43 which was already extensively addressed in the November 22, 2016 Resolution of the CTA Special First Division: 44 "Respondent prays for this Court to review, re-evaluate and revisit the assailed Decision insofar as it partially granted petitioner's claim for refund of input Value-Added Tax (VAT) in the reduced amount of P20,388,884.24 for the periods July 1 to September 30, 2004 and October 1 to December 31, 2004. The following grounds are submitted for the Court's reconsideration: a. petitioner's invoices and official receipts in support of its claimed unutilized input VAT failed to comply with the mandatory invoicing requirements under Sections 110(A), 113 (A)(B) and 237 of the National Internal Revenue Code (NIRC) of 1997, in relation to Sections 4.110-1, 4.110-8 and 4.113-1 of Revenue Regulations (RR) No. 16-05 and Revenue Memorandum Circular (RMC) No. 42-2003; and xxx xxx xxx Again, petitioner's supporting documents (invoices and official receipts) marked as Exhibits 'I-1' to 'I-334', 'J-1' to 'J-554' and 'GG-1' to 'GG-282' were examined and considered in arriving at the assailed Decision . In fact, not all input vat supported by invoices and official receipts were refunded. Out of the total accumulated input VAT credits of P63,598,157.93, a portion amounting to P5,379,821.82 was found invalid for lack of proper substantiation. Aside from the Court's findings of disallowances, and with only a general averment from respondent that petitioner did not comply with the substantiation requirements, no additional disallowances were found . Thus, the Court will not disturb its previous findings absent any compelling evidence to the contrary. Meanwhile, respondent insists that the documentary exhibits of petitioner should not have been given probative value for being hearsay evidence pursuant to Section 36, Rule 130 of the Rules of Court . Respondent further claims that petitioner's witness had no personal knowledge on the issuance of invoices and official receipts which were prepared by another person other than the witness. This argument, however, is bereft of merit. Based on records, respondent did not file any comment or opposition to petitioner's Formal Offer of Evidence, hence, the Court admitted Exhibits 'I-1' to 'I-334', 'J-1' to 'J-554' and 'GG-1' to 'GG-282'. Even assuming the invoices and official receipts are hearsay, nonetheless, they form part of the records of the case for failure of respondent to object as to the admissibility of these documents on the ground that they are hearsay. xxx xxx xxx With respect to the probative value of invoices and other commercial documents, the Supreme Court held in the case of Seaoil Petroleum Corporation vs. Autocorp Group and Paul Y. Rodriguez , that: 'A sales invoice is a commercial document. Commercial documents or papers are those used by merchants or businessmen to promote or facilitate trade or credit transactions. Business forms, e.g. , order slip, delivery charge invoice and the like, are commonly recognized in ordinary commercial transactions as valid between the parties and, at the very least, they serve as an acknowledgment that a business transaction has in fact transpired. These documents are not mere scraps of paper bereft of probative value, but vital pieces of evidence of commercial transactions. They are written memorials of the details of the consummation of contracts.' Besides, the Court cannot simply disregard the findings of the Independent Certified Public Accountant (ICPA) who conducted an independent special audit and examination of various receipts, invoices and other supporting documents of petitioner. The ICPA certified that the documents are faithful reproduction of the original." (Underscoring supplied and citations omitted) Nonetheless, this is an opportunity for the Court En Banc to address once and for all these two points which the CIR deemed essential to raise again on appeal. The VAT invoices and official receipts comply with the requirements of the law. The petitioner CIR invites the Court's attention "to review, re-evaluate and take a second hard look on" Exhibits G-3 to G-142, I-1 to I-334, J-1 to J-554 and finally GG-1 to GG-282 because, as reiterated by the CIR "these invoices and official receipts do not indicate in full the required information under the tax code and its implementing regulations, specifically: The term "zero-rated sale" was not clearly written or printed prominently on the same They do not indicate the breakdown of the sale price between its taxable and zero-rated components The name, business style, address and TIN of the purchasers, customers or clients were not clearly indicated Exhibits G-3 to G-142 , the counsels for the CIR should note, are BIR registered VAT official receipts issued by P&GAPL's for its zero-rated sales to affiliates and were audited by the Independent Certified Public Accountant (ICPA). 45 On the face of these P&GAPL BIR-registered official receipts are printed (a) the BIR Permit to Print; (b) P&GAPL's Taxpayer's Identification Number-VAT; (c) the name of the customer affiliates, the nature and value of the items sold; and, (d) phrase "zero-rated" with a check mark on the left space provided beside the phrase to indicate clearly that the sales transaction recorded therein are VAT zero-rated. Since each of these official receipts cover only zero-rated transactions, no other transactions such as those subject to VAT and those which are VAT-exempt are indicated. Exhibits I-1 to I-334 are VAT-registered invoices issued to P&GAPL by its suppliers of goods. Printed on these official invoices are the supplier-taxpayer's BIR Permit to Print and Taxpayer's Identification Number-VAT including the nature and value of the items purchased. 46 Since these invoices were issued only for P&GAPL's purchases that were subject to VAT they do not cover VAT-exempt or VAT zero-rated items. Thus, contrary to the CIR's observations, there are no VAT-exempt or VAT zero-rated items to disclose in these invoices. J-1 to J-554 are VAT-registered official receipts issued to P&GAPL by its suppliers of services. Also printed on these official receipts are the supplier-taxpayer's BIR Permit to Print and Taxpayer's Identification Number-VAT (TIN-V) including the nature and value of the services purchased. 47 Again, since these receipts were issued only for P&GAPL's purchases that were subject to VAT they do not cover VAT-exempt or VAT zero-rated purchases. Therefore, contrary the CIR's statements, there are no VAT-exempt or VAT zero-rated items to indicate in these receipts. GG-1 to GG-282 are official receipts issued to P&GAPL by its suppliers of services. Also printed on these official receipts are the supplier-taxpayer's BIR Permit to Print and Taxpayer's Identification Number-VAT (TIN-V) including the nature and value of the services purchased. 48 Since these receipts were issued only for P&GAPL's purchases that were subject to VAT they do not cover VAT-exempt or VAT zero-rated purchases. Accordingly, contrary the CIR's statements, there are no VAT-exempt or VAT zero-rated items to specify in these receipts. Based on the Court's re-examination of the exhibits, these exhibits clearly comply with the tax code requirements and directly contravene the allegations of the CIR. Accordingly, the CIR's allegations lack factual bases. The documentary evidence presented are not hearsay. Section 36 of Rule 130 of the Rules of Court provides for the rule on hearsay evidence, to wit: Sec. 36. Testimony generally confined to personal knowledge; hearsay excluded . A witness can testify only to those facts which he knows of his personal knowledge; that is, which are derived from his own perception, except as otherwise provided in these rules. Under the above rule, any evidence whether oral or documentary is hearsay if its probative value is not based on the personal knowledge of the witness , but on that of some other person who is not on the witness stand. Hence, information that is relayed to the former by the latter before it reaches the court is considered hearsay. 49 In the case at bench, the CIR makes a general and wholesale allegation that the documents presented by P&GAPL were hearsay evidence and identifies the following documentary evidence as bereft of probative value: 50 Exhibits Description Purpose C-1 to C-27 Service Agreements entered by P&GAPL to cover its sales of services to its affiliates To prove that P&GAPL entered into services agreements with the affiliates and to prove the legal basis of the billings and payments of the services. G-1 and G-2 Citibank Certificate of Inward Remittances To prove receipt of payments for the P&GAPL's sale of services to its affiliates G-143 to G-170 Certificates of Non-registration of Corporations issued by the Philippine Securities and Exchange Commission (SEC) To prove that the offshore affiliates of P&GAPL are not doing business in the Philippines I-1 to I-334 Individual VAT-registered invoices issued to P&GAPL by its VAT-registered suppliers. To prove that P&GAPL has valid purchases of goods for the period July 1 to December 31, 2004 in the total amount of P6,752,253.04 with related input VAT of P675,225.30. J-1 to J-554 Individual VAT-registered official receipts issued to P&GAPL by its VAT-registered suppliers. To prove that P&GAPL has valid purchases of services for the period July 1 to December 31, 2004 in the total amount of P556,429,422.48 with related input VAT of P55,642,942.25. GG-1 to GG-282 Individual official receipts for P&GAPL's purchases of services for the period April 1 to June 30, 2004. To corroborate the testimony of Mr. Alexander Cabrera, the court-appointed Independent Certified Public Accountant (Exhibit HH) DDD Exhibit 21 of the Procter and Gamble Company and Subsidiaries Report to the US Securities and Exchange Commission. To prove that P&GAPL's offshore affiliates to whom P&GAPL sold its services are doing business outside the Philippines and to corroborate the testimony of Florence Polomo Pavon (Exhibit EEE). First , the main subject of inquiry in P&GAPL's refund claim of input VAT attributable to zero-rated sales is whether it has unutilized input VAT credits from its purchases which are attributable to its zero-rated sales. The zero-rated sales arose from P&GAPL's sales of services to its offshore affiliates pursuant to its service agreements. When the subject of inquiry is the contents of the documents, no evidence shall be admissible other than the original document themselves. 51 The best pieces of evidence of those contracts entered between P&GAPL and its affiliates are no less than the service agreements themselves (Exhibits C-1 to C-29) which P&GAPL presented and whose originals were examined by the Independent Certified Public Accountant (ICPA). 52 Also, the best evidence to prove the purchase of goods and services are, respectively , the VAT invoices (Exhibits I-1 to I-334) and official receipts (Exhibits J-1 to J-554) issued to P&GAPL by its various suppliers. A VAT invoice is the best proof of the sale of goods or services to the buyer, while a VAT receipt is the best evidence of the payment of goods or services received from the seller . 53 Moreover, the originals of these VAT invoices and receipts were examined and vouched for by the ICPA in his reports to the Court a quo . 54 Second , the persons who testified about these documents in order to explain their relevance to the claim and to corroborate their contents had, without doubt, personal knowledge of the transactions recorded in these documents given the nature of their duties and responsibilities as P&GAPL employees , specifically: Maria Nora M. Manalo, tax counsel and company representative authorized to file P&GAPL's tax returns and pay the taxes due through the Electronic Filing and Payment System (eFPS) including supervising the preparation, review, filing of tax returns and other tax compliance matters such as preparation, computation, securing data on gross receipts and purchases for VAT purposes, 55 testified on P&GAPL's monthly VAT declarations and quarterly returns prepared based on its books of accounts, official receipts and invoices (Exhibits I-1 to I-334, J-1 to J-554 and GG-1 to GG-282), agreements and other financial source documents. 56 Sandeep Devgon, Associate Director, testified that P&GAPL entered into Service Agreements with its affiliates (Exhibits C-1 to C-29) to provide accounting and financial reporting services, employee services, purchases, business intelligence services, information technology business solutions, workplace and other services. 57 Mariel Calalo, Affiliate Accounting Regional Process Owner, whose responsibilities include preparation, monitoring, management and issuance of BIR-registered debit and credit memos, billing and collection for affiliates, summary reports used as basis for tax computation and tax return preparation, 58 testified on the amounts billed to P&GAPL affiliates abroad which are not doing business in the Philippines and which amounts were remitted to Citibank (Exhibits G-1 and G-2) and recorded in the books of P&GAPL. 59 Florence Palomo Pavon, Manila Service Center-Affiliates Regional Process Owner, whose duties include the management and lead operations of Affiliate Accounting in delivering business results through recording, settlement, reconciliation and reporting of transactions among the P&G group of companies, 60 corroborated the fact that the P&GAPL affiliates are not doing business by identifying and presenting Exhibit DDD along with the consularized copies of official certifications, statements and other papers issued by various jurisdictions (Exhibits KK to CCC-1). 61 Third , the negative certifications from the Securities and Exchange Commission (Exhibits G-143 to G-170) presented to prove that the offshore affiliates are not doing business in the Philippines are the best evidence of such fact stated in the certifications. 62 More importantly, these SEC certifications are entries in official records made in the performance of a duty by a public officer of the Philippines, and as such, are prima facie evidence of the facts stated therein and are, thus, an exception to the hearsay rule. 63 These negative certifications from the Philippine SEC (Exhibits G-143 to G-170) also corroborate the report to the US SEC (Exhibit DDD) and the consularized copies of official certifications, statements and other papers issued by various jurisdictions (Exhibits KK to CCC-1) in connection with the status and business activities of the affiliates in their home countries. 64 Finally , the VAT invoices and receipts (Exhibits I-1 to I-334, J-1 to J-554 and GG-1 to GG-282), as well as the service agreements (Exhibits C-1 to C-29) and the Citibank certifications (Exhibits G-1 and G-2) and other commercial documents are entitled to the presumption of regularity in absence of contrary evidence from the CIR. HEITAD In Spouses Quirino V. Dela Cruz v. Planters Products, Inc. , 65 the Supreme Court upheld the evidentiary value of a statement of account as not hearsay to prove the amount of liability of petitioners Dela Cruz as stated therein and explained the evidentiary nature and weight of business or commercial entries: "II. Statement of account was not hearsay The petitioners insist that they could not be held liable for the balance stated in Exhibit V due to such document being hearsay as a "mere statement of account." They argue that Cristina Llanera, the witness of PPI on the matter, was only a warehouse assistant who was not shown to be either an accountant, or bookkeeper, or auditor or a person knowledgeable in accounting. They posit that Llanera's testimony on Exhibit V was limited to stating that she had prepared the statement of account contained therein; that she did not affirm the correctness or veracity of the contents of the document; and that, consequently, Exhibit V had no evidentiary value as proof of their total liability for P240,355.10, the amount stated therein. We do not agree with the petitioners. xxx xxx xxx The invocation of the rule is misplaced, however, because the rule speaks of a situation where the person who made the entries is dead or unable to testify, which was not the situation here. Regardless, we have to point out that entries made in the course of business enjoy the presumption of regularity. If properly authenticated, the entries serve as evidence of the status of the account of the petitioners. In Land Bank v. Monet's Export and Manufacturing Corporation (G.R. No. 184971, April 19, 2010), the Court has explained that such entries are accorded unusual reliability because their regularity and continuity are calculated to discipline record keepers in the habit of precision; and that if the entries are financial, the records are routinely balanced and audited; hence, in actual experience, the whole of the business world function in reliance of such kind of records . Nor have the petitioners proved that the entries contained in Exhibit V were incorrect and untruthful . They cannot be permitted to do so now at this stage of final appeal, especially after the lower courts found and accepted the statement of account contained therein to be properly authenticated and trustworthy. Indeed, the Court is in no position to review and overturn the lower courts' unanimous finding and acceptance without strong and valid reasons because they involved an issue of fact." (Underscoring supplied) Accordingly, having failed to object to their admissibility during trial, 66 the CIR has also failed to impeach the probative value of the Service Agreements, VAT-registered invoices and official receipts, bank certificates and other commercial documents issued in the regular course of business. These pieces of documentary evidence when considered together with the testimonial and other documentary evidence collectively have acquired evidentiary weight to prove P&GAPL's VAT zero-rated sales transactions to its offshore affiliates and its purchases of goods and services from suppliers which in turn generated the input VAT credits subject of the instant claim. The arguments raised in petition, which are but a reiteration of those previously set forth and which the Court a quo had already considered, weighed, and resolved before it rendered its Amended Decision sought to be set aside, are without merit. The CIR is correct in pointing out that the tax refunds are in the nature of tax exemptions and are to be construed strictissimi juris against the taxpayer. 67 Nonetheless, this remanded case has twice undergone the scrutiny of the Court below without the CIR raising any new issue substantial enough to defeat the entitlement of the taxpayer. Thus, it bears stressing that when the taxpayer has already proven its entitlement to the claim as determined by the Court a quo , substantial justice also dictates that the government should not keep the money that does not belong to it at the expense of its citizens. 68 Considering the foregoing discussion, petitioner CIR has failed to validly argue against the holding of the Court a quo decreeing the partial grant of the claim in favor of P&GAPL. WHEREFORE , premises considered, the Petition for Review is DENIED for lack of merit. The May 17, 2016 Amended Decision and the November 22, 2016 Resolution are hereby AFFIRMED . SO ORDERED. (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Roman G. del Rosario, P.J., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla, Ma. Belen M. Ringpis-Liban and Catherine T. Manahan, JJ. , concur. Footnotes 1. Petition for Review, Rollo , p. 6. 2. Annex A, Petition for Review, Rollo , pp. 24-46. 3. Penned by J. Erlinda P. Uy with the concurrence of J. Esperanza R. Fabon-Victorino. 4. Annex B, Petition for Review, Rollo , pp. 48-54. 5. January 17, 2011 Decision, Division Docket (CTA Case No. 7523), Vol. III, p. 2118. 6. Id . 7. Id . 8. Id . at pp. 2118-2119. 9. Id . at p. 2119. 10. Id . 11. Division Docket (CTA Case No. 7523), Vol. I, pp. 142-144. 12. Division Docket (CTA Case No. 7556), pp. 168-170. 13. January 17, 2011 Decision, Division Docket (CTA Case No. 7523), Vol. III, p. 2121. 14. Id . 15. Id . at p. 2128. Penned by Erlinda P. Uy, Associate Justice, with the concurrence of Ernesto D. Acosta, Presiding Justice, and Esperanza R. Fabon-Victorino, Associate Justice. 16. Id ., at pp. 2130-2149. 17. Id ., at pp. 2162-2167. 18. Id ., at pp. 2168-2195. 19. Id ., at pp. 2582-2590. 20. Id ., at pp. 2576-2581. 21. Id ., at pp. 2595-2614. Penned by Associate Justice Olga Palanca-Enriquez with the concurrence of Presiding Justice Ernesto D. Acosta and Associate Justices Juanito C. Castaeda, Jr., Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas and with Associate Justice Lovell R. Bautista dissenting. 22. Id ., at pp. 2634-2640. 23. Division Docket (CTA Case No. 7523), Vol. IV, pp. 2674-2721. 24. Id ., at pp. 3326-3328. 25. Id ., at pp. 3346-3356. 26. Id ., at pp. 3359-3361. 27. Id ., at pp. 3362-3364. 28. Id ., at p. 3372. 29. Id ., at pp. 3367-3369. 30. Id ., at pp. 3423-3429. 31. Rollo , pp. 1-3. 32. Rollo , p. 56. 33. Rollo , pp. 6-21. 34. Rollo , pp. 58-59. 35. Motion for Extension of Time to File Comment filed on February 6, 2016 and February 7, 2016 Minute Resolution, Rollo , pp. 60-63-A. 36. Rollo , pp. 64-66. 37. Rollo , pp. 68-69. 38. Rollo , pp. 70-82. 39. Rollo , pp. 85-86. 40. Petition for Review, Rollo , p. 10. 41. Id ., at pp. 11-16. 42. Id ., at pp. 16-18. 43. Division Docket (CTA Case No. 7523), Vol. IV, pp. 3398-3404. 44. Id ., at pp. 3426-3427. 45. Formal Offer of Exhibits (Evidence) for the Petitioner, Division Docket (CTA Case No. 7523), Vol. II, p. 1481; the exhibits are contained in one box at the Judicial Records Division. 46. Formal Offer of Exhibits (Evidence) for the Petitioner, Division Docket (CTA Case No. 7523), Vol. II, p. 1483. The exhibits are contained in one box at the Judicial Records Division. 47. Id . 48. Formal Offer of Exhibits (Evidence) for the Petitioner, Division Docket (CTA Case No. 7523), Vol. II, p. 1489. The exhibits are contained in one box at the Judicial Records Division. 49. Leodegario Bayani v. People of the Philippines , G.R. No. 155619, August 14, 2007. 50. Formal Offer of Exhibits (Evidence) for the Petitioner, Division Docket (CTA Case No. 7523), Vol. II, pp. 1473-1490. The exhibits are contained in one box at the Judicial Records Division. 51. Rule 130, Section 3, Rules of Court. 52. Manifestation, Division Docket (CTA Case No. 7523), Vol. II, p. 1010; Exhibit D, November 27, 2007 ICPA Report, Division Docket (CTA Case No. 7523), Vol. II, pp. 1499-1505 and Exhibit FF, August 15, 2008 Supplemental ICPA Report, Division Docket (CTA Case No. 7523), Vol. II, pp. 1154-1156. 53. Takenaka Corporation Philippine Branch v. Commissioner of Internal Revenue , G.R. No. 193321, October 19, 2016. 54. Manifestation, Division Docket (CTA Case No. 7523), Vol. II, p. 1010; Exhibit D, November 27, 2007 ICPA Report, Division Docket (CTA Case No. 7523), Vol. 2, pp. 1499-1505 and Exhibit FF, August 15, 2008 Supplemental ICPA Report, Division Docket (CTA Case No. 7523), Vol. II, pp. 1154-1156. 55. Questions 2, 11 and 12, Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. I, pp. 183-185. 56. Manifestation and Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. I, pp. 272-278. 57. Manifestation and Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. I, pp. 315-340. 58. Question 5, Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. II, p. 1040. 59. Questions 6-27, Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. II, pp. 1040-1043. 60. Question 3, Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. III, p. 1642. 61. Questions 8-11, Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. III, pp. 1643-1647; Supplemental Formal Offer of Evidence for the Petitioner, Division Docket (CTA Case No. 7523), Vol. III, pp. 2045-2054. 62. Rule 130, Section 3, Rules of Court. 63. Rule 130, Section 44, Rules of Court. 64. Questions 8-11, Judicial Affidavit, Division Docket (CTA Case No. 7523), Vol. III, pp. 1643-1647; Supplemental Formal Offer of Evidence for the Petitioner, Division Docket (CTA Case No. 7523), Vol. III, pp. 2045-2054. 65. G.R. No. 158649, February 18, 2013. 66. November 22, 2016 Resolution, Rollo , p. 52. 67. Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue , G.R. No. 159490, February 18, 2008. 68. Commissioner of Internal Revenue v. Ironcon Builders and Development Corporation , G.R. No. 180042, February 8, 2010.