Commissioner of Internal Revenue v. Jardine Fleming (Phils.), Inc.

[CA-G.R. SP No. 30527. February 28, 1994.] COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . JARDINE FLEMING (PHILS.) INC., and THE COURT OF TAX APPEALS , respondent . D E C I S I O N GALVEZ , J p : Petition for review of the decision of the Court of Tax Appeals dated November 9, 1992, granting in part the claim for refund of private respondent Jardine Fleming (Phils.) Inc., as follows: "WHEREFORE, the Court hereby grants the instant petition in part, and orders respondent Commissioner of Internal Revenue to refund to petitioner (private respondent in this case) P43,204.00 or issue a tax credit in its name in the same amount, representing overpaid income taxes for the year 1987. The court hereby denies the petition in respect to the claim for refund in the amount of P19,977.00 in allegedly overpaid withholding taxes, for lack of evidence to prove that the said amount was actually withheld and that the income from which the same was allegedly withheld was declared by petitioner as part of its taxable income for the year 1987. No costs. SO ORDERED." The pleadings show that on March 15, 1988, private respondent Jardine Fleming (Phils.) Inc., a corporation organized and existing under Philippine Law, filed its Corporate Partnership Annual Tax Income Return for the year 1987, declaring a net loss of P322,168.00 and consequently, a tax due of "NIL". The return filed by private respondent reflected a refundable amount of P63,181.00 computed as follows: Tax due on 1987 income P0.00 Less: Cash Payment made to BIR on May 29, 1987, covered by Confirmation Receipt No. B-10600861 and BIR Payment Order No. C-0404878 (Exhs. "B" and B-1, respectively; P43,204.00 1987 income tax payable as of date of filing of consolidated return P43,204.00 Less: Tax withheld on advisory fees 19,977.00 Total amount refundable for 1987 P63,181.00 A formal claim for the refund of the P63,181.00 was made by private respondent in a letter dated December 13, 1988, and received by the Bureau of Internal Revenue on December 19, 1988, addressed to the Chief of the Bureau's Appellate Division. Since the Bureau of Internal Revenue failed to seasonably act upon private respondent's claim for refund, the latter, to forestall the running of the two-year prescriptive period laid down in the Internal Revenue Code, filed a petition for review with respondent Court of Tax Appeals on May 25, 1989. After due hearing, respondent Court of Tax Appeals ruled that the claim for refund of the P43,204.00 was valid and allowable not only because petitioner had admitted that said private respondent had a tax due of "NIL" in 1987 and had paid the amount of P43,204.00 on May 2, 1987, but that the Confirmation Receipt numbered B-10600861 and the payment Order numbered C-0404848 offered in evidence by private respondent, not having been disputed, were persuasive evidence to establish private respondent's entitlement to P43,204.00 was tax refund. Respondent court however ruled against the claim for refund of private respondent for other sum of P19,077.00. Since private respondent does not seek for a review of such denial, there would be no gainful purpose for this Court to dwell upon it further. We shall therefor circumscribe ourselves to the issue of whether private respondent is entitled to the tax refund of P43,204.00. It is the submission of petitioner that respondent Court of Tax Appeals erred in accepting as gospel truth the entries appearing in Jardine Fleming (Phils.) Inc.'s 1987 Corporate Annual Income Tax Return as well as Confirmation Receipt No B-10600861 and Payment Order No. C-0404878 to establish said private respondent's entitlement to a refund of P43,204.00, arguing that the same do not constitute incontrovertible evidence that private respondent is entitled to a refund. Petitioner argues that said returns were not verified through a routine audit and verification by the Bureau of Internal Revenue's revenue enforcement officers and in the absence of such investigation/verification by the Bureau of Internal Revenue, private respondent should have presented other documents in support of its claim for net loss and not merely its 1987 corporate income tax return. The records however show that as early as 1988, private respondent had filed its claim for refund but the Bureau of Internal Revenue sat on the case without taking any action taken thereon. Private respondent was thus compelled to seek judicial redress on May 25, 1989 by filing a claim for refund with respondent Court of Tax Appeals. During the time that said case was pending before respondent court, up to the time when the latter decided that case on November 9, 1992, no report whatsoever was submitted by the Bureau of Internal Revenue on its evaluation for private respondent's claim for refund notwithstanding the fact that the BIR had all the opportunity to conduct such an investigation. During the hearing of the case before the Court of Tax Appeals, not a single record of the Bureau of Internal Revenue was offered in evidence disputing private respondent's right to the refund. Petitioner's counsel even voluntarily submitted the case on the strength of its pleading. We completely agree with respondent court that the documentary and testimonial evidence private respondent had adduced during the trial had established a prima-facie case in favor of private respondent. Accordingly, the onus probandi was thus shifted to petitioner to refute the same. This petitioner failed to do. Petitioner was remiss in his duty to assist respondent court in arriving at a prudent and rational determination of the issues raised. This Court cannot condone his inaction much more penalize the private respondent for what he failed to do. As respondent court had pointed out in its resolution on petitioner's motion for reconsideration. "Since the filing of this claim for refund more than four (4) years ago, Respondent (now petitioner) had all the opportunity to investigate the subject claim for refund. But he did not. In fact, no single BIR record was elevated to this Court inspite (sic) several demands. Counsel for Respondent even voluntarily submitted this case based upon the pleadings. For his own failure or neglect to establish and satisfy the 'onus probandi' of this case, Respondent can no longer blame Petitioner (now private respondent) who only complied with his obligation in order to obtain the relief sought. For the dismal failure of his case, it is only Respondent (now petitioner) who should be blamed and bear the brunt of his own neglect." All told, this Court sees no compelling reason to overturn the judgment of respondent Court of Tax Appeals. IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, the petition for review is hereby DENIED DUE COURSE and accordingly DISMISSED. SO ORDERED. Benipayo and Verzola, JJ ., concur.