Commissioner of Internal Revenue v. Citytrust Finance Corp.

[CA-G.R. SP No. 31104. April 19, 1994.] COMMISSIONER OF INTERNAL REVENUE , petitioner , vs .CITYTRUST FINANCE CORPORATION (FORMERLY INVESTORS FINANCE CORP./FNCB FINANCE) and THE COURT OF TAX APPEALS , respondents . D E C I S I O N TORRES , J p : Challenged in this petition for review filed by petitioner Commissioner of Internal Revenue is the decision dated February 24, 1994 of the Court of Tax Appeals in CTA Case No. 4046 entitled "Citytrust Finance Corporation vs. Commissioner of Internal Revenue",the dispositive portion of which reads: 1 "IN VIEW OF THE FOREGOING, respondent Commissioner of Internal Revenue is hereby ordered to REFUND to petitioner CITYTRUST FINANCE CORPORATION the sum of P204,792.45, representing excess payment of withholding taxes for the year 1983. No pronouncement as to cost. SO ORDERED." The antecedent as disclosed by the records are as follows: On April 16, 1984, private respondent Citytrust Finance Corporation filed a petition with the Bureau of Internal Revenue its Corporation Income Tax Return for the year ending December 31, 1983 indicating a refundable amount of 343,391.69, computed as follows: Gross Income P189,738,257.00 Less: Deductions P189,773,344.00 Net Income (Loss) (P35,087.00) Tax Due NIL Tax Credit for 1983 P343,391.69 Total Amount Refundable P343,391.69 On April 14, 1986, private respondent filed the corresponding petition for review in order to interrupt the two (2) year prescribe period for judicially claiming the refund pursuant to Section 243 of the Tax Code. 2 On October 5, 1986, petitioner filed an answer thereto with special and affirmative defenses. 3 In its memorandum, petitioner maintains that the income from which taxes were withheld was not included as part of the gross income. It is averred that only the amount of P163,365.40 were withheld from petitioner's income of P3,924,123.81 for 1983, thence, private respondent is only entitled to the refund of P163,365.49. On February 24, 1993, the Court of Tax Appeals rendered the assailed decision ordering petitioner to refund to private respondent the sum of P204,792.45 representing excess payment of withholding taxes for the year 1983, the pertinent portion of which reads: 4 "During the trial, petitioner offered documentary exhibits to show proof of payment and remittance of the creditable withholding taxes sought to be refunded in its favor. The record shows that petitioner has submitted as evidence various certificates of creditable income taxes withheld at source (BIR Form 1743.1),statement of tax withheld at source (BIR Forms 1743 and 1743 A) and the certification issued by various withholding agents to support its claim for refund. Petitioner's 1983 Income Tax Return showed a gross income of P189,738,257.00 (Exhibit 'A').Out of the total creditable withholding taxes claimed by petitioner amounting to P343,391.69 it was able to prove by the presentation of documentary evidence the sum of P204,792.45 only. ..: xxx xxx xxx The law and the implementing regulation have adopted a minimal requirement in order that an excess tax credit withheld could be refunded to taxpayers. Petitioner was able to present all three requirements for claiming a refund of excess withholding taxes only with respect to the amount of P204,792.45. First, a claim for refund dated April 11, 1986 was filed with the Appellate Division of the BIR on April 14, 1986 (Exh. BR) and with this Court on April 15, 1986 well within the 2-year period from date of payment of the tax that is on April 15, 1984. Second, petitioner presented as documentary evidence its Annual Corporation Income Tax Return for 1983 (Exh. A) showing income as follows: Schedule I P184,886.846.00 Schedule 5 P4,851,411.00 P189,738,257.00 establishing the fact that for the taxable year 1983, it has included in its income tax return the particular income from which the various creditable taxes were withheld. Third, petitioner presented various BIR Forms No. 1743, 1743, 1 and 1743 A as proof of withholding taxes for 1993." On March 22, 1993, petitioner filed a motion for reconsideration on the ground that the decision was not supported y substantial evidence. 5 On May 4, 1993, the respondent court issued a resolution denying the motion for reconsideration for lack of merit, to wit: 6 "As shown by the records of the case, the claim for refund was filed with the BIR on April 14, 1986 and according to respondent, the same is pending investigation (Item A of answer). From that time up to the promulgation of the subject decision on February 24, 1993, respondent had never submitted to this Court the result of said investigation to support his allegations to deny the claim for refund. Remiss is this duty, respondent is now passing to the petitioner the burden to show that the declared losses per income tax return were in fact incurred. Respondent under the National Internal Revenue Code should have investigated, verified and audited the said income tax return. The Code gives respondent three years to do this, otherwise his right to assess the same save in case of fraud shall prescribe. In our case, investigation has started but it never ended. Suffice it to state that petitioner has sufficiently complied with the requirements of the law and the existing Revenue Regulations on the matter. Respondent could have shown it otherwise but failed in this duty. ACCORDINGLY, this Court hereby RESOLVED to DENY the respondent's Motion for Reconsideration for lack of merit. SO ORDERED." Hence, this petition for review. Petitioner maintains that the respondent court decided the case in a way not in accord with facts and law in resolving to grant private respondents tax refund in the amount of P204,792.45 considering that (1) the alleged net loss of P35,087.00 and overpayment of P343,391.69 upon which private respondent's claim for refund is prejudicated were not duly established' (2) that statements and certificates of tax withheld and certifications issued by various withholding agents presented and offered by private respondent as proof of withholding are not conclusive evidence of payment and remittance to the Bureau of Internal Revenue. A scrutiny of the assailed decision reveals that the same is well supported by substantial evidence. Private respondent was able to prove that it is entitled to refund as a result of loss incurred during the 1983 fiscal year. Of the P343,391.69 claimed as tax refundable, private respondent was able to prove only a tax refund in the amount of P204,792.45. The respondent court gave credence to documentary evidences presented by the private respondent which includes, inter-alia ,the certificates of creditable income taxes withheld at source, statement of tax withheld at source and the certificates issued by several withholding agents to support the claim for refund. Further, private respondent had satisfactorily complied with the requirements provided by law in order for a taxpayer to be entitled to tax refund. Contrary to the allegations of the petitioner, the respondent court has painstakingly explained in detail its findings of facts in the assailed decision which does not need reiteration lest was may become repetitious. Well-established is the rule that such questions as whether certain items of evidence should be accorded probative value of weight, or rejected as feeble or spurious, or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a proposition in issue are questions of facts which are within the province of the trial court. Hence, such issues of whether or not the body of proofs presented by a party, weighed and analyzed in relation to contrary evidence submitted by adverse party, may be said to be strong, clear and convincing or whether or not certain documents presented by one side should be accorded full faith and credit in the face of protest as to their spurious character by the other side are questions of facts. These findings of the trial court on questions of fact are accorded the highest respect on appeal, if not regarded as conclusive, absent the usual exceptions to this policy, such if there appears in the record some fact on circumstances are weight and influence which has been overlooked or the significance of which has been misinterpreted. 7 In the present case, We find no cogent reason to reverse or modify the respondent court's decision it appearing that there was an absence of substantial proof that the assailed decision was grounded entirely on speculations, surmises or conjectures. Hence, the conclusions and findings of facts of the respondent need not be disturbed. IN VIEW OF THE FOREGOING, the instant petition for review is hereby DENIED for lack of merit. No pronouncement as to costs. IT IS SO ORDERED. Mendoza and Pardo, JJ .,concur. Footnotes 1. Decision, Rollo, pages 40-55. 2. Petition, Rollo, pages 23-24. 3. Answer, Rollo, pages 37-39. 4. Decision, Rollo, pages 40-55. 5. Motion, Rollo, pages 56-61. 6. Resolution, Rollo, pages 69-71. 7. People vs. Ganduma, G.R. No. 64507, April 25, 1988; People vs. Francisco, G.R. No. 69580, February 15, 1990.