BPI Family Savings Bank, Inc. v. Court of Tax Appeals

FOURTH DIVISION [CA-G.R. SP No. 34240. March 31, 1995.] BPI FAMILY SAVINGS BANK, INC. , petitioner , vs . HON. COURT OF TAX APPEALS AND COMMISSIONER OF INTERNAL REVENUE , respondents . D E C I S I O N ABAD SANTOS , JR. , J p : This is a petition for review from the Decision the Court of Tax Appeals, in C.T.A. Case No. 4694. FACTS OF THE CASE: This case involves a claim for tax refund in the amount of P112,491.00 representing petitioner's tax withheld for the year 1989. In its Corporate Annual Income Tax Return for the year 1989, the following items are reflected: Income P1,017,931,831.00 Deductions 1,026,218,791.00 Net Income (Loss) (P8,286,960.00) Taxable Income (Loss) P8,286,960.00 Less: 1988 Tax Credit P185,001.00 1989 tax credit P112,491.00 TOTAL AMOUNT REFUNDABLE P297,492.00 It appears from the foregoing 1989 Income Tax Return that petitioner had a total refundable amount of P297,492.00 inclusive of the P112,491.00 being claimed as tax refund in the present case. However, petitioner declared in the same 1989 Income Tax Return that the said total refundable amount of P297,492.00 will be applied as tax credit to succeeding taxable year. 1 On October 11, 1990, petitioner filed a written claim for refund in the amount of P112,491.00 with the respondent Commissioner of Internal Revenue alleging that it did not apply the 1989 refundable amount of P297,492.00 (including P112,491.00) to its 1990 Annual Income Return or other tax liabilities due to the Income Return or other tax liabilities due to the alleged business losses it incurred for the same year. Without waiting for respondent Commissioner of Internal Revenue to act on the claim for refund, petitioner filed a petition for review with respondent Court of Tax Appeals, seeking the refund of the amount of P112,491.00. The respondent Court of Tax Appeals dismissed petitioner's petition on the ground that petitioner failed to present as evidence its Corporate Annual Income Tax Return for 1990 to establish the fact that petitioner had not yet credited the amount of P297,492.00 (inclusive of the amount P112,491.00 which is the subject of the present controversy) to its 1990 income tax liability. Petitioner filed a motion for reconsideration, however, the same was denied by respondent court in its Resolution dated May 6, 1994. Hence, this petition. In this petition before Us, petitioner argues that " it had submitted in evidence something better than the 1990 income tax return, when it presented the standard claim for refund filed with the respondent Commissioner (Exh. D, consisting of six pages, which includes certification of its vice-president (with attached supporting documents) that it did NOT apply its 1989 tax credit of P112,491.00 to its 1990 tax liabilities as of the first two quarters of 1990 and that it would NOT apply said credits to any other tax liability . 2 " We find petitioner's contention devoid of merit. The abovementioned document consisting of the certification signed by its vice-president is self-serving and cannot substitute the respondent court's requirement for the petitioner to submit its 1990 Corporate Annual Income Tax. It is incumbent upon the petitioner to show proof that it has not credited to its 1990 Annual Income Tax Return, the amount of P297,492.00 (including P112,491.00), so as to refute its previous declaration in the 1989 Income Tax Return that the said P297,492.00 (including P112,491.00) will be applied as a tax credit in the succeeding year of 1990. Having failed to submit such requirement, there is no basis to grant the claim for refund. As correctly pointed out by the respondent court: DHITCc "Note should be taken that the amount of P112,491.00 being claimed for refund is part and parcel of P297,492.00 which presumptively was already applied as tax credit to the succeeding taxable year 1990. Such presumption, of course, could have been overturned had the Petitioner submitted its 1990 Corporate Annual Income Tax Return showing that it did not automatically credit the said amount to the said taxable year 1990. Unfortunately, petitioner failed to submit this vital document . . . ." 3 Tax refunds are in the nature of tax exemptions, As such, they are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the person or entity claiming the exemption. 4 In other words, the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence its entitlement to the claim for refund. 5 WHEREFORE, foregoing premises considered, the petition is hereby DISMISSED for lack of merit. SO ORDERED. Paras and Vidallon-Magtolis, JJ ., concur. Footnotes 1. Annex "A", 1989 Corporate Annual Income Tax Return. 2. p. 7, Petition for Review; p. 19, Rollo . 3. C.T.A. Case No. 4694 Resolution, dtd. May 6, 1994; p. 19, Rollo . 4. see Commissioner of Internal Revenue vs. Procter and Gamble Philippine Manufacturing Corporation , 204 SCRA 381; CIR vs. Ledesma , 31 SCRA 95; Insular Lumber Co. vs. Court of Appeals , 104 SCRA 710; CIR vs. Rio Tuba Nickel Mining Corporation , 207 SCRA 549. 5. CIR vs. Mitsubishi Metal Corp. , 181 SCRA 214.