Miguel J. Ossorio Pension Foundation, Inc. v. Commissioner of Internal Revenue

SECOND DIVISION [CA-G.R. SP No. 47406. March 18, 1999.] MIGUEL J. OSSORIO PENSION FOUNDATION, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N COSICO , J p : By way of this "Petition for Review," the Miguel J. Ossorio Pension Foundation Inc. seeks the reversal of the resolution dated March 23, 1998 of the Court of Tax Appeals in C.T.A. Case No. 4244, which denied the claimed amount of P4,774,667.38 in its "Motion to Fix Refundable Amount" due to insufficiency of evidence. On November 2, 1990, the Court of Tax Appeals rendered a decision which was affirmed by this court in a decision dated January 20, 1993 in CA G.R. SP No. 23980, and which became final and executory on August 3, 1993. The decretal portion of the said decision reads: "WHEREFORE, we find and so hold that (1) petitioner is entitled to a refund of the amount of P312,633.40 representing withholding taxes paid on interest income from direct loans and made by the retirement funds of the pension plan being exempts from income tax pursuant to Sec. 65 (b), now Sec. 54 (b), of the Tax Code; and that (2) it is equally entitled to a refund of the amount of P780,352.28 representing final tax on yields from T-Bill placements of the retirement fund of the pension plan paid to the BIR in 1986 up to June 30, 1987, as well as final taxes paid after June 30 , 1987 , for being exempt pursuant to Sec. 56 (b), now Sec. 54 (b), of the Tax Code or the total refundable sum of P1,092,958.68." In compliance with the decision, respondent Commissioner of Internal Revenue refunded to petitioner the amounts of P780,352.28 on September 23, 1994, and P312,606.40 on September 19, 1996. On November 6, 1996, petitioner filed with the Court of Tax Appeals a "Motion to Fix Refundable Amount" for that portion of the above decision which ordered the refund of the amount of final taxes paid after June 30, 1987 not yet complied by respondent. In its motion, petitioner averred that the total amount of withholding taxes it erroneously paid to respondent, thru the Central Bank, on yields from T-Bills purchased from July 1, 1987 to December, 1994, and which respondent should refund, is P4,774,667.38. On the other hand, respondent opposed the motion of petitioner alleging that the portion of the decision which ordered the refund of the amount of final taxes paid by petitioner after June 30, 1987 is a complete nullity. On April 22, 1997, the Court of Tax Appeals resolved to set petitioner's motion for hearing in order to validate and fix with certainty the demanded amount of P4,774,667.38. After hearing, the Court of Tax Appeals issued the assailed resolution dated March 23, 1998 denying the claimed amount of P4,774,667.38 for insufficiency of evidence. LLjur Dissatisfied, petitioner appealed to this Court via the instant petition for review. Petitioner posits that the Court of Tax Appeals gravely erred in denying the claim for tax refund in the amount of P4,774,667.38 as there is sufficient documentary evidence in this case which proved said claim. Besides, petitioner avers that it is not anymore required to prove said claim with certainty inasmuch as respondent already admitted said amount of taxes in its motion to fix refundable amount when it opposed the motion solely on legal grounds. We disagree. As a matter of principle, this Court will not set aside the conclusion reached by an agency such as the Court of Tax Appeals, which is, by the very nature of its function, dedicated exclusively to the study and consideration of tax problems and has necessarily developed an expertise on the subject unless there has been an abuse or improvident exercise of authority (Luzon Stevedoring Corporation v. Court of Tax Appeals, 163 SCRA 647 [1988]). Findings of the fact of the Court of Tax Appeals are entitled to the highest respect and can only be disturbed on appeal if they are not supported by substantial evidence or if there is a showing of gross error or abuse on the part of the tax court (Commissioner of Internal Revenue v. Mitsubishi Metal Corporation, 181 SCRA 214 [1990]). In the case at bar, after a careful evaluation of the facts and law of the case, We find no grave abuse or improvident exercise of discretion on the part of the Court of Tax Appeals in denying petitioner's claim for tax refund in the amount of P4,774,667.38. Apart from the fact that said amount was not proven by petitioner with reasonable degree of certainty, there is also no direct and competent evidence to show that its funds were actually used by Citytrust Banking Corporation, its investment manager, in the purchase of treasury bills, and that a 20% final withholding tax have been withheld and remitted to the BIR. As aptly observed by the Court of Tax Appeals, to wit : "A minutiose scrutiny of petitioner's evidence reveals that no actual proof of indubitable participation of the MJOPFI Fund to the purchase of the treasury bills were presented. Petitioner mainly relied on the affidavit of Mrs. Rosario Capino (Exh. A) to establish the proposition that Citytrust Banking Corporation, the investment manager of herein petitioner, invested some of MJOPFI funds in T-Bills. In other words, petitioner failed to convince this Court that its funds were actually used in the purchase of treasury bills, and that a 20% final withholding tax have been withheld and remitted to the BIR. Petitioner was not able to adduce any proof of direct payment as having been made by the MJOPFI funds. In transactions involving treasury bills, such proof of payment can be easily established by the originals of the cash vouchers, purchase tickets, fixed income securities placements, official receipts evidencing payment and debit-credit ledger entries of the Fund. . . . (Bank of Philippine Islands vs. Commissioner of Internal Revenue, CTA Case No. 4455, July 11, 1996). Ironically, in the case at bar none of the aforementioned was offered as petitioner's evidence. The evidence offered by petitioner establishes the fact that its investment manager, Citytrust Banking Corporation was the buyer of said T-Bills, and not the MJOPFI funds itself. It did not even remotely suggest that the MJOPFI Fund was the real buyer, or that the purchase was for and in-behalf of the said Fund." (pp. 38-39, Rollo) Besides, the issue of whether or not petitioner had satisfactorily shown by competent evidence that it is entitled to the amount sought to be refunded is a question of fact, and this Court is bound by the findings of the Court of Tax Appeals (Commissioner of Internal Revenue v. Philippine American Life Insurance Co., 244 SCRA 446 [1995]). To be sure, petitioner has the burden of proving before the Court of Tax Appeals the certainty of the amount of refund which it is claiming against the BIR (Imperial Victory Shipping Agency v. National Labor Relations Commission, 200 SCRA 178 [1991]). In doing so, petitioner must rely on the strength of its evidence and not on the weakness of that of its opponent. Settled also is the rule that a mere allegation is not evidence (P.T. Cerna Corporation v. Court of Tax Appeals, 221 SCRA 19 [1993]). As held by the Court of Tax Appeals, in transactions involving treasury bills, proof of payment can be easily established by the originals of the cash vouchers, purchase tickets, fixed income securities placements, official receipts evidencing payment and debit-credit ledger entries of the Fund. However, instead of presenting these documents, petitioner merely relied on the affidavit and certification made by Mrs. Rosario Capino, xeroxed copies of periodic reports on T-Bill placements made by Citytrust Banking Corporation, as well as admissions of the BIR in its "Opposition to the Motion to Fix Refundable Amount." Thus, We agree with the Court of Tax Appeals that petitioner failed to sufficiently prove with competent evidence the claimed amount of P4,774,667.38. cdt Moreso, We cannot just disregard the observation of the court of Tax Appeals that: "The Court noted that in several cases, Citytrust Banking corporation, the herein investment manager of petitioner, filed with this Court claims for refund, of the 20% final withholding taxes which were withheld by the different banking and financial institutions, for and in behalf of the various retirements funds including that of the petitioner , which were granted by the Court. (see CTA Case No. 4807, January 20, 1997, and CTA Case No. 4314, January 24, 1996, among others) Thus, it will not be a fallacy to state that double refund might have taken place under the circumstances. Respondent therefore must take a cue from this." (p. 40, Rollo) As the power of taxation is a high prerogative of sovereignty, the relinquishment is never presumed and any reduction of diminution thereof with respect to its mode or its rate, must be strictly construed, and the same must be coached in clear and unmistakable terms in order that it may be applied (84 C.J.S. 659-800). The general rule is that any claim for exemption from the tax statute should be strictly construed against the taxpayer (Luzon Stevedoring Corporation vs. Court of Appeals, supra). A claim for refund is in the nature of claim for exemption and should be construed in strictissimi juris against the taxpayer (Commissioner of Internal Revenue v. Tokyo Shipping Co., Ltd., 244 SCRA 332 [1995]). In the instant case, as petitioner failed to convincingly prove with reasonable degree of certainty the claimed amount of P4,774,667.38, the Court of Tax Appeals properly denied the "Motion to Fix Refundable Amount" for lack of evidence. LLphil WHEREFORE, premises considered, the instant petition is hereby DENIED DUE COURSE and DISMISSED by the Court for lack of merit. SO ORDERED. Luna and Vidallon-Magtolis, JJ . , concur.