Philippine Long Distance Telephone Co. v. Commissioner of Internal Revenue

ELEVENTH DIVISION [CA-G.R. SP No. 61624. February 11, 2002.] PHILIPPINE LONG DISTANCE TELEPHONE COMPANY , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N CALLEJO , SR. , J p : The Philippine Long Distance Company, Petitioner for brevity, filed a "Petition" , dated December 29, 1997, with the Court of Tax Appeals, CTA for brevity , entitled and docketed as "Philippine Long Distance Telephone Company, Petitioner, versus Commissioner of Internal Revenue, Respondent, CTA Case No . 5572," alleging, inter alia , that: for the taxable year 1995, it terminated the employment of some rank and file employees and supervisory, as well as executive, employees caused by (a) technological changes; (b) decrease in workload; (c) transfer of toll equipment and operations to other areas and decrease in volume of operator-handled calls; (d) personnel changes or reorganization whereby functions of employees are absorbed by other employees; it paid separated employees their respective separation pay and other benefits, inclusive of accumulated vacation and sick leave credits due each of the said employees; Petitioner, as employer and withholding agent, deducted, from the separation pay received by each of its separated employees, the amount of withholding taxes for the Respondent, on January 25, 1996, computed as follows: "Rank & File2" P9,491,008.85 Annex A" to "A-1 Supervisory 10,958,222.84 Annex "B" to "B-7" Executive 3,257,676.51 Annex "C" TOTAL P23,706,908.20 (at page 049, Rollo) The termination of the employment of said employees was beyond the control of the Petitioner and, hence, under Section 28(b)(7)(B) of the Tax Code, and as interpreted by the Respondent under BIR Ruling No. 197-92, July 3, 1992 and BIR Ruling No. UN-010-96, January 4, 1996, the separation pay of said employees inclusive of terminal leave pay and accumulated vacation and sick leave credits are exempt from income tax; on November 20, 1997, the Petitioner filed, in behalf of its separated employees, with the Bureau of Internal Revenue, its administrative claim for tax credit or refund in the total amount of P23,706,908.20 but the Bureau had not yet made any final action on said claim; the Petition was filed to toll the running of the two-year period for the judicial claim of a refund for said tax credit. The Petitioner prayed that, after due proceedings, judgment be rendered in its favor as follows: "WHEREFORE, it is respectfully prayed that, after due hearing, judgment be rendered ordering Respondent to issue to herein Petitioner a tax refund or tax credit certificate for the amount of P23,706,908.20 representing its overpaid withholding tax. Petitioner prays for such other reliefs and remedies as this Honorable Court may deem just and equitable in the premises." (at page 051, Rollo ) The Petitioner appended to its " Petition " the lists of the employees whose employments were terminated. In his Answer to the Petition, the Respondent interposed the following Special and Affirmative Defenses. "SPECIAL AND AFFIRMATIVE DEFENSES 6. The petition states no cause of action as it does not allege the date/s when the tax sought to be refunded/credited was/were actually paid (Manufacturer's Bank and Trust Co., as Trustee for Gen. Trust Plan vs. Commissioner of Internal Revenue, CTA Case No. 1659, November 29, 1965); 7. The best evidence of payments and remittances of the alleged taxes withheld are the official receipts which are however not visible in this case; 8. In claiming for tax refund or for issuance of tax credit certificate, it is incumbent upon the Petitioner to prove that it is entitled to it and must be able to point positively provision/s of law granting such right, otherwise, failure to do so is fatal on its said claim; 9. Claims for refund of taxes such as the herein petition are construed strictly against claimants, the same being in the nature of exemption from taxes (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95, 1970; Manila Electric Co. vs. CIR, 67 SCRA 35, 1975); 10. It is incumbent upon Petitioner to show full compliance to the provisions of Section 230 of the Tax Code, as amended; 11. Consequently, therefore, Petitioner is not entitled to the claim herein sought to be refunded or credited." (at page 055, Rollo ) On March 19, 1998, the Petitioner filed a " Manifestation ", with the Court, that numerous employees who were separated from their employment with the Petitioner opted to file, on their own , applications with the Bureau of Internal Revenue, for tax refunds in the total amount of P16,439,777.61 and that, accordingly, the said amounts should be deducted from the amount of P23,702,908.20 claimed by the Petitioner, under its Petition. The Petitioner appended to its " Manifestation " the list of the names of the employees who filed, on their own, their respective claims for tax refund with the Bureau. Conformably with CTA Circular No. 1-95, as amended by CTA Circular No. 10-97, the Court appointed the Sycip, Gorres, Velayo and Company, SGV & Co. for brevity , as Commissioner, to conduct a special audit examination of various receipts, invoices and other long accounts, subject of the Petition, and ordered the said accounting/auditing firm to submit its " Report " to the Court, inclusive of photocopies of the original documents and other supporting papers, " duly pre-marked ", as integral parts of said Report. The SGV & Co. submitted its Report, dated September 29, 1998, later revised, on November 28, 1998, fixing the amount of Petitioner's claim for refund of P6,679,167.72. The SGV & Co. appended to its revised letter-report a summary of tax overwithheld being claimed from the Bureau of Internal Revenue, quoted, infra . PHILIPPINE LONG DISTANCE TELEPHONE COMPANY SUMMARY OF TAX OVER WITHHELD BEING CLAIMED TO BIR AS OF DECEMBER 31, 1995 (AS REVISED) PLDT's original claim 6,747,980.78 Deduct: Discrepancies in CSVs -unused VL, SL, etc. (Annex 1) 15,406.81 Erroneous computation of tax due (Annex 2) 17,343.60 Tax over withheld for redundant employees who personally filed with the BIR (Annex 3) 36,062.65 6,813.06 Adjusted claim to be reported to CTA P6,679,167.72 The Report was set for hearing on September 1, 1998 and October 1, 1998, during which Amelia B. Cabal who prepared said Report of SGV & Co., was cross-examined. The parties were not required, by the Court, to submit their respective comment on the letter-report and revised letter-report of the SGV & Co. Neither did the CTA issue any Order on said Report. Neither did the parties or any of them file any motion with the Court for the approval, revision or repetition of the Report. AaDSTH After the petitioner adduced its testimonial evidence, it filed with the Court its " Amended Formal Offer of Evidence " of the following documentary evidence: 1. EXHIBIT A, A-1, Letter dated November 19, 1997 filed by A-2, A-3, A-4 petitioner, thru counsel with the Bureau of Internal Revenue PURPOSE To prove that the administrative claim for refund was duly filed by petitioner." 2. EXHIBITS B, Alphabetical list of petitioner's employees (rank B-1, B-2, B-3 and file, supervisory and executive) who were B-4, B-5, B-6 declared redundant taxable year 1995 showing B-7 the amount of taxable income, taxes due, taxes paid and taxes overwithheld PURPOSE To prove that the original amount of the claim for refund is P23,706,908.20 3. EXHIBITS C, BIR Ruling UN 10-96 dated December 12, 1995 C-1, C-2 PURPOSE To prove that the Respondent issued a ruling declaring that any and all amounts received by employees of petitioner as a result of the redundancy program is exempt from taxes 4. EXHIBIT D Monthly Remittance Return of Income Taxes Withheld for December 1995 EXHIBIT D-1 BIR stamp of receipt showing the date January 24, 1996 EXHIBIT D-2 Name and signature of authorized representative PURPOSE To prove that petitioner withheld taxes on the separation pay of its redundant employees and remitted the same to the BIR 5. EXHIBIT E Revised Certification dated November 26, 1998 issued by SGV & Co; EXHIBIT E-1 Signature of Ms. Amelia B. Cabal found on p. 2 of the Certification PURPOSE To prove that SGV & Co., pursuant to the commission issued by the Honorable Court, issued a Revised Certification stating that an amount of P6,679,167.72 represent taxes erroneously withheld by petitioner on the separation pay of its employees and remitted to the BIR 6. EXHIBIT E-2 Amount of P6,679,167.72 as the Adjusted Claim to be reported to CTA PURPOSE To prove that, as per computation of SGV & Co., the total amount of taxes withheld by petitioner, as corrected and revised, amount to P6,679,167.72. 7. EXHIBIT E-3 Summary of Tax Over Withheld being claimed to BIR as of December 31, 1995 (as revised) EXHIBIT E-3-a P30,00,295.01 (sic) Tax over withheld from rank and file EXHIBIT E-3-b P2,983,680.00 Tax over withheld from Supervisors and staff EXHIBIT E-3-c P695,192.23 Tax over withheld from Executives EXHIBIT E-3-d P6,679,167.72 Tax over withheld-Grand Total PURPOSE To prove that as per computation and verification of SGV & Co., the amount of P30,00,295.01 (sic) represent taxes over withheld from rank and file employees, P2,983,680.48 from supervisors and staff and P695,192.23 from executives, for a total of P6,679,167.72. 8. EXHIBIT E-4 Revised Alphabetical List of Redundant Rank and File Employees as of Dec. 28, 1995 EXHIBIT E-4-a, Pages 2, 3 and 4 of Exhibit E-4 E-4-b, E-4-c EXHIBIT E-4-c-1 Amount of P3,000,295.01 as the total of tax over withheld PURPOSE To prove that petitioner erroneously overwithheld taxes in the amount of P3,000,295.01 from the separation pay received by the redundant rank and file employees for the year 1995. 9. EXHIBIT E-5 and Revised Alphabetical List of Redundant E-5-a Supervisory Employees as of Dec. 28, 1995 EXHIBIT E-5-a-1 P2,983,680.48 as the amount of tax over withheld PURPOSE To prove that petitioner erroneously overwithheld taxes in the amount of P2,983,680.48 from the separation pay received by the redundant supervisory employees for the year 1995. 10. EXHIBITS E-6, Annual Information Return of Income Tax E-6-A, E-6-B, Withheld on Compensation, Expanded and Final E-6-C, E-6-D, Withholding Taxes duly received by the BIR on E-6-E January 25, 1996 PURPOSE To prove that taxes on the separation pay of the redundant employees were actually withheld and remitted to the BIR 11. EXHIBIT E-7 List of Redundant Executive Employees as of Dec. 28, 1995 EXHIBIT E-7-a Amount of P695,192.23 as tax over withheld PURPOSE To prove that petitioner erroneously overwithheld taxes in the amount of P695,192.23 from the separation pay received by the redundant executive employees for the year 1995. 12. EXHIBIT E-8 Compilation of Cash Salary Vouchers of 186 redundant rank and file employees. 13. EXHIBIT E-9 Compilation of Cash Salary Vouchers of 89 redundant supervisory employees and 9 redundant executives PURPOSE Exhibits E-8 and E-9 are being offered to prove that the employees who were separated under the redundancy program received their separation net of withholding taxes." (at pages 060-062, Rollo) After the Petitioner rested its case, the Respondent presented Atty. Rodolfo L. Salazar, Chief of the BIR Appellate Division, as his sole witness after which he rested his case. The Petitioner later filed a " Memorandum " in support of its Petition. After due proceedings, the Court rendered judgment, dated July 25, 2000, denying the Petition for "insufficiency of evidence". The Court found and declared that the Petitioner failed to prove that terminated employees received separation pay and that taxes were withheld therefrom and that said taxes withheld were remitted to the Bureau of Internal Revenue. The Petitioner filed, on August 18, 2000, a " Motion for New Trial/Reconsideration ", on the following grounds: "I PETITIONER WILL PRESENT ADDITIONAL EVIDENCE CONSISTING OF NUMEROUS RECEIPTS AND QUITCLAIMS WHICH COULD NOT HAVE BEEN PRESENTED DURING TRIAL DESPITE DILIGENT EFFORTS AND WHICH, IF PRESENTED, WILL PROVE THE FACT OF RECEIPT OF SEPARATION PAY BY THE REDUNDANT RANK AND FILE EMPLOYEES II PETITIONER SUBMITTED SUFFICIENT EVIDENCE TO PROVE THAT THE AMOUNT OF INCOME TAXES ERRONEOUSLY WITHHELD FROM REDUNDANT EMPLOYEES WERE IN FACT PAID AND REMITTED TO THE BUREAU OF INTERNAL REVENUE III THE COURT ERRED IN DISREGARDING THE REPORT OF SGV & CO. WHICH CERTIFIED THAT PETITIONER IS ENTITLED TO A REFUND IN THE AMOUNT P6,679,167.72." (at pages 094-095, Rollo) The Court came out with a Resolution, dated October 18, 2000, denying the motion of the Petitioner ( Annex "B", Petition ). The Petitioner forthwith filed a " Petition for Review " under Rule 43 of the 1997 Rules of Civil Procedure, for the reversal of the Decision and Resolution of the Court of Tax Appeals. The Petitioner posed, for our resolution, in the present recourse, the issue of whether or not the Court a quo committed reversible errors in (a) finding and declaring that the Petitioner failed to prove its claim, in behalf of its separated employees, for a refund in the amount of P6,679,167.72; (b) in denying the " Motion for New Trial/Reconsideration " of the petitioner. Anent the first issue, the Court a quo , found and declared, that the Petitioner was burdened to prove , inter alia , that the separated employees were paid their respective separation pay and other benefits and that the Petitioner withheld taxes from each of the separated employees and remitted the same to the Bureau of Internal Revenue. However, the Petitioner failed to discharge its burden. Although the Petitioner adduced evidence that it terminated the services of some of its employees for reasons/grounds beyond its control, however, the Petitioner failed to adduce sufficient proof that it remitted separation pay to its separated employees and the amounts thereof, and that it withheld taxes from their separation pay and remitted the same to the Bureau of Internal Revenue. Although the Petitioner adduced, in evidence, the cash vouchers for its rank and file employees, the same were not signed by said employees. The Court further declared that, although the Petitioner submitted the revised lists of redundant employees, the amount of total income taxes withheld for each separated employee cannot be verified against the " Summary of Gross Compensation and Tax Withheld for 1995 ," adduced in evidence by the petitioner. The Certification (letter-report) of the SGV & Co." adduced in evidence by the Petitioner is not sufficient as it was necessary for the Petitioner to adduce, in evidence, the voluminous documents examined by the SGV & Co." and pre-marked. The Petitioner even failed to adduce in evidence the alphabetical list of employees from whom the taxes were purportedly withheld. Although Atty. Rodolfo L. Salazar, the Chief of the BIR Appellate Division declared, when he testified in the Court a quo that, out of 769 separated employees who filed, on their own, their claims for refunds for taxes withheld had already been granted by the Bureau, there was no way for the Court to ascertain whether the employees for whom the Petitioner filed its " Petition " for refund, included those whose claims had already been granted by the Bureau of Internal Revenue. "Prescinding from the above law and rulings, in order to qualify for an exemption from income taxes, the official or employee must be actually separated from the service for any of the causes aforementioned and the official or employee receives separation pay or benefits from the employer as a consequence of such separation. It follows therefore, that in order to be entitled to a claim for refund of overpaid or erroneously paid withholding taxes on separation pay, petitioner must prove that: (1) its employees were actually separated from employment due to causes beyond their control; (2) its employees actually received separation pay and other benefits as a consequence of such involuntary separation; (3) it actually withheld income taxes on the employees' separation pay/other benefits; and (4) it actually remitted to the BIR the withholding taxes on the employees' separation pay/other benefits. In the case at bar, it is undisputably established that petitioner's acquisition of new equipment as well as the technological changes adopted in its operation resulted to redundancy in several job functions/positions which necessitated from reduction of its manpower. In short, the separation from the service of Petitioner's employees was due to causes beyond their control. However, Petitioner failed to sufficiently prove that the terminated employees received separation pay and that taxes were withheld therefrom and remitted to the BIR. To prove actual payment of the separation pay/other benefits and the withholding of the corresponding income taxes as indicated in the revised lists of redundant employees, Petitioner submitted compilations of cash salary vouchers for the final payment/terminal pay of its redundant employees (Exhs. E-8 & E-9, inclusive). The cash salary vouchers for redundant supervisors and staff and executive employees' final pay (Exh. E-9) disclose that the corresponding income taxes on their separation pay/other benefits were deducted and that the final amounts indicated in the cash salary vouchers were net of the income taxes deducted. The said final separation pay/other benefits net of withholding taxes were duly received by the redundant supervisors and staff and executive employees with the exception of a few said employees, as shown by their signatures on the cash salary vouchers acknowledging actual receipt of payments. With respect to the redundant rank and file employees' final payment/terminal pay (Exh. E-8), the cash salary vouchers relative thereto have no payment acknowledgment receipts. Inasmuch as these cash vouchers were not signed by the respective employees to prove actual receipt of payment, the same merely serve as proofs of authorization for payment and not actual payment by the Petitioner of the redundant rank and file employees' separation pay and other benefits. In other words, Petitioner failed to prove that the rank and file employees were actually paid separation pay and other benefits. To establish that the withholding taxes deducted from the redundant employees' separation pay/other benefits were actually remitted to the BIR, herein Petitioner submitted the following: Exhibit a) Monthly Remittance Return of Income Taxes Withheld for December 1995 D b) Revised SGV & Co. Certification E to E-3-d c) Annual Information Return of Income Tax Withheld on Compensation, Expanded and Final Withholding Taxes for the year 1995 E-6 d) Summary of Income Taxes Withheld for the calendar year ended December 31, 1995 E-6-a e) Summary of Gross Compensation and Tax Withheld E-6-b to E-6-e However, it cannot be determined from the above documents whether or not Petitioner actually remitted the total income taxes withheld from the redundant employees' taxable compensation (inclusive of the separation pay/other benefits) for the year 1995. The amounts of total income taxes withheld for each redundant employee as reflected in the revised lists of redundant employees (Exhs. E-4, E-5, E-7, inclusive) cannot be verified for 1995 (Exhs. E-6-b to E-6-e, inclusive) due to the fact that his summary enumerates the amounts of income taxes withheld from Petitioner's employees on per district/area basis. The only schedule (with names, corresponding gross compensation and withholding taxes) attached to the summary was for the withholding taxes on service terminal pay (Exh. E-6-e). However, the names listed thereon were not among the names of the redundant separated employees being claimed by petitioner. Furthermore, a mere certification from SGV & Co. that the remittances of said withholding taxes of redundant employees have been verified against Petitioner's Alphabetical List of Employees from Whom Taxes Were Withheld for the year 1995 and traced to Monthly Remittance Returns of Income Taxes Withheld is not sufficient because We have no way of ascertaining the correctness of the said SGV findings. The Alphabetical List of Employees from Whom Taxes Were Withheld for the year 1995 and the Monthly Remittance Returns of Income Taxes Withheld referred to by independent CPA were not submitted to the Court for verification. It should be emphasized that under CTA Circular 1-95, as amended, Petitioner is directed to submit to the Court all the voluminous documents examined by the independent CPA duly pre-marked which Petitioner failed to do. It is worthy to note that Respondent presented a witness in the person of Atty. Rodolfo L. Salazar, Chief of the BIR Appellate Division, who testified that a portion of Petitioner's original claim for refund of P23,706,908.20 had already been granted. He also testified that out of 769 claimants, who opted to file directly with the BIR, 766 had been processed and granted. In fact, the three claims were not processed because the concerned taxpayer failed to submit the income tax returns and withholding tax certificates. Considering that no documentary evidence was presented to bolster said testimony, We have no means of counter checking whether the 766 claims alleged to have been already granted by the Respondent pertained to the P16,439,777.61 claim for refund withdrawn by the Petitioner from the instant petition or to the remaining balance of P6,679,167.72 which is the subject of this claim" ( at pages 038-041, Rollo ) On the other hand, the Petitioner avers that it was not burdened to prove that the separated employees received their respective separation pay from the Petitioner and the precise amounts thereof. The only burden of the Petitioner, during the proceedings before the Court a quo , was to prove that it terminated the employment of its employees and that the Petitioner withheld taxes on the employees separation pay benefits and remitted the same to the Bureau of Internal Revenue. Whether or not the employees received their separation pay is a question under the exclusive jurisdiction of the NLRC. Even if the Petitioner was burdened to prove that it remitted to the separated employees their separation pay and other benefits, nevertheless, the Petitioner discharged its burden. The Petitioner was not burdened to prove its claim beyond reasonable doubt but only by preponderance of evidence. As the Petitioner ratiocinated, in its Petition: "Is it really necessary in claims for refund of withholding taxes erroneously withheld on tax-exempt payments of separation pay to prove receipt by the terminated employees of their separation pay in order for the claim to prosper? We answer in the negative. In the instant case, there is no dispute that the separation from service of the employees was due to causes beyond their control (Decision. p. 6). There is no dispute also that the employees covered by the claims were in fact terminated. The fact that they were terminated is unquestionably clear and uncontroverted. The CTA, however, disregarded and refused to accept the cash salary vouchers of the redundant rank and file employees (the compilation of cash salary vouchers was submitted and offered in evidence as Exhibit E-8 and E-9, see Formal Offer of Evidence, annex "F") because these cash vouchers were not signed by the respective employees. The CTA said that ". . . Inasmuch as these cash vouchers were not signed by the respective employees to prove actual receipt of payment, the same merely serve as proofs of authorization for payment and not actual payment by the Petitioner of the redundant rank and file employees' separation pay and other benefits. . . " (Decision, p. 7). Said the CTA in conclusion, " . . . in other words, Petitioner failed to prove that rank and file employees were actually paid separation pay and other benefits. . . " The CTA therefore, does not question the fact that the employees were actually terminated. What the CTA is pointing out is Petitioner's supposed failure to show that the employees, in fact, received separation pay. This is not fatal to Petitioner's claim. In claims for refund of erroneously withheld taxes on tax-exempt separation pay benefits, what need be proven are the following: (1) The employees were actually separated from employment due to causes beyond their control; (2) The employer actually withheld taxes on the employees' separation pay benefits; and (3) The employer actually remitted said withheld taxes to the BIR. It is not essential to prove that the separation pay benefits were actually received by the terminated employees. That is not for the CTA to determine. This issue is a matter that is within the competence and jurisdiction of the Department of Labor and/or the National Labor Relations Commission. This is not the matter for the CTA to be interested in. Besides, the respondent did not raise this supposed defect in his memorandum. Proving, or submitting evidence to prove, receipt of separation pay would have been material, relevant and necessary if its deductibility as a business expense is in issue. Then we would agree that there is a need for the Petitioner to prove payment. But this is not the issue in the instant case. The issue is whether or not the withholding taxes which Petitioner remitted to the BIR should be refunded for having been erroneously withheld and paid to the latter. There is no need to prove actual receipt of separation pay. Furthermore, adopting the Court's logic to its conclusion, if, as ruled by the Court that receipt of separation pay was not established, and since the basis for the withholding tax is the separation pay, if such basis, as found by the CTA as not having been established, then there is no basis for the withholding tax that the Petitioner made. If such basis as found by the court does not exist, then Petitioner's withholding was done erroneously with more reason that Petitioner should be refunded. For as long as there is no legal basis for the payment of taxes to the BIR, the taxpayer is entitled to claim for a refund therefore. Hence, any taxes withheld from separation benefits and paid to the BIR constitute erroneous payment of taxes and should therefore, be refunded/credited to the taxpayer/withholding agent, regardless of whether or not separation pay was actually paid to the concerned employees. Assuming arguendo, that payment of separation pay is required, petitioner established with sufficient documentary and testimonial evidence that petitioner paid separation pay to the employees rendered redundant in 1995 by the redundancy program. First, petitioner presented testimonies of at least three (3) witnesses, Jose Marcito, Senior Manager of petitioner, Narcita Cadiente, Manager of petitioner's Executive Compensation Division and Benjamin Simbahan, Manager and Head of petitioner's Financial Accounting Division, each of whom testified that petitioner paid separation pay to the employees. Second, petitioner submitted an alpha list of the employees rendered redundant showing the amounts paid as separation pay, the tax due, tax withheld and remitted, and the tax overwithheld. Third, petitioner submitted compilations of the cash salary vouchers for the period ended December 31, 1995, of the redundant rank and file and supervisory and executive employees pre-marked by the independent CPA (compiled as Exhibits E-8 and E-9) showing the itemized components of the employees final or terminal pay and the deductions therefrom. Thus, contrary to the CTA's findings, petitioner complied with CTA Circular 1-95 and 10-97 requiring the submission of the voluminous documents examined and pre-marked by the independent CPA . All told, assuming arguendo that proof of payment of separation pay is required, petitioner had established with clear and convincing evidence that it paid separation pay to its employees. Petitioner submits that the quantum of proof necessary in proceedings before the CTA is not proof beyond reasonable doubt but rather, preponderance of evidence . With all the documentary and testimonial evidence submitted by petitioner, it had established by preponderance of evidence, that it paid the separation pay to its employees . " (at pages 016-019, Rollo ) We are not in full accord with the disquisitions of the Petitioner. We recall the pronouncement of our Supreme Court in "Commissioner of Internal Revenue, versus S . C . Johnson & Son, Inc . , 309 SCRA 87," where our Supreme Court declared: "It bears stressing that 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. The burden of proof is upon him who claims the exemption in his favor and he must be able to justify his claim by the clearest grant of organic or statute law." ( at pages 108-109, supra ) In a similar vein, our Supreme Court declared that a claimant for a tax refund is burdened to prove the factual basis of his or her own claim for tax credit or refund. For tax refunds, like tax exemptions, are construed strictly against the taxpayer. He is mandated to prove the inclusion of the income payments which were the basis of the withholding taxes and the fact of withholding ( Citibank N . A . , versus Court of Appeals, et al . , 280 SCRA 459). Contrary to the claim of the Petitioner, it is burdened to establish that each of the employees to whom it filed the claims for refund, indeed, received their separation pay. Indeed, Section 32(B) (6) (b) of the 1997 Tax Code (formerly Section 28 (b) (7) (B) provides that, excluded from the gross income is any amount received by the separated employee for any cause beyond the control of said employee: "SECTION 32. Gross Income. . . (B) Exclusion from Gross Income . The following items shall not be included in gross income and shall be exempt from taxation under this Title: xxx xxx xxx (6) Retirement Benefits, Pensions, Gratuities, etc. . . (b) Any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from the service of the employer due to the death, sickness or other physical disability or for any cause beyond the control of the said official or employee . (Emphasis supplied)" ( Idem supra ) More, BIR Ruling No. 197-92, dated July 3, 1992, cited by the respondent is quoted, infra , as follows: "Any amount received by an official or an employee or his heirs from his employer as a consequence of separation by such official or employee from the service of the employer due to death, sickness or physical disability or for any cause beyond the control of said official or employee is exempt from taxes regardless of age or length of service. The phrase for any cause beyond the control of said official or employee connotes involuntariness on the part of the official or employee and must not be asked for or initiated by him . " (Emphasis supplied) ( idem, supra ) The barefaced fact the employees were separated from their employment due to causes beyond their control and that the Petitioner withheld taxes on the separation pay of the affected employees and remitted the said withholding taxes to the Bureau of Internal Revenue is not enough. Unless and until there is proof that the separated employees received their separation pay, and the precise amount thereof, it cannot be certain with certitude by the Court of Tax Appeals that the withheld taxes remitted to the Bureau of Internal Revenue were correct or not. Although the Petitioner adduced testimonial evidence that the employees were given their separation pay, however, the Petitioner is burdened to adduce, in evidence, the Receipts or appropriate documentary evidence to prove that the separated employees, in fact, received their separation pay and the amount thereof. After all, a claim for refund of taxes withheld is akin to a claim for actual damages or compensatory damages, in civil law, which must be proved with the best obtainable evidence, namely the receipts and appropriate documents buttressing such claim: " Third . With respect to the question of damages, we find no reversible error committed in the award of actual damages to private respondents. To justify an award of actual damages, there must be a competent proof of the actual amount of loss. Credence can be given only to claims which are duly supported by receipts." ( Sanitary Steam Laundry, Inc., versus Court of Appeals, et al., 300 SCRA 20 at page 34, supra) Such claims cannot be anchored on mere conjectures, speculations or surmises considering the magnitude of the amounts involved. We do not believe that the Petitioner remitted the separation pay of its employees sans any receipts or documents signed by them acknowledging payments of their separation pay. For the Court of Tax Appeals, or this Court for that matter, to rely solely on testimonial evidence offered by the Petitioner is to trivialize the heavy burden of the Petitioner and perhaps open the door to fraudulent and/or unfounded claims of refund, at the expense of the State. This is unacceptable. The complaint of a separated employee against his employer, for separation pay, is within the exclusive competence of the National Labor Relations Commission. But whether or not the employees are entitled to a refund for taxes withheld on their separation pay and the amount of such refund, is an issue within the exclusive competence of the Court of Tax Appeals and not of the National Labor Relations Commission or the Department of Labor and Employment for that matter. The Petitioner faults the CTA for not issuing the appropriate Order required under Section 11, Rule 32 of the Rules of Court, on the Certification/Report of the SGV & Co. The Petitioner insists that the CTA was mandated to issue said Order before resolving the case on its merits. However, the CTA ignored the said Rule. It was only when the CTA rendered its Decision rejecting the Certification/Report of the SGV & Co., that the Petitioner learned, for the first time, of the rejection of said Report. The Petitioner was thereby deprived of its right to due process. Since the Certification/Report was accomplished by the SGV & Co., which was appointed as Commissioner, by the CTA no less, it behooved the CTA to accord the said Certification/Report full faith and probative weight. More so, the Petitioner avers, since the Respondent adduced no evidence in controversion of the Certification/Report: "Under Section 11 of Rule 32, after the hearing on the report, the Court must issue an "Order" adopting, modifying or rejecting the report in whole or in part or recommitting it with instructions or requiring the parties to present further evidence before the Commissioner or the Court. Hence, Section 11 of Rule 32 provides that: "Sec. 11. Hearing upon report . Upon the expiration of the period of ten (10) days referred to in the preceding section, the report shall be set for hearing, after which the court shall issue an order adopting, modifying, or rejecting the report in whole or in part, or recommitting it with instructions, or requiring the parties to present further evidence before the commissioner or the court. (11a, R33)" (Emphasis ours). The CTA failed to comply with the above-quoted Section 11 of Rule 32. Indeed, the CTA set the report for the hearing on October 1, 1998 and February 8, 1999. However, the CTA failed to issue the Order as required in said Section 11. The rejection by the CTA of the Certification/Report of the Court-appointed commissioner was contained only in its Decision on the merits. The use of the word "shall" in Section 11 means that the issuance of the Order is obligatory upon the CTA. However, the CTA failed to issue such an Order. It was only when the decision on the merits was issued by the CTA that herein petitioner was apprised of the Court's rejection of the Court-appointed Commissioner's Certification/Report. This, to us, is fatal, being violative of Section 11, Rule 32 of the Rules of Court which requires the Court to issue an Order of Section 11, Rule 32 of the Rules of Court which requires the Court to issue an Order after hearing on the report, to apprise the parties of whether it is adopting or rejecting the report or whether it wants the parties to present further evidence. Under Section 11, Rule 32, the CTA should have notified the parties of what it intended to do with the report. By being silent, the CTA led the petitioner to believe that the Certification/Report of the Court-appointed Commissioner was sufficient. Having been apprised for the first time of the CTA's rejection of the Certification/Report of its very own Court-appointed Commissioner in its decision dated July 25, 2000, the CTA should have allowed herein petitioner to present further evidence and granted the Motion for New Trial/Reconsideration (Annex "H") filed by herein petitioner. Clearly by not issuing the "Order" required in Section 11 of Rule 32, petitioner's right to due process was grossly violated. Petitioner should not be prejudiced by the failure of the CTA to comply with the requirement under Section 11 to issue an Order rejecting the Certification/Report. The consequence of such failure should be borne by the CTA and should not be taken against herein petitioner. The rejection of the Certification/Report in the Decision on the merits should be disregarded for being violative of petitioner's right to due process under Section 11 of the Rule 32 of the Rules of Court. Since the Commissioner who rendered the report is an officer of the CTA duly appointed by the CTA, the Certification/Report should be given full faith and credence and therefore, as discussed herein before, the rejection thereof is invalid, and the Certification/Report should be adopted by the CTA in toto . Moreover, no evidence was presented by the respondent to refute the findings of facts of the Court-appointed commissioner contained in its Certification/Report. The uncorroborated and substantiated testimony of respondent's lone witness does not provide ample basis for disregarding the documentary and testimony evidence presented by petitioner. Neither was there any showing of falsity or fraud in preparation of SGV & Co.'s Certification/Report . It has been held by the Supreme Court that the findings of the Commissioner will stand on the same basis as the findings of the judge himself. ( Arbes vs. Polistico, 63 Phil. 489, 492 ). A court may not set aside findings of fact by a commissioner unless they are clearly erroneous and the court must respect the advantage the commissioner enjoyed as it was able to judge the veracity and credibility of the evidence presented . The court may not refuse to recognize the findings merely because of a difference in personal persuasion or a dissatisfaction with the result reached. (Moran, Comments on the Rules of Court, Vol. II, 1996 edition, pages 179-180). Thus, the CTA erred in failing to issue a separate order disregarding the Certification/Report issued by SGV & Co. and violated petitioner's right to due process." ( at pages 025-027, Rollo ) The Petitioner further avers that it behooved the CTA to have allowed the Petitioner to adduce further evidence as prayed for by it in its "Motion for New Trial/Reconsideration" of the Decision of the CTA. The respondent, on the other hand, posits that the CTA is not governed by the technical rules of evidence. After all, the Respondent avers, the CTA had considered all the evidence before it: "The proceedings before the Court of Tax Appeals is not bound by the technical rules of evidence . The Petitioner argued that the Court of Tax Appeals erred in not issuing a separate "order" disregarding the certification/report of SGV & Co. pursuant to Section 11, Rule 32 of the Rules of Court. It further argued that the rejection of the Certification/Report in the Decision on the merits should be disregarded for being violative of petitioner's right to due process under the above-mentioned section. We do not subscribe to the petitioner's view. True, under Section 11, Rule 32 of the Rules of Court, requires the Court to issue an "order" either adopting, modifying or rejecting the report in whole or in part, however, this rules is not strictly binding to the Court of Tax Appeals (CTA). The law creating the CTA, however, specifically provides that proceedings before it "shall not be governed strictly by the technical rules of evidence . " ( Perez vs. Araneta, 103 Phil. 1167 ). As clearly pointed out by the Tax Court in Resolution to the motion for reconsideration of the petitioner promulgated on October 18, 2000, that "it should be made clear that findings arrived at by the commissioned independent CPA is not absolute guarantee that a claim for refund is to be granted. The Court conducts its own verification and considers all the aspects of the case especially the documentary evidence submitted in support of the claim for refund. In evaluating the evidence presented, the Court has the sound discretion to determine if the evidences presented by a party are sufficient to prove a cause of action." ( at pages 602-603, Rollo ) HcaDIA We do not agree with the Petitioner. We agree that, under Section 11, Rule 32 of the Rules of Court, the CTA was mandated to issue an Order, after due hearing, adopting modifying or rejecting the Report of SGV & Co. or for the recommitment of the Report with instructions or for the parties to adduce further evidence before the Commission or before the Court but that the CTA did not. However, the records show that the Commissioner was crossed-examined extensively. More, in spite of the faux pas of the CTA, the Petitioner did not file any motion with the CTA for it to issue said Order. Instead, the Petitioner filed its " Memorandum " on the merits of its Petition. Worse, the Petitioner failed to offer in evidence the pre-marked documents/papers used by the Commission as basis of the Report. Even after the CTA rendered its Decision where the CTA found and declared that the Report/Certification of the Commission was insufficient as anchor for a Report in favor of the Petitioner, the Petitioner could have filed a Motion for Reconsideration of the Decision of the CTA, on the ground that the CTA failed to comply with Section 11, Rule 32 of the Rules of Court and pray with the CTA that the " Certification/Report " be recommitted to SGV & Co., or that it be allowed to adduce further evidence before the Commission or the Court. However, although the Petitioner filed a "Motion for New Trial and Reconsideration," the Petitioner did not, in said motion invoke Section 11, Rule 32 of the Rules of Court. It was only in this Court that the Petitioner invoked, for the first time, the said Rule. Anent the last issue, the Petitioner avers that the CTA committed a reversible error in denying its " Motion for New Trial and Reconsideration " with ratiocination that: "THE CTA ERRED IN NOT ORDERING A NEW TRIAL TO ALLOW PETITIONER TO PRESENT ADDITIONAL EVIDENCE IN SUPPORT THEREOF. The CTA found that only the cash salary vouchers of supervisory and executive employees show payment acknowledgment receipts while those of the rank and file employees do not (Decision, p. 7). In its Motion for New Trial/Reconsideration dated August 17, 2000, petitioner submitted various Receipts, Release and Quitclaims executed by the rank and file employees proving that these employees duly received their separation pay. (See Annex "H"). Even if these Receipt, Release and Quitclaims were not notarized or authenticated, they constitute persuasive evidence of the fact of receipt by the employees of the separation pay which should have prompted the CTA to reconsider, or at the very least, order the re-opening of the case, for petitioner to present additional evidence. In the light of the CTA's determination of the existence of a legal basis for petitioner's claims (Decision, p. 4-5), consideration of equity and substantial justice comes into play and should have moved the CTA to relax the application of the Rules of Procedure and ordered a new trial to allow petitioner to present the Receipt, Release and Quitclaims, if only to satisfy the requirement of proof of receipt of separation pay. The Supreme Court has well settled the policy that litigations should, as much as possible, be decided on the merits and not on technicalities. ( People vs . Leviste 255 SCRA 238 ) Inasmuch as petitioner has established the material points, to wit: (1) it employed a redundancy program in 1995 (2) petitioner's employees were separated pursuant to the redundancy program and (3) separation pay and benefits paid by petitioner to the redundant employees are exempt from tax, it is submitted that a liberal interpretation of the Rules of Procedure is in order and the CTA should have ordered a new trial to ensue to afford petitioner the opportunity to establish its case and present evidence which the CTA perceived to be lacking. Thus, the Supreme Court ruled in ( "Mauna vs . Civil Service Commission, 232 SCRA 288") , it was held: "Finally, when the public respondent was asked to review the decision of the MSPD dated February 14, 1990, it affirmed the same and dismissed the petitioner's appeal for being filed out of time. Assuming for the sake of argument that the petitioner's appeal was filed out of time, it is within the power of this Court to temper rigid rules in favor of substantial justice. While it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses that do not really impair the proper administration of justice. If the rules are intended to ensure the orderly conduct of litigation, it is because of the higher objective they seek which is the protection of substantive rights of the parties . As held by the Court in a number of cases: . . . Because there is no vested right in technicalities in meritorious cases, a liberal, not literal, interpretation of the rules becomes imperative and technicalities should not be resorted to in derogation of the intent and purpose of the rules which is the proper and just determination of litigation. Litigations, should as much as possible, be decided on their merits and not on technicality. Dismissal of appeals purely on technical grounds is frowned upon, and the rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and thereby defeat their very aims. As has been the constant rulings of this Court, every party-litigant should be afforded the amplest opportunity for the proper and just disposition of his case, free from the constraints of technicalities . . . " (Emphasis ours). Concededly, the matter of allowing the reopening of trial, or a new trial, is within the judicial discretion of the CTA. Nonetheless, it is respectfully submitted that the rationale for the exercise of such discretion in favor of allowing the presentation of additional evidence, is consistent with the policy that rules of procedure be construed liberally in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of every action and proceeding. In denying petitioner's claim for refund, the CTA allowed the unjust enrichment of the government to the considerable and undue detriment and prejudice of petitioner." ( at pages 028-029, Rollo ) In issuing its Resolution denying Petitioner's "Motion for New Trial and Reconsideration," the CTA found and declared that said motion was not supported by affidavits of witnesses and/or authenticated documents: "In presenting these additional evidence, Petitioner seeks to prove the fact that the employees who were separated from PLDT received their corresponding separation pay. It must be remembered that one of the reasons the claim for refund was denied in the assailed decision is the failure of the Petitioner to prove that the separated employees received their separation pay. The documentary evidence consist of various Receipts and Quitclaims which Petitioner claims to have been misplaced during trial and which have only been recently found. However, a close scrutiny of the aforesaid documents reveal a fatal flaw or defect which constrain us to rule against the Petitioner, it has been observed that said quitclaims were not duly authenticated or at least notarized contrary to the clear requirement of Section 2 of Rule 27 which we quote together with Section 1, thus: SEC. 1. Grounds of and period for filing motion for new trial or reconsideration . Within the period for taking an appeal, the aggrieved party may move the trial court to set aside the judgment or final order and grant a new trial for one or more of the following causes materially affecting the substantial right of the said party: (a) . . . (b) Newly discovered evidence which he could not, with reasonable diligence, have discovered and produced at the trial, and which if presented would probably alter the result . xxx xxx xxx SEC. 2. Contents of motion for new trial or reconsideration and notice thereof. The motion shall be made in writing stating the ground or grounds therefor, a written notice of which shall be served by the movant on the adverse party. A motion for new trial shall be proved in the manner provided for proof of motion. A motion for the cause mentioned in paragraph (a) of the preceding section shall be supported by affidavits of merits which may be rebutted by affidavits. A motion for the cause mentioned in paragraph (b) shall be supported by affidavits of the witness by whom such evidence is expected to be given, or by duly authenticated documents which are proposed to be introduced in evidence . (Emphasis supplied) ( at pages 044-045, Rollo ) We find the Motion of the Petitioner intrinsically authenticated. For, although it prays, in the body of its Motion, for a "reopening of the trial" or a new trial, however, in the petitionary portion thereof, it prays for a new trial. "Petitioner will present additional evidence consisting of numerous receipts and quitclaims which could not have been presented during trial despite diligent efforts and which, if presented will prove the fact of receipt of separation pay by the redundant rank and file employees. The Court ruled that petitioner failed to prove that the rank and file employees were actually paid separation pay and other benefits inasmuch as their cash salary vouchers have no payment acknowledgment receipts. Petitioner moves for the opening (sic) of trial in order to present the Receipts and Quitclaims executed by the redundant rank and file employees in order to prove the fact of their receipt of their separation pay. These Receipts and Quitclaims could not be presented during the course of the trial despite diligent efforts, the files having been misplaced and were recently found. Through excusable mistake or inadvertence undersigned counsel relied on the audit of SGV & Co. of the voluminous cash salary vouchers, and was thus not made wary of the fact that the cash salary vouchers for the rank and file employees do not have acknowledgment receipts, unlike the cash salary vouchers for the supervisory and executive employees. If admitted in evidence, these Receipts and Quitclaims, together with the cash salary vouchers, will prove that the rank and file employees receive their separation pay from the petitioner. In the case of "Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue" docketed as CTA Case No. 5322, the Court of Tax Appeals allowed the reopening of trial inasmuch as petitioner Atlas had established material points regarding the possible existence of the export documents. In a Resolution dated October 29, 1998 in CTA Case No. 5322 this Court ruled: "Be that as it may, this Court resolves to pave the way for petitioner's desired presentation of additional evidence in the interest of justice. "The discretionary power of the court to reopen a trial , as distinguished from a new trial under the Rules of Court, either before or after rendition of judgment for the introduction of additional evidence so as to clarify its doubt on material points has been repeatedly sustained by the Supreme Court. . . Let it be emphasized that this decision to allow petitioner's presentation of evidence is applicable pro hac vice or in this occasion only as it is the finding of this Court that petitioner has established a few of the aforementioned material points regarding the possible existence of the export documents together with the prior and succeeding returns for the quarter involved, which unfortunately, when taken as they are on their own merit, however, said material points still leave some doubt and apprehension as the actual veracity of such export documents and returns, thus, the need for a deeper clarification." Petitioner appeals to the Court's sense of justice and fair play in allowing a new trial inasmuch as the petitioner had established several material points to prove its case, to wit: (1) petitioner's acquisition of new equipment as well as technological changes adopted in its operation resulted in the redundancy of several job functions/positions and the separation from service of petitioner's employees beyond their control, (2) petitioner had approved the payment of separation pay to the redundant employees, (3) the separation benefits paid to the redundant employees are exempt from withholding taxes, (4) in the computation of the separation pay, petitioner erroneously deducted withholding taxes therefrom, (5) petitioner's redundant supervisory and executive employees actually received their separation pay from petitioner, (6) petitioner withheld income from the compensation and separation pay of its employees, (5) petitioner remitted to the BIR the withholding taxes from the compensation and separation pay of its employees, and (6) that the separation benefits. The additional documents to be presented will afford the Court with the amplest opportunity for the proper and just determination of the case. A review and examination by the Court of these documents, which are annexed to the Affidavit of Merits attached hereto, is necessary in order to verify that the rank and file employees actually received their separation pay from petitioner. It is respectfully submitted that the findings of the Honorable Court are indicative that the instant claim for refund is meritorious and that legal basis exists for the grant of the refund to petitioner. In the light of the determination of the existence of the legal basis for petitioner's claims, considerations of substantial justice must come into play to move this Honorable Court to allow petitioner to establish the factual basis for such claims. Otherwise, there will be an unjust enrichment to the considerable and undue detriment and prejudice of petitioner. The Honorable Court has found that there is legal basis for the grant of an instant claim for refund, save for the perceived insufficiency of evidence for failing to establish actual receipt of separation pay by the rank and file employees and the fact of remittance of taxes withheld to the BIR. It is respectfully submitted that this Honorable Court has basis to order new trial, if only for the purposes of submitting the receipt and quitclaims and other related material evidence. The rationale for the exercise of such discretion in favor of allowing presentation of additional evidence , is consistent with the policy that rules of procedure be construed liberally in order to promote their object and assist the parties in obtaining just, speedy and inexpensive determination of every action and proceeding ( Tope Rate International Services, Inc. vs. Court of Appeals, 170 SCRA 84, Philippine-Singapore ports Corporation vs. NLRC, 159 SCRA 264, Republic vs. De Los Angeles, 159 SCRA 264, Dayag vs. Canizares, 237 SCRA 183, Ramos vs. Court of Appeals, 269 SCRA 34, Javier vs. Court of Appeals, 183 SCRA 171 ). On the basis of the foregoing, petitioner submits that basis exists for the Court to permit the reopening of trial in this case in order to allow petitioner to submit additional documents. ( at pages 415-417, Rollo; emphasis supplied ) There is a substantial difference between a motion for the reopening of a case for the reception of additional evidence of the parties and a motion for new trial, on the ground of a newly-discovered evidence. For one thing, a motion for the reopening of a case should be filed before judgment while a motion for a new trial should be filed only after a judgment had been rendered by the Court. More, a Motion for new trial is anchored only on specific grounds, whereas a motion for a reopening of the case is addressed to the sound discretion of the Court taking into account the interest of justice. As explained by the Supreme Court: "As pointed out in the opening statement of this opinion, a motion to reopen the trial is different and distinct from a motion for new trial. For one thing, a motion to reopen may properly be presented only after either or both parties have formally offered and closed their evidence, but before judgment. On the other hand, a motion for new trial is proper only after rendition or promulgation of judgment. For another, a motion for reopening, unlike a motion for new trial, is not specifically mentioned and prescribed as a remedy by the Rules of Court. There is no specific provision in the Rules of Court governing motions to reopen. It is albeit a recognized procedural recourse or device deriving validity and acceptance from long, established usage. A motion for new trial in civil or criminal actions may be applied for and granted only upon specific, well-defined grounds, set forth respectively in Rules 37 (Section 1) and 121 (Section 2). On the other hand, the reopening of a case for the reception of additional evidence after the case has been submitted for decision but before judgment is actually rendered is, it has been said, controlled by no other rule than that of the paramount interests of justice, resting entirely in the sound judicial discretion of a Trial Court; and its concession, or denial by said Court in the exercise of that discretion will not be reviewed on appeal unless a clear abuse thereof is shown." ( Ramon J. Alegre, versus Honorable Manuel T . Reyes, et al., 161 SCRA 226, at page 231, supra ) If the Petitioner intended the "Motion for New Trial and Reconsideration" as a motion for the reopening of the case, the motion must perforce be denied, it having been filed after the CTA had rendered its Decision. Even if the motion of the Petitioner is considered as a motion for new trial under Rule 37 of the 1997 Rules of Civil Procedure, it must perforce suffer the same fate. Section 1(b) Rule 37 of the 1997 Rules of Civil Procedure is quoted, infra , as follows: "SECTION 1. Grounds of and period for filing motion for new trial and reconsideration . Within the period for taking an appeal, the aggrieved party may move the trial court to set aside the judgment or final order and grant a new trial for one or more of the following causes materially affecting the substantial rights of said party. (a) Fraud, accident, mistake or excusable negligence which ordinary prudence could not have guarded against and by reason of which such aggrieved party has probably been impaired in his rights; or (b) Newly discovered evidence, which he could not, with reasonable diligence, have discovered and produced at the trial, and which if presented would probably alter the result. . . ( idem, supra ) Section 2, Rule 37 of the said Rules is quoted, infra , as follows: "SEC. 2. Contents of motion for new trial and reconsideration and notice thereof. The motion shall be made in writing stating the ground or grounds therefor, a written notice of which shall be served by the movant on the adverse party. A motion for new trial shall be proved in the manner provided for proof of motions. A motion for a cause mentioned in a paragraph (a) of the preceding section shall be supported by affidavits of merits which must be rebutted by affidavits. A motion for the cause mentioned in paragraph (b) shall be supported by affidavits of the witnesses by whom such evidence is expected to be given, or by duly authenticated documents which are proposed to be introduced in evidence . . . ( idem. supra ) The grant or denial of a motion for new trial is addressed to the sound discretion of the trial court whose judgment should not be disturbed absent clear showing of grave abuse of discretion (Remedios Miranda, versus Urbano Legaspi, et al., 92 Phil. 290). Case law has if that a motion for new trial on the ground of newly discovered evidence is properly granted where the movant is able to establish the confluence of the following requisites: "a) the evidence had been discovered after trial, b) the evidence could not have been discovered and produced during trial even with the exercise of reasonable diligence, and c) the evidence is material and not merely corroborative, cumulative or impeaching and is of such weight that if admitted would probably alter the result." ( Georgia Tumang versus Court of Appeals, et al., 172 SCRA 328, at pages 332-333, supra .) Anent the second requirement, we recall the pronouncement of our Supreme Court that " . . . what is essential is not so much the time when the evidence offered first sprang into existence nor the time when it first came to the knowledge of the party offering the evidence. What is primordial is that the party offering the evidence had exercised reasonable diligence in locating or producing such evidence before or during the trial but failed to secure the said evidence: "In order that a particular piece of evidence may be properly regarded as "newly discovered" for purposes of a grant of a new trial, what is essential is not so much the time when the evidence offered first sprang into existence nor the time when it first came to the knowledge of the party now submitting it; what is essential is, rather, that the offering party had exercised reasonable diligence in seeking to locate such evidence before or during trial but had nonetheless failed to secure it. Thus, a party who, prior to the trial had, no means of knowing that a specific piece of evidence existed and was in fact obtainable, can scarcely be charged with lack of diligence." ( Georgia Tumang versus Court of Appeals, et al., 172 SCRA 328, at pages 333-334, supra ) Diligence, our Supreme Court, emphasized is a relative and variable one, not capable of exact definition. In determining what is reasonable or not depends entirely on the particular factual milieu obtaining in each case ( idem, supra ). In another case, our Supreme Court declared that "diligence which the law requires an individual, to observe and exercise, varies according to the nature of the situation in which he happens to be, and the importance of the act which he has to perform ( Hermogina U. Bulilan, versus Commission on Audit, 300 SCRA 445 ). The offerer of additional evidence must adduce evidence to prove that such proffered evidence could not have been discovered and produced at the trial despite reasonable diligence. Such party's bare assertion of reasonable diligence is not enough, ( Commissioner of Internal Revenue versus A. Soriano Corporation, 267 SCRA 313 ). If a motion for new trial does not set forth facts or circumstances which would qualify said evidence as newly discovered, such a motion is a pro forma ( Marciana Dapin et al., versus Albino Domingo, et al., 209 SCRA 38 ) While newly discovered evidence is a ground for a new trial, "forgotten evidence" is not. Such species of evidence, our Supreme Court declared, is that evidence ". . . already in existence or available before or during trial, which was known to and obtainable by the party offering it and, which could have been presented and offered in a seasonable manner were it not for the oversight or forgetfulness of such party or his counsel." ( Georgia Tumang versus Court of Appeals, et al., 172 SCRA 328, at pages 333, supra ) In the present recourse, the Petitioner incorporated in its "Motion for New Trial", the Affidavit of Merit executed not by the Petitioner but by the Associate Attorney of the Law Firm representing the Petitioner, quoted, in pari materia, infra, as follows: "2. On August 3, 2000, petitioner, through counsel, received the Decision of the Court of Tax Appeals in CTA Case No. 5572 dated July 25, 2000 denying the petition for insufficiency of evidence; 3 Through excusable mistake and inadvertence, petitioner failed to submit proof of receipt of separation pay of rank and file employees declared redundant in the year 1995; 4. The redundant rank and file employees executed Receipt and Quitclaims attesting to their receipt of their separation pay from petitioner. Copies of these Receipts and Quitclaims are attached thereto; 5. The Receipts and Quitclaims could not have been presented during trial because the same were misplaced and could not be located during the course of trial despite diligent efforts. It was only after receipt of the Decision that the several of the Receipts and Quitclaims were located and, in fact, petitioner is still searching for the remaining Receipts and Quitclaims:" ( at page 424 Petition ) The Petitioner appended to its "Motion for New Trial" , etc., unnotarized copies of "Receipts, Release and Quitclaim" bearing the signatures purportedly those of the employees for whom the Petitioner filed the "Petition" before the CTA, dated December 28, 1995, a sample of which is quoted, infra , as follows: "RECEIPT, RELEASE AND QUITCLAIM KNOW ALL MEN BY THESE PRESENTS: I, HERMINIO A. AGBAYANI, of legal age, ______, Filipino, and with residence at ________________________, do hereby acknowledge receipt of the total sum of THREE HUNDRED EIGHTY NINE THOUSAND FOUR HUNDRED SIXTY EIGHT & 09/100 (p389,458.09), to me it had paid by the PHILIPPINE LONG DISTANCE TELEPHONE CO., INC. (hereinafter "PLDT") in full, complete, absolute and final payment of whatever claims I may have in connection with or by reason of PLDT's 1995 Redundancy Program and of my previous employment with PLDT including but not limited to termination or separation pay, retirement pay, death benefits, overtime pay, salary or salaries, wage or wages, sick leaves, medical and hospital benefits, vacation leaves, gratuities, bonuses, commissions, fees or any other kind of compensation, benefits or emoluments due to me, and which may be due from PLDT under the law or existing agreements, as well as any claims of whatever nature and kind which I had, I now have or may hereafter have against PLDT by reason of my association or connection therewith, or by any reason whatsoever. In consideration of the aforesaid payment, I relinquish and by these presents do hereby relinquish any right or claim, including reinstatement to any position in PLDT, and I have irrevocably remised, released and forever discharged and by these presents, do for myself, my heirs, executors, administrators and assigns, remise, release and forever discharge PLDT, its successors and assigns, and/or its directors, officers, stockholders, from any and all manner of action or actions, cause or causes of actions, sums of money, accounts, damages, claims and demands whatsoever, in law or in equity, against said PLDT, its directors, officers and stockholders, which I ever had or may have or which I, my heirs, executors, administrators, and assigns may hereafter have by reason or in connection with PLDT's Redundancy Program and/or my association or connection with PLDT, or by reason of any matter or cause whatsoever. I also affirm that the contents of this Receipt, Release and Quitclaim have been translated and explained to me in a language I could understand. IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of December 1995 in Makati City. (SGD.) HERMINIO A. AGBAYANI Assisted by: (SGD.) NOLI T. VELASQUEZ Certified True Copy SIGNED IN THE PRESENCE OF: _________________________ _______________________ Certified True Copy: (SGD.) MARGARETTE Y. GUZMAN Exec. Clerk of Court I ACKNOWLEDGMENT REPUBLIC OF THE PHILIPPINES MAKATI CITY BEFORE ME this ___ day of December 1995 appeared __________, exhibiting to me his Community Tax Certificate No. _________, issued on ______ at __________, and known to me to be the person who swore before me that the statements therein were voluntarily made and are true to the best of his own knowledge, information and belief. NOTARY PUBLIC Until 31 December 1995" (at page 325, Rollo ) Although the Rules require the appendage, by the Petitioner of the "Affidavits of Witnesses" it intends to present in a new trial, the Petitioner failed to append to its "Motion for New Trial" any affidavits of said witnesses. The " Receipts, Releases and Quitclaims " appended to the Petition are not authenticated. Indeed, the said deeds were not notarized, despite their having been signed, allegedly by the employees, as early as December 28, 1995, or approximately two (2) years before the Petitioner filed the Petition before the CTA. It behooved the Petitioner to have appended the Affidavits of the separated employees to authenticate the " Receipts, Releases and Quitclaims " purportedly executed by them, respectively. The Petitioner did not. ADaSEH The Petitioner wanted the CTA to believe that the employees executed the aforesaid "Receipts, Releases and Quitclaims" as early as December 28, 1995, and kept the same in its possession and custody. However, the Petitioner divulged the existence of said Receipts, etc., only when it filed its "Motion For New Trial, etc . ," on August 18, 2000, or an interregnum of almost five years. None of the responsible officers of the Petitioner, especially the custodian of said Receipts, etc., executed an "Affidavit" explaining why the same (a) were not notarized on or about December 28, 1995; (b) whether the said deeds were turned over to its counsel when it filed its Petition at bench; (c) why it failed to present the said Receipts to the SGV & Co., while the latter was conducting its examination and/or audit of the records of the Petitioner. It is incredible that, if it is true, as claimed by the Petitioner, the employees, indeed, signed the said Receipts on December 28, 1995, the Petitioner, one of the biggest corporations in the Philippines and laden with competent executives/officers/employees, did not bother having the same notarized on or about December 28, 1995. For sure, when the Petitioner endorsed the preparation and filing of the Petition to its counsel, it should have collated all the documents necessary to support its Petition and submit the same to its counsel. If the Petitioner did, its counsel has not explained why it failed to present the same before the Commissioner and/or adduce the same in evidence during the hearing of this Petition on its merits with the CTA. We are convinced that the said Receipts, etc. were antedated and executed only after the CTA rendered its Decision and only in anticipation of the "Motion for New Trial, etc.", filed by the Petitioner. Under the factual milieu, in the present recourse, granting by the CTA of Petitioner's "Motion for New Trial etc." , would have been an aberration. As our Supreme Court declared: "When the precaution was taken to remove and carefully keep the books and receipts referred to in the affidavits from Pampanga to Spain, it was because the holders thereof and those concerned were well aware of the value and importance of said documents, and they could not therefore disavow the existence of the same; nor could they allege that they were ignorant of the necessity of producing them in court since the 9th of July, 1993, at which time they were summoned and served with a copy of the complaint. In the course of these proceedings, which have continued for more than three years, other matters of business and accounting have also been discussed by the defendant's principals and themselves on the one hand and the plaintiff and certain persons on the other. In view of the foregoing, it can not be held that the said books and receipts constitute new and material evidence which by the exercise of due diligence could not have been discovered before the trial was held in the Court of First Instance of Pampanga, because they were not ignorant of the existence of the documents. These papers were in their possession, and if they were not produced in court during the pendency of this long and well-contested cause, which turned upon matters of accounting arising out of business established since the year 1896, it is because they were unwilling to do so for reasons which are best known to themselves. The granting of a new trial for the purpose of receiving evidence which could not have produced during the proceedings in action already decided by the judge, is not dependent on the consent of the litigants, nor does it lie in the discretion of the judge. It is indispensable that certain conditions which are expressly stated in the law, be complied with before a new trial can be lawfully permitted, otherwise the granting of such a motion would be improper and injurious to the adverse party." ( Mamerta Banal versus Jose Safront, 6 Phil. 275, at pages 277-278, supra ) In fine, then, We find and so declare that the CTA did not commit any abuse of its discretion in denying the "Motion for New Trial, etc." , of the Petitioner. IN THE LIGHT OF ALL THE FOREGOING, the Petition is DISMISSED. The oppugned Decision and Resolution of the CTA are AFFIRMED. SO ORDERED. Salazar-Fernando and Tria Tirona, JJ ., concur.