Honda Cars Philippines, Inc. v. Commissioner of Internal Revenue

FORMER SIXTH DIVISION [CA-G.R. SP No. 75365. September 29, 2005.] HONDA CARS PHILIPPINES, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N SUNDIAM , J p : This is a Petition for Review under Rule 43 of the revised Rules of Civil Procedure, seeking a partial modification of the Decision [ Rollo , pp. 62-75] of the Court of Tax Appeals [CTA for brevity], dated September 12, 2002, in CTA Case No. 6028 and the Resolution [ Rollo , pp. 71-102], dated January 17, 2003, denying petitioner's Motion for Partial Reconsideration of the aforesaid Decision. The undisputed facts as found by the CTA are as follows : "Petitioner is a domestic corporation with principal office at Laguna, Technopark, Sta. Rosa, Laguna. It is primarily engaged in the manufacture and assembly of automobiles, cars and automobile products ( pars. 1 and 2, Joint Stipulation of Facts .) On July 15, 1998 petitioner filed its Annual Income Tax Return for the fiscal year ended March 31, 1998 ( Exhibit D ) reflecting the following information: Gross income from sales P888,667,425.00 Service Income 188,413,245.00 Other Income 39,382,747.00 Total P1,116,463,417.00 Less: Deductions 1,108,437,757.00 Taxable Income P8,025,660.00 ============== Tax Due P6,386,623.00 Less: Creditable Tax Withheld 76,712,247.00 Amount Refundable P70,325,624.00 ============== The said return showed that petitioner placed "x" marks on both options. "To be refunded" and "To be applied as credit the next year" in the corresponding boxes. On July 15, 1999, petitioner filed its Annual Income Tax Return for the fiscal year ended March 31, 1999 ( Exhibit N ). The return disclosed the following: Tax Due P15,248,788.00 Less: Tax Credits Tax Withheld for the First Three Quarters P49,326,261.00 Tax Withheld for the Fourth Quarter 19,781,642.00 Total Tax Credits P69,107,903.00 Amount Refundable P53,859,115.00 =========== In addition, the return reflected that petitioner opted to carry-over to the succeeding taxable year its excess creditable taxes. On August 25, 1999 petitioner filed with the respondent a claim for tax credit or refund of the excess creditable withholding taxes for the taxable fiscal year ended March 31, 1998 in the amount of P73,928,000.00 ( Exhibit O; par. 17, Joint Stipulation of Facts ). EDIaSH On January 7, 2000, petitioner amended its Annual Income Tax Return for the fiscal year ended March 31, 1999 ( Exhibit T; par. 16, Joint Stipulation of Facts ). The return was amended to show that petitioner did not utilize its prior year's excess credit and to change its option from "To be carried as tax credit next year" to "To be issued as tax credit certificate." On February 1, 2000 petitioner filed with respondent a claim for tax credit or refund of the excess creditable withholding taxes for the taxable fiscal year ended March 31, 1999 in the amount of P53,859,115.00 ( Exhibit Y; par. 18, Joint Stipulation of Facts ). Due to respondent's inaction, petitioner filed with this court the instant petition on march 16, 2000, in order to judicially claim for the issuance of tax credit certificates of its unutilized creditable withholding taxes for the taxable years 1998 and 1999 pursuant to Section 76 of the Tax Reform Act of 1997." In its Decision, dated September 12, 2002, the CTA ruled in favor of herein respondent, Commissioner of Internal Revenue. The CTA partially granted the petition for review. It held that petitioner is entitled to the issuance of a tax credit certificate for the creditable taxes for the fiscal year 1998 in the amount of P70,283,805.00. However, as to the creditable taxes for the fiscal year 1999, the CTA held that the same cannot be given due course. Substantially, by applying Section 76 of the Tax Reform Act of 1997, the CTA held that petitioner is barred from claiming the creditable taxes withheld since petitioner, in its original Income Tax Return, marked the box corresponding to the option "to be carried as tax credit next year", which option, according to the CTA, is irrevocable. Petitioner sought the partial reconsideration of the Decision as to its claim for creditable taxes withheld for the fiscal year 1999. Acting on the Motion for Partial Reconsideration [ Rollo , pp. 76-97], on January 17, 2003 CTA issued the assailed Resolution denying said motion. Hence, this petition for review raising the following grounds: I. THE 1999 CLAIM CANNOT BE DENIED DUE COURSE BASED ON A GROUND WHICH WAS NOT RAISED BY RESPONDENT IN HIS ANSWER NOR INCLUDED IN THE JOINT STIPULATION OF ISSUES AGREED UPON BY THE PARTIES AT PRE-TRIAL. II. SINCE THE 1999 CLAIM REPRESENTS PURELY EXCESS AND UNUTILIZED CREDITABLE EXPANDED WITHHOLDING TAXES, SECTION 58 (D) OF THE TAX CODE, AS IMPLEMENTED BY SECTION 2.58.3 OF REVENUE REGULATIONS NO. 2-98, SHOULD GOVERN, NOT SECTION 76 OF THE TAX CODE. UNDER SECTION 58 (D) OF THE TAX CODE, THE RIGHT OF PETITIONER TO BE REFUNDED FOR ANY EXCESS AND UNUTILIZED CREDITABLE WITHHOLDING TAX IS SUBJECT ONLY TO THE CONDITION THAT THE TWO YEAR PRESCRIPTIVE PERIOD FOR CLAIMS FOR REFUND HAVE NOT LAPSED. III. UNDER SECTION 2.58.3 (C) OF REVENUE REGULATIONS 2-98, WHICH IMPLEMENTS SECTION 58(D) OF THE 1997 TAX CODE, IT IS THE ACTUAL APPLICATION OF THE EXCESS CREDIT IN THE FIRST QUARTER OF THE SUBSEQUENT TAXABLE YEAR THAT IS THE OPERATIVE ACT THAT SIGNIFIES THE IRREVOCABLE OPTION, NOT THE ELECTION TO CARRY OVER THE EXCESS CREDITABLE WITHHOLDING TAXES INDICATED IN THE ANNUAL INCOME TAX RETURN. IV. PETITIONER HAS A RIGHT UNDER SECTION 6(A) OF THE TAX CODE TO AMEND ITS 1999 ANNUAL INCOME TAX RETURN TO CHANGE THE OPTION IT MARKED FROM 'TO BE CARRIED AS CREDIT NEXT YEAR' TO 'TO BE ISSUED AS TAX CREDIT CERTIFICATE.' V. IN DENYING DUE COURSE TO THE 1999 CLAIM, THE COURT OF TAX APPEALS VIOLATED THE RIGHT OF PETITIONER EXPRESSLY GRANTED UNDER SECTION 58(D) OF THE TAX CODE TO BE REFUNDED OF THE EXCESS CREDITABLE WITHHOLDING TAXES AND THE RIGHT EXPRESSLY GRANTED TO PETITIONER UNDER SECTION 6(A) OF THE TAX CODE TO AMEND ITS 1999 ANNUAL INCOME TAX RETURN. EHTIcD VI. UNDER THE PRINCIPLE OF SOLUTION INDEBETI (sic), PETITIONER IS ENTITLED TO REFUND THE EXCESS AND UNUTILIZED CREDITABLE EXPANDED WITHHOLDING TAXES. VII. THE DECISION ENCOURAGES MULTIPLICITY OF SUITS. [ Rollo , pp. 8-10] Anent the first assigned error, petitioner claims that since the issue of the nature of the "x" mark in petitioner's 1999 Annual Income Tax Return was not included in the court-approved Joint Stipulation of Facts and Issues, such issue cannot be used as basis for deciding petitioner's claim for the fiscal year 1999. Petitioner likewise claims that the CTA did not attempt to resolve the relevant issues defined in the Joint Stipulation of Facts and Issues. Petitioner's claim is misplaced. It is true that stipulations of facts are generally binding upon the parties in a case. This is due to the reason that stipulations of facts are essentially made voluntary, thus, like contracts, it bind the parties thereto and they are not allowed to controvert statements made therein. It is principally designed for the parties' convenience and to simplify subsequent proceedings by identifying those facts which are not really controverted and do not need to be proved [ Filoil Marketing Corporation (now Petrophil Corporation) vs. Dy Pac & Co ., 160 SCRA 133]. In the CTA decision, it does not appear that a new fact had been raised by respondent which controverts the stipulation in the Joint Stipulation of Facts and Issues. The issue of petitioner's marking "x" on the option "to be carried as tax credit next year" is not a deviation from or a new matter which is not embodied in the stipulation. Petitioner itself admits that for the annual income tax return it filed for the fiscal year 1999 it marked the option "to be carried as tax credit next year." If the CTA had decided petitioner's claim on the basis of this issue, certainly, this is not a new matter which respondent or the CTA is legally precluded from raising. Rather, it is an issue which is germane to the subject of tax refund. In sum, petitioner had excess credits for the fiscal year 1998 and 1999, it opted to be refunded and to carry-over its excess credits by marking the appropriate box in its 1998 annual income tax return while it opted to carry-over the excess credits to the succeeding taxable year by marking the appropriate box in its 1999 annual income tax return; it amended its 1999 return by changing its option "to be carried as tax credit next year" to "to be issued as tax credit certificate"; respondent granted the claim for the issuance of a tax credit certificate for the excess credits for the fiscal year 1998 while it denied the claim for the issuance of a tax credit certificate for the excess credits for the fiscal year 1999. Accordingly, the CTA is duty-bound to render judgment strictly in accordance with these facts and it has a wide latitude of discretion in applying the pertinent provisions of law. Jurisprudence is replete with the rule that a litigant should not be allowed to assume a different posture when he comes before the court and challenge the position he had accepted at the administrative level. This is not permitted to give administrative authorities the prior opportunity to decide controversies within its competence [ Aguinaldo Industries Corporation (Fishing Nets Division) vs. Commissioner of Internal Revenue, et al. , 112 SCRA 136]. Basically, the subject of the petitioner for review filed before the CTA is respondent's denial of petitioner's claim for the issuance of a tax credit certificate for the excess credits for the fiscal year 1999 and petitioner's alleged entitlement thereto. Thus, respondent is obliged to put in issue all relevant laws applicable and raise them before the administrative body. Hence, the application of Section 76 is necessary for a proper and complete adjudication of petitioner's claim. It is by fitting that the CTA applied the provision of Section 76 by considering the irrevocability of the option to carry-over the excess credits, thus, the consequent denial of petitioner's claim. Likewise, a litigant is not allowed to raise an issue for the first time since it would be unfair to the adverse party if an entirely new issue is raised as the latter had no opportunity to counteract the new issue [ Marine Culture, Inc. vs. Court of Appeals, et al. , 219 SCRA 148]. This is not so in the present case. It is worthy to note that the applicability of Section 76 was raised as an issue in respondent's CTA Memorandum. Petitioner had the opportunity to rebut the same considering that it subsequently filed its Reply Memorandum wherein it had the opportunity to exhaustively defend its posture. ATDHSC Ergor, given these circumstances, the CTA correctly ruled on the basis of Section 76 since the application thereof is material and vital to the final determination of petitioner's entitlement to the issuance of a tax credit certificate. Anent the second assigned error, petitioner argues that Section 58 (D) (as implemented by Revenue Regulations No. 2-98) of the Tax Reform Act of 1997 and not Section 76 thereof should primarily apply in the determination of petitioner's entitlement to the tax credit certificate prayed for since the amount sought to be refunded arose purely from excess and unutilized creditable withholding taxes. It argues that its excess and unutilized creditable withholding taxes do not fall within the phrase "excess estimated income taxes paid" (which is governed by Section 76) for two reasons: (1) the amount of creditable withholding tax is not estimated because the amount is prescribed by law and (2) the amount is withheld by respondent's withholding agent by force of law. Further, it argues that the requisites for giving due course to a claim for refund of excess creditable taxes are that the income payment has been declared as part of the gross income, the fact of withholding is established by a copy of the withholding tax statement duly issued by the payor to the payee and that the claim is filed within the reglementary two-year period. Anent the third assigned error, petitioner contends that under Revenue Regulations No. 2-98, before an automatic credit for the succeeding taxable period can be allowed, the taxpayer has to show proof that there is not pending claim for cash refund or tax credit certificate. It contends that it did not avail of the automatic application of its excess credits for the fiscal year 1999 against its income tax liability of the succeeding taxable periods and that it amended its 1999 Annual Income Tax Return to correct its inadvertent error of putting the "x" mark in the box "To be carried as credit next year" instead of "to be issued as Tax Credit Certificate. It insists that it has the right to amend its 1999 Annual Income Tax Return as expressly granted under Section 6(A) of the 1997 Tax Code. Anent the fourth assigned error, petitioner contends that the ruling of the CTA that the amendment made by petitioner on its 1999 Annual Income Tax Return cannot be given effect violates its statutory right to amend his return under Section 6(A) of the Tax Code. Anent the fifth assigned error, petitioner avers that in not giving due course to petitioner's prayer for the issuance of a tax credit certificate for the fiscal year 1999, the CTA did not consider petitioner's right to be refunded of excess creditable withholding taxes under Section 58 (D) of the Tax Code (as implemented by Section 2.58 of Revenue Regulations No. 2-98) and the right to amend a tax return under Section 6(A) of the Tax Code. Further, it avers that the option indicated in the annual income tax return should be characterized as merely evidentiary and not irrevocable. We deem it best to jointly discuss the second, third, fourth and fifth assigned errors since they are intertwined. Petitioner underscores that the application of Section 76 is violative of its right to a tax refund as mandated by Section 58 (D) (as implemented by Revenue Regulations No. 2-98) and its right to amend its return under Section 6 (A). We hold otherwise. As correctly pointed out be petitioner, the whole and every part of a statute must be considered and that a statute must be construed as to harmonize and give effect to all its provisions whenever possible [ Rollo , p. 25]. However, the alleged irreconcilability between Section 58 (D) (as implemented by Revenue Regulations No. 2-98) and Section 76 is more apparent than real. We hereby quote the pertinent provisions: "Sec. 58. Returns and Payment of Taxes Withheld at Source . xxx xxx xxx (D) Income of Recipient . Income upon which any creditable tax is required to be withheld at source under Section 57 shall be included in the return of is recipient but the excess of the amount of tax so withheld over the tax due on his return shall be refunded to him subject to the provisions of Section 204; if the income tax collected at source is less than the tax due on his return, the difference shall be paid in accordance with the provisions of Section 56. ISCDEA xxx xxx xxx." On the other hand, Section 76 provides: "Sec. 76. Final Adjustment Return . Every corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year, the corporation shall either: (A) Pay the balance of tax still due; or (B) Carry-over the excess credit; or (C) Be credited or refunded with the excess amount paid, as the case may be. In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be irrevocable for the taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefore. " [Emphasis Ours] Contrary to petitioner's stance, Section 58 (D) does not solely deal with tax refund. It only provides that the income upon which any creditable tax is required to be withheld at source shall be included in the return of its recipient. Then it went further by stating that if there is an excess payment, the excess shall be refunded to him. Conversely, if there was underpayment, then the difference shall be paid by the taxpayer. Plainly, it only states the general rule when the amount of tax withheld at source does not jive with the tax due based on the return filed by the taxpayer. However, Section 76 specifically deals with items required to be filled up by a taxpayer in his final adjustment return. Section 76 likewise gives the taxpayer three (3) options as above-quoted in case of underpayment or overpayment of tax. It must be noted that the choice lies entirely on the taxpayer. In case the taxpayer opted to carry-over the excess credit and apply the same against income tax due for the taxable quarters of the succeeding taxable years, this option shall be considered irrevocable. Thus, Section 58 (D) (as implemented by Revenue Regulations No. 2-98) should be deemed subject to the proviso of Section 76. Construed jointly, Section 58 (D) and Section 76 merely states that if the taxes withheld at source is less than the total tax due for the fiscal year, the taxpayer shall pay the balance due. If, on the other hand, the taxes withheld at source is more than the total tax due for the fiscal year, the corporation may either carry-over the excess credit or be credited/refunded with the excess amount paid. However, once the option to carry-over the excess credits has been made by the corporation, this option is irrevocable so that the latter is not allowed to apply for a cash refund or issuance of a tax credit certificate. Petitioner insists that the option indicated in the annual income tax return should be characterized as merely evidentiary and not irrevocable. It insists that the option becomes irrevocable only once the taxpayer actually carries over the excess credits to the first quarter of the subsequent taxable year. Petitioner's insistence is not plausible. The recent case of Paseo Realty & Development Corporation vs. Court of Appeals, et al . [440 SCRA 235] is instructive, to wit: "Contrary to petitioner's assertion however, the taxpayer's election, signified by the ticking of boxes in Item 10 of BIR Form No. 1702, is not a mere technical exercise. It aids in the proper management of claims for refund or tax credit by leading tax authorities to the direction they should take in addressing the claim. cDSAEI The amendment of Section 69 by what is now Section 76 of Republic Act No. 8424 [Tax Reform Act of 1997] emphasizes that it is imperative to indicate in the tax return or the final adjustment return whether a tax credit or refund is sought by making the taxpayer's choice irrevocable. . . . . . . If the taxpayer has paid excess quarterly income taxes, it may be entitled to a tax credit or refund as shown in its final adjustment return which may be carried over and applied against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. However, once the taxpayer has exercised the option to carry-over and to apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable year, such option is irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed." Parenthetically, in the case of Philippine Bank of Communications vs. Commissioner of Internal Revenue, et al. , 302 SCRA 241 "the corporation must signify in its annual corporate adjustment return (by marking the option box provided in the BIR form) its intention, whether to request for a refund or claim for an automatic tax credit for the succeeding taxable year. To ease the administration of tax collection, these remedies are in the alternative, and the choice of one precludes the other." Thus, the operative act in making the option irrevocable is the mere act of marking the boxes which corresponds to the taxpayer's option as regards the excess amount/credit. It is not necessary that said excess amount/credit is actually applied against the tax due for the succeeding taxable year. As long as the taxpayer had elected to carry-over said amount/credit to the succeeding taxable year, that choice is irrevocable for that taxable period. That petitioner opted for the carrying-over of the excess credits for the succeeding taxable years, as specified in its 1999 Final Adjusted Income Tax Return, is a finding of fact which We must respect. Hence, as correctly ruled by the CTA: "We do not agree with the petitioner's argument that it is the actual application of the prior year's excess tax credit against the income tax due for the first quarter of the subsequent taxable year which makes the option to carry-over irrevocable. Rather, we believe that the act of choosing the option, which is done by marking the appropriate box in the Annual Income Tax Return, whether to refund or to carry-over the excess tax credits, is the controlling act. The act of exercising the option is done at (sic) time of filing of the returns. As a consequence, once the taxpayer marks in the Annual Income Tax Return its option to carry-over, it is bound to apply such option. Its non-application of the option will not alter the option made because, as stated earlier, it is already irrevocable. . . ." [ Rollo , p. 67] Petitioner argues that it subsequently amended its return by changing its first option, from "to be carried as tax credit next year" to "to be issued as tax credit certificate." It argues that the right to amend returns is a right guaranteed by Section 6 (A) of the Tax Reform Act of 1997. The arguments is untenable. Section 6(A) provides: "xxx xxx xxx Any return, statement or declaration filed in any office authorized to receive the same shall not be withdrawn; Provided, That within three (3) years from the date of such filing, the same may be modified, change, or amended; Provided, further , That no notice for audit or investigation of such return, statement or declaration has, in the meantime, been actually served upon the taxpayer." As a general rule, a taxpayer has the right to amend his/its return under Section 6(A). However, like Section 58 (D), this provision is deemed subject to the provision of Section 76, to the end that the entries in the return may be modified, change or amended save only for the option marked by the taxpayer with respect to the carrying-over of excess credits which is irrevocable. As quoted above, the amendment of Section 69 by what is now Section 76 emphasizes that it is imperative to indicate in the tax return or the final adjustment return whether a tax credit or refund is sought by making the taxpayer's choice irrevocable. As aptly held by the CTA: ". . . an amendment made in the Annual Income Tax Return changing the option from carrying-over to the next year to the issuance of tax credit certificate is not permissible. To hold otherwise will make the irrevocability of the option to carry-over as provided in Section 76 of the Tax Code a nullity. xxx xxx xxx . . . Petitioner's act of amending its 1999 Annual Income Tax Return changing the option it marked from carrying-over to issuance of tax credit certificate cannot be given effect as it would run counter to the meaning of the above-mentioned law" [ Rollo , pp. 67-68] aDACcH To let every taxpayer make the irrevocable option of carrying-over the excess credits for the succeeding taxable year and allow him later to amend his return when he changes his mind would render nugatory the irrevocability mandated by Section 76. Certainly, this is not the intendment of the law. Apart from this, as can be gleaned from the case cited by petitioner, an amendment of a tax return is for the purpose of giving the taxpayer an opportunity to correct an obvious error that would cause damage or prejudice to the taxpayer or in order to reflect the true and correct figures. In the case at bench, the marking of the option of carrying-over the excess credits may not be said to be a misstatement or obvious error. The filing of returns and the marking of the appropriate box as to the excess credits is nothing new to petitioner considering that this is not the first time that petitioner exercised its option to carry-over its excess credits. In its Annual Income Tax Return for the fiscal year 1998, petitioner marked the box corresponding to "to be refunded" and "to be applied as credit next year." Significantly, in its Annual Income Tax Return for the fiscal year 1999, petitioner marked the box corresponding to "to be carried as tax credit next year." Thus, such option unmistakably shows petitioner's resolve to apply its excess credits against tax due for the succeeding taxable years. Also, the marking of this box would not cause damage or prejudice to the petitioner as will be discussed below. Anent the sixth assigned error, petitioner argues that the obligation of the State to return what is not due to it is not excused by the mere marking in the Annual Income Tax Return that the excess creditable withholding tax shall be used for the next taxable period. It argues that the State is obliged to refund any excess withholding tax credits and that the government is unjustly enriched at the expense of the petitioner since the latter overpaid its income taxes and it did not use its 1999 excess creditable taxes withheld. The reliance of petitioner in the principle of unjust enrichment deserve scant consideration. It is undeniable that the Government is obligated to return the excess credit due petitioner. It must be stressed that the remedy of a refund or the issuance of a tax credit certificate has never been denied the petitioner out of whim or caprice on the part of respondent. To be more precise, the denial of petitioner's claim for the issuance of a tax credit certificate is a consequence of petitioner's option as indicated in its Annual Income Tax Return for the fiscal year 1999. Moreover, a perusal of Section 76 shows that the option of carrying-over the excess credits for the fiscal year 1999 is not limited to the succeeding taxable year or for the fiscal year 2000. In the case of Paseo Realty & Development Corporation vs. Court of Appeals, et al . [440 SCRA 235], wherein the claimant filed the claim before the amendment of Section 69 [NIRC] by what is now Section 76, the Supreme Court held: "Had this provision been in effect when the present claim for refund was filed, petitioner's excess credits for 1988 could have been properly applied to its 1990 tax liabilities. Unfortunately for petitioner, this is not the case." Undoubtedly, this only means that if the claim was filed during the effectivity of Section 76, then the excess credits can be properly applied to the succeeding taxable years. Admittedly, petitioner filed the claim on February 1, 2000 when Section 76 of the Tax Reform Act of 1997 was already in effect. Thus, the claim should be governed by said law. Consequently, the excess credits for the fiscal year 1999 may be applied to petitioner's income tax due for the succeeding taxable years. In fact, even respondent in his Comment pointed out that "the excess creditable tax may still be credited against petitioner's estimated quarterly income tax liabilities for the taxable quarters of the succeeding years in accordance with Section 76" [ Rollo , pp 121-122]. For this reason, contrary to petitioner's contention, unjust enrichment or solutio indebiti does not apply. IDAEHT Anent the seventh assigned error, petitioner contends that the denial of its claim on the mere basis of its honest error of indicating an "x" mark in the box to be carried over as credit to the next taxable year would result in multiplicity of suits. It contends that the irrevocable option in its annual income tax return for the fiscal year 1999 applies only to the next taxable fiscal year 2000, thus, it can include its claim for the 1999 excess credits in its annual income tax return for 2002 and indicate that the amount is to be refunded or issued as tax credit certificate. The contention is bereft of merit. As exhaustively discussed above, the option to carry-over the excess credits is irrevocable for that taxable period. Evidently, the excess credits which pertains to the fiscal year 1999 may not be the subject of a tax refund or tax credit certificate in the succeeding taxable years as this was expressly provided by Section 76 that "no application for cash refund or issuance of a tax credit certificate shall be allowed therefore." To go along with petitioner's contention would be to sanction a circumvention of the law. Considering that the excess credits which pertains to the fiscal year 1999 may not the subject of a tax refund or tax credit certificate, the position taken by petitioner that the CTA decision would encourage multiplicity of suits is entirely baseless. In closing, We reiterate that the CTA is a highly specialized body specifically created for the purpose of reviewing tax cases. Hence, as a matter of principle, this Court will not set aside the conclusion reached by the CTA 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 [ Commissioner of Internal Revenue vs. Court of Appeals, et al ., 271 SCRA 605]. Consequently, since the findings and conclusions of the CTA is untainted by any abuse of authority and free from any palpable error, We adhere to the CTA's decision. WHEREFORE, the instant petition for review is hereby DENIED. Accordingly, the assailed Decision, dated September 12, 2002, and the Resolution, dated January 17, 2003, are hereby AFFIRMED. SO ORDERED. Vidallon-Magtolis and Salazar-Fernando, JJ., concur.