CIR v. Toledo Power Company

 

CIR v. Toledo Power Company

CTA EB NO. 2359

January 5, 2022

Doctrine:

The person entitled to claim a tax refund is the taxpayer. However, in case the taxpayer does not file a claim for refund, the withholding agent may file the claim.

Facts:

On June 8, 2020, the Court in Division rendered the assailed Decision granting the Petition for Review in CTA Case No. 9465, ordering petitioner to issue a tax credit certificate to respondent in the amount of P18,391 ,219. 77. Aggrieved, petitioner filed a Motion for Reconsideration (Re: Decision promulgated 8 June 2020)6 on June 30, 2020, with respondent's Comment/Opposition (To Respondent's Motion for Reconsideration Re: Decision dated June 8, 2020]1 filed on July 9, 2020. In the assailed Resolution8 dated October 2, 2020, the Court in Division denied petitioner's Motion for Reconsideration for lack of merit.

Issue:

Whether or not respondent, as a withholding agent, has the legal personality to file the claim for refund.


Ruling: 

Yes. Petitioner points out that as a mere withholding agent, respondent has no personality to file a claim for refund. Instead, it is Yashima, the statutory taxpayer, who is the proper party to file the claim for refund. Petitioner is mistaken. Sections 204 (c) and 229 of the National Internal Revenue Code (NIRC). "Sec. 204. Authority of the Commissioner to Compromise, Abate, and Refund or Credit Taxes. – The Commissioner may - (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund. Sec. 229. Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected without authority, until a claim for refund. credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner, may even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." (Emphasis supplied) Based on the foregoing, the person entitled to claim a tax refund is the taxpayer. However, in case the taxpayer does not file a claim for refund, the withholding agent may file the claim.


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