Commissioner of Internal Revenue vs. Philippine Bank of Communications

 Commissioner of Internal Revenue vs. Philippine Bank of Communications 

G.R. No. 211348 

February 23, 2022 

Whether PBCOM is entitled to a tax credit/refund. 

PBCOM is entitled to a tax credit/refund of its CWT in the amount of P4,624,554.63. The requisites for claiming a tax credit or a refund of CWT are as follows: 1) the claim must be filed within the two-year period from the date of payment of the tax; 2) it must be shown on the return that the income received was declared as part of the gross income; and 3) the fact of withholding must be established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld. 


PBCOM filed the present claim within the two-year prescriptive period, satisfying the first requirement. They also complied with the last two requirements as to the amount which is verified by the CTA to have been included in the former’s General Ledger and Annual Income Tax Return for taxable year 2006, and supported by the required Certificates of Creditable Tax Withheld at Source. 


The failure in proving an administrative claim for a CWT refund/credit dues does not preclude the filing of the judicial claim for the same. 


The taxpayer filed a petition with the CTA praying for the issuance of a TCC for its excess/unutilized CWT for the year 2006. It alleged that the said petition was filed due to the inaction of the CIR on the former’s claim for a TCC. On the other hand, the BIR argued that the taxpayer’s claim for the issuance of a TCC is in a nature of a refund and thus subject to the administrative examination of the BIR. It further argued that the taxpayer failed to fully comply with the requirements for the administrative claim for CWT refund/credit, hence the judicial claim with the CTA was premature. 


The Supreme Court affirmed the CTA En Banc’s ruling that the failure of the taxpayer to comply with the requirements of its administrative claim for refund/credit does not preclude its judicial claim. A judicial claim for tax credit/refund CWT is independent from its administrative counterpart as implied in Section 204(C) and 229 of the Tax Code which require that both administrative and judicial claims to be filed within the same two-year prescriptive period. With reference to Section 229 of the NIRC, the only requirement for a judicial claim of tax credit/refund to be maintained is that a claim of refund or credit has been filed before the CIR; there is no mention in the law that the claim before the CIR should be acted upon first before a judicial claim may be filed. 

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