G.R. No. 188016 - REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE COMMISSIONER OF INTERNAL REVENUE, VS. TEAM (PHILS.) ENERGY CORPORATION (FORMERLY MIRANT (PHILS.) ENERGY CORPORATION).D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, the instant Petition for Review is hereby GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the modified amount of SIXTEEN MILLION THREE HUNDRED SIXTY-SIX THOUSAND FOUR HUNDRED TWELVE AND 59/100 (P16,366,412.59) , representing petitioner's excess and unutilized creditable withholding taxes for calendar years 2002 and 2003. SO ORDERED . [9] The CTA in Division found that the respondent had signified in its ITRs for the same years its intent to have its excess creditable tax withheld for calendar years 2002 and 2003 be refunded; that the respondents administrative and judicial claims for refund had been timely filed within the two-year prescriptive period under Section 204 (C) in relation to Section 229 of the NIRC; that the fact of withholding had been established by the respondent because it had submitted its certificate of creditable tax withheld at source showing that the aggregate amount of P17,168,749.60 constituted the CWT withheld by the respondent on its services to Republic Cement Corporation, Mirant (Philippines) Industrial Power Corporation and Solid Development Corporation for taxable years 2002 and 2003; and that the income from which the CWT had been withheld was duly declared as part of the respondents income in its annual ITRs for 2002 and 2003. The petitioner then filed a motion for reconsideration, but the CTA in Division denied the motion on September 5, 2008. The petitioner brought a petition for review before the CTA En Banc raising two issues, namely: I. THE SECOND DIVISION OF THIS HONORABLE COURT ERRED IN HOLDING THAT RESPONDENT IS ENTITLED TO ITS CLAIMED REFUND OF EXCESS AND UNUTILIZED CREDITABLE WITHHOLDING TAXES FOR CALENDAR YEARS 2002 AND 2003, SINCE THERE WAS A VIOLATION ON THE PART OF THE RESPONDENT TO FULLY COMPLY WITH THE REQUIREMENTS UNDER SECTION 76 OF THE 1997 TAX CODE. II. THE SECOND DIVISION OF THIS HONORABLE COURT ERRED IN NOT APPLYING THE RULE THAT TAX REFUNDS BEING IN THE NATURE OF TAX EXEMPTION ARE CONSTRUED STRICTISSIMI JURIS AGAINST THE PERSON OR ENTITY CLAIMING THE EXEMPTION. [10] On April 15, 2009, however, the CTA En Banc rendered its assailed judgment, disposing thus: WHEREFORE , the instant petition is hereby DISMISSED. Accordingly, the assailed Decision and Resolution are hereby AFFIRMED. SO ORDERED . [11] The CTA En Banc held that the defenses raised by the petitioner were general and standard arguments to oppose any claim for refund by a taxpayer; that the trial proper was conducted in the CTA in Division, during which the respondent presented evidence of its entitlement to the refund and in negation of the defenses of the petitioner; and that the petitioner raised the issue on the non-presentment of the respondents quarterly returns for 2002 and 2003 only in the petition for review, which was not allowed, stating thusly: This cannot be allowed. Petitioner had the opportunity to raise this issue either during