G.R. No. 204277, May 30, 2016
Procter and Gamble Asia Pte Ltd., Petitioner, vs. Commissioner of Internal Revenue, Respondent.

FACTS

Petitioner Procter & Gamble Asia Pte. Ltd. (PGAPL), a Singapore-based corporation with a Regional Operating Headquarters in the Philippines, filed an administrative claim for refund or tax credit of unutilized input VAT with the Bureau of Internal Revenue (BIR) on August 21, 2007. The claim pertained to the last two quarters of 2005. Alleging inaction by the Commissioner of Internal Revenue (CIR), PGAPL filed a judicial petition for review before the Court of Tax Appeals (CTA) Division on September 27, 2007, which was only 37 days after filing its administrative claim.
The CTA Division dismissed the petition for premature filing, ruling it failed to observe the mandatory 120-day period under Section 112 of the National Internal Revenue Code (NIRC) for the CIR to act on the claim. The CTA en banc affirmed, applying the doctrine established in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., which holds that strict compliance with the 120-day waiting period and the subsequent 30-day period for appeal is jurisdictional for the CTA to acquire authority over the case.

ISSUE

Whether the CTA correctly dismissed PGAPL’s judicial claim for refund of input VAT for having been filed prematurely, thereby depriving the CTA of jurisdiction.

RULING

Yes, the CTA correctly dismissed the petition. The Supreme Court affirmed the application of the Aichi Doctrine, which mandates that a taxpayer must observe the 120-day period given to the CIR to decide an administrative claim for tax refund or credit before resorting to judicial action. Filing a judicial claim before the expiration of this period is fatal and deprives the CTA of jurisdiction over the appeal. PGAPL’s filing after only 37 days was indisputably premature.
The Court rejected PGAPL’s argument that the Aichi Doctrine had been abandoned by subsequent cases, clarifying that the cited cases did not squarely address or modify the jurisdictional rule on the 120-day period. The principle that the 120- and 30-day periods are mandatory and jurisdictional remains prevailing. Furthermore, the Court held that the requirement is jurisdictional in nature; thus, it cannot be waived by the parties or cured by the CIR’s participation in the proceedings. A court’s jurisdiction is conferred by law, not by the actions or consent of the litigants. Consequently, the CTA en banc committed no error in dismissing PGAPL’s petition for lack of jurisdiction due to its premature filing.