GR 180290; (September, 2014) (Digest)
G.R. No. 180290 September 29, 2014
COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. PHILIPPINE NATIONAL BANK, Respondent.
FACTS
For the taxable year 2000, respondent Philippine National Bank (PNB) earned income from various transactions, including sales of real properties, leases, and commissions. The corresponding income taxes were withheld and remitted to the Bureau of Internal Revenue (BIR) by the various payors/withholding agents. PNB filed its income tax return for 2000, declaring no income tax liability from its Regular Banking Unit due to a net loss but had a final income tax due from its Foreign Currency Deposit Unit transactions. PNB reported total creditable withholding taxes that exceeded its final income tax due, resulting in an overpayment. PNB opted for a refund of the excess creditable withholding taxes and filed an administrative claim with the BIR. Due to the BIR’s inaction, PNB filed a Petition for Review with the Court of Tax Appeals (CTA). The CTA First Division granted PNB’s claim for a refund or tax credit certificate in the reduced amount of ₱23,762,347.83. The CTA En Banc affirmed this decision. The Commissioner of Internal Revenue (CIR) filed the present petition, arguing that PNB failed to prove the validity of the withholding tax certificates, the actual remittance of the withheld taxes, and its entitlement to the refund.
ISSUE
Whether the Court of Tax Appeals erred in ordering the refund of alleged excess creditable withholding taxes to PNB.
RULING
The Supreme Court denied the petition and affirmed the decision of the Court of Tax Appeals En Banc. The Court held that:
1. The petition raised questions of fact, which are beyond the Supreme Court’s jurisdiction as it is not a trier of facts. The issues required a review of the probative value of the evidence, specifically the withholding tax certificates.
2. The CIR was deemed to have admitted the validity of the 622 withholding tax certificates presented by PNB because it failed to object to their admissibility when they were formally offered before the CTA.
3. The CTA First Division and En Banc uniformly found that PNB had sufficiently established its claim. The CTA First Division, aided by a court-commissioned audit, meticulously examined the certificates and verified the related income against PNB’s general ledger and tax return, arriving at the refundable amount of ₱23,762,347.83. The Supreme Court accords respect to the factual findings of the CTA absent any showing of gross error or abuse.
4. A certificate of creditable tax withheld at source (BIR Form No. 1743.1, now Form 2307) is competent proof to establish the fact of withholding. It is not necessary to present the withholding agents to identify and authenticate each certificate.
5. The payee-claimant (PNB) is not required to prove the actual remittance of the withheld taxes to the BIR. The duty to withhold and remit taxes is vested by law in the payor/withholding agent, who acts as an agent of the government. The claimant’s burden is to prove the fact of withholding.