GR 144653; (August, 2001) (Digest)
G.R. No. 144653 ; August 28, 2001
BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent.
FACTS
Prior to its merger with petitioner Bank of the Philippine Islands (BPI) in July 1985, The Family Bank and Trust Co. (FBTC) earned income from rentals and interest from treasury notes for the period January 1 to June 30, 1985. Creditable withholding taxes totaling P174,065.77 were remitted to the Commissioner of Internal Revenue from this income. FBTC, however, incurred a loss of about P64,000,000.00 during this period and had an excess credit of P2,146,072.57 from the previous year. Upon its dissolution in 1985, FBTC had a total refundable amount of P2,320,138.34. As FBTC’s successor-in-interest, BPI claimed this amount as a tax refund. The Commissioner refunded only P2,146,072.57, leaving a balance of P174,065.77. BPI filed a petition for review in the Court of Tax Appeals (CTA) on December 29, 1987, seeking a refund of this amount. The CTA dismissed the petition, ruling the claim had prescribed. The Court of Appeals affirmed the CTA’s decision.
ISSUE
Whether petitioner’s claim for tax refund is barred by prescription.
RULING
Yes, the claim is barred by prescription. The two-year prescriptive period under Section 292 of the Tax Code commenced to run from the date FBTC was required to file its return under Section 78 of the National Internal Revenue Code of 1977 due to its dissolution. FBTC ceased operations on June 30, 1985, upon its merger with BPI, which was approved by the Securities and Exchange Commission on July 1, 1985. Section 78 requires a dissolving corporation to render a return within thirty days after the adoption of a resolution or plan for dissolution. Consequently, FBTC should have filed its return by July 30, 1985. The two-year prescriptive period for claiming a refund thus ended on July 30, 1987. Since BPI filed its petition with the CTA only on December 29, 1987, the claim was filed beyond the two-year period and is therefore barred by prescription. The petition was denied.