GR 169565; (January, 2009) (Digest)
G.R. No. 169565 January 21, 2009
COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. UNITED INTERNATIONAL PICTURES, AB, Respondent.
FACTS
Respondent United International Pictures, AB, a Swedish corporation licensed to do business in the Philippines, filed a petition for review in the Court of Tax Appeals (CTA Case No. 5618) on April 14, 1998, seeking a refund of its excess income tax payments for 1996 amounting to ₱5,791,194. While that petition was pending, respondent filed an administrative claim for refund of its excess income tax payments for 1997 amounting to ₱4,578,574. On October 1, 1999, the CTA rendered a decision in CTA Case No. 5618 ordering petitioner to deduct respondent’s 1996 tax liability from the amount claimed and to refund ₱4,007,357. This decision became final. Respondent then revised its pending administrative claim for 1997, adding its 1996 tax liability and claiming the creditable tax withheld in 1997 (₱6,327,243) as the total refund. Due to the BIR’s inaction, respondent filed a petition for review in the CTA on March 15, 2000. After trial, the CTA found respondent complied with all requirements for a refund but discovered respondent understated its 1997 income by comparing its income tax return and the certificate of tax withheld. Consequently, the CTA granted the petition but ordered a refund only of ₱6,285,892.05. Petitioner filed a petition for certiorari in the Court of Appeals, which affirmed the CTA’s findings. Petitioner’s motion for reconsideration was denied.
ISSUE
Whether the Court of Appeals erred in dismissing the petition for certiorari and affirming the CTA’s grant of a tax refund to respondent.
RULING
The Supreme Court denied the petition. It held that the CTA is a highly specialized body reviewing tax cases, and its findings of fact are binding unless not supported by substantial evidence. In this case, the CTA exhaustively explained its decision to grant a refund, albeit for a reduced amount, after finding respondent complied with the requisites for refund but had understated its income. The Court found no reason to disturb these factual findings, which were affirmed by the Court of Appeals.