GR 182582; (April, 2017) (Digest)
G.R. No. 182582 April 17, 2017
Metropolitan Bank & Trust Company, Petitioner, vs. The Commissioner of Internal Revenue, Respondent.
FACTS
Petitioner Metropolitan Bank & Trust Company (Metrobank) acquired Solidbank Corporation, which had a loan agreement with Luzon Hydro Corporation (LHC). Under the agreement, LHC was obligated to withhold and remit the 10% final tax on interest payments to the BIR. On March 2, 2001, and October 31, 2001, LHC made interest payments to Metrobank, withheld the corresponding final taxes, and remitted them to the BIR. Metrobank, however, erroneously included and also remitted these same tax amounts in its own Monthly Remittance Returns for March and October 2001, resulting in a double payment.
On December 27, 2002, Metrobank filed an administrative claim for refund with the BIR. Due to the Commissioner’s inaction, Metrobank filed a judicial claim before the Court of Tax Appeals (CTA) on September 10, 2003. The CIR opposed the claim, arguing, among others, that it was filed beyond the prescriptive period.
ISSUE
Whether or not the CTA En Banc correctly held that Metrobank’s claim for refund of the March 2001 final tax had prescribed.
RULING
Yes, the CTA En Banc was correct. The Supreme Court affirmed the dismissal of Metrobank’s claim on the ground of prescription. The legal logic hinges on the application of Sections 204 and 229 of the National Internal Revenue Code (NIRC), which mandate that a judicial claim for refund of an erroneously paid tax must be filed within two years from the date of payment.
The Court clarified that the two-year prescriptive period for filing a judicial claim is counted from the date the tax was paid by the taxpayer seeking the refund. In this case, Metrobank itself remitted the erroneously paid final withholding tax on April 25, 2001. Therefore, the two-year period for filing a judicial claim expired on April 25, 2003. While Metrobank’s administrative claim filed on December 27, 2002, was timely, its subsequent judicial claim filed on September 10, 2003, was beyond the reglementary period. The Court rejected Metrobank’s argument that the period should be reckoned from the date of the loan payments from LHC, as the claim pertains to its own erroneous remittance, not LHC’s. Consequently, having filed the judicial suit after the two-year deadline, Metrobank’s right to claim the refund was irrevocably barred by prescription.