GR 231581; (April, 2019) (Digest)
G.R. No. 231581 April 10, 2019
COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. UNIVATION MOTOR PHILIPPINES, INC., Respondent
FACTS
Respondent Univation Motor Philippines, Inc. filed its amended Annual Income Tax Return for 2010, showing an overpayment of income taxes. It subsequently filed an administrative claim for refund or tax credit with the Bureau of Internal Revenue (BIR) on March 12, 2012. As the BIR did not act upon the claim, respondent filed a judicial claim via a Petition for Review with the Court of Tax Appeals (CTA) on April 12, 2013. The CTA First Division partially granted the claim, ordering the issuance of a tax credit certificate. The CTA En Banc affirmed this decision. The petitioner Commissioner of Internal Revenue (CIR) elevated the case to the Supreme Court, arguing that the CTA prematurely assumed jurisdiction because respondent did not wait for a decision on the administrative claim, thereby violating the doctrine of exhaustion of administrative remedies. The CIR also contended that respondent’s administrative claim was pro forma for failing to submit complete supporting documents per relevant revenue issuances.
ISSUE
The core issues were: (1) whether the CTA prematurely assumed jurisdiction over the judicial claim, and (2) whether respondent substantiated its claim with sufficient documentary proof.
RULING
The Supreme Court denied the petition and affirmed the CTA En Banc’s decision. On the first issue, the Court held that the CTA correctly assumed jurisdiction. While Section 229 of the National Internal Revenue Code (NIRC) requires the prior filing of an administrative claim, it does not mandate awaiting the CIR’s final decision before seeking judicial relief. The two-year prescriptive period for filing a judicial claim is jurisdictional and must be strictly observed. Requiring a taxpayer to wait indefinitely for the CIR’s action could cause the claim to prescribe, barring judicial recourse. Therefore, respondent’s filing of the judicial claim within the two-year period from the date of tax payment, despite the pending administrative claim, was proper and timely.
On the second issue, the Court found that respondent sufficiently substantiated its claim. The CTA, as a specialized court, meticulously evaluated the evidence, including certificates of creditable tax withheld at source (BIR Form No. 2307) and other relevant documents. The Court emphasized that the CTA’s factual findings, when supported by substantial evidence, are accorded great weight and respect. The CIR’s argument that the submission was incomplete per its own revenue regulations was unavailing, as the core requirement is to prove the factual basis for the refund. Respondent’s evidence met this standard. Consequently, the CTA did not err in granting the tax credit.