GR L 19927; (February, 1965) (Digest)
G.R. No. L-19927 February 26, 1965
ANDREA R. VDA. DE AGUINALDO, petitioner, vs. COMMISSIONER OF INTERNAL REVENUE and the COURT OF TAX APPEALS, respondents.
FACTS
Leopoldo R. Aguinaldo and his wife received cash dividends of P10,000 in 1952 from Aguinaldo Brothers, Inc. They did not declare these dividends in their joint income tax return for 1952 but declared P5,000 of it in their 1953 return. They paid the tax due on their 1953 declared income on August 14, 1954. In August 1955, Bureau of Internal Revenue agents re-examined the spouses’ 1952 and 1953 returns, discovered the discrepancy, and readjusted the returns by increasing the 1952 declared income by P10,000 and eliminating the P5,000 dividends from the 1953 return. This resulted in a deficiency income tax of P3,840 for 1952 and an overpayment of P1,600 for 1953. The examination report, dated August 29, 1955, recommended crediting the 1953 overpayment against the 1952 deficiency. However, the Collector of Internal Revenue, by letter dated October 28, 1957, assessed the P3,840 deficiency for 1952 without crediting the overpayment. Aguinaldo’s counsel protested on January 10, 1958, requesting the credit. The request was denied, with the Commissioner of Internal Revenue stating the claim for tax credit was filed beyond the two-year period in Section 309 of the National Internal Revenue Code. Leopoldo R. Aguinaldo died, and his surviving spouse and administratrix, Andrea Vda. de Aguinaldo, appealed to the Court of Tax Appeals, which dismissed the appeal. Petitioner then elevated the case to the Supreme Court.
ISSUE
Whether or not petitioner is entitled to tax credit for the year 1953 pursuant to Section 309 of the Tax Code.
RULING
No. The Supreme Court affirmed the judgment of the Court of Tax Appeals. Section 309 of the Tax Code clearly requires the filing of a written claim for credit or refund within two years after payment of the tax as a condition precedent for the Commissioner of Internal Revenue to exercise his authority to grant such credit or refund. The Aguinaldos paid the income tax for 1953 on August 14, 1954. The adjustment by the BIR occurred on August 29, 1955. The claim for tax credit was filed on January 13, 1958. From both the date of payment (August 14, 1954) and the date of adjustment (August 29, 1955) to the date of the claim (January 13, 1958), more than two years had elapsed. Therefore, the claim was filed beyond the period prescribed by law, precluding the grant of the tax credit.