Facts: Petitioner Bank of the Philippine Islands (BPI) is a bank and trust corp. duly organized and existing under Philippine Laws. It acts as the liquidator of Paramount Acceptance Corporation after its dissolution on March 31, 1986.
On April 2, 1986, Paramount Acceptance Corp. (Paramount) filed its Corporate Annual Income Tax Return, for calendar year ending December 31, 1985, declaring a Net Income of P3,324,802.00. The income tax due thereon is P1,153,681.00. However, Paramount paid the BIR its quarterly income tax in the amount of P1,218,940.00
After deducting Paramount’s total quarterly income tax payments of P1,218,940.00 from its income tax of P1,153,681.00, the return shored a refundable amount of P65,259.00
On April 14, 1988, petitioner BPI, as liquidator of Paramount, through counsel filed a letter dated April 12, 1988 reiterating its claim for refund of P65,259.00 as overpaid income tax for the calendar year 1985. The following day or on April 15, 1988, BPI filed the instant petition with this court in order to toll the running of the prescriptive period for filing a claim for refund of overpaid income taxes.
The CTA rendered decision ordering the CIR to give the refund to the petitioner. On appeal, the decision was affirmed by the CA.
Issue: Whether of not the 2-year period of prescription for filing a claim for refund is to be counted from the actual filing of the income tax return.
Held: The two-year period for prescription should be counted from the date of payment of the tax, which for actions for refund of corporate income tax should be computed from the time of actual filing of the adjustment return or annual income tax return. This is so because at that point, it can already be determined whether there ahs been an overpayment by the taxpayer. Moreover, under Sec. 49 (a) by the NIRC (now Sec. 56(a), 1997 NIRC), payment is made at the time the return is filed.
There is some likelihood that the above rule could apply also to individuals who are self employed (i.e., in business and professional practice) as well as estates and trusts, which are likewise required to file quarterly returns.
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