CIR vs. Philamlife (G.R. No.

105208 May 29, 1995)

FAC!"
On May 30, 1983, private respondent Philamlife, For its Third Quarter of 1983, declared a net taa!le income of
P",#1#,$%1&00 and a ta due of P%08,'$'&00& (fter creditin) the amount of P3,899,#"#&00 it declared a
refunda!le amount of P3,1#8,0$1&00&
For its Fourth and *nal +uarter endin) ,ecem!er 31, private respondent su-ered a loss and there!y had no
income ta lia!ility&
.n the return for that +uarter, it declared a refund of P3,991,8'1&00 representin) the *rst and second +uarterly
payments/ P"1#,%'"&00 as 0ithholdin) taes on rental income for 1983 and P133,08'&00 representin) 198"
income ta refund applied as 1983 ta credit&
.n 198', private respondent a)ain su-ered a loss and declared no income ta lia!ility& 1o0ever, it applied as ta
credit for 198', the amount of P3,991,8'1&00 representin) its 198" and 1983 overpaid income taes and the
amount of P"#0,8$%&00 as 0ithholdin) ta on rental income for 198'&
On 2eptem!er "$, 198', private respondent *led a claim for its 198" income ta refund of P133,08'&00&
On 3ovem!er "", 198', it *led a petition for revie0 0ith the 4ourt of Ta (ppeals 0ith respect to its 198" claim
for refund& On ,ecem!er 1$, 198#, it *led another claim for refund On 5anuary ", 198$, private respondent *led a
petition for revie0 0ith the 4T(, doc6eted as 4T( 4ase 3o& '018 re)ardin) its 1983 and 198' claims for refund in
the a!ove7stated amount& 8ater, it amended its petition !y limitin) its claim for refund to only P3,8#8,%#%&00
.229:/ .n a case such as this, 0here a corporate tapayer remits;pays to the <.= ta 0ithheld on income for the *rst
+uarter !ut 0hose !usiness operations actually resulted in a loss for that year, as re>ected in the 4orporate Final
(d?ustment =eturn su!se+uently *led 0ith the <.=, should not the runnin) of the prescriptive period commence
from the remittance;payment at the end of the *rst +uarter of the ta 0ithheldinstead of from the *lin) of the Final
(d?ustment =eturn@
1:8,/
The issue in this case is the rec6onin) date of the t0o7year prescriptive period provided in 2ection "30 of
the 3ational .nternal =evenue 4ode Aformerly 2ection "9"B 0hich states that/ =ecovery of ta erroneously
or ille)ally collected& C 3o suit or proceedin) shall !e maintained in any court for the recovery of any
national internal revenue ta hereafter alle)ed to have !een erroneously or ille)ally assessed or collected,
or of any penalty claimed to have !een collected 0ithout authority, or of any sum alle)ed to have !een
ecessive or in any manner 0ron)fully collected, until a claim for refund or credit has !een duly *led 0ith
the 4ommissionerD !ut such suit or proceedin) may !e maintained, 0hether or not such ta, penalty, or
sum has !een paid under protest or duress&
.n any case, no such suit or proceedin) shall !e !e)un after the epiration of t0o years from the date
of payment of the ta or penalty re)ardless of any supervenin) cause that may arise after
payment/Provided, however, That the 4ommissioner may, even 0ithout a 0ritten claim therefor, refund or
credit any ta, 0here on the face of the return upon 0hich payment 0as made, such payment appears
clearly to have !een erroneously paid&
Forfeiture of refund& C ( refund chec6 or 0arrant issued in accordance 0ith the pertinent provisions of
this 4ode 0hich shall remain unclaimed or uncashed 0ithin *ve A#B years from the date the said 0arrant or
chec6 0as mailed or delivered shall !e forfeited in favor of the )overnment and the amount thereof shall
revert to the Eeneral Fund&
2ection "9" Ano0 2ection "30B stipulates that the t0o7year prescriptive period to claim refunds should !e
counted from date of payment of the ta sou)ht to !e refunded& Fhen applied to ta payers *lin) income
ta returns on a +uarterly !asis, the date of payment mentioned in 2ection "9" Ano0 2ection "30B must !e
deemed to !e +uali*ed !y 2ections $8 and $9 of the present Ta 4ode
.t may !e o!served that althou)h +uarterly taes due are re+uired to !e paid 0ithin sity days from the
close of each +uarter, the fact that the amount shall !e deducted from the ta due for the succeedin)
+uarter sho0s that until a *nal ad?ustment return shall have !een *led, the taes paid in the precedin)
+uarters are merely partial taes due from a corporation& 3either amount can serve as the *nal *)ure to
+uantity 0hat is due the )overnment nor 0hat should !e refunded to the corporation&
This interpretation may !e )leaned from the last para)raph of 2ection $9 of the Ta 4ode 0hich provides
that the refunda!le amount, in case a refund is due a corporation, is that amount 0hich is sho0n on its
*nal ad?ustment return and not on its +uarterly returns&
Therefore, 0hen private respondent paid P3,"'$,1'1&00 on May 30, 1983, it 0ould not have !een a!le to
ascertain on that date, that the said amount 0as refunda!le& The same applies 0ith co)ency to the
payment of P39$,8%'&00 on (u)ust "9, 1983&
4learly, #he $%es&%i$#ive $e%io' of #(o yea%s sho)l' &omme*&e #o %)* o*ly f%om #he #ime #ha#
#he %ef)*' is as&e%#ai*e', (hi&h &a* o*ly +e 'e#e%mi*e' af#e% a ,*al a'-)s#me*# %e#)%* is
a&&om$lishe'. I* #he $%ese*# &ase, #his 'a#e is A$%il 1., 198/, a*' #(o yea%s f%om #his 'a#e
(o)l' +e A$%il 1., 198.. The record sho0s that the claim for refund 0as *led on ,ecem!er 10, 198#
and the petition for revie0 0as !rou)ht !efore the 4T( on 5anuary ", 198$& <oth dates are 0ithin the t0o7
year re)lementary period& Private respondent !ein) a corporation, 2ection "9" Ano0 2ection "30B cannot
serve as the sole !asis for determinin) the t0o7year prescriptive period for refunds& (s 0e have earlier said
in the TMX Sales case, 2ections $8, $9, and %0 on Quarterly 4orporate .ncome Ta Payment and 2ection
3"1 should !e considered in con?unction 0ith it&
Moreover, even if the t0o7year period had already lapsed, the same is not ?urisdictional

and may !e
suspended for reasons of e+uity and other special circumstances&