SC affirms CTA order to grant P210-M tax credits to PNB

THE Supreme Court (SC) has upheld the Court of Tax Appeals’ (CTA) decision for the internal revenue commissioner to refund and grant a tax credit certificate to the Philippine National Bank (PNB) for the reduced amount of P210 million in excess credit withholding tax for 2010.

In a 15-page resolution dated March 15 and made public on Sept. 2, the High Court’s first division said the tax court had not committed an error in denying PNB’s plea to grant its initial P285-million claim.

“In this regard, we abide by the fundamental principle that the findings of fact by the CTA in Division are not to be disturbed without any showing of grave abuse of discretion considering that the members of the Division are in the best position to analyze the documents presented by the parties,” said the High Court.

It added that the CTA was duly performing its function to evaluate tax problems and disputes between two entities.

The High Court noted that the local lender failed to provide “any compelling reason” to overturn the tax court’s decision.

PNB argued that it had submitted all the necessary documents to substantiate its initial refund claim.

The CTA agreed with the commissioner of internal revenue’s (CIR) view that the bank failed to submit enough withholding tax certificates to prove its entitlement to the full refund claim.

On the other hand, the High Court ruled the PNB’s decision to bring the case to the CTA was proper, despite the CIR claiming the petition was premature due to the banks’ incomplete documents.

“Nothing in our laws and jurisprudence supports the CIR’s position that the exhaustion of an administrative claim for tax refund is a condition precedent that must be completely acted upon by the bureau of internal revenue before a  judicial claim for refund may be filed by the taxpayer concerned,” the SC noted.

“Indeed, jurisprudence dictates that a taxpayer need not await the BIR’s action on an administrative claim before going to the CTA.”

A tax credit certificate is a document reflecting the amount due to a taxpayer from an overpayment or erroneous payment of taxes. — John Victor D. Ordoñez