Tax 1 Case Digest Complete 2014

 

Part 1 General Principles of Taxation Case Title 1 Paseo Realty and Deelopment Corporation s C!" GR No# 11$%&'" (cto)er 1*" %++,

Summary On April 16, 1990, petitioner fled its Income Tax Return or the calendar year 1989 declarin a ross income o !1,8"",000#00, deductions o !1,$$",991#00, net income o !$9,009#00, an income tax due thereon in the amount o !%$,6"�, prior year's excess credit o !1(6,0%6#00, and credita)le taxes *ithheld in 1989 o !"(,10(#00 or a total tax credit o !%00,1&0#00 and credit )alance o !1$%,($$#00# On +oem)er 1(, 1991, petitioner fled *ith respondent a claim or -the reund o excess credita)le *ithholdin and income taxes orareate the years 1989 and 1990 in the amount o !1($,0&6#1"#.   On /ecem)er %$, 1991 allein that the prescriptie period or reunds or 1989 *ould expire on /ecem)er &0, 1991 and that it *as necessary to interrupt the prescriptie period, petitioner

Issue/s

Ruling

hether or not the petitioner can claim the reund o its credita)le taxes *ithheld in 1989 as the same had )een alleedly applied aainst its 1990 tax due#

+o#The conusion as to petitioner's entitlement to a reund could altoether hae )een aoided had it presented its tax return or 1990#

Notes/Remarks

 The rant o a reund is ounded on the assumption that the tax return is alid, i#e#, that the acts stated therein are true and correct# ithout the tax return, it is error to rant a reund since it *ould )e irtually impossi)le to determine *hether the proper taxes hae )een assessed and paid# It is axiomatic that a claimant has the )urden o proo to esta)lish the actual )asis o his or her claim or tax credit or reund# Tax reunds, lie tax exemptions, are construed strictly aainst the taxpayer# taxpayer# In case the corporation is entitled to a reund o the excess estimated 2uarterly income taxes paid, the reunda)le amount sho*n on its fnal ad3ustment return may )e credited aainst the estimated 2uarterly income tax lia)ilities or the taxa)le 2uarters o the succeedin year# year# The carryin or*ard o 

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fled *ith the respondent 4ourt o Tax Tax Appeals a petition or reie* prayin or the reund o -!"(,10(#00 representin credita)le taxes *ithheld rom income payments o petitioner or the calendar year endin /ecem)er &1, 1989#.

any excess or oerpaid income tax or a ien taxa)le year is limited to the succeedin taxa)le year only# hile a taxpayer is ien the choice *hether to claim or reund or hae its excess taxes applied as tax credit or the succeedin taxa)le year, such election is not fnal# !rior erifcation and approal )y the 4ommissioner o Internal Reenue is re2uired# The aailment o the remedy o tax credit is not a)solute and mandatory# mandatory# It does not coner an a)solute riht on the taxpayer to aail o  the tax credit scheme i it so chooses# +either does it impose a duty on the part o the oernment to sit )ac and allo* an important acet o tax collection to )e at the sole control and a nd discretion o the taxpayer#  The amendment o 5ection 69 )y *hat is no* 5ection $6 o Repu)lic Act +o# 8(%( emphasies that is imperatie to indicate in the taxit return or the fnal ad3ustment return *hether a tax credit or reund is souht )y main the taxpayer's choice irreoca)le#  T  Taxation axation is a destructie po*er *hich intereres *ith the personal and property rihts o the people and taes rom them a portion o their property or the

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support o the oern oernment# ment# And since taxes are *hat *e pay or ciilied society, or are the lie)lood o the nation, the la* ro*ns aainst exemptions rom taxation and statutes rantin tax exemptions are thus construed strictissimi 3uris aainst the taxpayer and li)erally in aor o the taxin authority# authority# A claim o reund or exemption rom tax payments must )e clearly sho*n and )e )ased on lanuae in the la* too plain to )e mistaen# 7lse*ise stated, taxation is the rule, exemption thererom is the exception# hetherr or  The po*er to tax