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Tax Case Digest: CIR v. PNB, G.R. No. 212699, March 13, 2019

Commissioner of Internal Revenue (CIR) V. Philippine National Bank (PNB)
G.R. No. 212699, March 13, 2019.

SC Second Division
J. REYES, JR., J.:

Lessons Applicable:  Duty of CIR, CTA's jurisdiction is appellate
Laws Applicable:

  • April 17, 2006: PNB electronically filed its Annual Income Tax Return (ITR) for taxable year 2005 with attachments dated February 12, 2007, June 22, 2007, and March 10, 2008, which were received by the CIR on February 22, 2007, June 25, 2007, and March 13, 2008, respectively.
  • PNB filed its claim for refund or issuance of tax credit certificate of its excess CWT in the amount of P74,598,430.47
  • Due to the CIR's inaction to the said claim, PNB filed a petition for review for its claim on April 11, 2008 before the CTA.
  • CTA Third Division: Denied the petition for review and Motion for Reconsideration (MR).  PNB's evidence to be insufficient to support its claim for refund or the issuance of a tax credit certificate.  Presentation of PNB's Annual ITR for 2006 is not enough to prove that it did not carry over the claimed excess or unutilized CWT to the subsequent quarters of 2006 and that succeeding Quarterly ITRs is vital to its claim for refund.
  • CTA En Banc: Affirmed CTA 3rd Division but reversed and granted PNB’s MR as PNB complied with all the requisites for the filing of such claim: 1. Within the 2-year prescription period 2. Income related to the CW formed part of taxable income as evidenced by documents presented: Original accounting tickets or input sheets; original deeds of absolute/conditional sale; general ledgers for the years 1999 to 2006; audited financial statements; and ITRs for the years 1999 to 2006 3. Supported by original Certificates of Creditable Tax Withheld at Source issued in the name of PNB and dated within the calendar year 2005.  It denied CIR’S MR. 
  • CIR filed a petition for review on certiorari under Rule 45

ISSUE: W/N presentation of the subsequent Quarterly ITRs (for 2006) is indispensable to the claim of refund.


NO.   CTA correctly ruled that there is nothing under the NIRC that requires the submission of the Quarterly ITRs of the succeeding taxable year in a claim for refund. Even the BIR's own regulations do not provide for such requirement.

  • Winebrenner & Iñigo Insurance Brokers, Inc. v. Commissioner of Internal Revenue (GR No. 206526, January 28, 2015): presentation of the claimant's quarterly returns is not a requirement to prove entitlement to the refund.
  • Republic v. Team Energy (Phils.) Corporation (G.R. No. 188016, January 14, 2015)
    • BIR ought to have its own copies, originals at that, of the claimant's quarterly returns on file, on the basis of which it could have easily rebut the claim that the excess or unutilized CWT sought for refund were carried over to the immediately succeeding taxable quarters.  Failure to present such document during the trial is fatal against the BIR's case rather than the claimant's.
  •  It bears stressing that the power to decide matters concerning refunds of internal revenue taxes, among others, is vested in the CIR.  It has the duty to ascertain the veracity of such claims and should not just wait and hope for the burden to fall on the claimant when the issue reaches the court. 
  • Commissioner of Internal Revenue v. PERF Realty Corporation (G.R. NO. 163345, July 4, 2008):
    • Duty of the CIR to verify whether or not the claimant had carried over its excess CWT
    • CTA's jurisdiction is appellate. In the exercise of its authority to review, the CTA cannot dictate what particular evidence the parties must present to prove their respective cases. The means of ascertainment of a fact is best left to the party that alleges the same. The court's power is limited only to the appreciation of that means pursuant to the prevailing rules of evidence.
  • Despite PNB's failure to present at the onset its Quarterly ITRs for 2006, its Annual ITR for 2006 is apt and sufficient to show that no CWT carry over was made in 2006.
  • Factual findings of the CTA when supported by substantial evidence, will not be disturbed on appeal.