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BPI - Family Savings Bank Vs CA

The petitioner bank filed a claim for a tax refund of 112,491 pesos representing creditable withholding tax paid in 1989. The CTA dismissed the petition because the bank failed to present its 1990 tax return to prove it had not credited the amount to its 1990 tax liability, as it had declared it would in its 1989 return. The CA affirmed this decision. However, the Supreme Court ruled in favor of the petitioner, finding that strict procedural rules should not prevent consideration of undisputed facts to arrive at a just determination. While tax refunds require strict construction against the claimant, the petitioner in this case established its claim based on substantial justice, equity and fair play.

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67 views2 pages

BPI - Family Savings Bank Vs CA

The petitioner bank filed a claim for a tax refund of 112,491 pesos representing creditable withholding tax paid in 1989. The CTA dismissed the petition because the bank failed to present its 1990 tax return to prove it had not credited the amount to its 1990 tax liability, as it had declared it would in its 1989 return. The CA affirmed this decision. However, the Supreme Court ruled in favor of the petitioner, finding that strict procedural rules should not prevent consideration of undisputed facts to arrive at a just determination. While tax refunds require strict construction against the claimant, the petitioner in this case established its claim based on substantial justice, equity and fair play.

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Goody
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© © All Rights Reserved
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BPI-FAMILY SAVINGS BANK, Inc.

, Petitioner, v. COURT OF APPEALS, COURT OF


TAX APPEALS and the COMMISSIONER OF INTERNAL REVENUE, Respondents.

Nature:

Before us is a Petition for Review assailing the March 31, 1995 Decision of the Court of
Appeals 1 (CA) in CA-GR SP No. 34240, which affirmed the December 24, 1993
Decision 2 of the Court of Tax Appeals (CTA).

Facts:

Petitioner bank’s annual corporate income tax return for 1989 showed that it suffered a
loss of P8,286,960, and that it had a total refundable amount of P297,492 inclusive of
P112,491 being claimed as tax refund in the present case. However, petitioner declared
in its 1989 income tax return as a tax creditE in the succeeding taxable year.

On October 11, 1991, petitioner bank filed a written claim for refund of P112,491 with
the BIR alleging that it did not apply the 1989 refundable amount of P297,492 as tax
credit to its 1990 annual corporate income tax return or either tax liabilities due to
business losses it incurred for the same year. Without waiting for respondent CIR’s
action in its claim for refund, petitioner filed a petition for review with the CTA.

CTA dismissed the petition on the ground that petitioner bank failed to present as


evidence its 1990 annual income tax return to prove that it had not yet credited the
amount of P297,422, inclusive of P112,491 which is the subject of the present
controversy to its 1990 tax liability. Since petitioner declared in its 1989 income
tax return that it would apply the excess withholding tax as tax credit for the following
year, the tax court presumed that it did so. Petitioner failed to overcome this
presumption because it did not present its 1990 tax return which would have shown that
the amount was not applied as a tax credit. Hence, it was concluded that petition was
not entitled to a tax refund. The CA affirmed said decision of the CTA.

Issue: 

Whether or not petitioner is entitled to a tax refund of P112,491 representing creditable


withholding tax paid for 1989.

Held: 

The petition is meritorious. As a rule, the factual findings on the appellate court are


binding on the SC. This rule, however, does not apply where, inter alia, the judgment is
premised on a misapprehension of facts or when the appellate court failed to notice
certain relevant facts which if considered would justify a different conclusion. This case
is one such exception.
Strict procedural rules generally frown up the submission of the return the trial. R.A.
1125, the law creating the CTA, however, specifically provides the proceedings before it
“shall not be governed strictly by the technical rules of evidence”. The paramount
considerations remains the ascertainment of truth. Verily, the quest for orderly
presentation of issues is not an absolute. It should not bar courts from considering
undisputed facts to arrive at a just determination of a controversy.

While tax refunds are in the nature of the exceptions and are to the construct strictissim
juris against the claimant, under the facts of this case, petitioner has established its
claim.

Substantial justice equity, and fair play are on the side of petitioner. Technicalities and
legalisms, however, exalted, should not be misused by the government to keep money
not belonging to it and thereby enrich would be better by allowing to appeal.

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