COMMISSIONER OF INTERNAL REVENUE , vs. TMX SALES, INC. and THE COURT OF TAX APPEALS.
- G.R. Number: G.R. No. 83736
- Promulgated: 1992-01-15
- Ponente: Gutierrez, Jr., J.
Doctrine
Quarterly income tax payments are mere installments or advances on the annual income tax and are adjusted upon filing of the annual Adjustment Return. Thus prescription for refund claims begins from the final payment/filing of the Adjustment Return.
When tax is paid in installments, the two-year prescriptive period under Section 292 (now Section 230) is counted from the date of the last installment (Final Adjustment Return), as held in prior cases cited by the Court.
Facts
The case concerns corporate quarterly income tax and whether the two-year prescriptive period to claim refund of erroneously collected tax runs from payment of the quarterly tax or from filing the Final Adjustment Return (final payment).
Section 85 requires corporations to file quarterly summary declarations on a cumulative basis and pay the computed tax within 60 days from the close of each of the first three quarters. These quarterly payments are characterized as installments.
Yearly audit required by Section 321 means the Final Adjustment Return, which reflects audited and adjusted gross receipts and deductions, truly shows whether tax remains due or a refund is warranted.
TMX Sales, Inc. filed suit for refund on 14 March 1984; the Court found the two-year prescriptive period runs from the filing of the Adjustment Return on 15 April 1982, so the claim was timely.
Issues
Whether the two-year prescriptive period to claim refund of erroneously collected corporate quarterly income tax runs from the date the quarterly tax was paid or from the date of filing the Final Adjustment Return (final payment).
Ruling
The prescriptive period runs from the filing of the Final Adjustment Return (final payment), not from each quarterly payment; petition denied and the Court of Tax Appeals decision dated 29 April 1988 is affirmed. No costs.
Keywords
G.R. No. 83736, corporate quarterly income tax, Section 292 (now Section 230) of the National Internal Revenue Code, prescriptive period to claim a refund, erroneously collected tax, Final Adjustment Return, claim for refund or credit, Commissioner of Internal Revenue, Court of Tax Appeals, overpaid income tax, tax paid in installments, final payment or last installment, statute of limitations, legislative intent, INTERPRETATIO TALIS IN AMBIGUIS SEMPER FRIENDA EST, UT EVITATUR INCONVENIENS ET ABSURDUM, Sections 84, 85 (now both incorporated as Section 68) National Internal Revenue Code, Section 86 (now Section 70) National Internal Revenue Code, Section 87 (now Section 69) National Internal Revenue Code, Quarterly Corporate Income Tax Payment, internal revenue