SECOND DIVISION In view of the foregoing, the Petition for Review is

G.R. No. 206526 January 28, 2015 hereby PARTIALLY GRANTED. Accordingly,
WINEBRENNER & IÑIGO INSURANCE respondent is hereby ORDERED to REFUND or
BROKERS, INC., Petitioner, ISSUE A TAX CREDIT CERTIFICATE in favor of
vs. the petitioner in the reduced amount of
COMMISSIONER OF INTERNAL REVENUE, ₱2,737,903.34 representing its excess/unutilized
Respondent. creditable withholding taxes for the year 2003.
DECISION SO ORDERED.3
MENDOZA, J.: Petitioner filed a Motion for Partial Reconsideration
In this petition for review under Rule 45 of the Rules with Leave to Submit Supplemental Evidence. It
of Court and Rule 16 of the Revised Rules of the prayed that an amended decision be issued granting
Court of Tax Appeals, Winebrenner & Ifiigo the entirety of its claim for refund, or in the
Insurance Brokers, Inc. (petitioner) seeks the review alternative, that it be allowed to submit and offer
of the March 22, 2013 Decision1of the Court of Tax relevant documents as supplemental evidence.
Appeals En Banc (CTA-En Banc). In the said Respondent Commissioner of Internal Revenue (CIR)
decision, the CTA-En Banc affirmed the denial of also moved for reconsideration, praying for the denial
petitioner's judicial claim for refund or issuance of of the entire amount of refund because petitioner
tax credit certificate for excess and unutilized failed to present the quarterly Income Tax Returns
creditable withholding tax (CWT) for the 1st to 4th (ITRs) for CY 2004. To the CIR, the presentation of
quarter of calendar year (CJ} 2003 amounting to the 2004 quarterly ITRs was indispensable in proving
₱4,073,954.00. In denying the refund, the CTA-En petitioner’s entitlement to the claimed amount
Banc held that petitioner failed to prove that the because it would prove that no carry-over of
excess CWT for CY 2003 was not carried over to the unutilized and excess CWT for the four (4) quarters
succeeding quarters of the subject taxable year. of CY 2003 to the succeeding four (4) quarters of CY
Under the 1997 National Internal Revenue Code 2004 was made. In the absence of said ITRs, no
(NJRC), a taxpayer must not have exercised the refund could be granted. In the CIR’s view, this was
option to carryover the excess CWT for a particular in accordance with the irrevocability rule under
taxable year in order to qualify for refund. Section 76 of the NIRC which reads:
The Factual Antecedents SEC. 76. Final Adjustment Return. – Every
On April 15, 2004, petitioner filed itsAnnual Income corporation liable to tax under Section 27 shall file an
Tax Return for CY 2003. adjustment return covering the total taxable income
About two years thereafter or on April 7, 2006, for the preceding calendar or fiscal year. If the sum of
petitioner applied for the administrative tax the quarterly tax payments made during the said
credit/refund claiming entitlement to the refund of its taxable year is not equal to the total tax due on the
excess or unutilized CWT for CY 2003, by filing BIR entire taxable income of that year, the corporation
Form No. 1914 with the Revenue District Office No. shall either:
50 of the Bureau of Internal Revenue (BIR). (A) Pay the balance of tax still due; or
There being no action taken on the said claim, a (B) Carry-over the excess credits; or
petition for review was filed by petitioner before the (C) Be credited or refunded with the excess amount
CTA on April 11, 2006. The case was docketed as paid, as the case may be.
CTA Case No. 7440 and was raffled to the Special In case the corporation is entitled to a tax credit or
First Division (CTA Division). refund of the excess estimated quarterly income taxes
On April 13, 2010, CTA Division partially granted paid, the excess amount shown on its final adjustment
petitioner’s claim for refund of excess and unutilized return may be carried over and credited against the
CWT for CY 2003 in the reduced amount of estimated quarterly income tax liabilities for the
₱2,737,903.34 in its April 13, 2010 Decision2 taxable quarters of the succeeding taxable years.
(original decision). The dispositive portion of the Once the option to carry-over and apply the excess
decision reads: quarterly income tax against income tax due for the
taxable quarters of the succeeding taxable years has
been made, such option shall be considered return and final adjustment return is indispensable to
irrevocable for that taxable period and no application prove that it did not carry over or utilized the claimed
for cash refund or issuance of a tax credit certificate excess creditable withholding taxes. Absent thereof,
shall be allowed therefor. there will be no basis for a taxpayer’s claim for
On July 27, 2011, the CTA-Division reversed itself. refund since there will be no evidence that the
In an Amended Decision,4 it denied the entire claim taxpayer did not carry over or utilize the claimed
of petitioner. It reasoned out that petitioner should excess creditable withholding taxes to the succeeding
have presented as evidence its first, second and third taxable quarters.
quarterly ITRs for the year 2004 to prove that the Significantly, a taxpayer may amend its quarterly
unutilized CWT being claimed had not been carried income tax return or annual income tax return or
over to the succeeding quarters. Thus: Final Adjustment Return, which in any case may
WHEREFORE,in view of the foregoing, petitioner’s modify the previous intention to carry-over, apply as
Motion for Partial Reconsideration is hereby tax credit certificate or refund, as the case may be.
DENIED while respondent’s Motion for But the option to carry over in the succeeding taxable
Reconsideration is hereby GRANTED. Accordingly, quarters under the irrevocability rule cannot be
the Decision dated April 13, 2010 granting modified in its final adjustment return.
petitioner’s claim in the reduced amount of The presentation of the final adjustment return does
₱2,737,903.34 is hereby REVERSED AND SET not shift the burden of proof that the excess creditable
ASIDE. Consequently, the instant Petition for withholding tax was not utilized or carried overto the
Review is hereby DENIEDdue to insufficiency of first three (3) taxable quarters. It remains with the
evidence. taxpayer claimant. It goes without saying that final
SO ORDERED.5 adjustment returns of the preceding and the
Aggrieved, petitioner elevated the case to the CTA succeeding taxable years are not sufficient to prove
En Bancpraying for the reversal of the Amended that the amount claimed was utilized or carried over
Decision of the CTA Division. to the first three (3) taxable quarters.
In its March 22, 2013 Decision, 6 the CTA-En The importance of the presentation of the succeeding
Bancaffirmed the Amended Decision of the CTA- quarterly income tax return and the annual income
Division. It stated that before a cash refund or an tax return of the subsequent taxable year need not be
issuance of tax credit certificate for unutilized excess overly emphasized. All corporations subject to
tax credits could be granted, it was essential for income tax, are required to file quarterly income tax
petitioner to establish and prove, by presenting the returns, on a cumulative basis for the preceding
quarterly ITRs of the succeeding years, that the quarters, upon which payment of their income tax has
excess CWT was not carried over to the succeeding been made. In addition to the quarterly income tax
taxable quarters considering that the option to carry returns, corporations are required to file a final or
over in the succeeding taxable quarters could not be adjustment return on or before the fifteenth day of
modified in the final adjustment returns April. The quarterly income tax return, like the final
(FAR).Because petitioner did not present the first, adjustment return, is the most reliable firsthand
second and third quarterly ITRsfor CY 2004, despite evidence of corporate acts pertaining to income taxes,
having offered and submitted the Annual ITR/FAR as it includes the itemization and summary of
for the same year, the CTA-En Banc stated that the additions to and deductions from the income tax due.
petitioner failed to discharge its burden, hence, no These entries are not without rhyme or reason. They
refund could be granted. In justifying its conclusions, are required, because they facilitate the tax
the CTA-En Banccited its own case of Millennium administration process, and guide this Court to the
Business Services, Inc.v. Commissioner of Internal veracity of a petitioner’s claim for refund without
Revenue (Millennium)7 wherein it held as follows: which petitioner could not prove with certainty that
Since the burden of proof is upon the claimant to the claimed amount was not utilized or carried over
show that the amount claimed was not utilized or to the succeeding quarters or the option to carry over
carried over to the succeeding taxable quarters, the and apply the excess was effectively chosen despite
presentation of the succeeding quarterly income tax the intent to claim a refund.
In the same vein, if the government wants to disprove law to prove the claimant’s entitlement to excess or
that the excess creditable withholding tax was not unutilized CWT, and by following logic, the
utilized or carried over to the succeeding taxable submission of quarterly income tax returns for the
quarters, the presentation of the succeeding quarterly subsequent taxable period was likewise unnecessary.
income tax return and the annual income tax return of He found no justifiable reason not to follow the
the subsequent taxable year indicating utilization or existing rulings of this Court. Petitioner’s reasoning
carrying over are [sic] indispensible. However, the in this petition echoes the dissenting opinion of
claimant must first establish its claim for refund, such Justice Castaneda. It further submits that despite the
that it did not utilize or carry over or that it opted to non-presentation of the quarterly ITRs, it has
utilize and carry over to the 1 st, 2nd, 3rd quarters sufficiently shown that the excess CWT for CY 2003
and final adjustment return of the succeeding taxable was not carried over or applied to itsincome tax
year. liabilities for CY 2004, as shown in the Annual ITR
Concomitantly, the presentation of the quarterly for 2004 it submitted. Thus, petitioner insists that its
income tax return and the annual income tax return to refund should have been granted. Petitioner further
prove the fact that excess creditable withholding tax avers, in its Reply,14 that even if Millennium Business
was not utilized or carried over or opted to be utilized case was applicable, such must be given prospective
and carried over to the 1st, 2nd, 3rd quarters and final effect considering that this case was litigated on the
adjustment return of the succeeding taxable quarter is basis of the doctrines laid down in Philam, State
not only for convenience to facilitate the tax Landand PERF Realty cases wherein the submission
administration process but it is part of the requisites of quarterly ITRs in a case for tax refund was held by
to establish the claim for refund. Section 76 of the this Court as not mandatory.
NIRC of 1997 provides that if the taxpayer claimant In its Comment,15 the CIR counters that even if the
carries over and applies the excess quarterly income taxpayer signifies the option for either tax refund or
tax against the income tax due for the taxable carry-over as tax credit, this does not ipso facto
quarters of the succeeding taxable years, the same is confer the right to avail of the option immediately.
irrevocable and no application for cash refund or There is a need, according to the CIR, for an
issuance of a tax credit certificate shall be allowed.8 investigation to ascertain the correctness of the
Hence, this petition. corporate returns and the amount sought to be
Noteworthy is the fact that the CTA-En Bancruling credited; and part of which is to look into the
was met with two dissents from Associate Justices quarterly returns so that it may be determined
Juanito C. Castañeda (Justice Castañeda) and whether or not excess and unutilized CWT was
Esperanza R. Fabon-Victorino (Justice Fabon- carried over into the succeeding quarters of the next
Victorino). taxable year. Because the pertinent quarterly ITRs
In his Dissenting Opinion9 which was concurred in were not presented, the CIR submits that the
by Justice FabonVictorino, Justice Castañeda petitioner failed to prove its right to a tax refund.
expressed the view that the CTA-En Banc should Issue
have reinstated the CTA-Division’s original decision The sole issue here is whether the submission and
because in the cases of Philam Asset Management presentation of the quarterly ITRs of the succeeding
Inc. v. Commissioner of Internal Revenue (Philam); 10 quarters of a taxable year is indispensable in a claim
State Land Investment Corporation v. Commissioner for refund.
of Internal Revenue (State Land); 11 Commissioner of The Court’s Ruling
Internal Revenue v. PERF Realty Corporation (PERF The Court recognizes, as it always has, that the
Realty);12 and Commissioner of Internal Revenue v. burden of proof to establish entitlement to refund is
Mirant (Philippines) Operations, Corporation on the claimant taxpayer. 16 Being in the nature of a
(Mirant),13this Court already ruled that requiring the claim for exemption,17 refund is construed in
ITR or the FAR for the succeeding year in a claim for strictissimi juris against the entity claiming the refund
refund had no basis in law and jurisprudence. and in favor of the taxing power. 18 This is the reason
According to him, the submission of the FAR of the why a claimant must positively show compliance
succeeding taxable year was not required under the with the statutory requirements provided for under
the NIRC in order to successfully pursue one’s claim. In this case, the fact of havingcarried over
As implemented by the applicable rules and petitioner’s 2003 excess credits to succeeding taxable
regulations and as interpreted in a vast array of year isin issue. According to the CTA-En Bancand
decisions, a taxpayer who seeks a refund of excess the CIR, the only evidence that can sufficiently show
and unutilized CWT must: that carrying over has been made is to present the
1) File the claim with the CIR within the two year quarterly ITRs. Some members of this Court adhere
period from the date of payment of the tax; to the same view.
2) Show on the return that the income received was The Court however cannot.
declared as part of the gross income; and Proving that no carry-over has been made does not
3) Establish the fact of withholding by a copy of a absolutely require the presentation of the quarterly
statement duly issued by the payor to the payee ITRs.
showing the amount paid and the amount of tax In Philam, the petitioner therein sought for
withheld.19 recognition of its right to the claimed refund of
The original decision of the CTA-Division made unutilized CWT. The CIR opposed the claim, on the
plain that the petitioner complied with the above grounds similar to the caseat hand, that no proof was
requisites in so far as the reduced amount of provided showing the non-carry over of excess CWT
₱2,737,903.34 was concerned. In the amended to the subsequent quarters of the subject year. In a
decision, however, it was pointed out that because categorical manner, the Court ruled that the
petitioner failed to present the quarterly ITRs of the presentation of the quarterly ITRs was not necessary.
subsequent year, there was an impossibility of Therein, it was written:
determining compliance with the irrevocability rule Requiring that the ITR or the FAR of the succeeding
under Section 76 of the NIRC as in those documents year be presented to the BIR in requesting a tax
could be found evidence of whether the excess CWT refund has no basis in law and jurisprudence.
was applied to its income tax liabilities in the quarters First, Section 76 of the Tax Code does not mandate
of 2004. The irrevocability rule under Section 76 of it. The law merely requires the filing of the FAR for
the NIRC means that once an option, either for the preceding – not the succeeding – taxable year.
refund or issuance of tax credit certificate or carry- Indeed, any refundable amount indicated in the FAR
over of CWT has been exercised, the same can no of the preceding taxable year may be credited against
longer be modified for the succeeding taxable years. 20 the estimated income tax liabilities for the taxable
For said reason, the CTA-En Banc affirmed the quarters of the succeeding taxable year. However,
conclusion in the amended decision that because of nowhere is there even a tinge of a hint in any
the said impossibility, the claim for refund was not provisions of the [NIRC] that the FAR of the taxable
substantiated. year following the period to which the tax credits are
The CIR agrees with the disposition of the CTA-En originally being applied should also be presented to
Banc, stressing that the petitioner failed to carry out the BIR.
the burden of showing that no carryover was made Second, Section 5 of RR 12-94, amending Section
when it did not present the quarterly ITRs for CY 10(a) of RR 6-85, merely provides that claims for
2004. refund of income taxes deducted and withheld from
Petitioner disagrees, as the dissents did, that the non- income payments shall be given due course only (1)
submission of quarterly ITRs is fatal to its claim. when it is shown on the ITR that the income payment
Hence, the issue on the indispensability of quarterly received is being declared part of the taxpayer’s gross
ITRs of the succeeding taxable year in a claim for income; and (2) when the fact of withholding is
refund. established by a copy of the withholding tax
The Court finds for the petitioner. statement, duly issued by the payor to the payee,
There is no question that those who claim must not showing the amount paid and the income tax
only prove its entitlement to the excess credits, but withheld from that amount.
likewise must prove that no carry-over has been It has been submitted that Philam cannot be cited as a
made in cases where refund is sought. precedent to hold that the presentation of the
quarterly income tax return is not indispensable as it
appears that the quarterly returns for the succeeding the payee showing the amount paid and the amount
year were presented when the petitioner therein filed of tax withheld therefrom.
an administrative claim for the refund of its excess xxx xxx xxx
taxes withheld in 1997. Evident from the above is the absence of any
It appears however that there is misunderstanding in categorical pronouncement of requiring the
the ruling of the Court in Philam. That factual presentation of the succeeding quarterly ITRs in
distinction does not negate the proposition that order to prove the fact of non-carrying over. To say
subsequent quarterly ITRs are not indispensable. The the least, the Court rules that as to the means of
logic in not requiring quarterly ITRs of the proving it, Ithas no power to unduly restrict it.
succeeding taxable years to be presented remains true In this case, it confounds the Court why the CTA did
to this day. What Section 76 requires, just like in all not recognize and discuss in detail the sufficiency of
civil cases, is to prove the prima facie entitlement to a the annual ITR for 2004,21 which was submitted by
claim, including the fact of not having carried over the petitioner. The CTA in fact said:
the excess credits to the subsequent quarters or In the present case, while petitioner did offer its
taxable year. It does not say that to prove such a fact, Annual ITR/Final Adjustment Return for taxable year
succeeding quarterly ITRs are absolutely needed. 2004, it appears that petitioner miserably failed to
This simply underscores the rulethat any document, submit and offer as part of its evidence the first,
other than quarterly ITRs may be used to establish second, and third Quarterly ITRs for the year 2004.
that indeed the non-carry over clause has been Consequently, petitioner was not able to prove that it
complied with, provided that such is competent, did not exercise its option to carry-over its excess
relevant and part of the records. The Court is thusnot CWT.22
prepared to make a pronouncement as to the Petitioner claims that the requirement of proof
indispensability of the quarterly ITRs in a claim for showing the non-carry over has been established in
refund for no court can limit a party to the means of said document.
proving a fact for as long as they are consistent with Indeed, an annual ITR contains the total taxable
the rules of evidence and fair play. The means of income earned for the four (4) quarters of a taxable
ascertainment of a fact is best left to the party that year, as well as deductions and tax credits previously
alleges the same. The Court’s power is limited only reported or carried over in the quarterly income tax
to the appreciation of that means pursuant to the returns for the subject period. A quick look atthe
prevailing rules of evidence. To stress, what the Annual ITR reveals this fact:
NIRC merely requires is to sufficiently prove the Aggregate Income Tax Due
existence of the non-carry over of excess CWT in a Less Tax Credits/Payments
claim for refund. Prior Year’s excess Credits – Taxes withheld
The implementing rules similarly support this Tax Payment (s) for the Previous Quarter (s) of the
conclusion, particularly Section 2.58.3 of Revenue same taxable year other than MCIT
Regulation No. 2-98 thereof. There, it provides as xxx xxx xxx
follows: Creditable Tax Withheld for the Previous Quarter (s)
SECTION 2.58.3. Claim for Tax Credit or Refund. Creditable Tax Withheld Per BIR Form No. 2307 for
(A) The amount of creditable tax withheld shall be this Quarter
allowed as a tax credit against the income tax liability xxx xxx x x x23
of the payee in the quarter of the taxable year in It goes without saying that the annual ITR (including
which income was earned or received. any other proof that may be sufficient to the
(B) Claims for tax credit or refund of any creditable Court)can sufficiently reveal whether carry over has
income tax which was deducted and withheld on been made in subsequent quarters even if the
income payments shall be given due course only petitioner has chosen the option of tax credit or
when it is shown that the income payment has been refund inthe immediately 2003 annual ITR. Section
declared as part of the gross income and the fact of 76 of the NIRC requires a corporation to file a Final
withholding is established bya copy of the Adjustment Return (or Annual ITR) covering the
withholding tax statement duly issued by the payer to total taxable income for the preceding calendar or
fiscal year. The total taxable income contains the of 2003 in the amount of ₱4,073,954.00 as prior
combined income for the four quarters of the taxable year’s excess credits. As shown in the 2004 ITR:
year, as well as the deductions and excess tax credits Annual ITR 2004
carried over in the quarterly income tax returns for Income Tax Due 1,321,409.00
the same period.
If the excess tax credits of the preceding year were
Less: Prior Year’s Excess Credits -
deducted, whether in whole or in part, from the
estimated income tax liabilities of any of the taxable
quarters of the succeeding taxable year, the total Creditable Tax Withheld for the (3,689,419.00)
amount of the tax credits deducted for the entire 4th
taxable year should appear in the Annual ITR under Quarter
the item "Prior Year’s Excess Credits." Otherwise, or
if the tax credits were carried over to the succeeding Tax Payable / (Overpayment) (2,368,010.00)
quarters and the corporation did not report it in the
Verily, the absence of any amount written in the Prior
annual ITR, there would be a discrepancy in the
Year excess Credit – Tax Withheld portion of
amounts of combined income and tax credits carried
petitioner’s 2004 annual ITR clearly shows that no
over for all quarters and the corporation would end
prior excess credits were carried over in the first four
up shouldering a bigger tax payable. It must be
quarters of 2004. And since petitioner was able to
remembered that taxes computed in the quarterly
sufficiently prove that excess tax credits in 2003 were
returns are mere estimates. It is the annual ITR which
not carried over to taxable year 2004 by leaving the
shows the aggregate amounts of income, deductions,
item "Prior Year’s Excess Credits" as blank in its
and credits for all quarters of the taxable year. It is
2004 annual ITR, then petitioner is entitled to a
the final adjustment return which shows whether a
refund. Unfortunately, the CTA, in denying entirely
corporation incurred a loss or gained a profit during
the claim, merely relied on the absence of the
the taxable quarter.24 Thus, the presentation of the
quarterly ITRs despite being able to verify the
annual ITR would suffice in proving that prior year’s
truthfulness of the declaration that no carry over was
excess credits were not utilized for the taxable year in
indeed effected by simply looking at the 2004 annual
order to make a final determination of the total tax
ITR.
due.
At this point, worth mentioning is the fact that
In this case, petitioner reported an overpayment in the
subsequent cases affirm the proposition as correctly
amount of ₱7,194,213.00 in its annual ITR for the
pointed out by petitioner. State Land, PERF and
year ended December 2003:
Mirantreiterated the rule that the presentation of the
Annual ITR 2003
quarterly ITRs of the subsequent year is not
Income Tax Due 1,259,259. mandatory on the part of the claimant to prove its
00 claims.
There are some who challenges the applicability of
Less: Prior Year’s Excess Credits (4,379,518
PERF in the case at bar. It is said that PERFis not in
(2002 Annual ITR) .00)
point because the Annual ITR for the succeeding year
Creditable Tax Withheld for the 4th (4,073,954 had actually been attached to PERF’s motion for
Quarter .00) reconsideration with the CTA and had formed part of
the records of the case. Clearly, if the Annual ITR
Tax Payable / (Overpayment) (7,194,213 has been recognized by this Court in PERF, why then
.00) would the submitted 2004 Annual ITR in this case be
For the overpayment, petitioner chose the option "To insufficient despite the absence of the quarterly
be issued a Tax Credit Certificate." In its Annual ITR ITRs? Why then would this Court require more than
for the year ended December 2004, petitioner did not what is enough and deny a claim even if the
report the Creditable Tax Withheld for the 4th quarter minimum burden has been overcome? At best, the
existence of quarterly ITRs would have the effect of
strengthening a proven fact. And as such, may only that the burden would fall on the petitioner’s head
be considered corroborative evidence, obviously not once the issue reaches the courts.
indispensable in character. PERF simply affirms that This mindset ignores the rule that the CIR has the
quarterly ITRs are not indispensable, provided that equally important responsibility of contradicting
there is sufficient proof that carrying over excess petitioner’s claim by presenting proof readily on hand
CWT was not effected. once the burden of evidence shifts to its side. Claims
Stateland and Mirantare equally challenged. In all for refund are civil in nature and as such, petitioner,
these cases however, the factual distinctions only as claimant, though having a heavy burden of
serve to bolster the proposition that succeeding showing entitlement, need only prove preponderance
quarterly ITRs are not indispensable. Implicit from of evidence in order to recover excess credit in cold
all these cases is the Court’s recognition that proving cash. To review, "[P]reponderance of evidence is
carry-over is an evidentiary matter and that the [defined as] the weight, credit, and value of the
submission of quarterly ITRs is but a means to prove aggregate evidence on either sideand is usually
the fact of one’s entitlement to a refund and not a considered to be synonymous with the term ‘greater
condition sine qua non for the success of refund. weight of the evidence’ or ‘greater weight of the
True, it would have been better, easier and more credible evidence.’ It is evidence which is more
efficient for the CTA and the CIR to have as basis the convincing to the court asworthy of belief than that
quarterly ITRs, but it is not the only way considering which is offered in opposition thereto.26
further that in this case, the Annual ITR for 2004 is The CIR must then be reminded that in Philam, the
sufficient. Courts are here to painstakingly weigh CIR’s "failure to present[the quarterly ITRs and
evidence so that justice and equity in the end will AFR] to support its contention against the grant of a
prevail. tax refund to [a claimant] is certainly fatal." PERF
It must be emphasized that once the requirements laid reinforces this with a sweeping statement holding that
down by the NIRC have been met, a claimant should the verification process is not incumbent on PERF[or
be considered successful in discharging its burden of any claimant for that matter]; [but] is the duty of the
proving its right to refund. Thereafter, the burden of CIR to verify whether xxx excess incometaxes [have
going forward with the evidence, as distinct from the been carried over].
general burden of proof, shifts to the opposing And should there be a possibility that a claimant may
party,25 that is, the CIR. It is then the turn of the CIR have violated the irrevocability rule and thereafter
to disprove the claim by presenting contrary evidence claim twice from its credits, no one is to be blamed
which could include the pertinent ITRs easily but the CIR for not discharging its burden of
obtainable from its own files. evidence to destroy a claimant’s right to a refund. At
All along, the CIR espouses the viewthat it must be any rate, a claimant who defrauds the government
given ample opportunity to investigate the veracity of cannot escape liability be it criminal or civil in
the claims. Thus, the Court asks: In the process of nature.
investigation at the administrative level to determine Verily, with the petitioner having complied with the
the right of the petitioner to the claimed amount, did requirements for refund, and without the CIR
the CIR, with all its resources even attempt to verify showing contrary evidence other than its bare
the quarterly ITRsit had in its files? Certainly, it did assertion of the absence of the quarterly ITRs, copies
not as the application was met by the inaction of the of which are easily verifiable by its very own records,
CIR. And if desirous in its effort to clearly verify the burden of proof of establishing the propriety of
petitioner’s claim, it should have had the time, the claim for refund has been sufficiently discharged.
resources and the liberty to do so. Yet, nothing was Hence, the grant of refund is proper.
produced during trial to destroy the prima facie right The Court does not, and cannot, however, grant the
of the petitioner by counterchecking the claims with entire claimed amount as it finds no error in the
the quarterly ITRs the CIR has on its file. To the original decision of the CTA Division granting
Court, it seems that the CIR languished on its duties refund to the reduced amount of ₱2,737,903.34. This
to ascertain the veracity of the claims and just hoped finding of fact is given respect, if not finality, as the
CTA,27 which by the very nature of its functions of
dedicating itself exclusively to the consideration of
the tax problems has necessarily developed an
expertise on the subject.28 It being the case, the Court
partly grants this petition to the extent of reinstating
the April 23, 2010 original decision of the CTA
Division.
The Court reminds the CIR that substantial justice,
equity and fair play take precedence over
technicalities and legalisms.1âwphi1 The government
must keep in mind that it has no right to keep the
rponey not belonging to it, thereby enriching itself at
the expense of the law-abiding citizen29 or entities
who have complied with the requirements of the law
in order to forward the claim for refund. Under the
principle of solution ihdebiti provided in Article 2154
of the Civil Code, the CIR must return anythihg it has
received.30
Finally, even assuming that the Court reverses itself
and pronounces the indispensability of presenting the
quarterly ITRs to prove entitlement to the claimed
refund, petitioner should not be Brejudiced for
relying on Philam. The CTA En Banc merely based
its pronouncement on a case that does not enjoy the
benefit of stare decis et non quieta movere which
means "to adhere to precedents, and not to unsettle
things which are established."31 As between a CTA
En Banc Decision (Millennium) and this Court's
Decision (Philam), it is elementary that the latter
should prevail.
WHEREFORE, the Court partly grants the petition.
The March 22, 2013 Decision of the Court of Tax
Appeals En Banc is REVERSED. The April 13, 2010
Decision of the Court of Tax Appeals Special First
Division is REINSTATED. Respondent
Commissioner of Internal Revenue is ordered to
REFUND to petitioner the amount of ₱2,737,903.34
as excess creditable withholding tax paid for taxable
year 2003.
SO ORDERED.