CIR vs Mirant (Phils.

) Operation Corp 652 SCRA 80 FACTS This is a petition for review under Rule 45 of the Rules of Court. Petitioner CIR, is empowered to perform the lawful duties of his office including, among others, the duty to act on and approve claims for refund or tax credit as provided y law. Respondent !irant is a corporation duly organi"ed and existing under and y virtue of the laws of the Repu lic of the Philippines. #n #cto er $5, $%%%, !irant filed with the &ureau of Internal Revenue 'BIR( its income tax return for the fiscal year ending )une *+, $%%%, declaring a net loss of P,*5,,%$,+-4.++ and unutili"ed tax credits of .*,,,-*,*//.++. #n 0pril $1, ,+++, !irant filed with the &IR an amended income tax return (ITR) for the fiscal year ending )une *+, $%%%, reporting an increased net loss amount of .*1%,*,4,*4+.++ ut reporting the same unutili"ed tax credits of .*,,,-*,*//.++, which it opted to carry over as a tax credit to the succeeding taxa le year. To synchroni"e its accounting period with those of its affiliates, changed its accounting period from fiscal year 'FY( to calendar year 'CY( effective 2ecem er *$, $%%%. Thus, on 0pril $1, ,+++, !irant filed its income tax return for the interim period )uly $, $%%% to 2ecem er *$, $%%%, declaring a net loss in the amount of .*/$,/14,+1-.++ and unutili"ed tax credits of .4/,-,-,1%*.++. Mirant in!i"ate! the e#"ess a$o%nt o& '(8)626)*+,.00 as -To .e "arrie! over as ta# "re!it ne#t /ear01%arter.2 #n 0pril $+, ,++$, it filed with the &IR its income tax return for the calendar year ending 2ecem er *$, ,+++, reflecting a net loss of .5-,%+$,/5+.++ and unutili"ed tax credits of ./1,*45,$$-.++. #n 3eptem er ,+, ,++$, !irant wrote the &IR a letter claiming a refund of ./1,*45,$$-.++ representing overpaid income tax for the 45 ending )une *+, $%%%, the interim period covering )uly $, $%%% to 2ecem er *$, $%%%, and C5 ending 2ecem er *$, ,+++. 0s the two6year prescriptive period for the filing of a 7udicial claim under 3ection ,,% of the 8ational Internal Revenue Code '8IRC( of $%%1 was a out to lapse without action on the part of the &IR, !irant elevated its case to the CT0 y way of Petition for Review on #cto er $,, ,++$. The CT0 4irst 2ivision rendered 7udgment partially granting !irant9s claim for refund in the reduced amount of .*/,-,+,4,1.++. !irant9s claim for the refund of its unutili"ed tax credits for the taxa le year $%%% in the total amount of .4/,-,-,1%*.++, was denied as it exercised the carry6over option with regard to the said unutili"ed tax credits, which is irrevoca le pursuant to the provisions of 3ection 1- of the $%%1 8IRC. &oth CIR and !irant filed their respective petitions for review in the 3C with CIR contending that the CT0 erred on a :uestion of law in holding respondent entitled to a refund or tax credit. #n the other hand, !irant raises the issue of eing entitled to a claim for additional refund or issuance of a tax credit certificate in the amount of P4/, -,-, 1%*.++ representing excess credita le witholding taxes for the fiscal year ended )une *+, $%%% and the interim period from )uly $, $%%% to 2ecem er *$, $%%%.

ISS34 ;hether or not !irant is entitled to a tax refund or to the issuance of a tax credit certificate and, if it is, then what is the amount to which it is entitled. R35I67 The Court finds the assailed decisions and resolutions of the CT0 <n &anc to e consistent with law and 7urisprudence.The last sentence of 3ection 1- of the 8IRC is clear in its mandate, to wit= >...#nce the option to carry6over and apply the excess :uarterly income tax against income tax due for the taxa le :uarters of the succeeding taxa le years has een made, such option shall e considered irrevoca le for that taxa le period and no application for cash refund or issuance of a tax credit certificate shall e allowed therefor.? #nce a corporation exercises the option to carry6over and apply the excess :uarterly income tax against the tax due for the taxa le :uarters of the succeeding taxa le years, such option is irrevoca le for that taxa le period. @aving chosen to carry6over the excess :uarterly income tax, the corporation cannot thereafter choose to apply for a cash refund or for the issuance of a tax credit certificate for the amount representing such overpayment. In this case, in its amended ITR for the year ended )uly *+, $%%% and for the interim period ended 2ecem er *$, $%%%, !irant clearly ticAed the ox signifying that the overpayment was >To e carried over as tax credit next yearB:uarter.? 0pplying the irrevoca ility rule in 3ection 1-, !irant having opted to carry over its tax overpayment for the fiscal year ending )uly *+, $%%% and for the interim period ending 2ecem er *$, $%%%, it is no8 .arre! &ro$ appl/in9 &or the re&%n! o& the sai! a$o%nt or &or the iss%an"e o& a ta# "re!it "erti&i"ate therefor, and for the unutili"ed tax credits carried over from the fiscal year ended )une *+, $%%/. Thus, in this case, having studied the applica le law and 7urisprudence, the Court agrees with the conclusion of the CT0 that Mirant "o$plie! 8ith all the re1%ire$ents &or the re&%n! o& its %n%tili:e! "re!ita.le 8ithhol!in9 ta#es &or ta#a.le /ear 2000. First, !irant clearly complied with the two6year period. This re:uirement is ased on 3ection ,,% of the 8IRC of $%%1. !irant filed its income tax return for the taxa le year ending 2ecem er *$, ,+++ on 0pril $+, ,++$. Thus, from such date of filing, petitioner had until 0pril $+, ,++* within which to file its claim for refund or for the issuance of a tax credit certificate in its favor. Second, !irant was also a le to esta lish that the income, upon which the credita le withholding taxes were paid, was declared as part of its gross income in its ITR. Finally, !irant was also a le to esta lish the fact of withholding of the credita le withholding tax. Therefore, as the CT0 ruled, !irant complied with all the legal re:uirements and it is entitled, as it opted, to a refund of its excess credita le withholding tax for the taxa le year ,+++ in the amount of .*/,-,+,4,1.++. The Court finds no a usive or improvident exercise of authority on the part of the CT0. 3ince there is no showing of gross error or

a use on the part of the CT0, and its findings are supported y su stantial evidence, there is no cogent reason to distur its findings and conclusions.