cir v pnb

CIR v. PNB Facts: - PNB issued to the BIR a check worth P180M as an advance income tax payment for the bank’s 1991 operations in response to then Pres. Aquino’s call to generate more revenues for national development. - By the end of 1991 PNB had a credit balance amounting to P73M. This amount was suppose to be carri ed over to cover tax liabi lit y for 1992- 1996 but was never app lie d because it did not incur tax liability during those yrs due to losses in its operations for the said inclusive years. - In 1997 PNB wrote the BIR to request for the issuance of tax credit certificate (TCC) for the unutilized balanc e of its advance payment made in 1991 amounting to P73M - BIR denied PNB’s claim for tax credit alleging that the claim in question is has prescribed on the ground that it was filed beyond the two (2) year prescriptive period as provided for under Section 229 of NIRC , the bank having filed such claim only in 1997, or more than two (2) years from 1992 when the overpayment of annual income tax for 1991 was realized by the bank. - PNB filed a petition for review with the CTA which affirmed the commissioner’s decision - In its appeal to the CA, PNB contends that that even if the two (2)-year prescriptive period under the Tax Code had alread y lap sed, the same is not juris dic tional, and may be suspended for reasons of equity and other special circumstances. Issue: W/N PNB’s claim for tax credit is barred by prescription ? Ruling: NO. Sec. 229 Recovery of tax er roneously or illeg all y collected. – No su it or pr oceedi ng sha ll be mai ntained in any cou rt for the recov ery of any national int ernal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected , . . , or of any sum, alleged to have been excessive or in any manner wrongfully collected , until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be begun after the expiration of two [(2)] years from the date of payment of the tax or penalty regardless of an y su perv ening cause that may ar ise af ter payment: Pr ovided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. Sec 229 is intended to apply to suits for the recovery of internal revenue taxes or sums erroneously, illegally or wrongfully collected. The term erroneous or illegal tax is one that is levied without statutory authority. In the prese nt case PNB’s request for iss uance of a tax cre dit certi fic ate (TCC) on the balance of its advance income tax payment cannot be treated as a simple case of excess payment as to be automatically covered by the two (2)-year limitation in Sec 229. It’s claim for tax credit did not proceed from an overpayment of tax erroneously or illegally collected,

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cir v pnb