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G.R. No. 83736 January 15, 1992

COMMISSIONER OF INTERNAL RE EN!E, petitioner ,

vs.

TM" SALES, INC. an# T$E CO!RT OF TA" A%%EALS, respondents.

F.R. Quiogue for private respondent.

G!TIERRE&, JR., J.:

Facts: Private respondent TMX Sales, Inc., a domestic corporation, filed its quarterly income taxreturn for the first quarter of !" , declarin# an income of P$% , %&.' , and consequentlypayin# an income tax thereon of P(&%,) ).)) on May $, !" . *urin# the su+sequentquarters, ho ever, TMX Sales, Inc. suffered losses so that hen it filed on -pril $, !"( its-nnual Income Tax eturn for the year ended *ecem+er ' , !" , it declared a #ross incomeof P!)&, ((.)) and total deductions of P%,)/),/&%.)), or a net loss of P/, $/,$($.)) 01T-*ecision, pp. 2(3 Rollo , pp. &$2&/4.

Thereafter, on 5uly !, !"(, TMX Sales, Inc. thru its external auditor, S67 8 1o. filed ith the-ppellate *ivision of the 9ureau of Internal evenue a claim for refund in the amount ofP(&%,) ).)) representin# overpaid income tax. 0 Rollo , p. ')4

This claim as not acted upon +y the 1ommissioner of Internal evenue. n March &, !"&,TMX Sales, Inc. filed a petition for revie +efore the 1ourt of Tax -ppeals a#ainst the1ommissioner of Internal evenue, prayin# that the petitioner, as private respondent therein, +e

ordered to refund to TMX Sales, Inc. the amount of P(&%,) ).)), representin# overpaid incometax for the taxa+le year ended *ecem+er ' , !" .

In his ans er, the 1ommissioner of Internal evenue averred that ;#rantin#, ithout admittin#,the amount in question is refunda+le, the petitioner 0TMX Sales, Inc.4 is already +arred fromclaimin# the same considerin# that more than t o 0(4 years had already elapsed +et een thepayment 0May $, !" 4 and the filin# of the claim in 1ourt 0March &, !"&4. 0Sections (!( and(!$ of the Tax 1ode of !%%, as amended4.;

n -pril (!, !"", the 1ourt of Tax -ppeals rendered a decision #rantin# the petition of TMXSales, Inc. and orderin# the 1ommissioner of Internal evenue to refund the amount claimed.

Petitioner 1ommissioner of Internal evenue is no +efore this 1ourt see

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>elds:

In the case at +ar, the amount of P(&%,) ).)) claimed +y private respondent TMX Sales, Inc.+ased on its -d=ustment eturn required in Section "% 0no Section /!4, is equivalent to the taxpaid durin# the first quarter. - literal application of Section (!( 0no Section (')4 ould thuspose no pro+lem as the t o2year prescriptive period reco ever, if the quarter in hich theoverpayment is made, cannot +e ascertained, then a literal application of Section (!( 0Section(')4 ould lead to a+surdity and inconvenience.