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ASIAWORLD PROPERTIES PHILS CORP versus - CIRG.R. No. 171766July !" #1#SECOND DI$ISION

%ACTS AS TO PETITIONER

For the calendar year 2001, petitioner filed its Annual (ITR) on 5 April 2002. Petitionerdeclared a ( !IT) due "ut #ith a refunda"le inco$e ta% pay$ent. Petitioner also indicated inits 2001 ITR its option to carry&o'er as ta% credit ne%t year uarter. *n + April 2002,petitioner filed #ith the R * re uest for refund alle-edly representin- partial e%cesscredita"le ta% #ithheld for the year 2001. Petitioner clai$ed that it is entitled to the refund ofits unapplied credita"le #ithholdin- ta%es. Petitioner $aintains that the option to carry&o'erand apply the e%cess uarterly inco$e ta% a-ainst the inco$e ta% due in the succeedin-ta%a"le years is irre'oca"le only for the ne%t ta%a"le period #hen the e%cess pay$ent #ascarried o'er.

%ACTS AS TO RESPONDENT

*n 12 April 2002, "efore the IR Re'enue istrict *ffice could act on petitioner/s clai$ forrefund, petitioner filed a Petition for Re'ie# #ith the !ourt of Ta% Appeals #hich denied thepetition for lac of $erit . Petitioner appealed to the !ourt of Appeals, #hich affir$ed theecision of the !TA, rulin- that petitioner/s choice to carry&o'er its ta% credits for the ta%a"leyear 1+++ to "e applied to its ta% lia"ilities for the succeedin- ta%a"le years is irre'oca"leand petitioner is not allo#ed to chan-e its choice in the follo#in- year. The carry&o'er ofpetitioner/s ta% credits is not li$ited only to the follo#in- year of 2000 "ut should "e carried&o'er to the succeedin- years until the #hole a$ount has "een fully applied.

ISS&E RAISE '( PETITIONER

Petitioner ar-ues that the carry&o'er of ta% credits is not li$ited only to the follo#in- year "utshould "e carried&o'er to the succeedin- years. ence for the unutili ed ta% credits,petitioner ou-ht to "e refunded.

ISS&E RAISE '( PETITIONER

Respondent contends that the carry&o'er of petitioner/s ta% credits is not li$ited only to thefollo#in- year "ut should "e carried&o'er to the succeedin- years until the #hole a$ount has"een fully applied.

R&LING O% THE S&PRE)E CO&RT

The !ourt ruled in fa'or of respondent

3nder the old 4IR!, the option to carry&o'er the e%cess or o'erpaid inco$e ta% for a -i'enta%a"le year is li$ited to the i$$ediately succeedin- ta%a"le year only. In contrast, under6ection 7 of the 4IR! of 1++ , the application of the option to carry&o'er the e%cesscredita"le ta% is not li$ited only to the i$$ediately follo#in- ta%a"le year "ut e%tends to thene%t succeedin- ta%a"le years. The clear intent in the a$end$ent under 6ection 7 is to$a e the option, once e%ercised, irre'oca"le for the 8succeedin- ta%a"le years.8

http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt7http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt7

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PEERSONAL END NOTES

*nce the ta%payer opts to carry&o'er the e%cess inco$e ta% a-ainst the ta%es due for thesucceedin- ta%a"le years, such option is irre'oca"le for the #hole a$ount of the e%cessinco$e ta%, thus, prohi"itin- the ta%payer fro$ applyin- for a refund for that sa$e e%cessinco$e ta% in the ne%t succeedin- ta%a"le years. 9 The unutili ed e%cess ta% credits #ill

re$ain in the ta%payer/s account and #ill "e carried o'er and applied a-ainst the ta%payer/sinco$e ta% lia"ilities in the succeedin- ta%a"le years until fully utili ed. +

http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt8http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt8http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt9http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt8http://www.lawphil.net/judjuris/juri2010/jul2010/gr_171766_2010.html#fnt9