4/2/2017 G.R.No.

162155

TodayisSunday,April02,2017

CustomSearch

RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.162155August28,2007

COMMISSIONEROFINTERNALREVENUEandARTUROV.PARCEROinhisofficialcapacityasRevenue
DistrictOfficerofRevenueDistrictNo.049(Makati),Petitioners,
vs.
PRIMETOWNPROPERTYGROUP,INC.,Respondent.

DECISION

CORONA,J.:

Thispetitionforreviewoncertiorari1seekstosetasidetheAugust1,2003decision2oftheCourtofAppeals(CA)
inCAG.R.SPNo.64782anditsFebruary9,2004resolutiondenyingreconsideration.3

OnMarch11,1999,GilbertYap,vicechairofrespondentPrimetownPropertyGroup,Inc.,appliedfortherefund
or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue district officer Arturo V.
Parcero of Revenue District No. 049 (Makati) of the Bureau of Internal Revenue (BIR),4 he explained that the
increase in the cost of labor and materials and difficulty in obtaining financing for projects and collecting
receivablescausedtherealestateindustrytoslowdown.5Asaconsequence,whilebusinesswasgoodduringthe
firstquarterof1997,respondentsufferedlossesamountingtoP71,879,228thatyear.6

According to Yap, because respondent suffered losses, it was not liable for income taxes.7 Nevertheless,
respondentpaiditsquarterlycorporateincometaxandremittedcreditablewithholdingtaxfromrealestatesales
totheBIRinthetotalamountofP26,318,398.32.8Therefore,respondentwasentitledtotaxrefundortaxcredit.9

On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional documents to
support its claim.10 Respondent complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a
petitionforreview11intheCourtofTaxAppeals(CTA).

OnDecember15,2000,theCTAdismissedthepetitionasitwasfiledbeyondthetwoyearprescriptiveperiodfor
filingajudicialclaimfortaxrefundortaxcredit.12ItinvokedSection229oftheNationalInternalRevenueCode
(NIRC):

Sec.229.RecoveryofTaxesErroneouslyorIllegallyCollected.Nosuitorproceedingshallbemaintainedinany
courtfortherecoveryofanynationalinternalrevenuetaxhereafterallegedtohavebeenerroneouslyorillegally
assessedorcollected,orofanypenaltyclaimedtohavebeencollectedwithoutauthority,orofanysumallegedto
havebeenexcessivelyorinanymannerwrongfullycollected,untilaclaimforrefundorcredithasbeendulyfiled
withtheCommissionerbutsuchsuitorproceedingmaybemaintained,whetherornotsuchtax,penalty,orsum
hasbeenpaidunderprotestorduress.

Inanycase,nosuchsuitorproceedingshallbefiledaftertheexpirationoftwo(2)yearsfromthedateof
payment of the tax or penalty regardless of any supervening cause that may arise after payment:
Provided,however,ThattheCommissionermay,evenwithoutaclaimtherefor,refundorcreditanytax,whereon
thefaceofthereturnuponwhichpaymentwasmade,suchpaymentappearsclearlytohavebeenerroneously
paid.(emphasissupplied)

TheCTAfoundthatrespondentfileditsfinaladjustedreturnonApril14,1998.Thus,itsrighttoclaimarefundor
creditcommencedonthatdate.13

ThetaxcourtappliedArticle13oftheCivilCodewhichstates:

http://www.lawphil.net/judjuris/juri2007/aug2007/gr_162155_2007.html 1/6
4/2/2017 G.R.No.162155

Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are of three
hundred sixtyfive days each months, of thirty days days, of twentyfour hours, and nights from sunset to
sunrise.

If the months are designated by their name, they shall be computed by the number of days which they
respectivelyhave.

Incomputingaperiod,thefirstdayshallbeexcluded,andthelastincluded.(emphasissupplied)

Thus,accordingtotheCTA,thetwoyearprescriptiveperiodunderSection229oftheNIRCforthefilingofjudicial
claimswasequivalentto730days.Becausetheyear2000wasaleapyear,respondent'spetition,whichwasfiled
731days14afterrespondentfileditsfinaladjustedreturn,wasfiledbeyondthereglementaryperiod.15

Respondentmovedforreconsiderationbutitwasdenied.16Hence,itfiledanappealintheCA.17

OnAugust1,2003,theCAreversedandsetasidethedecisionoftheCTA.18ItruledthatArticle13oftheCivil
Codedidnotdistinguishbetweenaregularyearandaleapyear.AccordingtotheCA:

Therulethatayearhas365daysapplies,notwithstandingthefactthataparticularyearisaleapyear.19

Inotherwords,eveniftheyear2000wasaleapyear,theperiodscoveredbyApril15,1998toApril14,1999and
April15,1999toApril14,2000shouldstillbecountedas365dayseachoratotalof730days.Astatutewhichis
clearandexplicitshallbeneitherinterpretednorconstrued.20

Petitionersmovedforreconsiderationbutitwasdenied.21Thus,thisappeal.

Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed against
claimants.22 Section 229 of the NIRC should be strictly applied against respondent inasmuch as it has been
consistentlyheldthattheprescriptiveperiod(forthefilingoftaxrefundsandtaxcredits)beginstorunontheday
claimantsfiletheirfinaladjustedreturns.23Hence,theclaimshouldhavebeenfiledonorbeforeApril13,2000or
within730days,reckonedfromthetimerespondentfileditsfinaladjustedreturn.

TheconclusionoftheCAthatrespondentfileditspetitionforreviewintheCTAwithinthetwoyearprescriptive
periodprovidedinSection229oftheNIRCiscorrect.Itsbasis,however,isnot.

Theruleisthatthetwoyearprescriptiveperiodisreckonedfromthefilingofthefinaladjustedreturn.24Buthow
shouldthetwoyearprescriptiveperiodbecomputed?

Asalreadyquoted,Article13oftheCivilCodeprovidesthatwhenthelawspeaksofayear,itisunderstoodtobe
equivalentto365days.InNationalMarketingCorporationv.Tecson,25weruledthatayearisequivalentto365
daysregardlessofwhetheritisaregularyearoraleapyear.26

However, in 1987, EO27 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter VIII, Book I
thereofprovides:

Sec.31.LegalPeriods."Year"shallbeunderstoodtobetwelvecalendarmonths"month"ofthirtydays,
unlessitreferstoaspecificcalendarmonthinwhichcaseitshallbecomputedaccordingtothenumberofdays
thespecificmonthcontains"day",toadayoftwentyfourhoursand"night"fromsunrisetosunset.(emphasis
supplied)

Acalendarmonthis"amonthdesignatedinthecalendarwithoutregardtothenumberofdaysitmaycontain."28
It is the "period of time running from the beginning of a certain numbered day up to, but not including, the
correspondingnumbereddayofthenextmonth,andifthereisnotasufficientnumberofdaysinthenextmonth,
thenuptoandincludingthelastdayofthatmonth."29Toillustrate,onecalendarmonthfromDecember31,2007
will be from January 1, 2008 to January 31, 2008 one calendar month from January 31, 2008 will be from
February1,2008untilFebruary29,2008.30

Alawmayberepealedexpressly(byacategoricaldeclarationthatthelawisrevokedandabrogatedbyanother)
orimpliedly(whentheprovisionsofamorerecentlawcannotbereasonablyreconciledwiththepreviousone).31
Section27,BookVII(FinalProvisions)oftheAdministrativeCodeof1987states:

Sec.27.Repealingclause.Alllaws,decrees,orders,rulesandregulation,orportionsthereof,inconsistentwith
thisCodeareherebyrepealedormodifiedaccordingly.

http://www.lawphil.net/judjuris/juri2007/aug2007/gr_162155_2007.html 2/6
4/2/2017 G.R.No.162155

ArepealingclauselikeSec.27aboveisnotanexpressrepealingclausebecauseitfailstoidentifyordesignate
the laws to be abolished.32 Thus, the provision above only impliedly repealed all laws inconsistent with the
AdministrativeCodeof1987. 1 a v v p h i1

Impliedrepeals,however,arenotfavored.Animpliedrepealmusthavebeenclearlyandunmistakablyintended
bythelegislature.Thetestiswhetherthesubsequentlawencompassesentirelythesubjectmatteroftheformer
lawandtheycannotbelogicallyorreasonablyreconciled.33

BothArticle13oftheCivilCodeandSection31,ChapterVIII,BookIoftheAdministrativeCodeof1987dealwith
the same subject matter the computation of legal periods. Under the Civil Code, a year is equivalentto 365
days whether it be a regular year or a leap year. Under the Administrative Code of 1987, however, a year is
composedof12calendarmonths.Needlesstostate,undertheAdministrativeCodeof1987,thenumberofdays
isirrelevant.

ThereobviouslyexistsamanifestincompatibilityinthemannerofcomputinglegalperiodsundertheCivilCode
and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the
AdministrativeCodeof1987,beingthemorerecentlaw,governsthecomputationoflegalperiods.Lexposteriori
derogatpriori.

ApplyingSection31,ChapterVIII,BookIoftheAdministrativeCodeof1987tothiscase,thetwoyearprescriptive
period (reckoned from the time respondent filed its final adjusted return34 on April 14, 1998) consisted of 24
calendarmonths,computedasfollows:

Year 1st calendar April15,1998 to May14,1998

1 month
2nd calendar May15,1998 to June14,1998
month
3rd calendar June15,1998 to July14,1998
month
4th calendar July15,1998 to August14,1998
month

5th calendar August15,1998 to September14,

month 1998
6th calendar September15, to October14,1998
month 1998

7th calendar October15,1998 to November14,

month 1998
8th calendar November15, to December14,
month 1998 1998
9th calendar December15, to January14,1999
month 1998
10th calendar January15,1999 to February14,1999
month
11th calendar February15,1999 to March14,1999
month
12th calendar March15,1999 to April14,1999
month

Year 13th calendar April15,1999 to May14,1999

2 month

14th calendar May15,1999 to June14,1999

month

15th calendar June15,1999 to July14,1999

month
16th calendar July15,1999 to August14,1999

http://www.lawphil.net/judjuris/juri2007/aug2007/gr_162155_2007.html 3/6
4/2/2017 G.R.No.162155

month

17th calendar August15,1999 to September14,

month 1999
18th calendar September15, to October14,1999
month 1999

19th calendar October15,1999 to November14,

month 1999

20th calendar November15, to December14,

month 1999 1999

21st calendar December15, to January14,2000

month 1999
22nd calendar January15,2000 to February14,2000
month

23rd calendar February15,2000 to March14,2000

month

24th calendar March15,2000 to April14,2000

month

Wethereforeholdthatrespondent'spetition(filedonApril14,2000)wasfiledonthelastdayofthe24thcalendar
monthfromthedayrespondentfileditsfinaladjustedreturn.Hence,itwasfiledwithinthereglementaryperiod.

Accordingly,thepetitionisherebyDENIED.ThecaseisREMANDEDtotheCourtofTaxAppealswhichisordered
toexpeditiouslyproceedtohearC.T.A.CaseNo.6113entitledPrimetownPropertyGroup,Inc.v.Commissioner
ofInternalRevenueandArturoV.Parcero.

Nocosts.

SOORDERED.

RENATOC.CORONA
AssociateJustice

WECONCUR:

REYNATOS.PUNO
ChiefJustice
Chairperson

ANGELINASANDOVALGUTIERREZ ADOLFOS.AZCUNA
AssociateJustice AssociateJustice

CANCIOC.GARCIA
AssociateJustice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had
beenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

Footnotes

1UnderRule45oftheRulesofCourt.

2PennedbyAssociateJusticeMarinaL.BuzonandconcurredinbyAssociateJusticesRebeccadeGuia
SalvadorandJoseC.MendozaoftheSpecialFifteenthDivisionoftheCourtofAppeals.Rollo,pp.2125.

http://www.lawphil.net/judjuris/juri2007/aug2007/gr_162155_2007.html 4/6
4/2/2017 G.R.No.162155
3PennedbyAssociateJusticeMarinaL.BuzonandconcurredinbyAssociateJusticesRebeccadeGuia
SalvadorandJoseC.MendozaoftheFormerSpecialFifteenthDivisionoftheCourtofAppeals.Id.,pp.26
28.

4Id.,pp.3742.

5Id.,pp.3940.

6 Id. This was the period of economic slowdown known as the "Asian (Financial) Crisis" which started in
mid1997.
7Id.,p.41.

8SummaryofTax/Paymentsfor1997:

Creditable
Quarter CorporateIncomeTax TOTAL
WithholdingTax
1st P3,440,082.00 P687,783.00 P4,127,865.00

2nd 15,694,502.00 633,175.00 16,327,677.00

3rd 2,419,868.81 3,154,506.51 5,574,375.32

4th 288,481.00 288,481.00

P21,554,452.81 P4,763,945.51 P26,318,398.32

Id.,p.40.
9Id.,p.41.

10Id.,pp.7879.

11DocketedasC.T.A.CaseNo.6113.Id.,pp.192199.

12PennedbyPresidingJudgeErnestoD.AcostaandconcurredinbyAssociateJudgesAmancioQ.Saga
(retired)andRamonO.deVeyra(retired).DatedDecember15,2000.Id.,pp.187190.

13CIRv.CA,361Phil.359,364365(1999).

14Thecomputationwasasfollows:

April15,1998toApril14,1999 365days
April15,1999toApril14,2000(leapyear) 366days

TOTAL 731days

15Rollo,p.190.

16Id.,p.191.

17 Docketed as CAG.R. SP No. 64782. Id., pp. 180186. (This case observes the procedure in RA 1125
priortotheamendmentsofRA9282.)

18 Id., pp. 2125. Under RA 9282 which took effect on April 22, 2004, decisions of the CTA are now
appealabletotheSupremeCourt.
19Id.,p.24.

20Id.

21Id.,pp.2628.

http://www.lawphil.net/judjuris/juri2007/aug2007/gr_162155_2007.html 5/6
4/2/2017 G.R.No.162155
22Id.,p.13.

23Id.,p.15.

24TaxCode,Sec.229andsupranote12at367.SeealsoACCRAInvestmentsCorporationv.CA.,G.R.
No. 96322, 20 December 1991, 204 SCRA 957. See also CIR v. Philippine American Life Insurance Co.,
G.R.No.105208,29May1995,244SCRA446.
25139Phil.584(1969).

26Id.,pp.588589citingPeoplev.delRosario,97Phil70,71(1955).

27ExecutiveOrder

28Gutierrezv.Carpio,53Phil.334,335336(1929).

29Section9,Time,74AmJur2d593citingReLynch'sEstate,123Utah57,254P2d454.

30ThisispursuanttoArticle13(3)oftheCivilCodewhichprovidesthat"[i]ncomputingaperiod,thefirst
dayshallbeexcluded,andthelastdayincluded."

Cf.RulesofCourt,Rule22,Sec.1.Thesectionprovides:

Section1.Howtocomputetime.IncomputinganyperiodoftimeprescribedorallowedbythisRules,
orbytheorderofthecourt,orbyanyapplicablestatute,thedayoftheactoreventfromwhich
the designated period of time begins to run is to be excluded and the date of performance
included. If the last day of the period, as thus computed, falls on a Saturday, a Sunday or a legal
holidayintheplacewherethecourtsits,thetimeshallnotrununtilthenextworkingday.(emphasis
supplied)

31 Jose Jesus G. Laurel, Statutory Construction: Cases and Materials, 1999 ed., 176 citing Black's Law
Dictionary,4thed.,1463.

32Agujetasv.CourtofAppeals,G.R.No.106560,23August1996,261SCRA17,32.

33Davidv.CommissiononElection,G.R.No.127116,08April1997,271SCRA90,103.

34Supranote25.

TheLawphilProjectArellanoLawFoundation

http://www.lawphil.net/judjuris/juri2007/aug2007/gr_162155_2007.html 6/6