CIR v Primetown Property Group (RACHEL) 3.
Revenue officer required respondent to submit additional documents
August 28, 2007 | Corona, J. | Ways or Means of Escaping from Taxation –
Prescription in Tax Cases
PETITIONER: COMMISSINER OF INTERNAL REVENUE (CIR)
RESPONDENTS: PRIMETOWN PROPERTY GROUP, INC.
(PRIMETOWN)
SUMMARY: Primetown filed a claim for tax refund or credit of income
tax paid. Pursuant to the law, it had 2 years from filing of its final adjusted
return to file a claim for tax refund or credit. The claim was not acted upon,
which resulted to a filing of the petition before the CTA. However, CTA
denied petition on the ground that the prescriptive period for the filing of
judicial claims is for 2 years, or 730 days pursuant to Art 13 of the civil
code. Since 2000 was a leap year, the filing of the respondent was made on
the 731st day, beyond the prescriptive period. CA reversed the decision of
the CTA. CIR in this case claim that in counting the 2 years, Art. 13 of the
Civil Code should be followed, which counts in numbers of days.
Primetown, on the other hand, raises that Sec 31, Chapter III Book I of the
Administrative Code of 1987 should be applied in computing the legal
period, which must be “12 months in a year”. What law should apply? SC
held that Sec 31, Chapter III Book I of the Administrative Code of 1987
should be applied in computing the legal period (12 months in year)
because it is the more recent law. Thus, taxpayer’s claim was filed within
the reglementary period.
DOCTRINE: As there is manifest incompatibility between the two
provisions, the court ruled that Sec 31, Chapter III Book I of the
Administrative Code of 1987, being the more recent law, governs the
computation of the legal periods. Lex posteriori derogat priori.
FACTS:
1. Gilbert Yap, vice chair of respondent Primetown Property Group,
Inc., applied for the refund or credit of income tax respondent paid in
1997.
2. He claimed that because explained because respondent suffered
losses, it was not liable for income taxes. Nevertheless, respondent
paid its quarterly corporate income tax and remitted creditable
withholding tax from real estate sales to the BIR in the total amount
of P26,318,398.32. Therefore, respondent was entitled to tax refund
or tax credit.
to support its claim. Respondent complied but its claim was not acted
upon. It filed a petition for review in the CTA.
4. However, the CTA dismissed he petition as it was filed beyond the
two-year prescriptive period for filing a judicial claim for tax refund
or tax credit as provided in Sec. 229 of the NIRC. In addition, the tax
court applied Article 13 of the Civil Code which states:
a. Art. 13. When the law speaks of years, months, days or
nights, it shall be understood that years are of three
hundred sixty-five days each….
5. Thus, according to the CTA, the two-year prescriptive period under
Section 229 of the NIRC for the filing of judicial claims was
equivalent to 730 days. Because the year 2000 was a leap year,
respondent's petition, which was filed 731 days after respondent filed
its final adjusted return, was filed beyond the reglementary period.
6. Primetown moved for reconsideration but it was denied. Hence, it
filed an appeal in the CA and the CA reversed the decision of the
CTA.
7. CIR moved for reconsideration but it was denied. Thus, this appeal.
1. This case was initiated in the Court of First Instance of Negros
ISSUE: W/N Art. 13 of the Civil Code should be applicable in computing
the legal periods or Sec. 31 of the Administrative Code of 1987
RULING: The petition is hereby DENIED. The case is REMANDED to the
CTA.
RATIO:
1. Sec. 31 of the Administrative Code of 1987 should be applied in
computing the legal period.
2. Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book
I of the Administrative Code of 1987 deal with the same subject
matter — the computation of legal periods.
3. Under the Civil Code, a year is equivalent to 365 days whether it be
a regular year or a leap year. Under the Administrative Code of 1987,
however, a year is composed of 12 calendar months. Needless to
state, under the Administrative Code of 1987, the number of days is
irrelevant.
4. There obviously exists a manifest incompatibility in the manner of
computing legal periods under the Civil Code and the Administrative
Code of 1987. For this reason, we hold that Section 31, Chapter VIII,
Book I of the Administrative Code of 1987, being the more recent
law, governs the computation of legal periods. Lex posteriori derogat
priori.