CIR vs Mirant (Phils.

) Operation Corp
652 SCRA 80
FACTS
Respondent Mirant filed with the Bureau of Internal Revenue (BIR) its income tax return
for the fiscal year ending June 30 !""" declaring a net loss and unutili#ed tax credits
of 3$$%33&&'00'
Respondent changed its accounting period from fiscal year (FY) to calendar year (CY)
effective (ecem)er 3! !"""' *hus on +pril !, $000 Mirant filed its income tax return
for the interim period July ! !""" to (ecem)er 3! !""" declaring a net loss and
unutili#ed tax credits of -&%$%,"3'00' Mirant in!i"ate! the e#"ess a$o%nt o&
'8(626()*+.00 as ,To -e "arrie! over as ta# "re!it ne#t .ear/0%arter.1
.n +pril !0 $00! it filed with the BIR its income tax return for the calendar year ending
(ecem)er 3! $000 reflecting a net loss and unutili#ed tax credits of &,3-/!!%'00'
.n 0eptem)er $0 $00! Mirant wrote the BIR a letter claiming a refund of
&,3-/!!%'00 representing overpaid income tax for the 12 ending June 30 !""" the
interim period covering July ! !""" to (ecem)er 3! !""" and 32 ending (ecem)er
3! $000'
Because of the inaction of BIR Mirant elevated its case to the 3*+ which granted its
claim for refund in a reduced amount of 3&%$0-$,'00 )ecause the Mirant exercised
the carry over option with regards to the unutili#ed credit for the taxa)le year amounting
to -&%$%,"3'00' on appeal )efore the 03 3IR and Mirant contend that the 3*+
erred on a 4uestion of law in holding respondent entitled to a refund or tax credit'
.n the other hand Mirant raises the issue of )eing entitled to a claim for additional
refund or issuance of a tax credit certificate in the amount of 5-& %$% ,"3'00
representing excess credita)le witholding taxes for the fiscal year ended June 30 !"""
and the interim period from July ! !""" to (ecem)er 3! !"""'
ISS23
Is Mirant entitled to a tax refund or to the issuance of a tax credit certificate6
R24I56
2es' *he 3ourt finds the assailed decisions and resolutions of the 3*+ 7n Banc to )e
consistent with law and 8urisprudence'
*he option to exercise to carry over and apply the excess 4uarterly income tax against
the tax due for the taxa)le 4uarters of the succeeding taxa)le years is irrevoca)le for
that taxa)le period and therefor the choice to apply for cash refund9credit representing
such overpayment is no longer availa)le'
0ince Mirant opt to carry over its tax overpayment next year94uarter it is no7 -arre!
&ro$ appl.in8 &or the re&%n! o& the sai! a$o%nt or &or the iss%an"e o& a ta# "re!it
"erti&i"ate therefor and for the unutili#ed tax credits carried over from the fiscal year
ended June 30 !""&'
Moreover the court finds that Mirant complied with all the re4uirements for the refund of
its unutili#ed credita)le withholding taxes for taxa)le year $000: claim was made within
the $ year period was also a)le to esta)lish that the income upon which the credita)le
withholding taxes were paid was declared as part of its gross income in its I*R and was
also a)le to esta)lish the fact of withholding of the credita)le withholding tax'
5en:
3laim of tax credit or tax refund must )e made within $ years rec;oned from the date of
filing of the tax return'
0ec' ,% of the <IR3: .nce the option to carry=over and apply the excess 4uarterly
income tax against income tax due for the taxa)le 4uarters of the succeeding taxa)le
years has )een made such option shall )e considered irrevoca)le for that taxa)le
period and no application for cash refund or issuance of a tax credit certificate shall )e
allowed therefor'>
Re4uirement for the refund of unutili#ed credita)le withholding tax:
!' Made within the $ year period
$' 7sta)lish that the income was declared as part of its gross income in its itr
3' 7sta)lish the fact of withholding of the credita)le withholding tax