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162155

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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)in
CAG.R.SPNo.64782anditsFebruary9,2004resolutiondenyingreconsideration.3

OnMarch11,1999,GilbertYap,vicechairofrespondentPrimetownPropertyGroup,Inc.,appliedfortherefundor
creditofincometaxrespondentpaidin1997.InYap'slettertopetitionerrevenuedistrictofficerArturoV.Parceroof
RevenueDistrictNo.049(Makati)oftheBureauofInternalRevenue(BIR),4heexplainedthattheincreaseinthe
costoflaborandmaterialsanddifficultyinobtainingfinancingforprojectsandcollectingreceivablescausedthereal
estate industry to slowdown.5 As a consequence, while business was good during the first quarter of 1997,
respondentsufferedlossesamountingtoP71,879,228thatyear.6

According to Yap, because respondent suffered losses, it was not liable for income taxes.7 Nevertheless,
respondentpaiditsquarterlycorporateincometaxandremittedcreditablewithholdingtaxfromrealestatesalesto
theBIRinthetotalamountofP26,318,398.32.8Therefore,respondentwasentitledtotaxrefundortaxcredit.9

On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional documents to
supportitsclaim.10Respondentcompliedbutitsclaimwasnotactedupon.Thus,onApril14,2000,itfiledapetition
forreview11intheCourtofTaxAppeals(CTA).

OnDecember15,2000,theCTAdismissedthepetitionasitwasfiledbeyondthetwoyearprescriptiveperiodfor
filing a judicial claim for tax refund or tax credit.12 It invoked Section 229 of the National Internal Revenue Code
(NIRC):

Sec.229.RecoveryofTaxesErroneouslyorIllegallyCollected.Nosuitorproceedingshallbemaintainedinany
court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally
assessedorcollected,orofanypenaltyclaimedtohavebeencollectedwithoutauthority,orofanysumallegedto
havebeenexcessivelyorinanymannerwrongfullycollected,untilaclaimforrefundorcredithasbeendulyfiled
withtheCommissionerbutsuchsuitorproceedingmaybemaintained,whetherornotsuchtax,penalty,orsum
hasbeenpaidunderprotestorduress.

Inanycase,nosuchsuitorproceedingshallbefiledaftertheexpirationoftwo(2)yearsfromthedateof
paymentofthetaxorpenaltyregardlessofanysuperveningcausethatmayariseafterpayment:Provided,
however,ThattheCommissionermay,evenwithoutaclaimtherefor,refundorcreditanytax,whereonthefaceof
thereturnuponwhichpaymentwasmade,suchpaymentappearsclearlytohavebeenerroneouslypaid.(emphasis
supplied)

TheCTAfoundthatrespondentfileditsfinaladjustedreturnonApril14,1998.Thus,itsrighttoclaimarefundor
creditcommencedonthatdate.13

ThetaxcourtappliedArticle13oftheCivilCodewhichstates:

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Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are of three
hundredsixtyfivedayseachmonths,ofthirtydaysdays,oftwentyfourhours,andnightsfromsunsettosunrise.

Ifthemonthsaredesignatedbytheirname,theyshallbecomputedbythenumberofdayswhichtheyrespectively
have.

Incomputingaperiod,thefirstdayshallbeexcluded,andthelastincluded.(emphasissupplied)

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

Respondentmovedforreconsiderationbutitwasdenied.16Hence,itfiledanappealintheCA.17

On August 1, 2003, the CA reversed and set aside the decision of the CTA.18 It ruled that Article 13 of the Civil
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.

The conclusion of the CA that respondent filed its petition for review in the CTA within the twoyear prescriptive
periodprovidedinSection229oftheNIRCiscorrect.Itsbasis,however,isnot.

The rule is that the twoyear prescriptive period is reckoned from the filing of the final adjusted return.24 But how
shouldthetwoyearprescriptiveperiodbecomputed?

Asalreadyquoted,Article13oftheCivilCodeprovidesthatwhenthelawspeaksofayear,itisunderstoodtobe
equivalent to 365 days. In National Marketing Corporation v. Tecson,25 we ruled that a year is equivalent to 365
daysregardlessofwhetheritisaregularyearoraleapyear.26

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

Sec.31. Legal Periods. "Year" shall be understood to be twelve calendar months "month" of thirty days,
unlessitreferstoaspecificcalendarmonthinwhichcaseitshallbecomputedaccordingtothenumberofdaysthe
specific month contains "day", to a day of twentyfour hours and "night" from sunrise to sunset. (emphasis
supplied)

Acalendarmonthis"amonthdesignatedinthecalendarwithoutregardtothenumberofdaysitmaycontain."28It
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
willbefromJanuary1,2008toJanuary31,2008onecalendarmonthfromJanuary31,2008willbefromFebruary
1,2008untilFebruary29,2008.30

Alawmayberepealedexpressly(byacategoricaldeclarationthatthelawisrevokedandabrogatedbyanother)or
impliedly (when the provisions of a more recent law cannot be reasonably reconciled with the previous one).31
Section27,BookVII(FinalProvisions)oftheAdministrativeCodeof1987states:

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

ArepealingclauselikeSec.27aboveisnotanexpressrepealingclausebecauseitfailstoidentifyordesignatethe
laws to be abolished.32 Thus, the provision above only impliedly repealed all laws inconsistent with the
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AdministrativeCodeof1987. 1avvphi1

Impliedrepeals,however,arenotfavored.Animpliedrepealmusthavebeenclearlyandunmistakablyintendedby
thelegislature.Thetestiswhetherthesubsequentlawencompassesentirelythesubjectmatteroftheformerlaw
andtheycannotbelogicallyorreasonablyreconciled.33

BothArticle13oftheCivilCodeandSection31,ChapterVIII,BookIoftheAdministrativeCodeof1987dealwith
thesamesubjectmatterthecomputationoflegalperiods.UndertheCivilCode,ayearisequivalentto365days
whetheritbearegularyearoraleapyear.UndertheAdministrativeCodeof1987,however,ayeariscomposedof
12calendarmonths.Needlesstostate,undertheAdministrativeCodeof1987,thenumberofdaysisirrelevant.

ThereobviouslyexistsamanifestincompatibilityinthemannerofcomputinglegalperiodsundertheCivilCodeand
theAdministrativeCodeof1987.Forthisreason,weholdthatSection31,ChapterVIII,BookIoftheAdministrative
Codeof1987,beingthemorerecentlaw,governsthecomputationoflegalperiods.Lexposterioriderogatpriori.

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 November14,1998
month
8th calendar November15,1998 to December14,1998
month
9th calendar December15,1998 to January14,1999
month
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

month

17th calendar August15,1999 to September14,

month 1999

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18th calendar September15, to October14,1999

month 1999
19th calendar October15,1999 to November14,1999
month
20th calendar November15,1999 to December14,1999
month
21st calendar December15,1999 to January14,2000
month
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.Commissionerof
InternalRevenueandArturoV.Parcero.

Nocosts.

SOORDERED.

RENATOC.CORONA
AssociateJustice

WECONCUR:

REYNATOS.PUNO
ChiefJustice
Chairperson

ANGELINASANDOVALGUTIERREZ ADOLFOS.AZCUNA
AssociateJustice AssociateJustice

CANCIOC.GARCIA
AssociateJustice

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitution,Icertifythattheconclusionsintheabovedecisionhadbeen
reachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

Footnotes

1UnderRule45oftheRulesofCourt.

2PennedbyAssociateJusticeMarinaL.BuzonandconcurredinbyAssociateJusticesRebeccadeGuia
SalvadorandJoseC.MendozaoftheSpecialFifteenthDivisionoftheCourtofAppeals.Rollo,pp.2125.
3PennedbyAssociateJusticeMarinaL.BuzonandconcurredinbyAssociateJusticesRebeccadeGuia
SalvadorandJoseC.MendozaoftheFormerSpecialFifteenthDivisionoftheCourtofAppeals.Id.,pp.26
28.

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4Id.,pp.3742.

5Id.,pp.3940.

6Id.Thiswastheperiodofeconomicslowdownknownasthe"Asian(Financial)Crisis"whichstartedinmid
1997.
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.

17DocketedasCAG.R.SPNo.64782.Id.,pp.180186.(ThiscaseobservestheprocedureinRA1125prior
totheamendmentsofRA9282.)

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.

22Id.,p.13.

23Id.,p.15.

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24TaxCode,Sec.229andsupranote12at367.SeealsoACCRAInvestmentsCorporationv.CA.,G.R.No.
96322,20December1991,204SCRA957.SeealsoCIRv.PhilippineAmericanLifeInsuranceCo.,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,thefirstday
shallbeexcluded,andthelastdayincluded."

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

Section1.Howtocomputetime.IncomputinganyperiodoftimeprescribedorallowedbythisRules,
orbytheorderofthecourt,orbyanyapplicablestatute,thedayoftheactoreventfromwhichthe
designatedperiodoftimebeginstorunistobeexcludedandthedateofperformanceincluded.
Ifthelastdayoftheperiod,asthuscomputed,fallsonaSaturday,aSundayoralegalholidayinthe
placewherethecourtsits,thetimeshallnotrununtilthenextworkingday.(emphasissupplied)
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

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