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CA In this case, petitioner did not present evidence to prove that its claimed refund had already
been automatically credited against its 1990 tax liability. The burden of proof to establish the
factual basis of claim for tax credit or refund lies on the claimant. Tax refunds are construed
(G.R. No. 119286; 13 October 2004) strictly against the taxpayer.

Facts: Under the provision, the taxpayer is allowed three (3) options if the sum of its quarterly tax
payments made during the taxable year is not equal to the total tax due for that year:

Petitioner filed a its Income Tax Return (ITR) for the calendar year 1989. He later filed with
respondent CTA for a refund of excess creditable taxes withholding (CTW) and income taxes for  pay the balance of the tax still due;
the years 1989 and 1990 in the aggregate amount of 147, 036.15.
 carry-over the excess credit; or
Respondent Commissioner (CIR) filed an Answer stating some defenses. The Court rendered  be credited or refunded the amount period.
decision in favor of the petitioner. However, CIR filed a Motion for Reconsideration (MFR)
alleging that the amount sought to be refunded “has already been included in the 172, 447
which the petitioner applied as tax credit for the succeeding taxable year 1990.

Upon the respondent Court (RC) dismissed the petition, the petitioner filed MFR which was
denied by the RC. Thus, petitioner filed a petition for Review before the CA. The appellate court
held that petitioner is not entitled to a refund because it appears that the latter did not specify the
amount to be refunded and the amount to be applied as tax credit to the succeeding taxable
year, but only marked an “X” to the box indicating “to be applied as tax credit to the succeeding
taxable year” when the latter filed its income tax return for the year 1989.

The Office of the Solicitor General (OSG) filed a Comment that the claimed refund was to be
applied against its tax liability for 1990.

Petitioner filed a Reply that the issue is not whether the 54,104 was included as tax credit to be
applied against its 1990 income tax liability but whether the same amount was actually applied
as tax credit for 1990.

The OSG filed a Rejoinder that petitioner’s 1989 tax return shows that the latter included 1988
excess credit which had already been segregated for refund and specified that the full amount of
Php 172, 479.00 be considered as its tax credit for 1990. The OSG further contended that the
remaining tax credit for 1989 should be the excess credit to be applied against its 1990 tax
liability. Hence, petitioner ask for a refund of its CTW in 1989 because it had been applied
against its 1990 tax due.


Whether or not the petitioner should be refunded.


No. The grant of refund is founded on the assumption that the tax return is valid. Without the tax
return, it is error to grant a refund since it would be impossible to determine whether the proper
taxes have been assessed and paid.