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Cir v. Primetown (Manner of Computing Time)

Primetown Property Group applied for a tax refund in 1999 for losses incurred in 1997. The Court of Tax Appeals dismissed Primetown's petition, finding it was filed after the two-year period to file for tax refunds. The Court of Appeals reversed, stating the two years should be counted as 730 days regardless of it being a leap year. The Supreme Court ruled that under the Administrative Code of 1987, a year consists of 12 calendar months, so Primetown's petition filed on April 14, 2000 was within the two-year period calculated from their final adjusted return filing.

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48 views

Cir v. Primetown (Manner of Computing Time)

Primetown Property Group applied for a tax refund in 1999 for losses incurred in 1997. The Court of Tax Appeals dismissed Primetown's petition, finding it was filed after the two-year period to file for tax refunds. The Court of Appeals reversed, stating the two years should be counted as 730 days regardless of it being a leap year. The Supreme Court ruled that under the Administrative Code of 1987, a year consists of 12 calendar months, so Primetown's petition filed on April 14, 2000 was within the two-year period calculated from their final adjusted return filing.

Uploaded by

michiko
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Commissioner of Internal Revenue V. Primetown Property Group, Inc.

G.R. No. 162155; August 28, 2007


Corona, J.:

MANNER OF COMPUTING TIME

FACTS:

On March 11, 1999, Gilbert Yap, Vice Chair of Primetown applied for a refund or credit of income tax
which was paid by Primetown on 1997. Primetown claimed that they were entitled for said refund
because they suffered losses that year due to the increase of cost for labor and materials, etc.
Despite these losses, they still paid their quarterly income tax and remitted credited withholding tax
from real estate sales to BIR. Hence, they were claiming for a refund. On May 13, 1999, revenue
officer Elizabeth Santos required Primetown to submit additional documents to which Primetown
complied with. However, its claim was not acted upon. Thus, prompting Primetown to submit a
petition for review in the Court of Tax Appeals (CTA) on April 14, 2000.
CTA dismissed the petition as it was filed beyond the 2-year prescriptive period for filing a judicial
claim for tax refund according to Sec 229 of NIRC. According to the CTA, the two-year period was
equivalent to 730 days (365 days each) pursuant to Art 13 of the NCC. Since Primetown filed its final
adjustment on April 14, 1998 and that the year 2000 was a leap year, the petition was filed 731 days
after Primetown filed its final adjustment return. Hence, beyond the reglementary period.
The CA reversed the CTA’s decision ruling that Article 13 of the NCC did not distinguish between a
regular year and a leap year. In other words, even if the year 2000 was a leap year, the periods
covered by April 15, 1998 to April 14, 1999 and April 15, 1999 to April 14, 2000 should still be
counted as 365 days each or a total of 730 days. A statute which is clear and explicit shall be neither
interpreted nor construed. Thus, this petition to the Supreme Court.
Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed
against claimants. Section 229 of the NIRC should be strictly applied against respondent inasmuch as
it has been consistently held that the prescriptive period (for the filing of tax refunds and tax credits)
begins to run on the day claimants file their final adjusted returns. Hence, the claim should have
been filed on or before April 13, 2000 or within 730 days, reckoned from the time respondent filed
its final adjusted return.

ISSUE:

Whether or not the petition was filed within the two-year period.

RULING:

Pursuant to EO 292 or the Administrative Code of 1987, a year shall be understood to be 12 calendar
months. The SC defined a calendar month as a month designated in the calendar without regard to
the number of days it may contain. The court held that Administrative Code of 1987 impliedly
repealed Art 13 of NCC as the provisions are irreconcilable. Primetown is entitled for the refund since
it is filed within the 2-year reglementary period.
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the
24th calendar month from the day respondent filed its final adjusted return. Hence, it was filed within
the reglementary period.

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