Case Digest: COMMISSIONER OF INTERNAL REVENUE vs PRIMETOWN PROPERTY GROUP, INC.

Sharing my personal digest on the COMMISSIONER OF INTERNAL REVENUE vs PRIMETOWN PROPERTY GROUP, INC. case.

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

I. FACTS

Gilbert Yap, Vice Chair of Primetown applied on March 11, 1999 for a refund or credit of income tax which Primetown paid in 1997. The petitioner suffered losses due to the real estate slowdown therefore was entitled of tax refund or credit.

Revenue officer Elizabeth Y. Santos required respondent to submit additional documents to support its claim. Respondent complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a petition for review in the Court of Tax Appeals (CTA). The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to claim a refund or credit commenced on that date.CTA dismissed the petition as it was filed beyond the two-year prescriptive period for filing a judicial claim for tax refund or tax credit. 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

Court of Appeals reversed and set aside the decision of the CTA. The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a leap year. Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed against claimants.

II. ISSUE

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

III. HELD

Yes, the Respondents petition is filed (April 14, 2000) on the last day of 24th calendar month from the day the respondent filed its final adjusted return (April 14, 1998) . The CA’s decision is correct but the basis is wrong. 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. 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.There obviously exists a manifest incompatibility in the manner of computing legal periods. 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.

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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