Friday, February 19, 2016

Commissioner of Internal Revenue (CIR) vs Far East Bank & Trust Company

FACTS: Far East Bank filed a claim for refund of overpaid creditable withholding taxes (CWT) which include CWT on rental income allegedly earned by the Petitioner as lessor.

ISSUE: Can a claim for refund be granted notwithstanding claimant's failure to show in the return that the income upon which the creditable taxes withheld were based was in fact reported?

RULING: No. The three (3) essential requirements for a claim for refund of this nature to prosper are: (1) filing the same within the two (2) year period; (2) establishing the fact of withholding with copies of the CWT certificates; and (3) showing that the income received was declared as part of gross income. Here, the petitioner failed to prove the third requirement as the return in fact showed “Not Applicable” under the portion referring to rental income. In addition, sme certificates were likewise not submitted as evidence.

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