COMMISSIONER OF INTERNAL REVENUE v.

BURROUGHSLIMITED AND THE COURT OF TAX APPEALS

PONENTE : PARASLEGAL DOCTRINE: Memorandum Circular No. 8-82 cannot begiven retroactive effect
in light of Section 327 of the NIRC.

FACTS:

1.

March 1979: The branch office of Burroughs Limited, a foreigncorporation, applied with the Central
Bank for authority to remit to itsparent company abroad, branch profit.

Amount Applied for: Php 7,647,058.0015% Branch Profit Remittance Tax: Php 1,147,048.70 Amount
Actually Remitted: Php 6,499,999.302.

24 December 1980: Burroughs claims a tax refund/credit of Php172,058.90.Branch Profit Remittance tax
should be 15% of

Amount Actually Remitted.(based on Ruling of Acting Commissioner of Internal Revenue)

3.

CTA: grants tax credit4.

CIR: Burroughs no longer entitled to refund because MemorandumCircular No. 8-82 dated 17 March
1982 had revoked and/or repealed theBIR ruling of 21 Jan 1980.

ISSUE(S)

WON Memorandum Circular No. 8-82 (MC 8-82) dated 17 March 1982 can begiven retroactive effect?
(NO)

DISPOSITION

Sec. 327. Non-retroactivity of rulings

. Any revocation, modification, or reversal of any of the rules and regulations promulgated in accordance
with the precedingsection or any of the rulings or circulars promulgated by the Commissioner

shall notbe given retroactive application if the revocation, modification, or reversal will beprejudicial
to the taxpayer

except in the following cases (a) where the taxpayerdeliberately misstates or omits material facts from
his return or in any documentrequired of him by the Bureau of Internal Revenue; (b) where the facts
subsequentlygathered by the Bureau of Internal Revenue are materially different from the facts
onwhich the ruling is based, or (c) where the taxpayer acted in bad faith. (ABS-CBNBroadcasting Corp.
v. CTA, 108 SCRA 151-152)