I.

RA 8424 - Tax Reform Act of RA 10963 - "Tax Reform for

1997 (NIRC) Acceleration and Inclusion
(TRAIN)
SECTION 97. Payment of Tax "SEC. 97. Payment of Tax Antecedent
Antecedent to the Transfer of Shares , to the Transfer of Shares, Bonds or
Bonds or Rights. — There shall not be Rights. — x x x.
transferred to any new owner in the books of
any corporation, sociedad anonima, "If a bank has knowledge of the death of a
partnership, business, or industry organized or person, who maintained a bank deposit
established in the Philippines any share, account alone, or jointly with another, it shall
obligation, bond or right by way of gift inter allow any withdrawal from the said deposit
vivos or mortis causa, legacy or inheritance, account, subject to a final withholding tax of six
unless a certification from the Commissioner percent (6%). For this purpose, all withdrawal
that the taxes fixed in this Title and due thereon slips shall contain a statement to the effect that
have been paid is shown. all of the joint depositors are still living at the
time of withdrawal by any one of the joint
"If a bank has knowledge of the death of a depositors and such statement shall be under
person, who maintained a bank deposit oath by the said depositors."
account alone, or jointly with another, it shall
not allow any withdrawal from the said deposit
account, unless the Commissioner has certified
that the taxes imposed thereon by this Title
have been paid; Provided, however, That the
administrator of the estate or any one (1) of the
heirs of the decedent may, upon authorization
by the Commissioner, withdraw an amount not
exceeding Twenty thousand pesos (P20,000)
without the said certification. For this purpose,
all withdrawal slips shall contain a statement to
the effect that all of the joint depositors are still
living at the time of withdrawal by any one of
the joint depositors and such statement shall
be under oath by the said depositors.

Revenue Regulation No. 12-2018:

SEC. 10. PAYMENT OF TAX ANTECEDENT TO THE TRANSFER OF

SHARES, BONDS OR RIGHTS AND BANK DEPOSITS WITHDRAWAL. – There

shall not be transferred to any new owner in the books of any corporation, sociedad anonima,
partnership, business, or industry organized or established in the Philippines any share,
obligation, bond or right by way of gift inter vivos or mortis causa, legacy or inheritance, unless an
eCAR is issued by the Commissioner or his duly authorized representative.

If a bank has knowledge of the death of a person, who maintained a bank deposit account alone,
or jointly with another, it shall allow the withdrawal from the said deposit account, subject to a final
withholding tax of six percent (6%) of the amount to be withdrawn, provided that the withdrawal
shall only be made within one year from the date of the decedent. The bank is required to file the
prescribed quarterly return on the final tax withheld on or before the last day of the month
following the close of the quarter during which the withholding was made. The bank shall issue
the corresponding BIR Form No. 2306 certifying such withholding. In all cases, the final tax
withheld shall not be refunded, or credited on the tax due on the net taxable estate of the
decedent.

The executor, administrator, or any of the legal heirs, withdrawing from the deposit account shall
provide the bank where such withdrawal shall be made, with the TIN of the estate of the
decedent. For this purpose, the bank shall require prior to such withdrawal, the presentation of
BIR Form No. 1904 of the estate, duly stamped received by the BIR,. Further, all withdrawal slips
shall contain the following terms and conditions: (a) a sworn statement by any one of the joint
depositors to the effect that all of the joint depositors are still living at the time of withdrawal; and,
(b) a statement that the withdrawal is subject to the final withholding tax of 6%.

In instances where the bank deposit accounts have been duly included in the gross estate of the
decedent and the estate tax due thereon paid, the executor, administrator, or any of the legal
heirs shall present the eCAR issued for the said estate prior to withdrawing from the bank deposit
account. Such withdrawal shall no longer be subject to the withholding tax imposed under this
section.

PNB v. SANTOS (G.R. No. 208293, December 10, 2014)

In this case, petitioners PNB and Aguilar released Angel C. Santos’ deposit to Manimbo without
having been presented the BIR-issued certificate of payment of, or exception from, estate tax.
This is a legal requirement before the deposit of a decedent is released.

Under Section 97 of the NIRC, If a bank has knowledge of the death of a person, who maintained
a bank deposit account alone, or jointly with another, it shall not allow any withdrawal from the
said deposit account, unless the Commissioner has certified that the taxes imposed thereon by
this Title have been paid: Provided, however, That the administrator of the estate or any one (1)
of the heirs of the decedent may, upon authorization by the Commissioner, withdraw an amount
not exceeding Twenty thousand pesos (20,000) without the said certification. For this purpose, all
withdrawal slips shall contain a statement to the effect that all of the joint depositors are still living
at the time of withdrawal by any one of the joint depositors and such statement shall be under
oath by the said depositors.

Taxes are created primarily to generate revenues for the maintenance of the government.
However, this particular tax may also serve as guard against the release of deposits to persons
who have no sufficient and valid claim over the deposits. Based on the assumption that only
those with sufficient and valid claim to the deposit will pay the taxes for it, requiring the certificate
from the BIR increases the chance that the deposit will be released only to them.

In their compulsory counterclaim, petitioners PNB and Aguilar claimed that Manimbo presented a
certificate of payment of estate tax. During trial, however, it turned out that this certificate was
instead an authority to accept payment, which is not the certificate required for the release of
bank deposits. It appears that Manimbo was not even required to submit the BIR certificate. He,
thus, failed to present such certificate. Petitioners PNB and Aguilar provided no satisfactory
explanation why Angel C. Santos’ deposit was released without it.

Petitioners PNB and Aguilar’s negligence is also clear when they accepted as bases for the
release of the deposit to Manimbo: (a) a mere photocopy of Angel C. Santos’ death certificate; (b)
the falsified affidavit of self-adjudication and special power of attorney purportedly executed by
Reyme L. Santos; and (c) the certificate of time deposit.
Petitioner Aguilar was aware that there were other claimants to Angel C. Santos’ deposit.
Respondents had already communicated with petitioner Aguilar regarding Angel C. Santos’
account before Manimbo appeared. Petitioner Aguilar even gave respondents the updated
passbook of Angel C. Santos’ account. Yet, petitioners PNB and Aguilar did not think twice before
they released the deposit to Manimbo. They did not doubt why no original death certificate could
be submitted. They did not doubt why Reyme L. Santos would execute an affidavit of self-
adjudication when he, together with others, had previously asked for the release of Angel C.
Santos’ deposit. They also relied on the certificate of time deposit and on Manimbo’s
representation that the passbook was lost when the passbook had just been previously presented
to Aguilar for updating.

During the trial, petitioner PNB’s counsel only reasoned that the photocopy of the death certificate
was also submitted with other documents, which led him to no other conclusion than that Angel
C. Santos was already dead. On petitioners PNB and Aguilar’s reliance special power of attorney
allegedly executed by Reyme L. Santos, Aguilar admitted that she did not contact Reyme L.
Santos for verification. Her reason was that Reyme L. Santos was their client. Therefore, they
had no obligation to do so.

Given the circumstances, "diligence of a good father of a family" would have required petitioners
PNB and Aguilar to verify. A prudent man would have inquired why Reyme L. Santos would issue
an affidavit of selfadjudication when others had also claimed to be heirs of Angel C. Santos.
Contrary to petitioner Aguilar’s reasoning, the fact that Reyme L. Santos was not petitioner PNB’s
client should have moved her to take measures to ensure the veracity of Manimbo’s documents
and representations. This is because she had no previous knowledge of Reyme L. Santos his
representatives, and his signature.

Petitioner PNB is a bank from which a degree of diligence higher than that of a good father of a
family is expected. Petitioner PNB and its manager, petitioner Aguilar, failed to meet even the
standard of diligence of a good father of a family. Their actions and inactions constitute gross
negligence. It is for this reason that we sustain the trial court’s and the Court of Appeals’ rulings
that petitioners PNB and Aguilar are solidarily liable with each other.

EXPLANATION:

If this case was ruled under the present section 97, the BIR-issued certificate of payment is not
anymore required. The provision “unless the Commissioner has certified that the taxes imposed
thereon by this Title have been paid” has been removed under the TRAIN law and it only requires
the payment of withholding tax of 6 percent for the withdrawal to be allowed. Hence, such
certificate is not required anymore.
 II.

RA 8424 - Tax Reform Act of RA 10963 - "Tax Reform for

1997 (NIRC) Acceleration and Inclusion
(TRAIN)
"SECTION 100. Transfer for Less Than "SEC. 100. Transfer for Less Than
Adequate and Full Consideration. — Adequate and Full Consideration. —
Where property, other than real property
referred to in Section 24(D), is transferred for
less than an adequate and full consideration in
money or money's worth, then the amount by
which the fair market value of the property
exceeded the value of the consideration shall,
for the purpose of the tax imposed by this
Chapter, be deemed a gift, and shall be
included in computing the amount of gifts made
during the calendar year.
Where property, other than real property
referred to in Section 24(D), is transferred for
less than an adequate and full consideration in
money or money's worth, then the amount by
which the fair market value of the property
exceeded the value of the consideration shall,
for the purpose of the tax imposed by this
Chapter, be deemed a gift, and shall be
included in computing the amount of gifts made
during the calendar year: Provided, however,
That a sale, exchange, or other transfer of
property made in the ordinary course of
business (a transaction which is a bona fide, at
arm's length, and free from any donative
intent), will be considered as made for an
adequate and full consideration in money or
money's worth."

Revenue Regulation No. 12-2018:

SEC. 16. TRANSFER FOR LESS THAN ADEQUATE AND FULL
CONSIDERATION. - Where property, other than real property referred to in Section 24(D), is
transferred for less than an adequate and full consideration in money or money's worth, then the
amount by which the fair market value of the property exceeded the value of the consideration
shall, for the purpose of the tax imposed by this Chapter, be deemed a gift, and shall be included
in computing the amount of gifts made during the calendar year: Provided, however, that a sale,
exchange, or other transfer of property made in the ordinary course of business (a transaction
which is a bona fide, at arm’s length, and free from any donative intent) will be considered as
made for an adequate and full consideration in money or money’s worth.

THE PHILIPPINE AMERICAN LIFE AND GENERAL INSURANCE COMPANY v.

THE SECRETARY OF FINANCE AND THE COMMISSIONER OF INTERNAL
REVENUE (G.R. No. 210987, November 24, 2014)

The price difference is subject to donor's tax

The absence of donative intent, if that be the case, does not exempt the sales of stock
transaction from donor's tax since Sec. 100 of the NIRC categorically states that the amount by
which the fair market value of the property exceeded the value of the consideration shall be
deemed a gift. Thus, even if there is no actual donation, the difference in price is considered a
donation by fiction of law.
Moreover, Sec. 7(c.2.2) of RR 06-08 does not alter Sec. 100 of the NIRC but merely sets the
parameters for determining the "fair market value" of a sale of stocks. Such issuance was made
pursuant to the Commissioner's power to interpret tax laws and to promulgate rules and
regulations for their implementation.

EXPLANATION:

If this case was ruled under the present section 100, lack of donative intent can exempt the sale
of tax. The provision “That a sale, exchange, or other transfer of property made in the ordinary
course of business (a transaction which is a bona fide, at arm's length, and free from any
donative intent), will be considered as made for an adequate and full consideration in money or
money's worth." has been included under the TRAIN law and made a sale that is less than the
adequate and full consideration to be treated as if it was made for an adequate and full
consideration if made in the ordinary course of business.
 III.

RA 8424 - Tax Reform Act of RA 10963 - "Tax Reform for

1997 (NIRC), amended further by Acceleration and Inclusion
Republic Act No. 9504 (TRAIN)
"SEC. 35. Allowance of Personal Section 35 of the NIRC, as amended,
Exemption for Individual Taxpayer. - is hereby repealed.

"(A) In General. - For purposes of determining

the tax provided in Section 24(A) of this title,
there shall be allowed a basic personal
exemption amounting to Fifty thousand pesos
(P50,000) for each individual taxpayer.

"In the case of married individual where only

one of the spouses is deriving gross income,
only such spouse shall be allowed the personal
exemption.

"(B) Additional Exemption for Dependents. -

There shall be allowed an additional exemption
of Twenty-five thousand pesos (25,000) for
each dependent not exceeding four (4).

"The additional exemption for dependents shall

be claimed by only one of the spouses in the
case of married individuals.
"In the case of legally separated spouses,
additional exemptions may be claimed only by
the spouse who has custody of the child or
children:

Provided, That the total amount of additional

exemptions that may be claimed by both shall
not exceed the maximum additional
exemptions herein allowed.

"For purposes of this Subsection, a

"dependent" means a legitimate, illegitimate or
legally adopted child chiefly dependent upon
and living with the taxpayer if such dependent
is not more than twenty-one (21) years of age,
unmarried and not gainfully employed or if such
dependent, regardless of age, is incapable of
self-support because of mental or physical
defect.

(C) Change of Status. — If the taxpayer

marries or should have additional dependent(s)
as defined above during the taxable year, the
taxpayer may claim the corresponding
additional exemption, as the case may be, in
full for such year.

"If the taxpayer dies during the taxable year,

his estate may still claim the personal and
additional exemptions for himself and his
dependent(s) as if he died at the close of such
year.

"If the spouse or any of the dependents dies or

if any of such dependents marries, becomes
twenty-one (21) years old or becomes gainfully
employed during the taxable year, the taxpayer
may still claim the same exemptions as if the
spouse or any of the dependents died, or as if
such dependents married, became twenty-one
(21) years old or became gainfully employed at
the close of such year.

SORIANO, et al. v. SECRETARY OF FINANCE, et al. (G.R. Nos. 184450,

184508, 184538, 185234, January 24, 2017)

In sum, R.A. 9504, like R.A. 7167 in Umali, was a piece of social legislation clearly intended to
afford immediate tax relief to individual taxpayers, particularly low-income compensation earners.
Indeed, if R.A. 9504 was to take effect beginning taxable year 2009 or half of the year 2008 only,
then the intent of Congress to address the increase in the cost of living in 2008 would have been
negated.
Therefore, following Umali, the test is whether the new set of personal and additional exemptions
was available at the time of the filing of the income tax return. In other words, while the status of
29
the individual taxpayers is determined at the close of the taxable year, their personal and
additional exemptions - and consequently the computation of their taxable income - are reckoned
when the tax becomes due, and not while the income is being earned or received.

The NIRC is clear on these matters. The taxable income of an individual taxpayer shall be
30
computed on the basis of the calendar year. The taxpayer is required to file an income tax
th 31
return on the 15 of April of each year covering income of the preceding taxable year. The tax
32
due thereon shall be paid at the time the return is filed.
It stands to reason that the new set of personal and additional exemptions, adjusted as a form of
social legislation to address the prevailing poverty threshold, should be given effect at the most
opportune time as the Court ruled in Umali.

In the present case, the increased exemptions were already available much earlier than the
required time of filing of the return on 15 April 2009. R.A. 9504 came into law on 6 July 2008,
more than nine months before the deadline for the filing of the income tax return for taxable year
2008. Hence, individual taxpayers were entitled to claim the increased amounts for the entire year
2008. This was true despite the fact that incomes were already earned or received prior to the
law's effectivity on 6 July 2008.

EXPLANATION:
If this case was ruled under TRAIN, the increased exemption would not be available for the
individual tax payers. Allowance of personal exemptions for individual tax payers has been
repealed under the TRAIN law.
 IV.

RA 8424 - Tax Reform Act of RA 10963 - "Tax Reform for

1997 (NIRC) Acceleration and Inclusion
(TRAIN)
"SECTION 86. Computation of Net
Estate. — For the purpose of the tax
imposed in this Chapter, the value of the net
estate shall be determined:
Deductions for judicial expenses of the
"(A) Deductions Allowed to the Estate of a testamentary or intestate proceedings
Citizen or a Resident. — In the case of a
citizen or resident of the Philippines, by are no longer allowed as an ordinary
deducting from the value of the gross estate — deduction.

"(b) For judicial expenses of the testamentary

or intestate proceedings;

COMMISSIONER OF INTERNAL REVENUE v. COURT OF APPEALS, G.R.

No. 123206 (Resolution), March 22, 2000

The deductions from the gross estate permitted under Section 79 of the Tax Code basically
reproduced the deductions allowed under Commonwealth Act No. 466 (CA 466), otherwise
known as the National Internal Revenue Code of 1939, and which was the first codification of
Philippine tax laws. Section 89 (a) (1) (B) of CA 466 also provided for the deduction of the
"judicial expenses of the testamentary or intestate proceedings" for purposes of determining the
value of the net estate. Philippine tax laws were, in turn, based on the federal tax laws of the
United States. In accord with established rules of statutory construction, the decisions of
American courts construing the federal tax code are entitled to great weight in the interpretation of
our own tax laws.

Judicial expenses are expenses of administration. Administration expenses, as an allowable

deduction from the gross estate of the decedent for purposes of arriving at the value of the net
estate, have been construed by the federal and state courts of the United States to include all
expenses "essential to the collection of the assets, payment of debts or the distribution of the
property to the persons entitled to it." In other words, the expenses must be essential to the
proper settlement of the estate. Expenditures incurred for the individual benefit of the heirs,
devisees or legatees are not deductible. This distinction has been carried over to our jurisdiction.
Thus, in Lorenzo v. Posadas the Court construed the phrase "judicial expenses of the
testamentary or intestate proceedings" as not including the compensation paid to a trustee of the
decedent's estate when it appeared that such trustee was appointed for the purpose of managing
the decedent's real estate for the benefit of the testamentary heir. In another case, the Court
disallowed the premiums paid on the bond filed by the administrator as an expense of
administration since the giving of a bond is in the nature of a qualification for the office, and not
necessary in the settlement of the estate. Neither may attorney's fees incident to litigation
incurred by the heirs in asserting their respective rights be claimed as a deduction from the gross
estate.
Coming to the case at bar, the notarial fee paid for the extrajudicial settlement is clearly a
deductible expense since such settlement effected a distribution of Pedro Pajonar's estate to his
lawful heirs. Similarly, the attorney's fees paid to PNB for acting as the guardian of Pedro
Pajonar's property during his lifetime should also be considered as a deductible administration
expense. PNB provided a detailed accounting of decedent's property and gave advice as to the
proper settlement of the latter's estate, acts which contributed towards the collection of
decedent's assets and the subsequent settlement of the estate

EXPLANATION:
If this was ruled under the present section 86, the notarial fee for the extrajudicial settlement and
the attorneys fee as guardian cannot be claimed as deductions. Under the TRAIN law,
Deductions for judicial expenses of the testamentary or intestate proceedings are no longer
allowed and included as an ordinary deduction. Hence, such Judicial or Administration expenses
cannot be claimed anymore as an allowable deduction.
 V.

RA 8424 - Tax Reform Act of RA 10963 - "Tax Reform for

1997 (NIRC) Acceleration and Inclusion
(TRAIN)
"SECTION 112. Refunds or Tax "SEC. 112. Refunds or Tax Credits of
Credits of Input Tax. — Input Tax. —
… …

"(D) Period within which Refund or Tax Credit
of Input Taxes shall be Made . — In proper
cases, the Commissioner shall grant a refund
or issue the tax credit certificate for creditable
input taxes within one hundred twenty (120)
days from the date of submission of complete
documents in support of the application filed in
accordance with Subsections (A) and (B)
hereof.
"In case of full or partial denial of the claim for
tax refund or tax credit, or the failure on the
part of the Commissioner to act on the
application within the period prescribed above,
the taxpayer affected may, within thirty (30)
days from the receipt of the decision denying
the claim or after the expiration of the one
hundred twenty day-period, appeal the decision
or the unacted claim with the Court of Tax
Appeals.
… punishable under Section 269 of this Code.
"(C) Period within which Refund of Input Taxes
shall be Made. — In proper cases, the
Commissioner shall grant a refund for
creditable input taxes within ninety (90) days
from the date of submission of the official
receipts or invoices and other documents in
support of the application filed in accordance
with Subsections (A) and (B) hereof: Provided,
That should the Commissioner find that the
grant of refund is not proper, the Commissioner
must state in writing the legal and factual basis
for the denial.
"In case of full or partial denial of the claim for
tax refund, the taxpayer affected may, within
thirty (30) days from the receipt of the decision
denying the claim, appeal the decision with the
Court of Tax Appeals: Provided, however, That
failure on the part of any official, agent, or
employee of the BIR to act on the application
within the ninety (90)-day period shall be

"xxx xxx xxx."

Revenue Regulations No. 13-2018

SEC. 4.112-1. Claims for Refund/Credit of Input Tax. –
…

(d) Period within which refund/credit of input taxes shall be made

In proper cases, the Commissioner of Internal Revenue shall grant refund for creditable input
taxes within ninety (90) days from the date of submission of the official receipts or invoices
and other documents in support of the application filed in accordance with subsections (A) and
(B) hereof: Provided, That, should the Commissioner find that the grant of refund is not
proper, the Commissioner must state in writing the legal and factual basis for the denial.

The 90-day period to process and decide, pending the establishment of the enhanced VAT
Refund System shall only be up to the date of approval of the Recommendation Report on
such application for VAT refund by the Commissioner or his duly authorized
representative: Provided, That all claims for refund/tax credit certificate filed prior to
January 1, 2018 will be governed by the one hundred twenty (120)-day processing period.

In case of full or partial denial of the claim for tax refund, the taxpayer affected may, within thirty
(30) days from the receipt of the decision denying the claim, appeal the decision with the Court of
Tax Appeals: Provided, however, that failure on the part of any official, agent, or employee
of the BIR to act on the application within the ninety (90)- day period shall be punishable
under Section 269 of the Tax Code, as amended.

COMMISSIONER OF INTERNAL REVENUE v. AICHI FORGING CO. OF ASIA,

INC., (G.R. No. 184823, October 6, 2010)

Section 112 of the NIRC is the pertinent provision for the refund/credit of input VAT. Thus, the
two-year period should be reckoned from the close of the taxable quarter when the sales were
made.

The two-year period to file a claim for tax refund/credit for the period July 1, 2002 to
September 30, 2002 expired on September 30, 2004. Hence, respondent's
administrative claim was timely filed.

The filing of the judicial claim was premature

However, notwithstanding the timely filing of the administrative claim, we are

constrained to deny respondent's claim for tax refund/credit for having been filed in violation
of Section 112 (D) of the NIRC, which provides that:

SEC. 112. Refunds or Tax Credits of Input Tax. —

xxx xxx xxx

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. — In
proper cases, the Commissioner shall grant a refund or issue the tax
credit certificate for creditable input taxes within one hundred twenty
(120) days from the date of submission of complete documents in
support of the application filed in accordance with Subsections (A) and
(B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on
the part of the Commissioner to act on the application within the period
prescribed above, the taxpayer affected may, within thirty (30) days from
the receipt of the decision denying the claim or after the expiration of the
one hundred twenty day-period, appeal the decision or the unacted claim
with the Court of Tax Appeals. (Emphasis supplied.)
 Section 112 (D) of the NIRC clearly provides that the CIR has "120 days, from
the date of the submission of the complete documents in support of the application [for tax
refund/credit]," within which to grant or deny the claim. In case of full or partial denial by the
CIR, the taxpayer's recourse is to file an appeal before the CTA within 30 days from receipt
of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the
application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the
CIR to CTA within 30 days.

In this case, the administrative and the judicial claims were simultaneously filed
on September 30, 2004. Obviously, respondent did not wait for the decision of the CIR or
the lapse of the 120-day period. For this reason, we find the filing of the judicial claim with
the CTA premature.

Respondent's assertion that the non-observance of the 120-day period is not

fatal to the filing of a judicial claim as long as both the administrative and the judicial claims
are filed within the two-year prescriptive period has no legal basis.

There is nothing in Section 112 of the NIRC to support respondent's view.

Subsection (A) of the said provision states that "any VAT-registered person, whose sales
are zero-rated or effectively zero-rated may, within two years after the close of the taxable
quarter when the sales were made, apply for the issuance of a tax credit certificate or
refund of creditable input tax due or paid attributable to such sales." The phrase "within two
(2) years . . . apply for the issuance of a tax credit certificate or refund" refers to applications
for refund/credit filed with the CIR and not to appeals made to the CTA. This is apparent in
the first paragraph of subsection (D) of the same provision, which states that the CIR has
"120 days from the submission of complete documents in support of the application filed in
accordance with Subsections (A) and (B)" within which to decide on the claim.

In fact, applying the two-year period to judicial claims would render nugatory
Section 112 (D) of the NIRC, which already provides for a specific period within which a
taxpayer should appeal the decision or inaction of the CIR. The second paragraph of
Section 112 (D) of the NIRC envisions two scenarios: (1) when a decision is issued by the
CIR before the lapse of the 120-day period; and (2) when no decision is made after the 120-
day period. In both instances, the taxpayer has 30 days within which to file an appeal with
the CTA. As we see it then, the 120-day period is crucial in filing an appeal with the CTA.

With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc.

relied upon by respondent, we find the same inapplicable as the tax provision involved in
that case is Section 306, now Section 229 of the NIRC. And as already discussed, Section
229 does not apply to refunds/credits of input VAT, such as the instant case.

In fine, the premature filing of respondent's claim for refund/credit of input VAT
before the CTA warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.
EXPLANATION:

If this case was ruled under the present section 112, the judicial claim before the CTA would still
be dismissed for premature filing.

The second paragraph of the old Section 112 (D) of the NIRC envisions two scenarios: (1) when
a decision is issued by the CIR before the lapse of the 120-day period; and (2) when no decision
is made after the 120-day period. In both instances, the taxpayer has 30 days within which to file
an appeal with the CTA. It is to be noted, however, that under the present TRAIN law, filing
before the CTA may only be done in case there is full or partial denial of the claim for tax refund.
It is to be filed within 30 days from the receipt of the decision denying the claim.

Also, the 120-day period was amended to 90-day period and the failure on the part of any official,
agent, or employee of the BIR to act within the 90-day period will not warrant the filing of the
appeal with the CTA but will subject such official, agent, or employee to a punishment under
Section 269 of the Code.
TAXATION
LAW II
Submitted by:
BRIONES, FATIMA DENNISE D.
2017400246
3S

Submitted to:
Atty. Deborah S. Acosta-Cajustin, CPA