Title: CIR Title: CIR vs. Goodyear Philippines (GR 216130, August 3, 2016 Facts: Respondent Respondent is a do!esti" "orporation duly organi#ed and e$isting under under the la%s o& the Philippines, and registered %ith the 'ureau o& Internal Revenue ('IR as a large ta$payer %ith a$payer a$payer Identi&i"ation )u!*er 000+0-+61+000. 000+0-+61+000.6 6 /n August 1-, 2003, the authori#ed authori#ed "apital sto" o& respondent respondent %as in"reased &ro! P00,000,000.00 P00,000,000.00 divided into ,000,000 ,000,000 shares %ith a par value o& P100.00 ea"h, to P1,31,63,000.00 divided into ,000,000 "o!!on shares and 13,31,630 pre&erred shares %ith a par value o& P100.00 ea"h. Conseuently, all the pre&erred shares %ere solely and e$"lusively su*s"ri*ed *y Goodyear ire and Ru**er Co!pany (GRC, %hi"h %as a &oreign "o!pany organi#ed and e$isting under the la%s o& the 4tate o& /hio, 5nited 4tates o& A!eri"a (54 and is unregistered in the Philippines."hanro*lesla% /n ay 30, 200, the 'oard o& 7ire"tors o& respondent authori#ed the rede!ption o& GRC8s 3,2-,216 pre&erred shares on /"to*er 1, 200 at the rede!ption pri"e o& P0,63,-1.00, *roe *roen n do%n do%n as &ollo &ollo%s %s99 P32 P32,-2 ,-21,6 1,600 00.0 .00 0 repres represen entin ting g the aggre aggrega gate te par par value value and and P-,32,31.00, representing a""rued and unpaid dividends."hanro*lesla% /n /"to*er 1, 200, respondent &iled an appli"ation &or relie& &ro! dou*le ta$ation *e&ore the International a$ A&&airs 7ivision o& the 'IR to "on&ir! that the rede!ption %as not su*:e"t to Philippine in"o!e ta$, pursuant to the Repu*li" o& the Philippines (RP + 54 a$ reaty.- his not%iths not%ithstand tanding, ing, respond respondent ent still too the "onserva "onservative tive approa" approa"h, h, and thus, thus, %ithheld %ithheld and re!itted the su! o& P1,6-,.10 to the 'IR on )ove!*er 3, 200, representing &i&teen per"ent (1; <=, "o!puted *ased on the di&&eren"e o& the rede!ption pri"e and aggregate par value o& the shares.10"hanro*lesla% /n /"to*er 21, 2010, respondent &iled an ad!inistrative "lai! &or re&und or issuan"e o& CC, repres represen entin ting g 1; 1; <= in the su! su! o& P1,6 P1,6-, -, .1 .10 0 *e&o *e&ore re the 'IR. 'IR. her herea ea&te &ter, r, or on )ove!*er 3, 2010, it &iled a :udi"ial "lai!, *y %ay o& petition &or revie%, *e&ore the CA, do"eted as C..A. Case )o. 1.11"hanro*lesla% CA> and (* it &ailed to su*!it "o!plete supporting do"u!ents *e&ore the 'IR. Issue/s: Issue/s: =/) the :udi"ial "lai! o& respondent should *e dis!issed &or non+e$haustion o& ad!inistrative re!edies. Ruling: )/. Ruling: )/. 4e"tion 22- o& the a$ Code states that :udi"ial "lai!s &or re&und !ust *e &iled %ithin t%o (2 years &ro! the date o& pay!ent o& the ta$ or penalty, providing &urther that the sa!e !ay not *e !aintained until a "lai! &or re&und or "redit has *een duly &iled %ith the Co!!issioner o& Internal Revenue (CIR, vi#.9 4?C. 22-. Re"overy o& a$ ?rroneously or Illegally Colle"ted. @ )o suit or pro"eeding shall *e !aintained in any "ourt &or the re"overy o& any national internal revenue ta$ herea&ter alleged to have *een erroneously or illegally assessed or "olle"ted, or o& any penalty "lai!ed to have *een "olle"ted %ithout authority, or o& any su! alleged to have *een e$"essively or in any !anner %rong&ully "olle"ted, until a "lai! &or re&und or "redit has *een duly &iled %ith the Co!!issioner> *ut su"h suit or pro"eeding !ay *e !aintained, %hether or not su"h ta$, penalty, or su! has *een paid under protest or duress.
In any "ase, no su"h suit or pro"eeding shall *e &iled a&ter the e$piration o& t%o (2 years &ro! the date o& pay!ent o& the ta$ or penalty regardless o& any supervening "ause that !ay arise a&ter pay!ent $ $ $. (?!phases and unders"oring supplied erily, the pri!ary purpose o& &iling an ad!inistrative "lai! %as to serve as a noti"e o& %arning to the CIR that "ourt a"tion %ould &ollo% unless the ta$ or penalty alleged to have *een "olle"ted erroneously or illegally is re&unded. o "lari&y, 4e"tion 22- o& the a$ Code @ Bthen 4e"tion 306 o& the old a$ Code @ ho%ever does not !ean that the ta$payer !ust a%ait the &inal resolution o& its ad!inistrative "lai! &or re&und, sin"e doing so %ould *e tanta!ount to the ta$payer8s &or&eiture o& its right to see :udi"ial re"ourse should the t%o (2+year pres"riptive period e$pire %ithout the appropriate :udi"ial "lai! *eing &iled. In C'D Po%er Co!pany, Etd. v. CIR,36 the Court enun"iated9 In the &oregoing instan"es, attention !ust *e dra%n to the Court8s ruling in P.F. Diener Co., Etd. v. 7avid (Diener, %herein it %as held that in no %ise does the la%, i.e., 4e"tion 306 o& the old a$ Code (no%, 4e"tion 22- o& the )IRC, i!ply that the Colle"tor o& Internal Revenue &irst a"t upon the ta$payer8s "lai!, and that the ta$payer shall not go to "ourt *e&ore he is noti&ied o& the Colle"tor8s a"tion. In Diener, the Court %ent on to say that the "lai! %ith the Colle"tor o& Internal Revenue %as intended pri!arily as a noti"e o& %arning that unless the ta$ or penalty alleged to have *een "olle"ted erroneously or illegally is re&unded, "ourt a"tion %ill &ollo% $ $ $.3 (?!phases and unders"oring supplied In the "ase at *ar, re"ords sho% that *oth the ad!inistrative and :udi"ial "lai!s &or re&und o& respondent &or its erroneous %ithholding and re!ittan"e o& <= %ere indu*ita*ly &iled %ithin the t%o+year pres"riptive period.3 )ota*ly, 4e"tion 22- o& the a$ Code, as %orded, only reuired that an ad!inistrative "lai! should &irst *e &iled. It *ears stressing that respondent "ould not *e &aulted &or resorting to "ourt a"tion, "onsidering that the pres"riptive period stated therein %as a*out to e$pire. ad respondent a%aited the a"tion o& petitioner no%ing &ully %ell that the pres"riptive period %as a*out to lapse, it %ould have resultantly &or&eited its right to see a :udi"ial revie% o& its "lai!, there*y su&&ering irrepara*le da!age. hus, in vie% o& the a&oresaid "ir"u!stan"es, respondent "orre"tly and ti!ely sought :udi"ial redress, not%ithstanding that its ad!inistrative and :udi"ial "lai!s %ere &iled only 13 days apart.
