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Belle Corporation v.

CIR
G.R. No. 181298
January 10, 2011
FACTS:
Petitioner Belle, a domestic corporation engaged in the real estate and property business, filed with the BIR
its income tax return (ITR) for the first quarter of 1997. Subsequently, it filed with the BIR its second quarter
ITR, declaring an overpayment of taxes. In view of the overpayment, no taxes were paid for the second and
third quarters of 1997. Instead of claiming the amount as a tax refund, petitioner decided to apply it as a tax
credit to the succeeding taxable year by marking the tax credit option box in its 1997 ITR. On April 12, 200,
petitioner filed with the BIR an administrative claim for refund its unutilized excess income tax payments for
the taxable year 1997. Notwithstanding the filing of the administrative claim for refund, petitioner carried
over the excess amount to the taxable year 1999. Due to the inaction of the respondent CIR and in order to
toll the running of the two-year prescriptive period, petitioner appealed its claim for refund of unutilized
excess income tax payments for the taxable year 1997 via petition for review. The CTA denied the petition.
ISSUE:
Whether petitioner is entitled to a refund of its excess income tax payments for the taxable year 1997
RULING:
No. In case the corporation is entitled to a refund of the excess estimated quarterly income taxes paid, the
refundable amount shown on its final adjustment return may be credited against the quarterly income tax
liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry over and apply
the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable
years has been made, such option shall be considered irrevocable for that taxable period and no
application for tax refund or issuance of tax credit certificate shall be allowed therefor. Under Section 76 of
the NIRC, in case of overpayment of income taxes, the remedies are still the same; and the availment of
one remedy still precludes the other. The carry-over of excess income tax payments is no longer limited to
the succeeding taxable year. Unutilized excess income tax payments may now be accrued over to the
succeeding taxable years until fully realized.
In this case, since the petitioner carried over its 1997 excess income tax payments to the succeeding
taxable year 1998, it may no longer file a claim for refund of unutilized tax credits for taxable year 1997.
Once the option to carry over excess income tax payments to the succeeding years has been made, it
becomes irrevocable. Thus, applications for refund of the unutilized excess income tax payments may no
longer be allowed.

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