THE Court of Tax Appeals (CTA) has affirmed Sonoma Services, Inc.’s refund of P5 million representing its excess and unutilized creditable withholding tax (CWT) for the calendar year 2015.
In a 13-page decision on May 25 and made public on May 27, the CTA full court said it found no reason to reverse its previous decision granting the company’s claim for a refund.
“This court has time and again ruled that the presentation of certificates of creditable withholding tax at source (CCWTS) is sufficient to prove the fact of withholding; and, that proof of remittance of the taxes withheld to the BIR (Bureau of Internal Revenue) as well as the testimony of various payers and withholding agents who issued the CCWTS are not needed to prove the taxpayer’s entitlement to the claim for refund,” according to the ruling written by CTA Associate Justice Roman G. Del Rosario.
Sonoma Services, a domestic corporation located in Makati City, is engaged in tax preparation, bookkeeping, and payroll services.
The commissioner of internal revenue (CIR) previously filed an appeal to reverse a division ruling granting the company’s claim for refund. The official argued that the company failed to present documents that represented its customers and withholding agents to validate its claim to refund its CWT.
The tax court noted that under the BIR’s own laws, there is no mention of denying a taxpayer’s claim for refund due to non-submission of these documents.
“There is, therefore, no legal basis for the CIR to insist that the alleged non-submission of Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax (SAWT) and Monthly Alphalist of Payees (MAP) should result in the denial of Sonoma’s claim for tax refund or credit,” the CTA said.
The CIR said in its petition that the absence of these documents renders the certificates of CWT submitted by the company as hearsay.
The CTA said the Supreme Court previously established that the taxpayer making a claim for excess CWT does not need to present the individual who prepared the CCWTS.
“It cannot be denied that these documents (CCTWS) are admissible in evidence and are competent proof of the fact of withholding of income taxes from the income payments made to petitioner and of the amount of tax withheld,” the court said, citing its previous ruling. — John Victor D. Ordoñez
