THIRD
DIVISION
COMMISSIONER
OF INTERNAL REVENUE,
Petitioner,
G. R. No. 113703
January 31, 1997
-versus-
A.
SORIANO CORPORATION, COURT OF TAX APPEALS
and COURT OF APPEALS,
Respondents.
D
E C I S I O N
FRANCISCO, J.:
The facts of
this case are undisputed.
On November 27, 1987, private respondent, A. Soriano Corporation
[hereinafter
referred to as ANSCOR for brevity], filed with the respondent, Court of
Tax Appeals, a petition for refund of excess tax payments it made to
the
Bureau of Internal Revenue [BIR] in the amount of P273,876.05 for the
year
1985 and P1,126,065.40 for the year 1986 or a total amount of
P1,399,941.45,
arriving at the foregoing amount as follows:
1985
Prior years' excess income tax
payments
P3,016,841.00
[Exh. A] Plus:
Taxes withheld on interest P255,864.00
Rentals, etc. 812,380.00 1,068,244 [Exh.
A]
P4,085,085.00
Less:
Income Tax P2,620,347.00
1981 tax credit claimed in CTA Case No.
3964
1,190,861.95
3,811,208.95
Excess tax payment P273,876.05
[Exh. D]
1986
Taxes withheld by withholding agents
1,126,065.40
[Exh. C]
Total excess tax payments P1,399,941.45"[1]
During trial
before the Court of Tax Appeals, ANSCOR
presented evidence to substantiate its claim, to which no objection was
interposed by the petitioner, Commissioner of Internal Revenue, except
for the purposes for which they were offered. When ANSCOR rested its
case,
the petitioner, instead of presenting evidence, submitted the case for
decision solely upon the evidence adduced by ANSCOR and the pleadings
on
record.[2]
On August 7,
1991, the Court of Tax Appeals rendered
a decision, the pertinent portion of which reads:
In the light of the course respondent has
chosen
to prove his case, the approach turns out short. In a very recent case
[Citytrust Banking Corporation vs. Commissioner of Internal Revenue,
CTA
Case No. 4099, May 28, 1991] we conclude under similar circumstances:
Respondent did not object to the
existence of
statements and certificates which were offered by petitioner as proof
of
the withholding taxes but took exception to their contents and
purposes.
Despite said reservation, up until the submission of this case for
decision,
respondent was not heard to complain about the veracity of the contents
of these documents or exhibits nor has it shown any irregularity in the
same which will taint their reliability or sufficiency as proofs of the
taxes withheld despite the fact that it is well within their competence
to do so. Respondent is thereby considered to have admitted the truth
of
the contents of these exhibits. Hence, those amounts of withheld taxes
which are supported by corresponding statements or certificates of
withholding
taxes admitted in evidence shall be allowed as tax credits.
Nor does the failure of respondent
affect
only
the subject of 1985 taxes Against the claimed deductions by petitioner
for 1986, which it supported with tax returns as evidence, respondent
could
only give out the perfunctory resistance such as that 'mere allegation
of net loss does not ipso facto merit a refund'. But respondent for his
part, did not present any evidence that would have dispute the
correctness
of the tax returns and other material facts therein [Citytrust Banking
Corporation vs. Commissioner of Internal Revenue, supra].
WHEREFORE, the petition is hereby
GRANTED.
Respondent
is ordered to issue a tax credit memorandum to petitioner in the sum of
P1,399,941.45 to be used as payment for its internal revenue tax
liabilities."[3]
On September
17, 1991, the petitioner filed a motion
for reconsideration of the foregoing decision. Seeking the admission in
evidence of a report[4]
submitted only on September 18, 1991 by the BIR Official who
investigated
ANSCOR's claim for refund, a supplemental motion for reconsideration
was
filed by the petitioner on September 27, 1991. The Court of Tax
Appeals,
however, denied the petitioner's motion for reconsideration and
supplemental
motion for reconsideration. In a resolution dated December 9, 1992, it
held, among others, that the petitioner cannot be allowed to present
the
BIR report of September 18, 1991 because such report was in the
personal
physical possession of a subordinate of the petitioner during the trial
and is therefore not in the nature of a newly discovered evidence but
is
merely "forgotten evidence."[5]
The petitioner appealed to the Court of Appeals which affirmed the
assailed
decision and resolution of the Court of Tax Appeals. Hence, this
Petition
for Review on Certiorari raising the singular issue of: "whether CTA.
Case
No. 4201 should be reopened in order to allow petitioner to present in
evidence the report of investigation of the BIR officer on private
respondent's
claim for refund."[6]
It is evident
that what the petitioner sought
before the Court of Tax Appeals was actually a new trial on the ground
of newly discovered evidence. Thus, as correctly put by ANSCOR in its
Comment
to the Petition, the resolution of the above stated issue hinges on the
determination of the nature of the BIR report either as newly
discovered
evidence, warranting a trial de novo, or "forgotten evidence"
which
can no longer be considered on appeal.[7]
Section 5, Rule
13 of the Rules of the Court of
Tax Appeals provides that the provisions of Rule 37 of the Rules of
Court
shall be applicable to motions for new trial before the Court of Tax
Appeals.
Under Section 1, Rule 37 of the Rules of Court, the requisites for
newly
discovered evidence as a ground for a new trial are: [a] the evidence
was
discovered after the trial; [b] such evidence could not have been
discovered
and produced at the trial with reasonable diligence; and [c] that it is
material, not merely cumulative, corroborative or impeaching, and is of
such weight that, if admitted, will probably change the judgment.[8]
All three requisites must characterize the evidence sought to be
introduced
at the new trial.cralaw:red
We agree with the
ruling of the respondent Courts
that the BIR report of September 18, 1991 does not qualify as newly
discovered
evidence. Aside from petitioner's bare assertion that the said report
was
not yet in existence at the time of the trial, he miserably failed to
offer
any evidence to prove that the same could not have been discovered and
produced at the trial despite reasonable diligence. Why such a report
of
vital significance could not have been prepared and presented during
the
four [4] long years that the case was pending before the Court of Tax
Appeals
is simply beyond our comprehension. Worse, petitioner did not even
endeavor
to explain this circumstance.cralaw:red
Perhaps realizing
that under the Rules the said
report cannot be correctly admitted as newly discovered evidence, the
petitioner
invokes a liberal application of the Rules. He submits that Section 8
of
the Rules of the Court of Tax Appeals declaring that the latter shall
not
be governed strictly by technical rules of evidence mandates a
relaxation
of the requirements of new trial on the basis of newly discovered
evidence.
This is a dangerous proposition and one which we refuse to countenance.
we cannot agree more with the Court of Appeals when it stated thus:
To accept the contrary view of the
petitioner
would give rise to a dangerous precedent in that there would be no end
to a hearing before respondent court because, every time a party is
aggrieved
by its decision, he can have it set aside by asking to be allowed to
present
additional evidence without having to comply with the requirements of a
motion for a new trial based on newly discovered evidence. Rule 13,
Section
5 of the Rules of the Court of Tax Appeals should not be ignored at
will
and at random to the prejudice of the orderly presentation of issues
and
their resolution. To do so would affect, to a considerable extent, the
principle of stability of judicial decision.[9]
We are left
with no recourse but to conclude that
this is a simple case of negligence on the part of the petitioner. For
this act of negligence, the petitioner cannot be allowed to seek refuge
in a liberal application of the Rules. For it should not be forgotten
that
the first and fundamental concern of the rules of procedure is to
secure
a just determination of every action. In the case at bench, a liberal
application
of the rules of procedure to suit the petitioner's purpose would
clearly
pave the way for injustice as it would be rewarding an act of
negligence
with undeserved tolerance.
WHEREFORE, the
petition is hereby DENIED and the
assailed decision of the Court of Appeals dated January 31, 1994 is
AFFIRMED
in toto.cralaw:red
SO ORDERED.cralaw:red
Narvasa, C.J,
Davide, Jr., Melo and Panganiban,
JJ., concur.cralaw:red
___________________________________
Endnotes
[1]
Decision in CA-G. R. No. 29967 promulgated on January 31, 1994, pp.
1-2;
Rollo, pp. 37-38.
[2]
Ibid.
[3]
Decision in CTA Case No. 4201 promulgated on August 7, 1991, pp. 3-4;
Rollo,
pp. 29-30.
[4]
The said report reads as follows:chanroblesvirtuallawlibrary
"Barring and assuming
presentation
of the requested documents and taking into consideration the
certification
of creditable income taxes withheld issued by the Chief, Withholding
Tax
Division (See Annex "B" and B-1 and B-2) that only the total amount of
P414,292.06 and P414,772.99 creditable income taxes withheld from A
Soriano
Corporation (ANSCOR) for the taxable year 1985 and 1986, respectively,
the maximum amount that can be favorably subjected to a tax credit memo
for the two (2) taxable year will only be P34,697.10, computed as
follows:chanroblesvirtuallawlibrary
Balance of the accumulated tax
credit as of 1985 after credit under CTA Case No. 3694
P1,825,979.05
Add: 1985 Creditable Tax
Withheld
per Certificate by the Withholding Tax Division 414,292.06
Total 2,240,271.11
Less: Tax Doc per
return-1985
2,620,347.00
Difference 380,075.89
Less: Creditable Taxes
Withheld for 1986
per Certification
by Withholding Tax
Division 414,772.99
Excess tax credit which may
be subjected to a tax credit memo P 34,697.10
[5]
Supra, p. 6; Rollo, p. 42.
[6]
PETITION in G.R. No. 113703 dated March 16, 1994, p. 10 Rollo, p.17.
[7]
COMMENT in G.R. No. 113703 dated August 10, 1994, p. 14; Rollo, p. 66.
[8]
Dapin vs. Dionaldo, 209 SCRA 38, 44 [1992]; Bernardo vs. Court of
Appeals,
216 SCRA 224 [1992]; Pantig vs. Baltazar, 191 SCRA 830 [1990]; Velasco
vs. Ortiz, 184 SCRA 303 [1990]; Tumang vs. Court of Appeals, 172 SCRA
328
[1989].
[9]
Supra, p. 8, Rollo, p. 44. |