December 18, 2001
Ponente: Puno, J.
FACTS
The CIR assessed Marubeni, a Japanese corporation engaged in business, for deficiency income, branch profit remittance, contractors and commercial brokers taxes arising from undeclared income from two contracts in the Philippines.
Marubeni filed two petitions before the CTA questioning the said assessment, followed by an application for tax amnesty pursuant to E.O. No. 41.
Subsequently, the coverage of E.O. No. 41 was expanded, prompting Marubeni to file a supplementary tax amnesty return.
The CIR was contending that Marubeni did not properly avail of the tax amnesty because Section 4(b) of E.O. No. 41 provided that "those with income tax cases already filed in Court as of the effectivity hereof" may not avail themselves of the amnesty.
RULING
SC ruled in favor of Marubeni.
With respect to income taxes, Marubeni properly availed of the tax amnesty because the point of reference is the date of effectivity of E.O. No. 41.
The filing of income tax cases in court must have been made before and as of the date of effectivity of E.O. No. 41.
In this case, the 2 CTA cases were filed last September while E.O. 41 took effect in October. However, with respect to contractors tax assessment and estate and donors tax and tax on business, Marubeni cannot avail of the tax amnesty.
E.O. No. 64 has no provision on who cannot avail of the tax amnesty but it provides that provisions of E.O. 41 which are not contradicting are applicable also. A tax amnesty, much like a tax exemption, is never favored nor presumed in law.
If granted, the terms of the amnesty, like that of a tax exemption, must be construed strictly against the taxpayer and liberally in favor of the taxing authority. For the right of taxation is inherent in government.
