FACTS:
In its 1997 income tax return filed on 13 April 1998, respondent declared a creditable withholding tax of P1.2M for taxable year 1997 to be claimed as tax credit in taxable year 1998.
On 13 April 1999, respondent submitted its ITR for taxable year 1998 in which it reported a net loss. Due to its net-loss position, it was unable to claim the P1.2M tax credit.
ISSUE(S):
Whether or not respondent may claim a refund of the unutilized creditable withholding tax for taxable year 1997.
HELD:
NO. Inasmuch as the respondent already opted to carry over its unutilized creditable withholding tax to taxable year 1998, the carry-over could no longer be converted into a claim for tax refund because of the irrevocability rule provided in Section 76 of the NIRC of 1997. Thereby, the respondent became barred from claiming the refund.
However, in view of the irrevocable choice, the respondent remained entitled to utilize the tax credit in succeeding taxable year until fully exhausted. In this regard, the prescription did not bar it from applying the amount as tax credit considering that there was no prescriptive period for the carrying over of the amount as tax credit in subsequent taxable years.
