Petitioner on 16 April 2007 filed its annual Income Tax Return (ITR) for the year ended 31 December 2006 reflecting an income tax overpayment.
On 14 November 2007, it filed an Annual ITR for the short fiscal year ended 31 March 2007 reflecting the income tax overpayment from the previous period as “Prior Year’s Excess Credit“. On the same date, it filed an amended Annual ITR for the short period fiscal year 31 March 2007 reflecting the removal of the amount indicated as “Prior Year’s Excess Credit“.
Petitioner on 10 October 2008 filed with respondent a claim for refund and/or issuance of a Tax Credit Certificate (TCC) of the alleged excess and unutilized creditable withholding taxes for 2006.
Whether or not the irrevocability rule applies exclusively to the carry-over option.
YES. A perfunctory reading of Section 76 of the NIRC unmistakably discloses that the irrevocable option referred to is the carry-over option only. There appears nothing therein from which to infer that the other choice is also irrevocable.
In other words, the law does not prevent a taxpayer who originally opted for a refund or tax credit certificate from shifting to the carry-over of the excess creditable taxes to the taxable quarters of the succeeding taxable years. However, in case the taxpayer decides to shift its option to carry-over, it may no longer revert to its original choice dues to the irrevocability rule. As Section 76 unequivocally provides, once the option of carry over has been made, it shall be irrevocable.