#20 pansacola vs cir

7/23/2019 #20 Pansacola vs Cir

1/6

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. !""" No#e$be% &' ())&

C*RME+INO ,. P*NS*CO+*' Petitione%'

#s.

COMMISSIONER O, INTERN*+ REVENUE' Respon-ent.

D E C I S I O N

UISUM/ING' 0.1

,o% %e#ie2 on ce%tio%a%i is the Decision -ate- 0une !' ())3 of the Cou%t of *ppeals in

C*4G.R. S.P. No. &)56!. The appellate cou%t -enie- petitione%7s a#ail$ent of the

inc%ease- a$ounts of pe%sonal an- a--itional e8e$ptions un-e% Republic *ct No.

95(5' the National Inte%nal Re#enue Co-e of ""6 :NIRC;' 2hich too< e=ect on

0anua%> ' ""9. *lso assaile- is the appellate cou%t7s Resolution3 -ate- Septe$be%

' ())3' -en>in? the $otion fo% %econsi-e%ation.

The facts a%e un-ispute-.

On *p%il 3' ""9' petitione% Ca%$elino ,. Pansacola @le- his inco$e ta8 %etu%n fo%

the ta8able >ea% ""6 that %eAecte- an o#e%pa>$ent of P!'"!). In it he clai$e- the

inc%ease- a$ounts of pe%sonal an- a--itional e8e$ptions un-e% Section 3! of the

NIRC' althou?h his ce%ti@cate of inco$e ta8 2ithhel- on co$pensation in-icate- the

lesse% allo2e- a$ounts on these e8e$ptions. He clai$e- a %efun- of P!'"!) 2ith

the /u%eau of Inte%nal Re#enue' 2hich 2as -enie-. +ate%' the Cou%t of Ta8 *ppeals

also -enie- his clai$ because acco%-in? to the ta8 cou%t' Bit 2oul- be absu%- fo% the

la2 to allo2 the -e-uction f%o$ a ta8pa>e%7s ?%oss inco$e ea%ne- on a ce%tain >ea%

of e8e$ptions a#ailin? on a -i=e%ent ta8able >ea%B Petitione% sou?ht

%econsi-e%ation' but the sa$e 2as -enie-.

On appeal' the Cou%t of *ppeals -enie- his petition fo% lac< of $e%it. The appellate

cou%t %ule- that U$ali #. Estanislao' %elie- upon b> petitione%' 2as inapplicable to

his case. It fu%the% %ule- that the NIRC too< e=ect on 0anua%> ' ""9' thus the

inc%ease- e8e$ptions 2e%e e=ecti#e onl> to co#e% ta8able >ea% ""9 an- cannot be

applie- %et%oacti#el>.


2/6

Petitione%' befo%e us' %aises a sin?le issue1

Fhethe% o% not the inc%ease- pe%sonal an- a--itional e8e$ptions un-e% the

NIRCF can be a#aile- of b> the pFetitione% fo% pu%poses of co$putin? his inco$e ta8

liabilit> fo% the ta8able >ea% ""6 an- thus be entitle- to the %efun-.

Si$pl> state-' the issue is1 Coul- the e8e$ptions un-e% Section 3! of the NIRC'

2hich too< e=ect on 0anua%> ' ""9' be a#aile- of fo% the ta8able >ea% ""6

Petitione% a%?ues that the pe%sonal an- a--itional e8e$ptions a%e of a @8e-

cha%acte% base- on Section 3! :*; an- :/; of the NIRC an- as %ule- b> this Cou%t in

U$ali' these pe%sonal an- a--itional e8e$ptions a%e @8e- a$ounts to 2hich an

in-i#i-ual ta8pa>e% is entitle-. He conten-s that unliin? a?ain in U$ali' petitione%

alle?es that the Cou%t of *ppeals e%%e- in %ulin? that the inc%ease- e8e$ptions 2e%e

$eant to be applie- be?innin? ta8able >ea% ""9 an- 2e%e to be %eAecte- in the

ta8pa>e%s7 %etu%ns to be @le- on o% befo%e *p%il !' """. Petitione% %easons that

such %ulin? 2oul- postpone the a#ailabilit> of the inc%ease- e8e$ptions an- lite%all>

-efe% the e=ecti#it> of the NIRC to 0anua%> ' """. Petitione% insists that the

inc%ease- e8e$ptions 2e%e al%ea-> a#ailable on *p%il !' ""9' the -ea-line fo%

@lin? inco$e ta8 %etu%ns fo% ta8able >ea% ""6' because the NIRC 2as al%ea->

e=ecti#e.

Respon-ent' th%ou?h the Oce of the Solicito% Gene%al' counte%s that the inc%ease-

e8e$ptions 2e%e not >et a#ailable fo% ta8able >ea% ""6 because all p%o#isions of

the NIRC too< e=ect on 0anua%> ' ""9 onl> that the @8e- cha%acte% of pe%sonal

an- a--itional e8e$ptions -oes not necessa%il> $ean that these 2e%e not ti$e

boun- an- petitione%7s p%oposition 2as cont%a%> to Section 3! :C; of the NIRC. It

fu%the% state- that petitione%7s e8e$ptions 2e%e -ete%$ine- as of Dece$be% 3'

""6 an- the e=ecti#it> of the NIRC -u%in? the pe%io- of 0anua%> to *p%il !' ""9

-i- not a=ect his ta8 liabilities 2ithin the ta8able >ea% ""6 an- the inclusi#e

pe%io- f%o$ 0anua%> to *p%il !' ""9' the @lin? -ates an- -ea-line fo%

a-$inist%ati#e pu%poses' 2as outsi-e of the ta8able >ea% ""6. Respon-ent also

$aintains that U$ali is not applicable to this case.

P%efato%il>' pe%sonal an- a--itional e8e$ptions un-e% Section 3! of the NIRC a%e@8e- a$ounts to 2hich ce%tain in-i#i-ual ta8pa>e%s :citiJens' %esi-ent aliens; a%e

entitle-. Pe%sonal e8e$ptions a%e the theo%etical pe%sonal' li#in? an- fa$il>

e8penses of an in-i#i-ual allo2e- to be -e-ucte- f%o$ the ?%oss o% net inco$e of

an in-i#i-ual ta8pa>e%. These a%e a%bit%a%> a$ounts 2hich ha#e been calculate- b>

ou% la2$a eKui#alent to the $ini$u$ of subsistence' tae%.

The> a%e @8e- a$ounts in the sense that the a$ounts ha#e been p%e-ete%$ine- b>


3/6

ou% la2$ae%. 4

:*; In Gene%al.4,o% pu%poses of -ete%$inin? the ta8 p%o#i-e- in Section (5:*; of this

Title' the%e shall be allo2e- a basic pe%sonal e8e$ption as follo2s1

8 8 8 8

,o% each $a%%ie- in-i#i-ual P3(')))

8 8 8 8

:/; *--itional E8e$ption fo% Depen-ents.The%e shall be allo2e- an a--itional

e8e$ption of Ei?ht thousan- pesos :P9'))); fo% each -epen-ent not e8cee-in? fou%

:5;. :E$phasis ou%s.;

Section 3! :*; an- :/; allo2 the basic pe%sonal an- a--itional e8e$ptions as

-e-uctions f%o$ ?%oss o% net inco$e' as the case $a>be' to a%%i#e at the co%%ect

ta8able inco$e of ce%tain in-i#i-ual ta8pa>e%s. Section (5 :*; :; :a; i$pose-

inco$e ta8 on a %esi-ent citiJen7s ta8able inco$e -e%i#e- fo% each ta8able >ea%. It

p%o#i-es as follo2s1

SEC. (5. Inco$e Ta8 Rates.

:*; Rates of Inco$e Ta8 on In-i#i-ual CitiJen

:; *n inco$e ta8 is he%eb> i$pose-1

:a; On the ta8able inco$e -e@ne- in Section 3 of this Co-e' othe% than inco$e

subLect to ta8 un-e% Subsections :/;' :C;' an- :D; of this Section' -e%i#e- fo% each

ta8able >ea% f%o$ all sou%ces 2ithin an- 2ithout the Philippines b> e#e%> in-i#i-ualcitiJen of the Philippines %esi-in? the%ein :E$phasis ou%s.;

Section 3 -e@nes Bta8able inco$eB as the pe%tinent ite$s of ?%oss inco$e

speci@e- in the NIRC' less the -e-uctions an-o% pe%sonal an- a--itional

e8e$ptions' if an>' autho%iJe- fo% such t>pes of inco$e b> the NIRC o% othe% special

la2s. *s -e@ne- in Section (( :P;' Bta8able >ea%B $eans the calen-a% >ea%' upon the

basis of 2hich the net inco$e is co$pute- un-e% Title II of the NIRC. Section 53 also


4/6

suppo%ts the %ule that the ta8able inco$e of an in-i#i-ual shall be co$pute- on the

basis of the calen-a% >ea%. In a--ition' Section 5! p%o#i-es that the -e-uctions

p%o#i-e- fo% un-e% Title II of the NIRC shall be taea% in 2hich

the> a%e Bpai- o% acc%ue-B o% Bpai- o% incu%%e-.B

Mo%eo#e%' Section 6" :H; %eKui%es the e$plo>e% to -ete%$ine' on o% befo%e the en-of the calen-a% >ea% but p%io% to the pa>$ent of the co$pensation fo% the last

pa>%oll pe%io-' the ta8 -ue f%o$ each e$plo>ee7s ta8able co$pensation inco$e fo%

the enti%e ta8able >ea% in acco%-ance 2ith Section (5 :*;. This is fo% the pu%pose of

eithe% 2ithhol-in? f%o$ the e$plo>ee7s Dece$be% sala%>' o% %efun-in? to hi$ not

late% than 0anua%> (! of the succee-in? >ea%' the -i=e%ence bet2een the ta8 -ue

an- the ta8 2ithhel-.

The%efo%e' as p%o#i-e- in Section (5 :*; :; :a; in %elation to Sections 3 an- (( :P;

an- Sections 53' 5! an- 6" :H; of the NIRC' the inco$e subLect to inco$e ta8 is the

ta8pa>e%7s inco$e as -e%i#e- an- co$pute- -u%in? the calen-a% >ea%' his ta8able

>ea%.

Clea%l> f%o$ the abo#e Kuote- p%o#isions' 2hat the la2 shoul- consi-e% fo% the

pu%pose of -ete%$inin? the ta8 -ue f%o$ an in-i#i-ual ta8pa>e% is his status an-

Kuali@e- -epen-ents at the close of the ta8able >ea% an- not at the ti$e the %etu%n

is @le- an- the ta8 -ue the%eon is pai-. No2 co$es Section 3! :C; of the NIRC 2hich

p%o#i-es'

Sec. 3!. *llo2ance of Pe%sonal E8e$ption fo% In-i#i-ual Ta8pa>e%.

8 8 8 8

:C; Chan?e of Status. If the ta8pa>e% $a%%ies o% shoul- ha#e a--itional

-epen-ent:s; as -e@ne- abo#e -u%in? the ta8able >ea%' the ta8pa>e% $a> clai$ the

co%%espon-in? a--itional e8e$ption' as the case $a> be' in full fo% such >ea%.

If the ta8pa>e% -ies -u%in? the ta8able >ea%' his estate $a> still clai$ the pe%sonal

an- a--itional e8e$ptions fo% hi$self an- his -epen-ent:s; as if he -ie- at the

close of such >ea%.

If the spouse o% an> of the -epen-ents -ies o% if an> of such -epen-ents $a%%ies'

beco$es t2ent>4one :(; >ea%s ol- o% beco$es ?ainfull> e$plo>e- -u%in? the

ta8able >ea%' the ta8pa>e% $a> still clai$ the sa$e e8e$ptions as if the spouse o%

an> of the -epen-ents -ie-' o% as if such -epen-ents $a%%ie-' beca$e t2ent>4one:(; >ea%s ol- o% beca$e ?ainfull> e$plo>e- at the close of such >ea%.

E$phasis $ust be $a-e that Section 3! :C; of the NIRC allo2s a ta8pa>e% to still

clai$ the co%%espon-in? full a$ount of e8e$ption fo% a ta8able >ea%' e.?. if he

$a%%ies ha#e a--itional -epen-ents he' his spouse' o% an> of his -epen-ents -ie

an- if an> of his -epen-ents $a%%>' tu%n ( >ea%s ol- o% beco$e ?ainfull>


5/6

e$plo>e-. It is as if the chan?es in his o% his -epen-ents7 status too< place at the

close of the ta8able >ea%.

ConseKuentl>' his co%%ect ta8able inco$e an- his co%%espon-in? allo2able

-e-uctions e.?. pe%sonal an- a--itional -e-uctions' if an>' ha- al%ea-> been

-ete%$ine- as of the en- of the calen-a% >ea%.

In the case of petitione%' the a#ailabilit> of the afo%e$entione- -e-uctions if he is

thus entitle-' 2oul- be %eAecte- on his ta8 %etu%n @le- on o% befo%e the !th -a> of

*p%il """ as $an-ate- b> Section ! :C; :;. Since the NIRC too< e=ect on 0anua%>

' ""9' the inc%ease- a$ounts of pe%sonal an- a--itional e8e$ptions un-e%

Section 3!' can onl> be allo2e- as -e-uctions f%o$ the in-i#i-ual ta8pa>e%7s ?%oss

o% net inco$e' as the case $a>be' fo% the ta8able >ea% ""9 to be @le- in """. The

NIRC $a-e no %efe%ence that the pe%sonal an- a--itional e8e$ptions shall appl> on

inco$e ea%ne- befo%e 0anua%> ' ""9.

Thus' petitione%7s %eliance in U$ali is $isplace-.

In U$ali' the cou%t note- that -espite bein? ?i#en autho%it> b> Section (" :; :5; of

the National Inte%nal Re#enue Co-e of "66 to a-Lust these e8e$ptions' no

a-Lust$ents 2e%e $a-e to co#e% "9". Note that Rep. *ct No. 6&6 is entitle- B*n

*ct *-Lustin? the /asic Pe%sonal an- *--itional E8e$ptions *llo2able to In-i#i-uals

fo% Inco$e Ta8 Pu%poses to the Po#e%t> Th%eshol- +e#el' *$en-in? fo% the Pu%pose

Section ("' Pa%a?%aph :+;' Ite$s :; an- :(; :*;' of the National Inte%nal Re#enue

Co-e' *s *$en-e-' an- ,o% Othe% Pu%poses.B Thus' 2e sai- in U$ali' that the

a-Lust$ent p%o#i-e- b> Rep. *ct No. 6&6 e=ecti#e ""(' shoul- consi-e% the

po#e%t> th%eshol- le#el in ""' the ti$e it 2as enacte-. *n- 2e obse%#e- the%ein

that since the e8e$ptions 2oul- especiall> bene@t lo2e% an- $i--le4inco$e

ta8pa>e%s' the e8e$ption shoul- be $a-e to co#e% the past >ea% "". To such an

e8tent' Rep. *ct No. 6&6 2as a social le?islation inten-e- to %e$e-> the non4

a-Lust$ent in "9". *n- as cite- in U$ali' this le?islati#e intent is also clea% in the

%eco%-s of the House of Rep%esentati#es7 0ou%nal.

This is not so in the case at ba%. The%e is nothin? in the NIRC that e8p%esses an>

such intent. The polic> -ecla%ations in its enact$ent -o not in-icate it 2as a social

le?islation that a-Luste- pe%sonal an- a--itional e8e$ptions acco%-in? to the

po#e%t> th%eshol- le#el no% is the%e an> in-ication that its application shoul-%et%oact. *t the ti$e petitione% @le- his ""6 %etu%n an- pai- the ta8 -ue the%eon in

*p%il ""9' the inc%ease- a$ounts of pe%sonal an- a--itional e8e$ptions in Section

3! 2e%e not >et a#ailable. It has not >et acc%ue- as of Dece$be% 3' ""6' the last

-a> of his ta8able >ea%. Petitione%7s ta8able inco$e co#e%s his inco$e fo% the

calen-a% >ea% ""6. The la2 cannot be ?i#en %et%oacti#e e=ect. It is establishe- that

ta8 la2s a%e p%ospecti#e in application' unless it is e8p%essl> p%o#i-e- to appl>

%et%oacti#el>. In the NIRC' 2e note' the%e is no speci@c $ention that the inc%ease-


6/6

a$ounts of pe%sonal an- a--itional e8e$ptions un-e% Section 3! shall be ?i#en

%et%oacti#e e=ect. Confo%$abl> too' pe%sonal an- a--itional e8e$ptions a%e

consi-e%e- as -e-uctions f%o$ ?%oss inco$e. De-uctions fo% inco$e ta8 pu%poses

pa%ta non4

co$pliance. *ll that has to be -one is to appl> it in e#e%> case that falls 2ithin its

te%$s.

*cco%-in?l>' the Cou%t of *ppeals an- the Cou%t of Ta8 *ppeals 2e%e co%%ect in

-en>in? petitione%7s clai$ fo% %efun-.

HERE,ORE' the petition is DENIED fo% lac< of $e%it. The Decision -ate- 0une !'

())3 an- the Resolution -ate- Septe$be% ' ())3 of the Cou%t of *ppeals in C*4

G.R. S.P. No. &)56! a%e he%eb> *,,IRMED.

SO ORDERED.

#20 pansacola vs cir

Documents