College of Oral and Dental Surgery vs Court of Tax Appeals

FACTS: The College of Oral and Dental Surgery, sent a letter to the Collector of Internal Revenue, dated November 14, 1952, protesting against the collection and claimed for the refund of the sums of P4,333.39 and P500 paid for income tax corresponding to 1950 and the amount of P2,434.50 paid for income tax corresponding to 1951. It was claimed that the school was exempted from the payment of said tax in virtue of section 27, paragraph (f) of the National Internal Revenue Code. This petition for refund was denied by the Collector of Internal Revenue. Thereafter, the taxpayer sent another letter requesting for the reconsideration but CIR denied such on the ground that while it was true that the profits realized by the College of Oral and Dental Surgery were used for the expansion and improvement of the school and that no part thereof apparently injured to the benefit of any individual stockholder, yet considering that the records proved that Dr. Aldecoa, as president of the institution, and his family actually derived some benefits in the operation of the same. On April 29, 1955, the College of Oral and Dental Surgery filed a petition with the Court of Tax Appeals CTA. The CTA issued a resolution dismissing the petition on the ground that the court acquired no jurisdiction to entertain the same, it appearing that the case was filed 2 years after the taxes sought to be refunded had been paid.

ISSUE: Whether or not the claim for the refund was made within the prescribed period

RULING: No. There is no controversy that the taxes sought to be recovered where paid on May 15, 1951, September 15, 1951 and May 15, 1952, and that although the claim for the refund of the same was filed wlith the Collector of Internal Revenue on November 14, 1952, the request for the reconsideration of the latter's decision was denied only on April 20, 1955. Meanwhile, no proceeding in court was instituted for that purpose in the intervening period. Although the filing of the claim with the Collector of Internal Revenue is intended as a notice to said official that unless the tax or penalty alleged to have been erroneously or illegally collected is refunded court action will follow, this does not imply that the taxpayer must wait for the action of the Collector before bringing the matter to court. Indeed, it must be observed that under said provisions, the taxpayer's failure to comply with the requirement regarding the institution of the action or proceeding in court within 2 years after the payment of the taxes bars him from the recovery of the same, irrespective of whether a claim for the refund of such taxes filed with the Collector of Internal Revenue is still pending action of the latter.