Revenue v. Smart Communication

DEL CASTILLO, J.:

The right of a withholding agent to claim a refund of erroneously or illegally withheld taxes comes with the responsibility to return the same to the principal taxpayer. This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision1 dated June 28, 2007 and the Resolution2 dated July 31, 2007 of the Court of Tax Appeals (CTA) En Banc. Factual Antecedents Respondent Smart Communications, Inc. is a corporation organized and existing under Philippine law.

It is an enterprise duly registered with the Board of Investments. On May 25, 2001, respondent entered into three Agreements for Programming and Consultancy Services3 with Prism Transactive (M) Sdn. Bhd.

(Prism), a non-resident corporation duly organized and existing under the laws of Malaysia. Under the agreements, Prism was to provide programming and consultancy services for the installation of the Service Download Manager (SDM) and the Channel Manager (CM), and for the installation and implementation of Smart Money and Mobile Banking Service SIM Applications (SIM Applications) and Private Text Platform (SIM Application). On June 25, 2001, Prism billed respondent in the amount of US$547,822.45, broken down as follows: SDM Agreement US$236,000.00 CM Agreement 296,000.00 SIM Application Agreement 15,822.45 Total