CIR vs. Itogon Suyoc Mines

Respondent Itogon-Suyoc Mines, a mining corporation duly organized and existing under Philippine laws fild  its income tax return.

Fiscal year (1956-1960) paid PhP 13, 155.20 as the first installment of the income tax due. Then filed an amended income tax return reporting a net loss of PhP 331,707.33

Fiscal year (1960-1961) setting forth its income tax liability of PhP 97.345 but deducting the amount of PhP 13,155.20 representing alleged tax credit for over-payment of the preceding fiscal year 1959-1960.

Petitioner assessed against the respondent the amount of PhP 1,512.83 as 1% monthly interest.  The basis for such an assessment was the absence of legal right to deduct said amount before the refund or tax credit thereof was approved by petitioner CIR.

ISSUE: WON respondent corporation is liable to pay the sum of PhP1,512.83 as 1% monthly interest for delinquency in the payment of income tax.?

HELD:
NIRC provides that interest upon the amount determined as a deficiency shall be assessed and shall be paid upon notice and demand from the CIR at the specified. If in any preceding year the tax payer was entitled to a refund of any amount due as tax, such amount, if not yet refunded, maybe deducted from the tax to be paid.