Implementing Rules and Regulations for Clerical Corrections in Date of Birth and Sex in the Civil Registry

The Office of the Civil Registrar General of the National Statistics Office promulgated Administrative Order No. 1 series of 2012 (AO 1) on October 24, 2012. The AO implements the provisions of Republic Act 10172, the amendatory law to Republic Act 9048, and supplements Administrative Order 1 series of 2001, which, in turn, implements RA 9048. Both statutes provide a means of correcting erroneous entries in the civil registry without need of judicial action.

Prior to RA 10172, RA 9048 allowed changes in a person’s first name or nickname as well as corrections to typographical entries through an administrative petition to the local civil registry or the consul-general. RA 10172 expands RA 9048 and expressly allows corrections to entries concerning a person’s date of birth or sex. More specifically, the law amended Sections 1, 2, 5 and 8 of RA 9048, which respectively defined the scope of the powers of the civil registry, the terms used in the Act, the form and contents of the petition and the authority to charge fees for the correction.

Only clerical or typographical errors are allowed to be corrected. For substantial amendments to any entry in the civil registry, except for change of first name or nickname, an adversarial proceeding under Rule 108 of the Rules of Court is still required. These include petitions to change nationality, age or status. Under the act, clerical or typographical errors are “harmless and innocuous…visible to the eyes or obvious to the understanding, and can be corrected or changed only by reference to other existing record or records.”

Dissension in the Court: February 2013

The primary issue in the three (3) consolidated cases involving San Roque Power, Taganito Mining and Philex Mining decided last February 12, 2013 revolves around the proper period for filing the judicial claim for refund or credit of creditable input tax. Under Section 112(A) and 112(C) of the Tax Code, a taxpayer whose sales are zero-rated or effectively zero-rated can file his administrative claim for refund or credit at anytime within two (2) years after the taxable quarter when the sales were made and, after full or partial denial of the claim or failure of the Commissioner to act on his application within 120 days from submission of the same, he may, within 30 days from receipt of the decision denying the claim or after the expiration of the 120-day period, file his judicial claim with the CTA.

These cases all involved the timely filing by the taxpayers of their administrative claims with the Commissioner of Internal Revenue. However, San Roque and Taganito both prematurely filed their judicial claims without waiting for the 120-day period (for the Commissioner to act on their administrative claims) to lapse, whereas Philex was a case of late filing since it did not file its judicial claim until after 426 days beyond the 120 + 30 day periods. Voting 9 to 6, the majority, in a decision penned by Justice Carpio, denied tax refund or credit to San Roque and Philex, but granted the same to Taganito.

The majority denied refund to San Roque on the basis, among others, that the waiting period for filing a judicial claim is mandatory and jurisdictional and has been in the Tax Code for more than 15 years before San Roque filed its judicial claim in April 10, 2003 (barely 13 days after it filed its administrative claim). The majority, however, granted refund to Taganito who, although like San Roque filed its judicial claim without waiting for the 120-day period to lapse, was deemed to have filed its judicial claim on time since it was filed on February 14, 2007 or after the issuance of BIR Ruling No. DA-489-03 on December 10, 2003 (which states that the taxpayer need not wait for the 120-day period to lapse before it could seek judicial relief with the CTA) but before the October 6, 2010 Supreme Court (SC) decision in Commissioner of Internal Revenue v. Aichi Forging Company of Asia (reinstating the 120+30 day periods as mandatory and jurisdictional). The majority held that since the Commissioner has exclusive and original jurisdiction to interpret tax laws under Section 4 of the Tax Code, a taxpayer should not be prejudiced by an erroneous interpretation by the Commissioner and, under Section 246, a reversal of a BIR ruling cannot adversely prejudice a taxpayer like Taganito who in good faith relied on it prior to its reversal.

Revised Implementing Rules and Regulations for the Adopt-A-School Program

The Department of Education (DepED) promulgated the revised implementing rules and regulations (IRR) for Republic Act 8525, or the Adopt-a-School Act of 1998, on 18 January 2013. DepED Order 2 series of 2013 is the latest revision to Department Order No. 80 s. 1998 – the first IRR issued for RA 8525.

The said law aims to improve access to quality education by promoting private sector participation in school building, rehabilitation and development. Under RA 8525, an adopting private entity (APE) must enter into a Memorandum of Agreement (MOA) with a public school. The MOA must be for at least two years and shall contain the terms of the ‘adoption’. Under such a MOA, the APE may provide training to a school’s faculty or construct or upgrade school facilities. It may also donate educational materials to public schools, whether elementary, secondary or tertiary, within the twenty poorest provinces in the country. In return, the law allows the APE to have its name displayed below the name of the adoptee school apart from an additional deduction to gross income equivalent to half of the expenses incurred and representation in the local school board.

New Rules and Regulations Governing the Elections

The Comelec promulgated Resolution No. 9615 on 15 January 2013. This Resolution implements the provisions of Republic Act No. 9006, more popularly known as the Fair Election Act, for purposes of the 2013 national and local mid-term elections.

The Fair Election Act governs the use of TV, radio and other broadcast media, and other forms and methods of campaigning, the use and conduct of election surveys and exit polls, and the method of implementing the right to reply enshrined under Section 4, Article IX-C of the 1987 Constitution. The law seeks to level the playing field among national and local electoral candidates and parties, particularly by placing limits on the amount of time a candidate or political party may access a particular medium for campaign purposes as well as by limiting the type and forms of allowable election campaign materials, and regulating public rallies, meetings and other political activities.

November 2012 Philippine Supreme Court Decisions on Commercial Law

Here are select November 2012 rulings of the Supreme Court of the Philippines on commercial law:

Banks; level of diligence required. Primarily, it bears noting that the doctrine of “mortgagee in good faith” is based on the rule that all persons dealing with property covered by a Torrens Certificate of Title are not required to go beyond what appears on the face of the title. This is in deference to the public interest in upholding the indefeasibility of a certificate of title as evidence of lawful ownership of the land or of any encumbrance thereon. In the case of banks and other financial institutions, however, greater care and due diligence are required since they are imbued with public interest, failing which renders the mortgagees in bad faith. Thus, before approving a loan application, it is a standard operating practice for these institutions to conduct an ocular inspection of the property offered for mortgage and to verify the genuineness of the title to determine the real owner(s) thereof. The apparent purpose of an ocular inspection is to protect the “true owner” of the property as well as innocent third parties with a right, interest or claim thereon from a usurper who may have acquired a fraudulent certificate of title thereto.

In this case, while Philbank failed to exercise greater care in conducting the ocular inspection of the properties offered for mortgage, its omission did not prejudice any innocent third parties. In particular, the buyer did not pursue her cause and abandoned her claim on the property. On the other hand, Sps. Delgado were parties to the simulated sale in favor of the Dys which was intended to mislead Philbank into granting the loan application. Thus, no amount of diligence in the conduct of the ocular inspection could have led to the discovery of the complicity between the ostensible mortgagors (the Dys) and the true owners (Sps. Delgado). In fine, Philbank can hardly be deemed negligent under the premises since the ultimate cause of the mortgagors’ (the Dys’) defective title was the simulated sale to which Sps. Delgado were privies.

October 2012 Philippine Supreme Court Decisions on Tax Law

Here are select October 2012 rulings of the Supreme Court of the Philippines on tax law:

National Internal Revenue Code; Quarterly income tax; irrevocability of option to carry-over excess or claim for refund. It is clear that once a corporation exercises the option to carry-over, such option is irrevocable “for that taxable period.” Having chosen to carry-over the excess quarterly income tax, the corporation cannot thereafter choose to apply for a cash refund or for the issuance of a tax credit certificate for the amount representing such overpayment. To avoid confusion, the Court has defined the phrase “for that taxable year” as merely identifying the excess income tax, subject of the option, by referring to the “taxable period when it was acquired by the taxpayer.” United International Pictures, AB vs. Commissioner of Internal Revenue, G.R. No. 168331, October 11, 2012.

National Internal Revenue Code; income tax overpayments; claim for refund; requirements. In claiming for refund of excess creditable withholding tax, petitioner must show compliance with the following basic requirements: (1) the claim for refund was filed within two years as prescribed under Section 229 of the NIRC of 1997; (2) the income upon which the taxes were withheld were included in the return of the recipient (Sec 10, Revenue Regulations No. 6-85); and (3) the fact of withholding is established by a copy of a statement (BIR Form 1743.1) duly issued by the payor (withholding agent) to the payee showing the amount paid and the amount of tax withheld therefrom (Section 10, Revenue Regulations No. 6-85). Parenthetically, the Office of Solicitor General pointed out that the amount of income payments in the income tax return must correspond and tally to the amount indicated in the certificate of withholding, since there is no possible and efficacious way by which the Bureau of Internal Revenue can verify the precise identity of the income payments as reflected in the income tax return. United International Pictures, AB vs. Commissioner of Internal Revenue, G.R. No. 168331, October 11, 2012.

(Caren thanks Grace Ann C. Lazaro for assisting in the preparation of this post.)