Two options to a taxpayer whose quarterly income tax payments in a given taxable year exceeds its total income tax due: (1) filing a tax refund, either in the form of cash or tax credit certificate or (2) availing of a tax credit. Once the carry-over option is taken, actually or constructively, it becomes irrevocable for that taxable period.

A Petition for Review was filed for failure of the CIR to act on the taxpayer’s administrative claim seeking the refund or issuance of a tax credit certificate representing its unutilized creditable tax withheld for the taxable year 2007. The CIR argued that the refund cannot be granted because the taxpayer automatically carried over the said amount to its income tax return for the fiscal year ended March 31, 2008. The Court ruled that Section 76 of the NIRC provides two options to a taxpayer whose quarterly income tax payments in a given taxable year exceeds its total income tax due: (1) filing a tax refund, either in the form of cash or tax credit certificate or (2) availing of a tax credit. Once the carry-over option is taken, actually or constructively, it becomes irrevocable for that taxable period. Thus, the application for cash refund or issuance of tax credit certificate of the taxpayer cannot be allowed. (UPSI Management, Inc. 2 vs. Commissioner of Internal Revenue, CTA Case No. 7945, December 16, 2011 ).