149 _______________ 144 Rollo , pp. 2271 and 2274-2275. 145 Id. , at pp. 2276-2277. 146 Id. , at pp. 2280-2281. 147 Id. , at pp. 2281-2284. 148 Id. , at p. 2277. 149 Id. , at pp. 2277-2279 and 2288-2291. 451
VOL. 800, AUGUST 16, 2016 451 Banco De Oro vs. Republic Finally, petitioners-intervenors RCBC and RCBC Capital argue that this Court’s interpretation of the phrase “at any one time” cannot be applied to the PEACe Bonds and should be given prospective application only because it would cause prejudice to them, among others. They cite Section 246 of the National Internal Revenue Code on non- retroactivity of rulings, as well as Commissioner of Internal Revenue v. San Roque Power Corporation , 150 which held that taxpayers may rely upon a rule or ruling issued by the Commissioner from the time it was issued up to its reversal by the Commissioner or the court. According to them, the retroactive application of the court’s decision would impair their vested rights, violate the constitutional prohibition on non-impairment of contracts, and constitute a substantial breach of obligation on the part of government. 151 In addition, the imposition of the 20% final withholding tax on the PEACe Bonds would allegedly have pernicious effects on the integrity of existing securities that is contrary to the state policies of stabilizing the financial system and of developing the capital markets. 152 CODE-NGO likewise contends that it merely relied in good faith on the 2001 BIR Rulings confirming that the PEACe Bonds were not subject to the 20% final withholding tax. 153 Therefore, it should not be prejudiced if the BIR Rulings are found to be erroneous and reversed by the Commissioner or this court. 154 CODE-NGO argues that this Court’s Decision construing the phrase “at any one time” to determine the phrase “20 or more lenders” to include both the primary and secondary market should be applied prospectively. 155 Assuming it is liable for the 20% final withholding tax, CODE-NGO argues that the collection of the final tax was _______________ 150 703 Phil. 310; 690 SCRA 336 (2013) [Per J . Carpio, En Banc ]. 151 Rollo , pp. 2292-2304. 152 Id. , at pp. 2304-2306. 153 Id. , at p. 2389. 154 Id. , at p. 2390. 155 Id. , at p. 2395.
452 452 SUPREME COURT REPORTS ANNOTATED Banco De Oro vs. Republic barred by prescription. 156 CODE-NGO points out that under Section 203 of the National Internal Revenue Code, internal revenue taxes such as the final tax, should be assessed within three (3) years after the last day prescribed by law for the filing of the return. 157 It further argues that Section 222(a) on exceptions to the prescribed period, for tax assessment and collection does not apply. 158 It claims that there is no fraud or intent to evade taxes as it relied in good faith on the assurances of the Bureau of Internal Revenue and Bureau of Treasury the PEACe Bonds are not subject to the 20% final withholding tax. 159 We find merit on the claim of petitioners-intervenors RCBC, RCBC Capital, and CODE-NGO for prospective application of our Decision.
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