Professional Documents
Culture Documents
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 81446 August 18, 1988
BONIFACIA SY PO, petitioner,
vs.
HONORABLE COURT OF TAX APPEALS AND
HONORABLE COMMISSIONER OF INTERNAL
REVENUE, respondents.
Basilio E. Duaban for petitioner.
SARMIENTO, J.:
This is an appeal from the decision 1 of the
respondent Court of Tax Appeals, dated
September 30,1987, which affirmed an earlier
decision of the correspondent Commissioner of
Internal Revenue in assessment letters dated
August 16, 1972 and September 26, 1972, which
ordered the payment by the petitioner of
deficiency income tax for 1966 to 1970 in the
amount of P7,154,685.16 and deficiency specific
tax for January 2, 1964 to January 19, 1972, in
the amount of P5,595,003.68.
We adopt the respondent court's finding of facts,
to wit:
Petitioner is the widow of the late
Mr. Po Bien Sing who died on
September 7, 1980. In the taxable
years 1964 to 1972, the deceased
Po Bien Sing was the sole
proprietor of Silver Cup Wine
Factory (Silver Cup for brevity),
Talisay, Cebu. He was engaged in
the business of manufacture and
sale of compounded liquors, using
alcohol and other ingredients as
raw materials.
On the basis of a denunciation
against Silver Cup allegedly "for
tax evasion amounting to millions
of pesos" the then Secretary of
Finance Cesar Virata directed the
Finance-BIR--NBI team constituted
under Finance Department Order
No. 13-70 dated February 19, 1971
(Exh- 3, pp. 532-553, Folder II, BIR
rec.) to conduct the corresponding
investigation in a memorandum
dated April 2, 1971 (p. 528, Folder
II, BIR rec.). Accordingly, a letter
and a subpoena duces tecum dated
April 13,1971 and May 3,1971,
respectively, were issued against
II
RESPONDENT COURT OF TAX APPEALS PALPABLY
ERRED IN DECIDING THE CASE IN A WAY
CONTRARY TO THE DOCTRINES ALREADY LAID
DOWN BY THIS COURT.
III
RESPONDENT COURT OF TAX APPEALS GRAVELY
ERRED IN FINDING PO BEEN SING TO HAVE
INCURRED THE ALLEGED DEFICIENCY TAXES IN
QUESTION. 3
We affirm.
Settled is the rule that the factual findings of the
Court of Tax Appeals are binding upon this
Honorable Court and can only be disturbed on
appeal if not supported by substantial evidence. 4
The assignments of errors boils down to a single
issue previously raised before the respondent
Court, i.e., whether or not the assessments have
valid and legal bases.
The applicable legal provision is Section 16(b) of
the National Internal Revenue Code of 1977 as
amended. It reads:
Sec. 16. Power of the
Commissioner of Internal Revenue
to make assessments.
xxx xxx xxx
(b) Failure to submit required
returns, statements, reports and
other documents. - When a report
required by law as a basis for the
assessment of an national internal
revenue tax shall not be
forthcoming within the time fixed
by law or regulation or when there
is reason to believe that any such
report is false, incomplete, or
erroneous, the Commissioner of
Internal Revenue shall assess the
proper tax on the best evidence
obtainable.
1967
645,33
5.04
1968
1,683,
588.48
1969
1,589,
622.48
1970
3,028,
502.92
Total
amoun
t due.
and
collecti
ble
P7,154
,685.1
6
the compound of
Silver Cup.
In the same vein, the factory
personnel manager testified that
false entries were entered in the
official register book: thus,
A As factory
personnel manager
and all-around handy
man of Po Bien Sing,
owner of Silver Cup,
these labels were
entrusted to me to
make the false
entries in the official
register book of
Silver Cup, which I
did under the
direction of Po Bien
Sing. (Sworn
statement, p. 512,
Folder II, BIR rec.) 10
(Emphasis ours)
The existence of fraud as found by the
respondents can not be lightly set aside absent
substantial evidence presented by the petitioner
to counteract such finding. The findings of fact of
the respondent Court of Tax Appeals are entitled
to the highest respect. 11 We do not find anything
in the questioned decision that should disturb this
long-established doctrine.
WHEREFORE, the Petition is DENIED. The Decision
of the respondent Court of Tax Appeals is hereby
AFFIRMED. Costs against the petitioner.
SECOND DIVISION
Petitioner,
SO ORDERED.
Present:
CARPIO MORALES
- versus -
TINGA,
VELASCO, JR., an
BRION, JJ.
COMMISSIONER ON INTERNAL
REVENUE,
Promulgated:
Respondent.
x------------------------------------------------ x
The
right
of
the
respondent to assess petitioner
for deficiency income tax, VAT
and Documentary Stamp Tax for
the
year
1995
has
not
prescribed pursuant to Section
222(a) of the 1997 Tax Code.
Petitioners 1995 Income Tax
Return (ITR) filed on April 11,
1996 was false and fraudulent
for its deliberate failure to
declare its true sales. Petitioner
declared in its 1995 Income Tax
Return that it was on its preoperation stage and has not
declared
its
income.
Investigation by the revenue
officers of the respondent,
however, disclosed that it has
been operating/doing business
and had sales operations for the
year 1995 in the total amount of
P7,156,336.08 which it failed to
report in its 1995 ITR. Thus, for
the year 1995, petitioner filed a
fraudulent annual income return
with intent to evade tax.
Likewise, petitioner failed to file
Value-Added Tax (VAT) Return
and reported the amount of
P7,156,336.08 as its gross sales
for the year 1995. Hence, for
failure to file a VAT return
and for filing a fraudulent
income tax return for the
year
1995,
the
corresponding taxes may be
assessed at any time within
ten (10) years after the
discovery of such omission
or fraud pursuant to Section
222(a) of the 1997 Tax Code.
DECISION
Additionally,
of
distraint
and/or
levy
against
of prescription.
The
1
2
3
4
motion
for
the
issuance
of
the
provisions
of
The
National
Internal
the BIR.18[18]
12
13
14
15
16
10
17
11
18
Resolution19[19]
By
of
January
15,
of
Subpoenas
and
disallowed
the
officers,20[20]
it
finding
that
the
Petitioners
Motion
for
24
hence, the
I.
III.
x x x in holding that the
issuance
of
subpoena
ad
testificandum would constitute a
violation of the prohibition to
reveal the identity of the
informer because compliance
with such prohibition has been
rendered moot and academic by
the voluntary admissions of the
Respondent himself.
19
20
21
22
23
24
25
26
IV.
x x x in holding that the
constitutional
right
of
an
accused to examine the witness
against him does not exist in
this case.
The Petitioners
liability
for
tax
deficiency
assessment which is the main
issue in the Petition for Review is
currently
pending
at
the
Honorable
Second
Division.
Therefore, it is a prejudicial
question raised in the criminal
case
filed
by
the
herein
Respondent against the officers
of the Petitioner with the
Department of Justice.
V.
the
CTA,
were
whether
respondents
IX.
x x x when it quashed the
subpoena duces tecum as the
Honorable Court had issued an
outstanding
order
to
the
Respondent
to
certify
and
forward to the CTA all the
records of the case because up
to the date of this Petition the
BIR records have not been
submitted yet to the CTA.27[27]
For in
by
Section
12
of
Finance
27
28
1.
2.
Do
you
know
Mr.
Leonardo Sablan? Please
state
under
what
circumstance you came
to know Mr. Sablan?31[31]
(Underscoring supplied)
read:
1.
2.
3.
4.
5.
6.
7.
Under
what
circumstances do you
know
petitioner
corporation?
Please
state in what capacity,
the date or period you
obtained said knowledge.
Do you know a Ms.
Elnora Carpio, who from
1995 to the early part of
1996 was the book
keeper
of
petitioner?
Please state how you
came to know of Ms.
Carpio.
At the time that
Ms. Carpio was book
keeper of petitioner did
she consult you or show
any
accounting
documents and records
of petitioner?
What documents, if
any, did you obtain from
petitioner?
Were
these
documents
that
you
obtained from petitioner
submitted to the Bureau
of
Internal
Revenue
(BIR)?
Please describe
said
documents
and
under
what
circumstances the same
were submitted.
Was the consent of
the petitioner, its officers
or employees obtained
when the documents that
you
obtained
were
submitted to the BIR?
Please state when and
from whom the consent
was obtained.
Did you execute an
affidavit as an informer in
the assessment which
was issued by the BIR
against petitioner for the
tax year 1995 and other
years?30[30]
(Underscoring supplied)
preclude
BIR
from
assessing
provides:
In
ascertaining
the
correctness of any return, or in
making a return when none has
been made, or in determining
the liability of any person for
any internal revenue tax, or in
collecting any such liability, or in
evaluating tax compliance, the
Commissioner is authorized:
(A)
(B)
while the questions for the revenue officers read:
29
30
the
31
To examine
any book, paper,
record or other
data which may
be relevant or
material to such
query;
To obtain on
a regular basis
from any person
other than the
person
whose
internal
revenue
tax
(C)
liability
is
subject to audit
or investigation,
or from any office
or officer of the
national and local
governments,
government
agencies
and
instrumentalities,
including
the
Bangko Sentral ng
Pilipinas
and
governmentowned
and
controlled
corporations, any
information such
as, but not limited
to,
costs
and
volume
of
production,
receipts or sales
and
gross
incomes
of
taxpayers,
and
the
names,
addresses,
and
financial
statements
of
corporations,
mutual
fund
companies,
insurance
companies,
regional operating
headquarters
of
multinational
companies, joint
accounts,
associations, joint
ventures
or
consortia
and
registered
partnerships and
their members;
To summon
the person liable
for tax or required
to file a return, or
any
officer
or
employee of such
person, or any
person
having
possession,
custody, or care
of the books of
accounts
and
other
accounting
records
containing
entries relating
to the business
of the person
liable for tax, or
any
other
person,
to
appear before the
Commissioner or
his
duly
authorized
representatives at
a time and place
(D)
(E)
specified in the
summons and to
produce
such
books,
papers,
records, or other
data, and to give
testimony;
To take such
testimony of the
person concerned,
under oath, as
may be relevant
or
material
to
such inquiry; and
To
cause
revenue
officers
and employees to
make a canvass
from time to time
of any revenue
district or region
and inquire after
and concerning all
persons
therein
who may be liable
to
pay
any
internal revenue
tax,
and
all
persons owning or
having the care,
management
or
possession of any
object
with
respect to which a
tax is imposed.
x x x x (Emphasis and
underscoring supplied)
in
criminal
prosecution
to
cross
process
issued
to
secure
the
32
33
CTA
SO ORDERED.
officers
and
accountant
of
SECOND DIVISION
petitioner-
CARPIO MORALES,
TINGA,
Present:
QUISUMBING, J., Ch
- versus -
COMMISSIONER ON INTERNAL
REVENUE,
Respondent.
34
35
36
37
DECISION
CARPIO MORALES, J.:
38
39
40
41
42
46
47
48
49
50
43
51
44
52
45
53
54
55
56
57
58
59
60
61
62
63
IV.
x x x in holding that the
constitutional right of an accused to
examine the witness against him
does not exist in this case. The
Petitioners
liability
for
tax
deficiency assessment which is the
main issue in the Petition for Review
is
currently
pending
at
the
Honorable
Second
Division.
Therefore, it is a prejudicial question
raised in the criminal case filed by
the herein Respondent against the
officers of the Petitioner with the
Department of Justice.
V.
x x x in dismissing the request for
subpoena ad testificandum because
the Opposition thereto submitted by
the Respondent was not promptly
filed as provided by the Rules of
Court thus, it is respectfully
submitted that, Respondent has
waived his right to object thereto.
VI.
x x x when the Honorable Court of
Tax Appeals ruled that the purpose
of the Petitioner in requesting for
written interrogatories is to annoy,
embarrass, or oppress the witness
because such ruling has no factual
basis since Respondent never
alleged nor proved that the
witnesses
to
whom
the
interrogatories are addressed will be
annoyed,
embarrassed
or
oppressed; besides the only obvious
purpose of the Petitioner is to know
the whereabouts of
accounting
records and documents which are in
the possession of the witnesses to
whom
the
interrogatories
are
directed and to ultimately get
possession
thereof.
Granting
without admitting that there is
annoyance,
embarrassment
or
oppression; the same is not
unreasonable.
VII.
2.
3.
IX.
x x x when it quashed the subpoena
duces tecum as the Honorable Court
had issued an outstanding order to
the Respondent to certify and
forward to the CTA all the records of
the case because up to the date of
this Petition the BIR records have
not been submitted yet to the CTA. 64
[27]
4.
5.
6.
7.
petitioner
corporation?
Please
state
in
what
capacity, the date or period
you
obtained
said
knowledge.
Do you know a Ms.
Elnora Carpio, who from
1995 to the early part of
1996 was the book keeper
of petitioner? Please state
how you came to know of
Ms. Carpio.
At the time that Ms.
Carpio was book keeper of
petitioner did she consult
you or show any accounting
documents and records of
petitioner?
What documents, if
any, did you obtain from
petitioner?
Were these documents
that you obtained from
petitioner submitted to the
Bureau of Internal Revenue
(BIR)? Please describe said
documents and under what
circumstances the same
were submitted.
Was the consent of the
petitioner, its officers or
employees obtained when
the documents that you
obtained were submitted to
the BIR? Please state when
and from whom the consent
was obtained.
Did you execute an
affidavit as an informer in
the assessment which was
issued by the BIR against
petitioner for the tax year
1995 and other years?67[30]
(Underscoring supplied)
2.
1.
Under
what
circumstances do you know
64
65
67
66
68
To obtain on a regular
basis from any person other
than
the
person
whose
internal revenue tax liability
is
subject
to
audit
or
investigation, or from any
office or officer of the national
and
local
governments,
government
agencies
and
instrumentalities, including the
Bangko Sentral ng Pilipinas and
government-owned
and
controlled
corporations,
any
information such as, but not
limited to, costs and volume of
production, receipts or sales and
gross incomes of taxpayers, and
the names, addresses, and
financial
statements
of
corporations,
mutual
fund
companies,
insurance
companies, regional operating
headquarters of multinational
companies,
joint
accounts,
associations, joint ventures or
consortia
and
registered
partnerships and their members;
(C)
To summon the person
liable for tax or required to file a
return,
or
any
officer
or
employee of such person, or any
person having possession,
custody, or care of the books
of
accounts
and
other
accounting
records
containing entries relating to
the business of the person
liable for tax, or any other
person, to appear before the
Commissioner
or
his
duly
authorized representatives at a
time and place specified in the
summons and to produce such
books, papers, records, or other
data, and to give testimony;
(D) To take such testimony of the
person concerned, under oath, as
may be relevant or material to
such inquiry; and
(E) To cause revenue officers and
employees to make a canvass
from time to time of any revenue
district or region and inquire
after and concerning all persons
therein who may be liable to pay
any internal revenue tax, and all
persons owning or having the
care, management or possession
in
light
of
69
70
71
72
73
74
the
foregoing
SO ORDERED.
Petitioners,
Present:
SANDOVAL-GUTIERREZ,
-versusCORONA,
AZCUNA and
GARCIA, JJ.
PRIMETOWN PROPERTY
GROUP, INC.,
Respondent.
Promulgated:
August 28, 2007
x----------------------------------------x
DECISION
CORONA, J.:
75
76
77
The CTA found that respondent filed its final adjusted return
The tax court applied Article 13 of the Civil Code which states:
year,
respondent's
petition,
which
was
filed
731
88
days [14] after respondent filed its final adjusted return, was
78
79
80
81
82
87
83
88
84
89
85
90
86
91
15, 1999 to April 14, 2000 should still be counted as 365 days
each or a total of 730 days. A statute which is clear and
numbered
93
94
95
96
97
98
up
to,
but
not
including,
the
92
day
99
100
101
102
103
104
105
6th
calendar
month
September 15,
1998
to
October 14,
1998
7th
calendar
month
October 15,
1998
to
November
14, 1998
8th
calendar
month
November 15,
1998
to
December
14, 1998
9th
calendar
month
December 15,
1998
to
January 14,
1999
10th
calendar
month
January 15,
1999
to
February 14,
1999
11th
calendar
month
February 15,
1999
to
March 14,
1999
12th
calendar
month
to
Year 13th
2
calendar
month
to
14th
calendar
month
to
15th
calendar
month
to
16th
calendar
month
to
August 14,
1999
17th
calendar
month
to
September
14, 1999
18th
calendar
month
September 15,
1999
to
October 14,
1999
19th
calendar
month
October 15,
1999
to
November
14, 1999
Year 1st
1
calendar
month
to
2nd
calendar
month
to
3rd
calendar
month
to
4th
calendar
month
to
August 14,
1998
20th
calendar
month
November 15,
1999
to
December
14, 1999
5th
calendar
month
to
September
14, 1998
21st
calendar
month
December 15,
1999
to
January 14,
2000
22nd
calendar
month
January 15,
2000
to
February 14,
2000
23rd
calendar
month
February 15,
2000
to
March 14,
2000
106
107
108
24th
calendar
month
to
No costs.
SO ORDERED.
Atty. Ong
If Your Honor please, objection again on
the materiality. What would counsel for
the respondent prove on this point?
Atty. Garces
Same purpose, Your If Honor to prove that
Ayala Securities corporation is a mere
investment or holding company
Atty. Ong
What is the materiality of the case if it is a
mere investment company. In fact, we are
here in court to prove the reasonableness
or unreasonableness of the accumulation
of profit. I think counsel for the respondent
is trying to harp on presumption; but
actually we will not be delving on
presumption but on actual facts proving
the reasonableness of the accumulation
based on actual evidence.
Judge Alvarez
In order to determine the reasonableness
or unreasonableness, there must be a
basis. witness will have to answer the
question.
A. Yes.
xxx xxx xxx
Q. As of September 30, 1955 when the
Ayala Securities Corporation tiled its
income tax return, were the officers of the
Ayala Securities Corporation and the Ayala
and Company housed in the same
building?
A. Yes, sir; they were.
Q. And also are the employees of the
Ayala Securities corporation and the Ayala
and Company the same - meaning that
the employees of the Ayala Securities
Corporation are also the employees of the
Ayala and Company?
A. At the time, if I remember right, Ayala
and Company was the operating company
and the employees were the employees of
the Ayala and Company; (t.s.n., pp. 3237).
Another witness, Mr. Salvador J. Lorayes the
Secretary and head of the Legal Department of
the corporation, also testified that:
Judge Alvarez questions
Amount Ceded
1952
1952
P316,526.75
1953
P246,082.04
1954
P203,384.69
Withholding Tax
1952
P 75,966.42
1953
59,059.68
1954
48,812.32
Total
P183,838.42
=============
Amount
claimed . . . . . . . .
....
P 35,912.25
Amount
allowed . . . . . . . .
....
20,085.90
====
1954
P29,624.73
Amount
allowed . . . . . . . .
....
19,455.50
====
The above assessment resulted from the disallowance of a
portion of the deduction claimed by Phoenix Assurance Co.,
Ltd. as head office expenses allocable to its business in the
Philippines fixed by the Commissioner at 5% of the net
Philippine income instead of 5% of the gross Philippine income
as claimed in the returns.
P121,425.00
EN BANC
G.R. No. L-19495
Personal properties
Palay
Carabaos
P6,444.00
1,000.00
Real properties:
Capital, 74 parcels )
Conjugal 19 parcels)
assessed at
P187,204.00
Personal properties:
Buick Sedan
Packard car
Aparadors
Cash in Bank (PNB)
Palay
Carabaos
P8,100.00
2,000.00
500.00
8,858.46
6,444.00
1,500.00
P27,402.46
P324,797.21
4,500.00
P329,297.21
Personal properties:
Real properties:
Palay
Carabaos
Packard Automobile
2 Aparadors
Real properties:
Capital, 25 parcels assessed at
P6,444.00
1,500.00
2,000.00
500.00
P87,715.32
Total
P356,699.67
Estate tax
P16,246.04
5% surcharge
411.29
Delinquency
interest
11,868.90
Compromise
No notice of death
Late payment
P15.00
40.00
Total
Inheritance Tax
5% surcharge
55.00
P28,581.23
P38,178.12
1,105.86
Delinquency
interest
28,808.75
Total
50.00
P69,142.73
P97,723.96
RESOLUTION
April 24, 1967
BENGZON, J.P., J.:
Respondent Lilia Yusay Gonzales seeks reconsideration of our
decision holding her liable for the payment of P97,723.96 as
estate and inheritance taxes plus delinquency penalties as
administratrix of the intestate estate of Matias Yusay. The
grounds raised by her deserve this extended resolution.
Firstly, movant maintains that the issue of whether or not the
estate and inheritance tax return filed by Jose Yusay on May
13, 1949 was sufficient to start the running of the statute of
limitations on assessment, was neither raised in the Court of
Tax Appeals nor assigned as error before this Court. The
records in the Court of Tax Appeals however show the
contrary. Paragraph 2 of the answer filed by the Commissioner
of Internal Revenue states:
2. That he likewise admits, as alleged in paragraph 1
thereof having received the letter of the petitioner
dated November 27, 1959 (Annex "A" of the Petition
for Review), contesting the assessment of estate and
inheritance taxes levied against the Intestate Estate
of the late Matias Yusay, Special Proceedings No.
459, Court of First Instance of Iloilo, on the ground
that the said assessment has already prescribed, but
specifically denies the allegation that the assessment
have already prescribed, the truth of the matter
being that the returns filed on May 11, 1949 cannot
be considered as a true, and complete return
sufficient to start the running of the period of five (5)
years prescribed in Sec. 331 of the Tax Code;
This point was discussed in the memorandum of the
Commissioner of Internal Revenue, thus:
In the estate and inheritance tax return filed by Jose
S. Yusay (Exhibits B & 1, pp. 14-20, B.I.R. records) the
net value of the estate of the deceased was claimed
to be P203,354.00 and no inheritance tax was shown
as the heirs were not indicated. In the final
computation of the estate by an examiner of the
respondent, the net estate was found to be worth
P410,518.38 (p. 105, B.I.R. records) or about more
than twice the original amount declared in the return.
In the subsequent investigation of this case, it was
also determined that the heirs of the deceased were
xxx
xxx