Tflird Division People of the Philippines vs. Benjamin G. Kint Anar

DECISION

CTA CRIM Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kintanar Criminal Case No. 0-031 "That on or about the 16th day of April 200 l, in Parafiaque City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen residing in the Philippines, who is engaged in business and earning income as distributor of Forever Living Products Philippines, Inc., w ith obligation under the law to file his Income Tax Return (ITR) for the taxable year 2000 on or before the 15th day of April 2001 , did, then and there, willfully, unlawfully and feloniously fail to fil e his income tax return with the Bureau of Internal Revenue for the year 2000, to the damage and prejudice of the Government in the estimated amount of P3,475,090.64, exclusive of penalties, surcharges and interest. ' CONTRARY TO L AW."

Criminal Case No. 0 -032 "That on or about the 16th clay of April 2002, in Parafiaque City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen residing in the Philippines, who is engaged in business and earning income as distributor of Forever Living Products Philippines, Inc., with obligation under the law to file his Income Tax Return (ITR) for the taxable year 2001 on or before the 15th day of April 2002, did, then and there, willfully, unlawfull y and feloniously fail to fil e his income tax return with the Bureau of Internal Revenue for the year 2001 , to the damage and prejudice of the Government in the .

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esttmated amount of P5,l75,242.12, exclusive of penallles, surcharges and interest. ' CONTRARY TO LAW ."

Page 2 of 49

CERTIFIED TRU E COPY:

~ CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

1 The CORRECT ESTIMATED AMOUNT is " 5,1 72,519.25". Note that in Exhibit "J-4" the Total l!!come Tax Still Due from Benjamin Kintanar fo r the taxable year 200 I is "5, 172,5 19.25" and NOT "5, 175,242.1 2" as erroneously provided for in the In formation filed by the Stale Prosecutor. "Ex hibit "J-4" is Annex "A" of the Final Decision on Disputed Assessment issued by Jose Mario C. Buflag, Deputy Commissioner of the Legal and Inspection Group of the BIR. ~ 196 CTA CRJM Case No. 0-031 & 0-032 People vs. Benjamin G. Kintanar Accused voluntarily surrendered before the Second Division of the Court of Tax Appeals and posted the required surety bail bond for his provisional liberty in the total amount ofP40,000.00 for both cases. 2 On March 22, 2007, accused, by counsel, filed a Compliance and Motion to Defer Arraigment3 seeking deferment of the arraignment until the Depatiment of Justice (DOJ) has resolved the petition for review filed by the accused on September 25, 2006.

A Comment/Opposition" was fil ed by the People, through the Revenue Attorney on March 27, 2007. This Court granted the motion on April 2, 2007, arraignment was reset to May 21, 2007.

Upon arraignment5, accused assisted by defense counsel de parte, Atty. Marie Michelle D. Mufioz, entered a plea of "NOT GUILTY" to both charges. On June 14, 2007,6 upon motion of the counsels for both parties, the two cases were ordered consolidated.

The Preliminary Conference7 and Pre-trial8 were held on Lviay 30, 2007 and June 14, 2007, respectively. After the termination of the pre-trial, the case was set for the presentation of the parties' respective evidence. Formal Offer of Evidence9 was filed by the prosecution on June 12, 2008.

The accused, through counsel, filed his Comment/Objection to 2 Docket pp. 38-87 3 Docket pp. I 00-10 I 4 Docket, pp. 159- 162 5 Minutes of the hearing, May 2 1, 2007, Docket, p. 168 ; Resolution dated May 2 1, 2007, Docket, pp. 170- 17 1' 6 Minutes of the hearing, June 14, 2007, Docket, p. 179 7 Minutes of Preliminary Conference, Docket, pp. 172-178 8 Minutes of the hearing, June 14, 2007, Docket, p. 179 / /

CERTIFIED TRUE COPY:

9 Docket, pp. 4 73-5 12 f/"' c::.-~_;..z::::__ 197 CHRlSTTNE C. MAZA-GUARIN

Executive Clerk of Coun 11

Coun of Tax Appeals

CTA CRJM Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kinlanar

Plaintiffs Formal Offer of Evidence 10 on August 13, 2008. In a Resolution 11 promulgated on September 2, 2008, the Formal Offer of Evidence filed by the prosecution was ADMITTED subject to the Court's final evaluation and/or appreciation of their purposes, materiality, relevancy, and probative value to the issues involved in these cases.

Accused, after presentation of his evidence, fi led, thru counsel, his

Motion to Admit Formal Offer of Evidence

12 on August 20, 2009. Opposition (On the Accused's Motion to Admit Formal Offer of Evidence) 13 was filc;d by the plaintiff, by counsel; on October 6, 2009. A Resolution 14 was rendered on October 19, 2009 which GRANTED the Motion to Admit Formal Off¢t of Evidence and ordered prosecution to comment on the Formal Offet, of Evidence of the Accused.

On December 2, 2009, a Resolution 15 was promulgated which ADMITTED Exhibits " 1" to "29", inclusive all their sub-markings, EXCEPT Exhibits " 12-D", "13-D", " 14-D" and " 15-D" for fa ilure of the defense counsel to mark, identif-y, and submit the same to the Court. In the same Resolution, the Court noted that Exhibit " 18" is a copy of BPI Check No. 1083979, and not a copy of BPI Check No. 1093979. The admitted exhibits are subj ect to the Court's final evaluation and/or appreciation of their purposes, materiality, relevancy, and probative value to the issues involved in this case. The parties (-::..--- 10 Docket, pp. 845-854 11 Docket, pp. 856-857 12 Docket, pp. I 012-1031 13 Docket, pp. I 085-1090 14 Docket, pp. I 096-1097 15 Docket, pp. 111 3- 111 4 198

CERTIFIED TRUE COPY:

~L

CHRISTINE C. MAZA-GUARIN Exec11tive Clerk of Cow1 II

Cuurt of Tax Appeals

DECISlON

CTA CRJM Case No. 0-031 & 0-032 People vs. Benj amin G. Kintanar

Page 5 of 49

were given thirty (30) days from receipt of notice to submit their simultaneous memoranda.

Accused Benjamin G. Kintanar, Jr., through counsel, filed his Memorandum 16 on January 18, 20 I 0, while the prosecution submitted its Memorandum 17 on February 17, 2010.

On January 11 , 2010 an Order18 was issued transferring this case to the "Third Division" of the Court of Tax Appeals pursuant to CT A Administrative Circular No. 01 -2010.

In a Resolution 19 promulgated on February 25, 2010 by the Third Division of the Court of Tax Appeals, the cases in caption were submitted for decision.

Evidence (or the Prosecution

The prosecution . presented six (6) witnesses to establish accused's culpability, namely: Mr. Simplicia V. Cabantac, Jr., Atty. Christina C. Barroga, Mr. Michael T. Cajandab, Ms. Annabelle Alacantara, Ms. Carmencita Flores and Mr. Romeo E. N ara r~ o. Thereafter, the prosecution rested its case with the admission of its evidence? '

1. Testimony of Simplicia V. Cabantac 16 Docket, pp. I 11 5-11 30 17 Docket, pp. 11 50-11 69 18 Docket, pp. I 136 19 Docket, pp. I 172 /v

CERTIFIED TRUE COPY:

e--~L CHRISTINE C. MAZA-GUARIN

Executive Clerk of Cou11 II

Court of Tax Appeals

21 Exhibits "A" to "JJ", Resolu tion dated September 2, 2008, Docket, pp. 856-857 199

CT A CRlM Case No. 0-03 l & 0-032 People vs. Benjamin G. Kintanar

Prosecution 'vitness Simplicia V. Cabantac, Jr., the first witness for the prosecution, is 42 years old, married, residing at 25-G Mayaman St., UP Village, Quezon City, Revenue Officer IV, National Investigation Division, BIR.

During the hearing held on July 4, 2007, he affirmed tile truthfulness of the allegations contained in his Afficlavit22 elated .June 29, 2007 and likewise confirmed that the signature therein is his signature. Also, he atlestecl that the documents presented to him during the said hearing were the very same docurnents he mentioned in his Affidavit, which documents were marked as Exhibits "A" to " J", "M", "N", "0", "P", "Q", "R", "S", "V", inclusive of their b

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0 73 su -mar ongs.- In his Affidavit, witness Cabantac, Jr. declared that he is a Revenue Officer assigned at the National Investigation Division (NID) of the Bureau of lntemal Revenue (BIR) authorized, among other things, to investigate individuals and entities that may have committed violations of tax laws and recommend criminal prosecution of violators, to conduct preliminary investigation for the purpose of establishing prima facie evidence of fraud . Accord ing to Cabantac, Jr., on the basis of the complaint re ferred to their office, regarding the alleged tax evasion scheme for non-filing of tax returns by spouses B e 1~jamin G. Kintanar, .Jr. and Gloria V. Kintanar, Access Letters dated July 18, 2002 (Exhibits "Q" to "Q-1") to Revenue District Officers of Revenue District Office (RDO) No. 52, Parafiaque City and?--- 22 Docket, pp. 180- 18!J 23 TSN dated July 4, 2007, pp. 9-18 200 CERTiriEb 'fRUf! eo~Y:

~ CHRISTINE C. MAZA-GUARIN Ex.:cutive Clerk of Court II

Court of Tax Appeals

CT A CRlM Case No. 0-03 I & 0-032 People vs. Benjamin G. Kintonar

Revenue District Office (RDO) No. 43, Pasig City \Vere issued by Amando R .. Rosimo, Chief of Tax Fraud Division, indicating therein that the investigating team be furnished Yvith the listed documents pertinent to the preliminary investigation.

Access Letter dated July 19, 2002 (Exhibit " fZ") to Forever Living Products Philippines, Inc. (FLPPl) was also issued authmizing the investigating team to secure a certification as to the total income payments/commissions, and bonuses earned by spouses Ber~amin G. Kintanar and Gloria V. Kintanar, together with the amount of taxes w ithheld for calendar years 1996 to 2001.

In response to the Access Letters, RJJO No. 43 , Pasig City issued a Certificati on dated August 19, 2002 together with attachments (Exhibits "S" to "S-1 ") that veri fication from the BIR-lntegrated Tax System ([TS) and district records show that said spouses are not registered and have not filed any returns in its district; while RDO No. 52, Paraflaque City issued a Certifi cation dated September 17, 2002 that as per verification made from available records of its , office, said spo11ses has no record on fi le Cor the years 1999 to 2001 (Exhibit "P"). On the other hand, Mr. Ivlichael T. Cajandab, Comptroller of FLPPl sent a letter-reply dated January 20, 2003 (Exhibit M") indicating therein the total income payments they made to Ivlr. Kintauar for calendar years 1999, 2000 and 200 I, to wit:

"Applicable Year - 1999 2000 --~------ ·----- 2001

Amount of Income

Amount of Tax

Payrnents

Withheld

12,047,634.3 0 1,204,763.43 J 8,738,780.00 1,873,878.00 ---- -- ---------- ----- --· - 27,767,655.58 2,776,765.56"

CERTIFIED TRUE COPY:

~ 201 c__~·L CHRJSTINE C. MAZA·GUARIN

Execulive Clerk Df CYllli II

Court of Tax Appeals

DEClSlON

CTA CRtM Case No. 0-03 ! & 0-032 People vs. Benjamin G. Kin/anew

Page 8 of 49

Witness Cabantac, Jr. further stated lllat the result of the initial investigati on revealed that spouses Benj amin G. Kintanar and Glori a V. Kintanar are distributors and independent contractors of FLPPI and is actually considered as the No. 1 distributor in the Philippines. lienee, on the basis o f the said initial investigation, Letter of Authority (LOA) No. 00029663 dated March 28, 2003 (Exhibits "A" to "A-3") was issued aga inst the spouses, authorizing the investigating team to examine the books of accounts and other accounting records for the period covering taxable years 1999-2002. The said LOA was allegedly received by Mr. Kintanar on April 3, 2003 as shown by his signature (Exhibit "A-3"). Despite receipt of the LOA, tb e spouses did not submit the required documents.

Consequently, a Second Request for the Presentation of Records dated April 2 1, 2003 (Exhibit "B") and F inal Notice for presentation and/or production of the required records/documents elated May 5, 2003 (Exhibit "C") were served and allegedly received by the spouses. Upon failme of the spouses to present or submit the required documents, a Subpoena Duces 'Tecum dated June 11 , 2003 (Exhibit D" to "D-2") was issued to them commanding them to appear before the Chief Prosecution Division in order to enforce compli ance in the presentation of their books of accounts and other accounting a LJCl tax records. Again, the spouses did not comply Mr. Cabautac, .Jr. further narrated that on December 9, 2003, a Preliminary Assessment Notice (Exhibits "E" to "E-4") was issued against the spouses informing them that defi ciency taxes were found clue ag_ains1 th.em.for A ___ CERT!Flefl i'RUE C(JPY: ~ ~

2G2

CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

CT A CRlM Case No. 0-03 l & 0-032 People vs. Benjamin G. Kintanar taxable years 1999 to 2002 \Vith the complete details of discrepancies, and gi viug them fifteen (15) days to explain the discrepancies found against them . As the spouses did not comply, they were considered in default. Consequently, a Formal Letter of Demand dated February 26, 2004 (Exhibits "F" to "F-7") including Assessment Notices (Exhibits "G" to "G-7") were issued for the payment of defi ciencies on taxes. Still, no payment of taxes was macle by the spouses. Instead, accused Benjamin G. Kintanar, Jr. sent a Letter dated August 31, 2004 (Exhibits " H" to "H-3") protesting the defi ciency assessments for lack of factual a nd legal basis, together w ith photocopies of his income lax returns for 2000, 2001 and 2002, and undertaking to submit additiona l docum ents \\iithin sixty (GO) days there from. 1-Iovvever, no documents were submitted.

l-Ienee, a Letter dated September 30, 2004, (Exhibits " I" to "I-1 ") was issued by l\!Ir. Arne! SD. Guballa, Chie f of the National Investiga tion Division, informing the spouses that no documents have yet been received by their office and that they have sixty (60) days from the date the protest was 1iled or until November 3, 2004 to submit their supporting documents otherwise, the assessment shall become final, executory and demandable.

Since there was no compliance by the spouses, a F inal Decision on Disputed Assessment dated December 13, 2004 (Exhibits " J" to "J-5") was issued informing the spouses about the denial of their protest for non- submission of required documents within the sixty (60) clay reglementary period. The spouses were also informed that the Integrated Tax Sys te JT~-2--------· e~tt'fr ~mo 'fftUij co i~v,

C-~

203 CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

People vs. Benjamin G. Kintanar

Page I 0 of 49

computerized records and certification from revenue district office of Parafiaque do not reflect that they had filed and paid their taxes for taxable years 1999 to 2001 ; that they also failed to present original copies of their Income Tax Returns (ITRs) 1vithin the sixty (60) day period mandated by lmv. On the basis of the data and documentary evidence gathered, the prosecution proceeded to compute the deficiency income taxes for taxable years 1999, 2000 and 2001 , as follovvs:

"a.

For taxable year 1999, accused Benjamin G. Kintanar, Jr. earned income from Forever Living Products Philippines, Inc. in the amount of Pl 2,047,634.3 0 but did not report Ute sarne to the prejudice of the government in the amount of P2,320, 183.96, exclusive of interest, penalties and surcharges.

b.

For taxable year 2000, accused 13 e r~j a min G. Kintanar, Jr. earned income from Forever Living Products Philippines, inc. in the amount of Pl 8,73 8,780.00 but did not report the same to the prejudice of the government in the amount of P3,475,090. 86, exclusive of interest, penalties and surcharges.

c.

For taxable year 2001 , accused Benj amin G. Kintanar, Jr. earned income from Forever Living Products Philippines, Inc. in the amount of P27,767,655 .58 but did not report the same to the prejudice of tlte government in the amount of P5, 172,5 19.25, exclusive of interest, penalties and surcharges."

2. Testimony of Atty. Christina C. Barroga Second w itness for the prosecution is Atty. Christina C. Barroga, married, a resident of Kingspoinl Subdivision, Bagbag, Novaliches, Quezon City, the OIC, Assistant District Offi cer of the BlR RDO No. 52, Paranaque City.

At the bearing held on July I 6, 2007, she identified and affirmed the truthfulness of the allegati ons contained in the A ffidavit which sh~ executed 0 1~ CER'flf.fat) &R.U{g CoPV:

C-k!._~ CHRISTINE C. MAZA-GUARlN 2 0 4

Executive Clerk of Court 11 /

Court of Tax Appeals

DEClSlON

CTA CRl!Vl Case No. 0-03 1 & 0-032 People vs. Benja111in G. Kintanar

Page It of 49

July I 0, 2007 and that the signature therein is her signature. 24 A lso, she avowed that the documents presented to her during lhe said hearing were the very same documents she mentioned in her Affidavit, \Vhich documents \Vere marked as Exhibits "K", "L", "P", "Q", "Y", "AA".25 In her Affidavit 76 , witness Ally. Barroga slated that as the second highest official of the BIR in the said di stri ct, she is authorized to issue certifications, when the Reventte District Officer is not available, regarding the status of taxpayers within their area of jurisdi ction based on the computerized record kept ou file iu their office culled from the ITS. In line with the said authority, Ally. Barroga issued a Certi ucati01/ 7 on February 19, 2007 to the effect that accused Benj amin G. Kintanar, .Jr., did not file lncorne Tax Return for the years 1999, 2000 and 2001. S<1id certification e ffectively corroborates the Certificalion28 issued by the fo rmer R.evenue District Offi cer Carmelita R. Bacod on September 17, 2002 in response to lhe request o f the Tax Fraud Division refl ected on the Access Letter elated .July 18, 2002.

3. Testimony of Michael T. Cajandab Third witness for tile prosecution M ichael T. Cajandab, 37 years old, marri ed, resident of Block 12 Lot 16, Casimi ro l 'ownhornes, Phase IV , Las Piflas City, Metro Manila. W 24 TSN dated July IG, 2007, pp. 5-9 25 TSN dated July 16, 2007, pp. 9- 13 26 Docket, pp. 2G2-26,1 27 Exhib it " K", Docket, p. 5119 28 Exhib it "P", Docket, p. 567 205

CERTIFIED TRUE COPY:

c::::::-~L....._ CHRlSTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

CT A CRlM Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kintanar

He appeared at the hearing held on A ugust 22, 2007 and testified that: he is the Comptroller ofFLPPJ; he executed an A t1idavit 79 on August 16, 2007;

he affirms that the signature therein is his signature. 30 A lso, be confirmed that the documents presented to him during the said hearing were the very same documents he mentioned in his A£Iiclavit, which documents were marked as Exhibits "CC", " DD", DD-1 ", "M", "R" "T", to "T-19".31 On cross-examination prosecution witness Cajandab confirmed that: the A lpha List marked as Exhibits " DD" and "DD-1 ", which is a reportorial requirement by the BIR containing the total amount of income payments made by their company to their distributors or independent contractors and the total arnount of taxes for a particular year, was received by the BlR in the year 200 I as evidenced by the stamped received; he did not use any documents other than the alpha list and the bounced checks to determine the income payments made to the accused; he did not sign on the checks issued to accused Benjamin Kintanar and he is just fam iliar \Vith the execution of these checks and tile an1mmt stated lbereiu; the difference between the income payments, stated in his a£1idavil to have been made by the company to the accused for 2000, in the amount of Eighteen Million Seven Hundred Thirty Eight Thousand Seven Hundred Eighty (P 18,73 8,780.00), and the total amount of checks marked as Exhibits "T" to "T-10", which is on ly Eight Mi llion N ine Hundred Twenty Four Thousand Three Hundred Sixty Four and 62/ I 00 (P8,924,364.62), could P- 29 Docket, pp. 2811-287 30 TSN dated August 22, 2007, pp. 7-9 31 TSN dated August 22, 2007, pp. 9- 14 206 CERTIFIBtJ 'fRUE COPY:

~L_

CHRISTINE C. MAZA-GUARlN

Executive Clerk of Court II

Court of Tax Appeals

CT A CRJM Case No. 0-03 J & 0-032 People vs. Benjamin G. Kintanar be attributed to the I orYo withholding lax and the fact that there are some checks that are missing, the checks might have already been disposed.

Witness

Caj andab merely affirmed the di1Ierence between the income payments, stated in his affid avit to have been made by the company to the accused for 200 1, in the amount of Twenty Seven M illion Seven Hundred Sixty Seven Thousand Six Hundred r itty Five and 58/100 (P27,767,G55.58), and the total amount of checks marked as Exhibits "T- ll " to "T- 19", which is only Ten .Million Two Hundred Sixty N ine Thousand l"i ve 1-lundred Forty One and 80/100 (P 1 0,269,54 1.80). 37· Witness Cajandab further testified on cross-examination that: be only knows that their company issued checks to accused Benj amin Kintanar, Jr., that and he cannot coniirrn whether these checks were deposited to his account or were encashed, that as fa r as as their company is concerned tltese checks were "'3 cleared in their bank accounts.J In his Affidavit, 34 witness Caj andab stated that:

as the Comptroller of

FLPPl, he is in-charge of the accounting department of tbe con1pnny; tlpon receipt of the DIR Access Letter dated July 19, 2002 requesting for a certification as to the total income payments earned by spouses B e r~j arnin G. K intanar, Jr. and Gloria V. K intanar [or the calendar years 1996-200 1, he checked the A lpha List, a reportori al requirement by the BirZ containing the total amount of payments macle by the company to its distributors and lo la~ 32 TSN, August 22, 2007, pp. 111-25 33 TSN , August 22, 2007. pp. 25-28 3 ~ Docket, pp 285-287 207 GERfifiEb f i\Ue 6t3PV:

~ CHR1STINE C. MAZA-GUARIN

Executive Clerk of CoUJi II /

Court of Tax Appeals

DEClSlON

CTA CRlM Case No _ 0-03 1 & 0-03 2 People I'S. flenjalllill c_ Kintanar

Page 14 of 49

amount of taxes vvithhelcl lo r a particular year, and identi fied the various checks to prove the iucome payments made by FLPPT to nccused; ailer verifying \Vith their company's records, he issued a Letler-Reply 35 elated January 20, 2003 indicating that the total incon1e payments made to the accused, were as Collows:

"Applicable Year 1999 2000 2001

Amount of Income I

Amount of Tax

Payments

Withheld

-- ___ 12,047'-634.30 - --- ____ j,204,763.43 18,738,780.00 I ,873,878.00 27,767,655.58 2,776,765.56" ------· ----·-----------~-- · ·-

4. Testimony of Anabelle Alcantara Prosecution \Vitness Anabelle Alcantara is .cJ7 years old, rnarried, residing at 4 P. Cruz, St., Barangka lbaba, Mandaluyoug City, Systems Analyst at the BllZ-Office or the Assistant Commissio11er for lnformation Systems Operations Service.

During the hearing held on November 5, 2007, sl1e identified and affirmed the truthfulness of the allegations conta ined in tile A ITidavit which she executed on October 25, 2007 and that the sigualure therein is ller sigrwtu re. 36 Also, she acknowleclgecl that the documents presented to her cluriug the said hearing were the very same documents she mentioned iu her Ailidavit, which documents were marked as Exhibits "FF", " 171 ~ - 1 ". She further testified that: the Certification37 was signed for Alberto Pio de Roda, Assistant Commissioner for Informa tion Systellls Operation Service, by Victoria C. De Leon; u/- 35 Exhib it " 1\11", P- 55 I 36 TSN dated Nove111 ber 5, 2007, pp. 7- 10 ;, Exhibit "FF", P- 7 10 208 CBRil FH~D 'fR.UE e013V:

~(_ CHRISTINE C. MAZA-GUARIN Executive Clerk of Court II ....

Court of Tax Appeals

CTA CRlM Case No 0-03 1 & 0-032

People vs. Benjamin G. Kintanm· signature appearing above the name of Mr. de Roda is the signature of her Head Revenue Executive Assistant, Victoria C. De Leon, she can identify the said signature because Ms. De Leon is the signatory of their certifications; the information contained in the Certification issued by their office were extracted "'8 from tile ITS Database . .)

In her Affidavit, 39 witness Alcantara stated that: she is a Systems Analyst of the BIR and her most important function is to verify all tile information from the ITS based on the request of the Bl R. and other government agencies; she has personal knowledge that their office iss ued a Certification dated September 26, 2007, concerning a certain taxpayer named Benj amin G. Kintanar, Jr., signed by her !lead Revenue Executive Assistant Victoria T. De Leon in behalf of Ass istant Commissioner Alberto Pio De Roda which substantially states that based on the ITS accused Benj amin G. Kintanar, Jr. is a registered Professional Taxpayer, however, the BJR has no record of accused hav ing filed his Income Tax Returns for the years 1999-200 l.

5. Testimony of Cannencita Flores Fifth witness for the prosecution is Carmencita Flores, 51 years old, marri ed, with address at 3 Lualhati St., Armel 6 Subd. Sta. Lucia, Pasig City, that she is the Service Ivlanager of Bank of the Philippine Islands (BPI) North Greenhills Branch.

At the hearing held on February 6, 2008, she testified that: as the Service Manager, she is the over-all in-charge of the bank operations; she wa~ 38 TSN dated November 5, 2007, j.Jp. I 0- 13 39 Docket, pp. 330-33 1 209 eElt'fiflgb TI':VE 60PV:

~L____

CHRISTINE C MAZA-GUARIN

Executive Clerk of Court II /"

Court of Tax Appeals

CT A CRLM Case No. 0-031 & 0-032 People vs. Benjamin G. Kintanar commanded to appear before the court for the certification of the original and copies of documents pertaining to checks issued by FLPPl, with Account No. 257 1008435, to the accused which were encashed, deposited and credited to the bank account of the accused, with Account No. 2575003tl89, and to bring bank statements of the accused for the years 2000 and 2001 ; she knows the accused Benjamin G. Kintanar, .lr. because he is one of the clients oftheir bank; pursuant to the subpoena, she brought the bank statements of the accused for the whole year of 2000 and 2001. The bank statements of the accused for 2000 and 2001 were marked as Exhibits "GG" and "HI-I", respectively.40 On February 20, 2008, prosecution witness Carmencila Flores \vas called to the witness stand for the continuation of her direct examination. She identified and affirmed that tile affidavit shown to her is the same Affidav it v/hich she executed on February 15, 2008 and that the signature therein is her signature.' 11 Also, she avowed the veracity of her A Hidavit and affirmed that the documents presented to her during the said hearing were the very same documents she mentioned iu her Affida vit, which documents were marked as Exhibits "GG" and "l-Ui.".'1/ Witness Flores further testified that: the checks (Exhibits "T" to "T-19) shown to her during the said hearing were the very same checks she mentioned iu her a [(ida vit that were encashed or deposited under the account name of the accused; based on the checks furnished by the prosecution, she checked their head office records to verify the details of th~- 40 TSN dated February 6, 2008, pp. 7- 16 4 1 TSN elated February 20, 2008, pp. 9·· 1 I 42 TSN dated feb ruary 20, 2008, pp. ll -12 210 CERT~ rtBh PfRUB COPY:

c...?6'L CHRISTINE C. MAZA-GUARIN Executive Clerk of Court ll

Court of Tax Appeals

CT A CRJM Case No. 0-03 1 & 0-032 People FS. Benjamin G. Kintanar said checks against the bank statements and also the corresponding deposit slip, if there are deposits made.' 13 On cross-examination, witness Carmencita F lores stated that: she was assigned as Service Manager in North Greenhills Branch on April 16, 2003; she was not yet assigned in the said branch when checks marked as Exhibits "T" and "T- 19" were encashed and deposited and her verification is based on the documents she requested fi·orn their head office; she was not the one who prepared the bank statements of accused marked as Exhibits "GG" and "HH", it is their head ofiice records section which prepares the bank statements of all 1 1.

<14 t 1e c 1ents.

On re-direct examinati on, \Vitness Flores declared that: the documents she identified as the bank statements of the accused are actually bank records furnished to her by their head office.

When asked what documentary procedure or steps she made to verify the correctness or accuracy of the entries appearing in the deposit column of the bank statements, she responded "Based on the checks that you jim1ished me" and that she requested from their head ofll.ce copies of the checks, which were furnished to her by the prosecution during the previous hearing, the deposit slip, microfilm copies of those documents for verifica tion and counterchecks said documents with the bank statements.

45 r 43 TSN dated February 20, 2008, pp. 9-20 44 TSN dated Febmary 20, 2008, pp. 20-3 I 4 ' TSN dated February 20, 2008, pp. 32-36 211 CER.'tlf>'!Bb 'fRUe COPY:

~C-

CHRISTINE C. MAZA-GUARIN

Executive Clerk of CoWi U

CoUI1 of Tax Appc;Ws

DEClSION

People vs. Benjamin C. Kintanar

In her Affidavit, 46 \Vitness Carmencita Flores swore that: she is the Service Manager of BPI North Greenhills Branch; she came to know Mr. Ber~amin G. Kintanar, Jr. as a depositor of their branch; she confirms that the checks marked as Exhibit "T" to "T-19", which were encashed or deposited, appears in the bank statements.

6.J~es_rl_n10I1Y of RQ ill~O NaranjQ Last witness for the prosecution Romeo Naranjo is 57 years old, married, a resident of 307-C Bonaventure Gardens, P. Osmena St. Makati City. He is the Revenue District Officer assigned at the Revenue District Office No. 40, Cubao, Quezon City.

Prosecution wit11ess Naranjo was presented on the witness stand on June 11 , 2008. He identified and affinned that the A ffidavit shown to him is the very same affidavit he executed on May 27, 2008, and that the signature therein is his signature. Likewise, he verified that: the documents presented to him during the said hearing were the very same documents he mentioned in his Affidavit, which documents were marked as Exhibits "S", "S-1 ", "S-2" and "Q-1 "; that the signature in Exhibit "S", appearing above the name Romeo Naranjo, is his signature. Witness Naranjo alleged that he is familiar \Vith the signature of Hilda G. Giron, thus, be af1inned that the signature in Exhibits "S-1 " and "S-2", appearing above the name Hilda G. Giron, is the signature of ~ - 46 Docket, pp. 35 1-354 212 CERTIFIED l~RUE COPY:

C-~W{__

CHRJSTINE C. MAZA·GUARIN

Executive Clerk of Court 11

Court of Tax Appeals

..

CT A CRlM Case No. 0-031 & 0-032 People vs. Benjamin C. Kintanar

Ms. Giron. Finally, he affirmed and confirmed the veracity of the contents of his Af1idavit. 47 On cross-examination, witness Naranjo testified that: the verification of records made by him was limited to the records of BlR Pasig at that time, thus, it is possible that the subject taxpayer is registered in another district, that the records of a taxpayer can be found in another distri ct other than Pasig vvhen returns were filed with the other districts. 118 In his Affidavit, 49 witness Romeo Naranj o declared that: he is the Revenue District Officer assigned at Revenue District Office No. 40, Cubao; prior to his assignment in the Revenue District 01lice of Cubao, Q uezon City, he was assigned at the Revenue District Office No. 43, Pasig City; as the highest official in the Revenue District Office No. 43 of Fasig City, he is authorized to issue certifications regarding the status of taxpayers ·within their area ofjurisdiction based on the BIR-ITS. 1-Ie issued a Cer!ili ca tion on August 19, 2002 (pre-marked as Exhibits "S", "S-l " and "S-2"), which essentially states that accused Benj arnin G. Kinl anar aucl spouse Gloria V. Kintanar have not filed any return in their oHice and that they nre not registered in their district.

On June 12, 2008, the prosecution made a formal offer of documentary evidence as represented by the following mnrkecl exhibits. ____ Exl~~QL~~---- _______ .. _ ···-··----~-

Descriptio11 _______ _

"A" to "A- Letter of Authority No. 00029663 dated March 8, 2003 1 / --;:~ 47 TSN, June II , 2008, pp. 6- 10 48 TSN, June ll ,2008,pp. l0l 3 49 Docket, pp. 394-395 213 eERriFtEB TRUE eOPY:

c__~L CHRISTINE C. MA ZA-GUARIN Executive Clerk c,f Court II "

Court of Tax Appeals

DEClSlON

CT A CRlM Case No. 0-03 I & 0-032 Peop le vs. Benjamin G. Kinlanar

Page 20 of 49

---- ------- 2"

"A-3"

------ " 13" ''C" ---- "D" to "D- 2" "E" to "E- l" --------

"E-2" to

"E-4"

--·------ "F" to "r- 2" ·- ------~

"F-3" to

"F-5"

- --- ·-- -- ------

"F-G" &

" F7"

"G" to "G- 7" "II" to "H- 3"

"I"

"l - l " -- ---------- " .J " to ".J-2" "J-3" to "J- tl"

"J-5"

" 1( '' ------ -~

"L"

"M "

-~--- -------- " N" to "N- 10" --- - --

"N- 11 "

"N-12"

·- -- ---· ---·----

" N-1 3"

·----- -- ··- - " 0 " to " 0 - 3" - -- --- " 0-4" to ------- -- --------- - - ---- -

Signature_ of Accused

----· Second Request for Presentation of Records elated April 2 1,2003 Final Notice elated May 5, 2003 . ---------·- Subp oena Duces ]'ecwn dated Juii C II , 2003

Preliminary Assessment Notice

----- ---------- -·· -- --- -- ·--·-------------·

Attachments to the Preliminary Assessment Notice

containing tbe Details of D iscrepancies for Taxable Years 1999, 2000, 200 I and 2002 Formal Letter of Demand dated fe bruary 26, 2004 --------- ------------- ·--- Attachments to the Formal Letter of Dernand conta ining the Detai ls of Discrepancies for Taxable Years 1999, 2000, 200 1 and 2002 ----------- ------------- -------- --- - ----- ------- BIR Post O ffi ce Registry Receipt elated August 2, 2004 and the Signature of the recipient Assessment Notices Nos. ES-IT- 1999-0083, ES-VAT- 1999-0084, ES-IT-2000-0085, ES-VAT-2000-0086, ES- IT-200 l-0087, ES-VA T-200 1-0088, ES-IT-2002-0089

and ES-VAT-2002-0090

Lelter of the accused dated A ugust 3 J, 2004 Letter dated September 30, 2004 i -·- _ S ig na t~re _o£.Eec ipi~~~~--- ___ - --- --------- --- Final decision on Disputed Assessment elated December 13, 2004

Attachments

to !he Final Decision 0 11

Disputed

Assessment denominated as Anuex "A" Signature of r_ecipient Ce rti fica ti o~~d a ted February. ~ 9, _lQ.QZ -- ----------- Certificate of Registration dated January l, 199G __ 1-e tter=~~eJ? l;td a t~d Jan~ary ~0 , 2003 ____________ Letter dated June 3, 2005 issued by Guillermo C. ! Parayno, Commissioner of Internal Revenue addressed . to Ratti Gonzales, Secretary of Justice together with a tta ~ ll i_11g J~ ~l t-_A ffijav it d a te~ !J~t ~ _\2 005 - Signature of Revenue Offi cer Sitnplicio V. Cabantac, Jr. _s ig1_!a tu~·e o( R~y e~l~,-~_Qffi ~~L-A t~~lis> Ag_~~~!in Zamora_ -~ig~1 ature __ ?L~~.Y~~~~e__9 ffi ~er §j ~ _t~ ~~g y "- !E:... ___ __ ,--- _ Reply-Affid avit dated A ugust 1, 2005 -- . -- - - -- ---- ----- --- - . -- -----~----- Signatures or Sirnplicio V.

Ca b a~~~c , , }!~~.Aure li o 214 eR~ ... ··--· ~{__ Cl:-tRlsriNE C. MAZA-GUARIN Ext:mllive Clel'k of Court 11

Court of Tax Appeals

·~

CTA CR!M Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kintanar

----~---~ ____ ..._ _ ___________ -~------------- "0 -6"

"P"

"Q" to "Q- 1"

"R"

---------- ----- ''S"

"S-1"

----------

"S-2"

"T" to "T- 19" -----------~- "'1""""

"T -1"

"T-2"

----·

"T-3"

"T-4"

---~--

"T-5"

--------

"T-6"

"T-7"

----~--- --

"T-8"

----·---

"T-9"

"T-1 0"

-- -·--·--~----- -- "T- 1 l " ------------·

"T -1 2"

"T -13"

----·-----

"T-1 <I"

-----·~- "'1'-1 5"

"T-16"

Agustin T. Zamora and Sixto C. Dy, Jr.

Certification elated September 17, 2002 Access Letters dated July 18, 2002 _6ccess _Le~e~~~a te_~]uly 1 9.'_~ 00l ____ --- Certification of Revenue District Offi cer Romeo

Naranjo

Certific..?J:ion .s?! G i!d a_g ~ Hira r~---- - Certification of Gilda G. Hirang

Bank of the Philippine Islands Checks

--------- ---- ------- ------------- - ------ ------- ------ - Bank of the Philippine Islands Check No. 00011 29896 elated January 15, 2000 Bank of the Philippine Islands Check No. 00011 39852 elated February 15, 2000 Bank of the Philippine Islands Check No. 00011 7141 6 _qa te d~prll 15, 2000 ------ ~~------------- Bank of the Philippine Islands Check No. 00011 83948 dated May 15, 2000 Bank of the Philippine Islands Check No. 00011 94458 dated June 15,2000 -------- --~------------------------ Bank of the Philippine Islands Check No. 0001 205173 j~te d _ Ju}L_!_S_,__ ~_QQQ ____ ---- ---- Bank of the Philippine Islands Check No. 0001 216LI84 dated August 15, 2000 Bank of the Philippine Islands Check No. 0001 229757 jated Sep~emb e_r 15, 2000 ·-------- Bank of the Philippine Islands Check No. 0001 244 172 dated October 15, 2000 -·---·---·--------· Bank of the Philippine Islands Check No. 0001 258722 dated November 15, 2000 Bank of the Philippine Islands Check No. 0001 2736 16 _Si a t ~_S! D_~~mQ~!:....! 5__, __ 2_Q_Q_Q_ ________ Bank of the Philippine Islands Check No. 0001 289 129 ~_teqlanuary 1 5~1_Q_Q_l ________ ·---------·------ Bank of the Philippine Islands Check No. 0001305 I 18 elated February 15, 200 I Bank of fhe Philippine Islands Check No. 0001 32 162 1 d a te cl lVl ar~_l_J 5, 2QO I ··---·---- --· Bank of the Philippine Islands Check No. 0001 33 8854 d a t e_9 _6p~ il l 2_o_ _ _?_OO 1 ____________ Bank of the Philippiue Islands Check No. 0001 374883 dated June 15, 200 I Bank of the Philippine Islands Check No. 0001411 323 _1 _ ...._ __ 1 ,\ _ _ _ _ •.

1 r "'"\ n f\ 1 ~ e!R.TIF'iEi:JIRt1 cL:OPY:

~(__ CHRISTfNE C. MAZA-GUARIN 215

Executive Clerk of Court II

Court of Tax Appeals

CT A CRIM Case No. 0-03 l & 0-032 People vs. Benjamin G. Kintanar

"T-1 7"

"T-1 8"

"T-19"

Bank of the Philippine Islands Check No. 000142822 1 dated September 15, 2001 ________ _ Bank of the Philippine lslands Check No. 0001445125 dated October 15, 2001 Bank of the Philippine Islands Check No. 000146125 1 dated November 15,2001 - --~- -- - !------·-------- ------------ -----------

"U"

"V"

''W"

" W- 1"

"X" to "X- 2"

"X-3"

"Y"

"Z"

"AA"

"BB"

"BD-1"

"CC"

"DD"

" DD- 1"

"EE"

Service Record elated March 9, 2007 Letter elated December 12, 2002 ------·-··- Affid avit of Plaintiff's witness, Simplicio V. Cabantac, Jr.

__§ i gr~~tw~~f_§itEEU c i () __ y. Ca~Cl}~ta cJi· . _ ·----· ___ _ Affid avit of Plaintiff's w itness, Christina C. Barroga ~i gn~ .t~Ire of q u·istina C. Barro_&?_ _ __ _ Revenue Travel Assignment Order No. 5-2006 Service Record dated June 5, 2007 Statement o[ Actual Duties and Responsibilities of Christina C. Barroga Affidavit of Plaintif f' s witness, Michael T. Cajandab Signature ofMichael T. C aj ~nd ~Q____ ------· ___ _ Certification dated July 17, 2007 Portion of the year 2000 Alpha List indicating the name

of Accused

·-~-------------- --- ------- - Portion of the year 2001 Alpha List indicating the name

of Accused

Affidavit ofPlaintiff s witness Anabelle Alcantara

"EE-l "

I Signature of A nabelle Alcantara __ "YF" __ Cet~ifi c:a t0n da_led S~ptemb et~ 26, 20_Q7

"FF-1 "

Signature of Alberto A. Pio De Roda __

"GG"

Bank Statements of the Accused from January to

December 2000

"I-11-l" "ll" Bank Statements of the Accused from January to

December 200 I

Affidavit of Plaintiff's witness Carrnencita Flores "11-1 "

I Signature of Carmencita Flores

"JJ "

I Affidavit ofPlaintiff's witness Romeo E. Naranj o ___ ".TL-l:_ ___ j_§jg~~t~E~ ofT~~Eeo ~..:_Nara nj_~ ___ __ -------)/£- 216 etKttPmo Til tJ ~ eoPY:

~{_ CHfUSTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

'.

CT A CRlM Case No_ 0-031 & 0-032

Peop7e l'S. Benjamin G. Kintanar

Evidence {or tile De{ense On the other hand, the defense presented three (3) wituesses, the accused himself, Mr. Benjamin G. Kintanar, Ms. Jennifer l(. Abaci, and Ms. Marina C. Mendoza.

1. Testimony of Accused Benjamin G. Kintanar, Jr. first ·witness for the prosecution, accused hirn se l!~ Benjarnin G. Kintanar, Jr., of legal age, married, resident of l45-A Saint Francis Street, Orando, Pasig City.

He appeared at the hearing held ou November 12, 2008 and testified on direct examination that: he executed an Affidavit50 ou November 7, 2008 and thereby affirm the contents of the said Affidavit; the signature therein is his signature; be is an independent distributor of health and fitness products of FLPPl since the mid-90s but between the 2002 to middle of 2008 he left the said cornpany but went back on September 2008. Also, be confinned that the documents presented to hirn during the said hearing were the very same documents he mentioned in his A fTid av it, which documents were marked as Exhibits " 1" to " 1 5''. 51 In his A ffidavit, accused declared that: he, together \Vith his ·wife, filed their ITRs for the years 2000 and 200 1 (Exhibits "6" and " I 1 ") with the BIR RDO No. 40; that the said lTR was fil ed by Ms. Marina Mendoza, who used to be connected with the BIR, because he and his wife were not very aware and familiar with the process or filing the ITR and corn plying with the tax laYvs an~ 50 Docket, PP- 896-902 CERTIFIED iR~ E CPPV:

51 TSN, November 12,2008, PP-4- 10

C-~~

CHRISTrN E C. MAZA-GUARIN Ex.:cutive Clerk of Col111 II / 217

Court of Tax Appeals

DECJSION

CT A CRltvJ Case No. 0-031 & 0-032 People \'S. Benjamin G. Kintanar

Page 24 of 49

regulations; that his total earned income for the year 2000 amounted to P 11 ,053,918.61 while his lax clue for the year 2000 amounted to Pl , l05,391.88 (Exhibit "6-C"); that the said income tax clue was withheld [rom his income for the year 2000 by his employer FLPPI as ev idenced by the copies of quarterly Certifica tes of Creditable Tax Withheld at Source issued by FLPPI (Exhibits "7" to " 10") and was fil ed w ith 131R R.DO No. Ll() on March 23,2001 (Exhibits "7 -C", "8-C", "9-C" and " 1 0-C"); tbHt for the year 2001 , accused likewise testified that he fil ed his IT R fo r the year 200 I w ith the ass istance o f Ms. Marina Mendoza beca use of the sa me reasons and that his to![! I earned income · for the year 2001 amounted loP 14,404,899.23 , while his tax due for the year 2001 amou11tecl to Pl ,ti40,LI92.32 (Exl1ibit " 11 -C"); the accused pointed out that lle paid his lax clue since, as explained to him by Ms. Marina M endoza, the tax withheld by FL PPl fro m his earnings were deemed payrnent of his tax, as evidenced by tile Certificates oC Creditable Tax Withheld at Som ce (Exhibits " 12" to " l 5") issued on a quarterly basis by his e1nployer FLPPI ; that accused believe that the said certificates was filed by FLPPJ \Vith the BlR on A pril 5, 2002 as evidenced by the stamped received by the DJR (Exhibits " J 2-C", " 13- C", " 14-C" and " I 5-C"); that he engaged the services of J\!ls. Marina Mendoza for a considerati on as evidenced by tile checks he iss ued as paymeut (Exhibits "3" and "5").

On cross examiuation5J ncc t1secl Benj amin K inlanar. Jr. staled that: lJe is - ' one of the top I 0 dealers of FLPPI , and as such received co1nmission in cmne~ CERTIFIBJJ fRU E COPY:

52 C-- ~ ·...c..· .--/ TSN, November J 2, 2008, pp: I 0-33 ~ [__ 218 CHRISTINE C. MAZA-GUARIN Executive Clerk of Court ll

Cowi of Tax Appeals

..

CTA CRlM Case No. 0-03 1 & 0-0.32 People vs. Benjamin G. Kintanar fo r taxable years 2000 and 2001; checks marked a Exhibits "T" to "T- 18" are those he received h om FLPPl and cle<1red by BPI North Greenhills Branch, his Account N umber in BPI is 107003489;

he received the said checks from Michael Cajandab, Accountant of FLPP! , and confirmed that for 2000 and 2001 he received commission income in the total <1mouut of P1 8,738,780 and P27,767,655.58, respecti vely.

Further, accused testified that: he is a registered taxpayer in RJ)O Pasig since 1997 and for the purpose of preparing and filing of his lTR for 2000 and 2001, he hired Ms. Marina Mendoza but the signatures in the ITRs are his; he provided all the details including personal circumstances, but when he signed the ITR be failed to read all the contents; he paid his income tax with l11e BlR for 2000 and 2001 , the tax clue has been paid by offsetting it with the creditable tax vvitbheld at source; he did not personally file his ITR and did not verify from the BIR if his ITRs were actually fil ed, but he obtained copies of the ITRs stamped received by the BIR.

Also, during the cross-examination accused confirmed tll at: he had been a resident of Orando, Pasig City from J 972 to 1997, then fi·om 1997 he transferred to !V!erville, Paraftaque up to 2003 or 2004 , from 2004 be went back to Pasig up to the present; he agreed that, supposedly, his TTR should have been filed where be is registered; no ITRs \Vere actually filed in Pasig and he did not verif·y from any district offices of the BlR if his ITR for 2001 and 2002 \verc actually fil ed; hi s !TRs lo r 2000 and 200 I re llected an address in Lagro Subdivision, Novaliches, Quezon C ity; he has 219 never lived in said address.

CERTIFIED TRUE COPY:

/ _.

~L.._ ~ CHIUSTINE C. MAZA-GUARIN

Executive Clerk of Court 11

Court of Tax Appeals

DEClSJON

CTA CRIIvf Case No. 0-03 I & 0-032 People \'S. Be1!jamin G. Kintanar

Page 26 of 49

Counsel for the prosecuti on emphasized that the lTRs of accused for 2000 and 2001 bore the stamp ofRDO, Cubao.

On re-direct examination accused Benjamin Kintanar, Jr. explained that: he did not veri fy w hether the lTRs were actually fil ed for those years because Ms. Mendoza is a very close ii·iend of hi s sister; the Certificates of Creditable Tax Withhe ld at Source were issued by Ms. Natalia Golez of FLPPI. 53

2. Second witness for the defense Jennifer K. A baci The second \Vitness for the defense, averred in her affid avit that: the accused is her brother; 11wt she personally knows that tile accused filed his ITRs for the year 2000 and 200 J; that she likewise engaged the secvices of Ms. Marina Mendoza, who used to work in the Bl R, to ass ist her, together w ith his brother and sister, in the filing of their lTRs; To corroborate the testimony of accused, the second w itness Jennifer Abaci, the accused's sister, Curther alleged that she knows Ms. Marina Ivlendoza because Ms. Mendoza is the mother o f her friend, who also happens to be Iter downliue in FLPPI; that in one of Iter conversation with her friend, they discussed the filing of their lTRs and the latter told her that she need not worry about it because her mother was an accountant and working in B!R; that eventually, Ivls. Jennifer Abad met up with Ms. Marina Tvlendoza and they agreed that the latter w ill prepare and file the ITR.s of Ms. A baci and her husband; that it was w itness Jennifer A bad 'vho introduced Ll1e accused and another sister to Ms. Marina Mendoza for the same purpose, that is, for the / /~ 53 TSN , November 12, 2008, pp. 34-37 220

CERTIFIED TRUE COPY:

~ CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

. '·

CTA CRIM Case No_ 0-03 1 & 0-032

People vs_ Benjamin C. Kintanar preparation and filing of their lTRs from 1998; that from 1998 to 2002, she and her siblings engaged the services of Ms. Marina M endoza and it was the latter who would remind them of the filing of their ITRs; that since communication between her and Ms. Marina Mendoza is more open and accessible, Ms. Mendoza wou lei inform her o [ accused's filing, the documents he should give and hi s payment for her; that in 2002, Ms. Marina Mendoza stopped doing the preparation and filing of tlleir LTH.s since the BIR started investiga ting otl his brother, the accused herein.

3. Witness 1Vls. Marina 1Vledoza The third and last witness for the defense, M s. Marina Mendoza, is 68, widowed, and a resident of LJLJ5 Camia St., Mansanas Subdi vision, TVIarilao, Bulacan.

Witness Ms. Mendoza, who turned out lo be a hostil e w itness, 111 substance, testified that: she came to know the accused B e 1~j c.unin G. Kintanar, Jr. around 2000, thru her daughter Jennifer Mendoza Delos Santos, who happens to know the sister o f accused, Jennifer A bad, as they are "nwg- kumare "; Jennifer Abaci, sister of accused, recruited her daughter to J Olll FLPPl around 1997 to 1999; that there was a titne when the sister o f the accused went to their house and during their conversation, she advised Ms. Abad on how to prepare an lTR; that Ms. Abaci and the accused \Vent to their house and asked her for advice with respect to preparing his ITR ; that she told accused to secure a 13HZ l;orrn 23 16 (W2) from f<' LPPI if he will prepare his 221

CERTIFIED TRUE COPY:

~L_

CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

-2-- ' '' '

DEClSlON

CTA CRJM Case No_ 0-031 & 0-032

People vs_ Benjamin G. Kintanar

Page 28 of 49

ITR, which the accused showed to her; she does not remember exactly when the accused asked for consultation, its either 1999 or 2000 Ms. Mendoza clarified and reiterated that she d icl not rece1ve any compensation for the advice she provided the accused and her sister; she recalls having received a check issued in her name from both accused and his sister, but the said checks she received from accused are installment payments for jewelries that the accused purchased from her sou-in-law, Mr. Dong Morenos; she confirmed that the checks shovm to her by counsel were lile checks she received from siblings K inlanar.

Ms. !Vfendoza likewise denied, when presented with Exhibits "6" and " 11 ", that she was lhe one -vvho prepared and fil ed the ITR_s of the accused for the years 2000 and 2001, respectively; she adrnilled lhal she was a former employee of 131R and worked as a TZ.evenue Enforcement Officer but she vehemently denied that she is ac qt~ ainted to certain Revenue D istrict 0£1icers within lhe Philippines.

Lastly, .tvls. Marina Mendoza vehemently denied involvement in the filiug of ll1e ITR of accused Be1~jamin G. K iutanar, .Jr.

THE ISSUE

WHETHER OR NOT ACCUSED BENJAMIN G.

KlNTANAR IS LIABLE FOR VIOLATION OF

SECTION

255

OF

TI-lE

1997

NATIONAL

INTERNAL REVENUE CODE, AS AMENDED. ~ ~ 222

C~RTIF'IE:D TRUE COPY:

~ CHRISTJNE C. MAZA-GUARJN

Executive Clerk of Court II

Court of Tax Appeals

DECJSlON

CTA CRlM Case No. 0-031 & 0-032 People vs. Benjamin G. Kintanur

Page 29 of 49

THE RULING OF THE CO URT

Accused, Benjamin G. Kintanar, is charged before this Court in these two (2) consolidated cases for failure to (iJe his Income Tax Returns (ITRs) for taxable years 2000 and 200 I on his taxable income in the estimated amounts of P3,475 ,090.64 and P5 ,175,242. 12, 5'1 respectively, exclusive of penalties, surcharges and interest, in violation of the first paragraph of .Section 255 of the National 117lernal Revenue Code (NJR C) of 1997, as amended, which reads as follows :

"SEC 255.

Failure to Fife Retum, Supply Correct and Accumte h ?fon notion, Pay J'ax, Withhold mzd Remit 1ax and Refund Excess Taxes Withheld on Compensation. -

Any

person req uired under this Code or lJy rules a utl regulations promulgated thereunder to pay any tax, make a retunt, keep any record, or supply correct and accurate information, w ho w illfully fails to pay such tax, make such r eturn, keep such record, or supply such correct and accmate information, or withhold or remit taxes withheld on compensation, at the time or times required by law or r ules and r egulations shall, iu addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less than Ten thousand pesos (P J 0,000) and suffer imprisonment of not Jess than one (1 ) year bttt not more than ten ( 10) years." (emphasis supp lied).

Sectiou 255 contemplates !our (4) dilTerent situations, each of which constitutes a failure to perform, ill a timely manner, an obligation imposed by the NJRC o.f 1997, os amended, namely:

1) to pay estimated tax or taxes;

2) to make (fi le) a return;

3) to keep records; and

J

~__/" 51 Tile CORR ECT ESTIMATED AMOUNT is "5, 172,519.25". Note that in Exhibit " J-tl " the l'otal lnc:ome Tax S'Lill Due fi'O JJJ Benja1nin Ki11lanar to r the taxable year 200 I is "5, 172,5 19.25" and NOT "5, 175,2,12.1 2" as erroneously provided for in the Jn fo n11atio JJ fi led by the Stale Prosecutor. "Exhibit " J-11" is Annex " A" of l11e Final Decision on Disputed Assessmel1l issued by Jose Mario C. Uuiiag, Deputy Commissioner orthe I.e gal and Inspection c.; roup or the BlR. -s R <i"B U E COPY.

e~ll.TI ~l~ · 2 2 3 CHRISTINE c. MAZA-GUARIN E)(eCUlive Clerk of Court ll

CoUli of Tax Appeals

I

• '

DECI SLON

CTA CRJM Case No. 0-0J I & 0-032 People I'S. Benjamin G. Kintanar

Page 30 of 49

4) to suppl y information.

To establish the offense of failure to make or llle a return, the prosecution must prove three (3) essentia I elements beyond reasonable doubt, to wit:

1) tllatthe accused \Vas a person required to make or llle a return; 2) that the acCLLsed failed to make or file a return at the lime required by law; and 3) that the failure to make or 1i le Fl return ,,vas will [ul. It is bas ic that in all criminal prosecutions, the burden o f proof is on the prosecution to establish the guilt of the accused beyond reasonable doubt. It has the duty to prove each and every element of the crirne charged in the information to wMrant a llndiug of guilt for the said crime or for any other crime necessarily included therein.55 11u accused is required to mal<e or Ole a return As regards the first element, accused admitted tbat he is a registered taxpayer with Tax IdentiJ'ication N umber 186-677-853 and that he earns income h om selling Forever Living products.

The undisputed facts are admitted in the Pre-Trial Order elated July 4, 2007,56 the relevant portions o h vhich state:

"11. Statement of the l'acts A. A dmitted l . Accused D e r~j a min Gatpayat K intanar, Jr. a.k.a . .lun Kintanar, Filipino citizen, or legal age, ~ 55 Leonila 13atulaJIOII vs. Peop le of the Philippines, 502 SCRA 35, citi11g People vs. Ca ingat, 376 SC RA ~6 8 7 • 3,9G

CERTIFIED TRUE COPY·

Docket, pp. 246-254 c._~ · 224 CHRISTINE C. MAZA-GUARIN Executive Clerk of Court ll

Cour1 of Tax Appeals

CT A CRlM Case No 0-03 l & 0-032 People vs. Benjamin C. Kintana,.

married to Glori a V . Kintanar, and a resident of the Philippines, is a registered taxpayer with Tax ldeuti1icatiou N umber 186-677-853.

2. On A ugust 31, 2004, accused sent a Protest Letter together with a photocopy of his income tax returns for years 2000 to 2002."

Iu relation lo his duly to pay taxes to the national government, he is likewise required to make or 1ile an income tax retum arising fi·om his supposed income for taxable years 2000 and 200 I . Accused Kintanar's duly to make/file a reltrrn is specifically mentioned in Sections 5 I and 74 of the NJRC of199 7, as amended, the pert:i11ent porti ons ohvhi ch read: "SEC. 51.

Individual Return. -

(A)

lZequirements.

- (1 ) Except as provided iu paragraph (2) of this Subsection, the following individuals arc required to iile an incom e tax return:

(a) Evuy Filipino citizen r·csiding in the Philippines;

XXX

XXX

XXX

(LI)

The income tax return shall be filed in duplicate by the following persons:

(a) A resident citizen - on his income from all sources;

XXX

XXX

XXX

"SEC. 74.

individuals. -

Declaration

of

Income

Tax

for

(A)

In General. -- Except as otherwise prov ided in this Section, every individual subj ect to income tax under Sections 24 and 25(A) of this Tille, who is receiving self- employment income, whether it constitutes the sole source of his income or in combination \Vith sa lari etE~Br1'¥R8!!:1tt!OE.Y: ~~ 225 CHRISTINE C. MAZA-GUARIN Executi ve Clerk of Court II

Court of Tax Appeals

' ~.

CT A CRIM Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kintanar fi xed or determinable income, shall m ake a nd file a declaration of his estima ted income fo r the cunent taxable year on or befo1·e April 15 of the sa me taxa ble year. In general, self-employment income consists of the earnings derived by the individual hom the practice of profession or conduct of trade or business carried on by him as a sole proprietor or by a partnership of whi ch he is a member. Nonresident Filipino citizens, w ith respect to income from w ithout the Philippines, and nonresident aliens not engaged in trade or business in the Philippines, are not required to render a declaration of estimated income tax. The declaration shall contain such pertinent infonnalion as the

Secretary

of Finance, upon recommendation of the Commissioner, may, by rules and regul ations prescribe. An individual may make amendments o f a declaration fi led during the taxable year under the rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner." (Emphasis Supp lied) Accused admitted that he is an independent distributor of health and fitness products of FLPPI, wherein he has been a consistent top distributor and fron1 which he has been earning substantial amoun ts of income during taxable years 2000 and 2001. The prosecution, on the other hand, presented as its '~r itness, Mr. Michael T. Cajandab, Comptroller of FLPPI, who testified that in verifying the income received by accused, he checked the A lpha List marked as Exhibits " DD" and " DD- 1 ", w hich is a reportorial requirement by the 13HZ containing the total amount of income payments made by their company to their distributors or independent contractors and tlte total amount o f taxes for a particular year, said A lpha List was received by the BlR in the year 2001 as evidenced by the stamped received. Upon verification, .Mr. Caj andab sent a Letter-Reply 57 dated January 20, 2003 indicating the total income payments they made to Mr. Kintanar for ca lendar years 1999, 2000 and 2001. :tvlorever 01 Exhibit "M", p. 55 1

22G

eER'fiPlEB 'f'RUE COPY:

c _£_:t!:x:: ___ _ CHRJSTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

P---

DECJSLON

CTA CRJM Case No. 0-031 & 0-03 2 People vs. Benjamin C. Kinlannr

Page 33 of 49

Carmencita Flores, Service Manager of Bank of the l)hilippine Islands (BPI) North Greenhills Branch, testified and affirmed her affid avit which explicitly provides that she came to know Mr. Benj amin G. Kintanar, Jr. as a depositor of their branch and, after a review of the bank statements, she confirmed that the checks issued by FLPPI to accused as income payments, marked as Exhibit "T" to "T-1 9", were encashed or deposited under the account name of the accused. In view of the fact that accused Benjamin Kintanar, Jr. is a resident and a citizen of the Philippines mandated under Section 51 of the NlRC of 1997 to file an income tax return; and the prosecution having properly established that said accused earned income, as an independent distributor of health and fitness products o f FLPPl , accused qualifies under the first element and is therefore liable to fi le his annual income tax returns during the taxable years that he has been earning income w ithin the Philippines, specifica lly during the taxable years 2000 and 200 l.

The accused (ailed to make or Ole a return at the time required bv lmv Important to the determination o r the presence of the second element is the determinati on of the proper venue for the filing of the income tax return and t11e period within which to (ile the same, which is provided in Section 51, Subsections (B) and (C)( l), to wit:

"SEC. 51. Individual Ret.nrn. -

XXX

XXX

XXX

(B)

Where

to File.

Except in

cases where the Commissioner otherw ise permits, the tclliPr'IF1~ 22 '7 CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

'

DECISJON

CTA CRJM Case No. 0-0J I & 0-032 People vs. Benjamin G. Kimanar

Page 34 of 49

vvilh an authorized agent bank, Revenue District Officer, Collection Agent or duly authorized Treasurer of the city or municipality in which such person has his legal residence or pl'incipal place of business in tlw Philippines, or if there be no legal residence or place of business in the Philippines, with the Office of the Comrnissioner.

(C) W hen to File. -- ( 1) The return of any individual specified above shall be fil ed on or before the fifteenth ( 15111) day of April of each year covering income for preceding taxable yea r.

XXX

XXX

xxx" Records reveal that accused was registered as a taxpayer in Pasig City where he was a resident h om J 972 to 1 997, hmvever from 1997 up to 2003 or 2004, accused admitted that he, together with his farnily, transferred to Merville, Parafiaque City, then afterwards, they went back to Pasig City. After a careful evaluation of the records at hand, this Court is satisfi ed and so holds that the prosecution satisfactori ly laid down the pieces of evidence needed to prove that there is no record of filing of the required Income Tax Ret11ms within the reglementary period, in any of the revenue districts of the Bureau of Intem al Reveuue, where accused resided, at specific points in lillie, prior to or during the taxable years 2000 and 200 I. Full credence is accorded by tllis Court to the Certifica.tion 58 issned, affirmed and testified to by Atty. Barroga, OlC, Assistant District Officer of tbe BlR HDO No. 52, Parafia C]ue City, to the dTect tl wt accused B er~j a rnin G. Kintanar, .l r., did not fi le his !TIZs ror the years 1999, 2000 and 2001. Sa i~ )S Ex.hibil "K", Docket, p. 5,19 228

CERTlFIED TRUE COPY:

C--~

CHRISTINE C. MAZA-GUARIN Executive Clerk of Court ll

Court of Tax Appeals

4 ''

CTA CRIM Case No. 0-03 l & 0-032 l'eople vs. Benjamin G. Kintanar certificati on corroborates another Certi fi cation 59 issued by the former Revenue District Officer Carmelita R. Bacocl on September 17, 2002 in response to the request of the Tax Fraud Division reflected on the Access Letter dated July 18, 2002.

Likewise, the same weight is given to the Certification 60 issued, affirmed and testified to by Romeo Naranj o, assigned as Revenue District Officer of Revenue District Office No. 43, Pasig City, which essentially states that accused Benjamin G. Kintanar and spouse Gloria V. Kintanar have not fil ed any return in their office and that they are not registered in their district. Above finding is fortified by another Certification 61 dated September 26, 2007, signed by V ictoria T. De Leon, Head Revenue Executive Assistant of the Informati on Systems Operations Service of the BIR, in behalf of Assistant Commissioner Alberto Pio De Roda, which substantially states that based on the ITS of the BlR accused Bet1jamin G. K intanar, .Jr. is a registered Professional Taxpayer, however, BIR has no record of accused having filed his ITRs for the years 1999-200 1.

For his part, accused presented Exhibits "6" ancl " 11 " to substantiate his claim that he filed his ITRs for the years 2000 and 2001 with the BIR RDO No. 40, Cubao, Quezon City, through Ms. Marina Mendoza, who was a form er employee at the BlR Revenue Dis trict Oflice, Quezon City. We are not convinced. A careful examination of the lTRs presented by accused belies his claim, for the said lTRs are of doubtful authenticity, ?L- 59 Exhibit " P", Docket, p. 567 60 Exil ibits "S", "S-1" a11d "S-2" 61 Exhibit "ff", p. 710 229 CERiiPlEb 'fRUE COPVi .

c:---L-~ ,, CHRJSTfNE C. MAZA-GUARIN E x~c uti ve Clerk nf Court II

Court of Tax Appeals

.

'

DEClSlON

CT A CRlM Case No. 0-031 & 0-032 People vs. Benjamin C. Kintanar

Page 36 of 49

materially flawed with the fo llowing irregularities surrounding its existence, to wit:

1) The subj ect ITRs are incomplete in itseH~ as both failed to indicate the CommuniLy Tax Certificte (CTC) Number, Place and Date of issuance and the Arnount paid (Doxes 107-110); 2) The subj ect lTRs contain an address (Bile 73, Lot 24, Lagro Subdi vision, Q uezon Cit y) which, as admitted by the accused, had never been the legal residence of his fa mily; 3) The subj ect ITRs bear the stamp "Received" by IillO No. 40 of Cubao, Quezon City, which is not the district office that has jurisdiction over the accused given address (Lagro Subdivision, Q uezon Ci ty) in the subj ect ITRs, hence, even if authentic, were fi led at the wrong venue; and 4) The accused ad rnilled that he did not read all the contents of the subj ect ITRs and just relied on Ms. Marina Mendoza as to its preparation and filing.

Moreover, Court cannot give-ill and afford credit to the above ITRs on the ground that a stamp received by 8JR-RDO No. 4 0 seemingly appears on the face of the document. This Comt is of the considered view that ITRs are public documents, specifically fa lling under Section !9(c) of Rule 132 of the Rules of Court which refers to "public records a./private documents required by law to be entered therein ". As such, Section 27, Rule I 32 of the Rules of Court declares:

230 eERf lFIEB TRUE COPY:

C--~

CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

c;::;Z-- '' D.EClSlON CTA CRIM Case No. 0-03 I & 0-032 People vs. Benjamin G. Kintanar

Page 37 of 49

SEC. 27. Public record of a private docutnent. -- An authorized public record of a private document may be proved by the original record, or by a copy thereof, attested by the legal custodian of the record, with an appropriate certificate that such officer has the custody. As can be gleaned from the foregoing provision, in order to convince this court to accord probative value on the ITRs presented, accused must prove the existence of the subject ITRs in the records of BlR RDO No. 40, either by presenting the original record of BlR RDO No. 4 0, or by a copy thereof, attested by the appropriate officer of BIR RDO No. 40, with an appropriate certificate that such officer has the custody. Clearly, the accused failed on this point.

That the (ailure to make or {ile a return was will[ul Willfu l in tax crimes statutes means a voluntary, intentional violation of a known lega l duty and bad faith or bad purpose need not be shovvn. 62 According to Black's Law Dictionary, "the word '\villful" or "willfully" when used in the def~nition of a crime, it has been sa id time and again, means only inLeuLionalJy or purposely as distinguished from accidentally or negligently and does not require any actual impropriety; while on the other hand it has been stated vvith equal repetition and insistence that the requirement added by such a word is not satisfied unless there is a bad purpose or evil intent." R.olin M. Perkins & Ronald N. Boyce, Criminal Law 875-76 62 fVlertens (Law of Federal Inco me Taxalio11) Chapter 117.05, page 28, Vo l lillie 13, see U.S. v. G reen, 757 F2cl 11 6, 85- 1 LJSTC 9 178 (CA7 1985), in which the Court, citing U.S. v. Moore, 627 F2d 830 (CA 1980) and U.S. v. Verkuilen, 690 F2d 6'18, 82-2 USTC 9G 18 (CA 7 1982), upheld the co 11viction of / __ a tax protester for wlllful failure to fil e returns ! CERTIFIED TRUE. COPY:

y

C- L£>L

2 31 CHRISTINE C. MAZA-GUARIN

Executive Clerk of CoUJ1 II

Court of Tax Appeals

I'

DEClSlON

CT A CRl M Case No. 0-03 I & 0-032 People vs. Benjamin G. Kinlanar

Page 38 of 49

(3rd eel. 1982)63 . Further, Black's Law Dictionary defines "willfulness" as the voluntary, intentional violaHou or disregard of a known legal duty. Therefore, in order to convict an accused for w illful failure to file income tax returns, it must be shovm that the accused had knowledge of his legal duty to file an income tax return, but nevertheless, he voluntarily, knowingly and intentionally failed to file the required returns. This Court will now look into the factual circumstances of the case al bar.

For his defense, accused vehemently denied Lhe charges against him for willful failure to file his income tax returns for taxable years 2000 and 2001. Accused claims that he hired Ms. Marina Mendoza, a fo rmer employee of the BIR and an accountant, to help him in the preparation and filing of his income tax return, and that he supplied all the data and documents she needed for its preparation. Having relied on .1\!ls. Mendoza's k.nowledge on filing the ITR, accused in effect is saying that he did not willfully fail to comply with his legal duty to file the income tax returns.

On the other band, Ms. Marina J\!lencloza vehemently denied that she has any involvement in the filing of the ITRs of accused Benj amin G. Kintanar, Jr. She admits having met the accused when accused and his sister, l\!Is. Je niffer K . Abaci went to tlle form er's house, but she asserts that insofar as the preparation of accused ITRs is concerned, she merely gave bim an advice on how to prepare an ITR. Further, Ms. fVIendoza reiterated that she did not receive any /...'1 c: . ::._._....-- 63 Black's Law Dicti onary, 8t 11 ed., p. 1630 232

CERTIFIED TRUE COPY:

~L.._ CHRISTINE C. MAZA-GUARIN Executive Clerk of Court ll

Court of Tax Appeals

'

DECJSJON

CT A CRIM Case No. 0-03 I & 0-032 People vs. Benja111in G. Kintanar

Page 39 of 49

compensati on for the advices she had given the accused, and when asked about the checks she received from accused, she clari£iecl that the checks constitute as installment payments for jewelries that the accused purchased from her son- in-law, Mr. Dong Morenos. Lastl y, Ms. Mendoza fi rmly denied, upon being preseuted the ITRs of tl1e accused Lor 2000 and 200 J, having prepared the lTRs of the accused.

Accused had knowledge of his obligation to fil e his incmne tax return for his income earned as an independent distributor of FL PPl. This iuference can be proved by the testirnoni es o C the accused and Ms. Marina asserting that for the purpose of preparing and filing of his ITRs for 2000 and 2001 , he hired Ms. Marina M endoza but the signatures in the lT Rs are !tis; he provided all the details including personal circumstances.

Clearly he had knowledge of his obligation that is why he allegedly hired another person to fil e in hi s behalf. Also, "willfulness" is a stale o f mind that may be inferred fi·om the circumstances of the case. 64 Thus, proof of w illfulness may be, and usually is, 1 b .

. 1 . 1

J

65 s Jown y c1rcumstanlla evH euce a oue.

After a painstaking analysis of the testimonial and documentary evidence presented by the prosecution and the defense, the Court is of the well considered view and so holds that the attendant circumstances in this case, admi tted and proven during the proceedings, sati sfactorily proved the element o f "willfulness" on this cbarge against the accused. Sitnply put, based on the 64 Black's Law dictio1Jary, 6' 11 Ecl itio11, p. 1599 65 United5'totes v. Grumlw, 728 F.2cl 7911, '/96-9"/ (6' 11 Cir. 198 11); Un ited S t <:~tes v. Gleason, 726 F.2d d 385, 388 (8'h Cir. 1984); United States v. Marabelles, 724 F.2d 1374, 1379 (9' 11 Cir,_ L 2.8~·0PY•

P-----

CERTlFIED TKU;;_ ' vp:.-:t;:/L-- CHRISTINE c. MAZA-GUARIN 2 3 3

Executive Clerk of Court II

Court of Tax Appeals

.

' '' CTA CRlM Case No. 0-0JI & 0-032 People vs. Benjamin G. Kintanar prevailing circumstances in this case, the accused knowingly, voluntarily and intentionally failed to file his income tax returns for the taxable years 2000 and 2001.

Records show that the 13 ureau of Internal Revenue sent at least three (3) notices to accused Benjamin Kintanar, Jr. for the examination of his books of accounts and other accounting records for all internal revenue taxes. First one was Letter of Authority (LOA) No. 00029663 dated March 28, 2003 (Exhibits "A" to "A-3") received by Mr. Kintanar on April 3, 2003 as shown by his signature (Exhibit "A-3"). Despite receipt of the LOA, the spouses did not submit the documents requested.

Second Request for the Presentation of

Records dated April 2 1, 2003 (Exhibit " 13") and received on April 23 , 2003 , and then a Fina l Notice for presentation and/or production of the required records/documents dated May 5, 2003 (Exhibit "C") were served and allegedly received by the spouses. Upon failure of the spouses to present or submit the required documents, a Subpoena Duces Tecum dated June 11 , 2003 (Exhibit D" to "D-2") vvas issued to them commanding them to appear before the Chief Prosecution Division in order to enforce cornpliance in the presentation of their books of accounts and other accounting and tax records. No response was received by the BIR from the spouses in any of these notices. Consequently, a Formal Letter of Demand dated f ebruary 26, 200·4 (Exhibits "F" to "F-7") including Assessment Notices (Exhibits "G" to "G-7") were issued for the payment of deficiencies on taxes. lt was only at this point when accused Beqjarnin G. Kintanar, Jr. manifested a hint of concern or CER'flf'IBIJ 'fftUE C0PY:

~ e-r&t-- cHRisriNE C. MAZA-GUARIN 234

Executive Clerk of Court II

Court of Tax Appeals

DECJSlON

CTA CRIM Case No. 0-03 l & 0-03 2 People vs. Benjamin G. Kintanar

Page 41 of 49

interest by sending a Letter dated A ugust 3 1, 2004 (Exhibits "H" to "H-3") protesting the deficiency assessments for lack of factual and legal basis, together with photocopies of his income tax returns for 2000, 2001 and 2002, and undertaking to submit additional documents within sixty (60) clays therefrom. On September 30, 2004 a Letter (Exl1ibits "I" to "I-1 ") was issued by Mr. A rne! SD. Guballa, Chief of the National Investigation Division, reminding the spouses that no documents have yet been received by their office and that they have sixty (60) days from the date the protest was fil ed or until November 3, 2004 to submit their supporting documents otherwise, the assessment shall become final, executory and demandable. However, despite said undertaking of accused to submit additional documents and reminder from Mr. Gubally, accused did not submit any document. Hence, a Final Decision on Disputed Assessment dated December 13, 200<1 (Exhibits "J" to "J-5") \Vas issued informing the spouses about the denial of their protes t for non- submission of required documents w ithin the sixty (60) day reglementary period.

Another circumstance vvhich convinced this Court to infer the presence of "willfulness" on the part of the accused not to fil e his income tax returns is his admission that he signed the ITRs but failed to read all the contents, and that lle did not personally file his JTR and did not verify from the BlR if his lTRs were actually filed.

Veri ly, all of the foregoing circumstances taken together, accused displayed hi s incli fference lovvards the

231J

issue of his tax responsibi lities to the~ CERTIF-'IED "!"RUE COPY:

c--~L- CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

People vs. Benjamin G. Kintanar deemed jointly instituted in the same proceeding. The filing of the criminal action shall necessarily carry with it the filing of the civil action. No right to reserve the filing of such civil action separately from the criminal action shall be allowed or recognized. (Rules of Court, Rule 111 , sec. l[a], J'>ar. Ja) In this case, records reveal that the BIR sent a Fonnal Letter of Demand dated February 26, 2004 (Exhibits "F" to "F-7") including Assessment Notices (Exhibits "G" to "G-7"), which were received by the accused on August 10, 2004. Accused Benjamin G. Kintanar, .r r. protested the defici ency assessments, by sending a Letter dated August 31, 2004 (Exhibits "I-I" to "H-3 "), for lack of factual and legal basis, together with photocopies of his income tax returns for 2000, 2001 and 2002, and undertaking to submit additional documents vvithin sixty (60) days therehom. On September 30, 2004 a Letter (Exhibits "I" to "I- I") was issued by Mr. Arne! SD. Guballa, Chief of the National Investigation Division, acknowledging receipt of the protest and reminding the spouses that no documents have yet been received by their office and that they have sixty

(60) days fi·om the date the protest was filed or until Novernber 3, 2004 to submit their supporting documents otherwise, the assessment shall become final , executory and demandable.

However, accused did not submit the documents. Hence, BIR issued a Final Decision on Disputed Assessment dated December 13, 2004 (Exhibits ".J " to "J-5"), \Vhich was received by the accused on April 12, 2005, informing the spouses about the denial of their protest for non-submission of required documents within the sixty (60) day reglementary .----~ period.

236 ----------· CERTIPIE'B l'RUE et>flV:

C--~2,/L­ CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

CT A CIUM Case No. 0-03 1 & 0-032 People vs. Benjamin C. Kintanar

Section 228 of the N I RC of 1997 provides for the period and procedure of protesting assessment, viz:

SEC.

228. Protesting of Assessment. - When the Commissioner or ltis duly authorized representative finds that proper taxes should be assessed, he shall first noti fY the taxpayer of his findings : Provided, however, That a preassessment noti ce shall not be required in the following cases:

XXX

Such assessment may be protested aJministratively by tiling a request for reconsideration or reinvestigation within thirty (3 0) clays from receipt of the assessment in such form and manner as may be prescribed by implernenting rules and regulations.

Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been submitted ; otherwise, the assessment shall become final.

lf the protest is denied in whole or in parl, or is not acted upon within one hundred eighty (1 80) clays from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from th e lapse of one hundred eight.y (UW)-day period ; otherwise, the decision shall become final, executory ami demandable.

Tlle accused failed to prove tllat lle has submitted any document in support of his protest within GO clays from the elate of fi ling o f his protest, or until November 3, 2004, thus, llle assessments against accused became final pursuant to the above-quoted provision . Moreover, for failure of the accused to / / ',_____ 237

CERTIFIED TRUE COPY:

C-~~

CHRISTINE C. MAZA-GUARIN

Executive Clerk of Coun II

Court of Tax Appeals

DEC LSlON

CT A CRJM Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kintanar

Page 45 of 49

judicially appeal the Final Decision 66 w ithin thirty (30) days from receipt th ereo f~ the assessments had become final, executory and demandable. Accordingly, accused is barred from disputing the correctness of the subj ect assessments absent any proof of irregularities in the performance of duties, an assessment dttly made by the Bureau of Interual Revenue examiner and approved by his superior officers will not be disturbed. A ll presumptions are in favo ur of the correctness of LRx assessments. 67 Therefo re, accused is hereby held liable to pay the assessed tax cle(iciencies [or taxable years 2000 allCI 2001 , in accordm1ce with the subject assessments 68 issued against hin1, which had become final, executory and demandable, to wit:

~41L:[email protected]~~:f9!£'Pf2!E~::;br0S":Z::;J}!·l&~,~i-..:ti~::¥6±i-:::.!.4&1hlf::..~-ii£!.Ri.2!':'.~!a~fh1£Btf£¥~~"W1?:!·E'i'Jlt~-¥M1Jt'::::Zt..:..:._~~~if!

TAXABLE YEAR

2000 2001 Tota l Income Tax Sti ll Due 3,LI75,090.64

Add : Surcharge

Interest 03/3 1/2004

TOTAL

INCOME

DEF lCIENCY 1,737,545 .32 3,038,966.76 TAX P8,25 1,602.72 2,586,259.62 2,97 1,6 12.3 1 Pl0,730,391.1 8 lt is explicitly provided for under Section 255 of the NIRC of 1997, as amended, that, any person required under this Code or by rules and regulations promulgated thereunder to pny any tax, make n return, keep nny record, or 66 Exhi bits "J" to "J-4", pp544-548 67 Pp 1'. Gloria Kintanar, CTA Crim Case Nos. 0-033 & 0-034 citing Republic v. Court ofApp eals, G.R. No. L-385110, April 30, 1987.

68 Exhi bit "J-11", p. 5118 69 1ND ICATED Til E CORRECT AMOUNT. Tile correct estin1ated aniOLIIIt is "5,172,5 19.25". Note that i11 Exhi bit "J-tl" tile Total Jnco111e Tax Still Due from Benjam i11 Ki11t8 11m fo r the taxa ble year 200 I is "5, 172,5 19.25" and NOT "5, 17 5,2112. 12" as erroneously provided for in the In formation fi led by the State Prosecutor. "Exhi bit "J-11" is Annex "A" of the Final Decision on Disputed Assessment issued by./ . Jose Mario C. Bufiag, Deputy Comm issioner of the Legal and Inspection GrouQ of the ,BliCOPY• ~

CERTIFIED JRY~

.

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L..-- 2 3 8 CHRISTINE c. MAZA-GUARIN Executive Clerk of Court ll

Court of Tax Appeals

DECISlON

CT A CRfM Case No. 0-03 I & 0-032 People vs. Benjamin C. Kintanur

Page 46 of 49

supply correct and accurate information, who w illfully fails to pay such tax, make such return, keep such record, or supply correct and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation, at the time or Limes required by law or rules and regulations shall, in addition lo other penalties provided by law, upon conviction thereof, he punished hy n line of not less thnn Ten thousand pesos (PIO,OOO) and suffer imprisonment of not less than one (1) year Lmt not more than ten (10) years.

Taking into account that accused is not disqualified from the scope of the Indeterminate Sentence Law, 70 the same shall apply, and thus, the imposable penalty shall not exceed the maximum fixed by law, \Vhich is I 0 years, and the tnmtmunl penally shall not be less than 1 year, the minimum term prescribed by Section 255 of the N IRC of 1997. Considering that the subject of this disposition involves two informations fil ed against accused, docketed as CTA Criminal Case Nos. 0-031 & 0-032, both for failure to file ITRs ror the taxab le years 2000 and 2001 , respectively, the imposition of a line or P 10,000.00 for each information is proper, likewise, the imposition of indeterminate penalty of imprisonment of one (1) year as minimum, Lo two (2) years as maximum for each inform a lion is appropriate under the circurnstances.

Secti on 280 of the NlRC of 1997, as amended, provides for the imposition of subsidiary penally in the event that/-----

CERTIFIED TRUE COPY:

e--~L CHRISTINE C. MAZA-GUARIN -· ------------ ---- ------ - -- - ·- ---

Executive Clerk of Court II

10 Section l and 2 of Acl no. 41 OJ as amended by Acl No. 4225 and Republic A~Nrrt 40'iJ::fax Appeals 239

DECrSLON

CT A CRIM Case No. 0-03 l & 0-032 People vs. Benjamin G. Kintanar

Page 47 of 49

accused has no property ';vilh which to meet the fin e imposed upon him by the court, or is unable to pay such Cine.

WHEREFORE, premises considered, Court finds and so holds that:

1. In CTA Criminal Case No. 0-031, accused Benjamin G. K.intanar, Jr., is GUILTY BEYOND Rl~A S ONABLE DOUBT of violation of Section 255 of the National Internal Revenue Code of 1997, as amended, and is hereby sentenced to suffer an indeterminate penalty of imprisonment of one (1) year as minimum, lo two (2) years as maximum, and is ORDERED to pay a fine in the amount of PlO,OOO.OO, with subsidiary imprisonment in case accused has no properly with which lo meet the said fine, pursuant to Section 280 of llw NIRC of 1 997, as amended.

As regards civil liability, accused is hereby ORDERED TO PAY defi ciency income tax for the taxabl e year 2000 in the amount of

EIGHT MILLION TWO HUNDRED FTPTY ONE TI-lOUSAND SIX

HUNDRED TWO AND 72/ 100 PESOS (P8,25 1 ,602.72), inclusive of the surcharge and interest, plus 20% delinquency interest per annum from the total amount of P8,25 1,602.72, counted from April 12, 2005, 71 until fu lly paid, pursuant to Section 2LI9(C)(3) of the NIRC of 1997, as amended; aud t CERTIFIED iRUI! COPY:

~ CHRISTINE C. MAZA-GUARIN Executive C lerk of Court II

Court of Tax Appeals

71 Exhi bit ".1-5", p. 51111, date whe 11 tile accused received tile Fi 11al Dec isio11 0 11 Disputed Assessment elated December 13, 2004 (Exhibit 'T ' 240

DECISiON

CTA CRJM Case No. 0-03 1 & 0-032 People vs. Benjamin G. Kintanar Page 48 o[ 49

2. In CTA Criminal Case No. 0-032, accused Benjamin G. Kintanar, Jr., is GUILTY BEYOND REASONABLE DOUBT of violation of Section 255 of the Natiouallntemal Revenue Code of 1997, as amended, and is hereby sentenced to suffer an indeterminate penalty of imprisonment of one (1) year as mmunum, to two (2) years as maximum, and is O R DERED to pay a fine in the amount ofP lO,OOO.OO, with subsidiary imprisonment in case accused has no property with which to meet the said fine, pursuant to Section 280 of the NlRC of 1997, as amended.

As regards civil liability, accused is hereby ORDERED TO PAY defici ency income tax for the taxable year 200 l in the amount of

TEN IvllLLION SEVEN HUNDRED THIRTY THOUSAND THREE

H UNDRED NINETY ONE AN D 181100 PESOS (Pl0,730,391.18), inclusive of the surcharge aud interest, plus 20% delinquency interest per annum from the total amount of P10,730,39l.l8, counted from April 12, 2005,77 until fully paid, pursuant to Section 249(C)(3) of the NIRC of 1997, as amended.

No costs.

Associate Justice

72 Exhibit "J-5", p. 51111, date when the accused received the Fi 11al Decisio11 011 Disputed Assess 111ent dated December 13, 2004 (ExJ1ibit " J" CERTif'!Eb 'fRUB C ()FiY ~ C-A.-3-~ 2 41 CHIUSTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals

DEcrSlON

CT A CRlM Case No. 0-03 1 & 0-032 People l'S. Benjamin G. Kintanur

WE CONCUR:

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Page 49 of 49

~ - tt4L ~~

OLGA PALANCA-ENRIQUEZ

Associate Justice

ATTESTATION

1 attest tllat the conclusions in th e above Decision were reached in consultation before the case was ass igned to the writer of the opinion of the Court's Division.

CEH.TIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opi ni on of the Court.

242 \~~..J\..- ~- o~ ERNESTO D. ACOSTA

Presiding Justice

e~R.'f'i~IBB 'TRUe eoPV~ C-?~ CHRISTINE C. MAZA-GUARIN

Executive Clerk of Court II

Court of Tax Appeals