cta_resolution CTA Case No. EB CRIM-129EB CRIM-129 2024-10-21

PEOPLE OF THE PHILIPPINES v. STAR ASSET MANAGEMENT NPL., MARK S. FRONDOSO AND JOSEPH RYAN R. SYCIP Unit 3A, One Orion Building, 11th Avenue, corner 38th Street, Bonifacio Global City, Taguig Metro Manila

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC PEOPLE OF THE CTA EB Crim No. 129 PHILIPPINES, (CTA Crim Case No . 0-995) Petitioner, Members: -versus- DEL ROSARIO, P.J., RINGPIS-LIBAN, MANAHAN , BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. STAR ASSET MANAGEMENT NPL INC., MARK S. FRONDOSO AND JOSEPH Promulgated: RYAN R. SYCIP, OCT 2 1 202~ Respondents. )(- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RESOLUTION CUI-DAVID, J.: For this Court's resolution is petitioner's Motion for Reconsideration (of the Decision dated April 22, 2024) filed on May 8, 2024, with respondents' Comment/Opposition [Re: Motion for Reconsideration dated 7 May 2024] received by the Court on June 4, 2024 and Compliance/Manifestation dated July 1, 2024. Petitioner's Motion for Reconsideration (Motion) a' ssails the Decision of the Court in the above-captioned case promulgated on April22, 2024, the dispositive portion of which reads: WHEREFORE, in light of the foregoing, the instant Petition for Review is DISMISSED on the ground of prescription of the offense and for being moot and academic.

RESOLUTION CTA EB Crim No. 129 (CTA Crim Case No. 0-995) People of the Philippines v. Star Asset Management NPL., MarkS. Frondoso and Joseph Ryan R. Sycip X------------------------------------------------------------------------------------------X SO ORDERED. Petitioner argues that the Court misinterpreted Emilio E. Lim, Sr. and Antonia Sun Lim v. Court ofAppeals (Lim)! and that the five (5)-year prescriptive period is interrupted by the filing of the Complaint-Affidavit with the Department of Justice (DOJ), pursuant to Tupaz v. Ulep (Tupaz). 2 According to petitioner, considering that the date of commission of the crime is February 12, 2017, 3 the filing of the Complaint-Affidavit on June 25, 2021, is within the five (5)-year prescriptive period. In their Comment, respondents argue that the five-year prescriptive period specified under Section 281 of the NIRC of 1997, as amended, lapsed on February 13, 2022, but the Information was only filed with the Court in Division on December 6, 2022. The Motion is bereft of merit. While the Tupaz case4 did consider the filing date of the complaint with the DOJ to determine whether the criminal action was instituted within the five (5)-year prescriptive period, the Supreme Court, in approving the Revised Rules of the Court of Tax Appeals (RRCTA) in 2005, clarified that it is the filing of the information in Court that interrupts the running of the prescriptive period under Section 2, Rule 9 5 thereof, co~sistent with the principles established in the Lim case,6 as enunciated by the Supreme Court.7 Accordingly, the interpretation in the Lim case ts controlling. In that case, it was stated that failure to pay tax is committed only after receipt of the final notice and demand for payment, coupled with a willful refusal to pay the taxes due within the allotted period. The Supreme Court ruled as follows: ' 'G.R. Nos. 48134-37, October 18, 1990. 2 G.R. No. 127777. October I, 1999. 3 The Court previously ruled that the date of commission of the crime is on February 13, 2017. 4 Supra at note 2. 5 RULE 9- PROCEDURE IN CRIMINAL CASES SEC. 2. Institution of criminal actions.- All criminal actions before the Court in Division in the exercise of its original jurisdiction shall be instituted by the filing of an information in the name of the People of the Philippines. In criminal actions involving violations of the National Internal Revenue Code and other laws enforced by the Bureau of Internal Revenue, the Commissioner of Internal Revenue must approve their filing. In criminal actions involving violations of the Tariff and Customs Code and other lmvs enforced by the Bureau of Customs, the Commissioner of Customs. must approve their filing. The institution of the criminal action shall interrupt the running of the period of prescription. [Emphasis supplied] 6 Supra at note 1. 7 People v. SKI Construction Group, Inc., C.T.A. Crim. Case 1\'o. 0-1137, June 13, 2024.

RESOLUTION CTA EB Crim No. 129 (CTA Crim Case No. 0-995) People of the Philippines v. Star Asset Management NPL., MarkS. Frondoso and Joseph Ryan R. Sycip x------------------------------------------------------------------------------------------x Relative to Criminal Cases Nos. 1788 and 1789 which involved petitioners' refusal to pay the deficiency income taxes due, again both parties are in accord that by their nature, the violations as charged could only be committed after service of notice and demand for payment of the deficiency taxes upon the taxpayers . ... We hold for the Government. Section 51 (b) of the Tax Code provides: "(b) Assessment and payment of deficiency tax. -After the return is filed, the Commissioner of Internal Revenue shall examine it and assess the correct amount of the tax. The tax or deficiency in tax so discovered shall be paid upon notice and demand from the Commissioner of Internal Revenue." (Emphasis on the originan Inasmuch as the final notice and demand for payment of the deficiency taxes was served on petitioners on July 3, 1968, it was only then that the cause of action on the part of the BIR accrued. This is so because prior to the receipt of the letter-assessment, no violation has yet been committed by the taxpayers. The offense was committed only after receipt was coupled with the willful refusal to pay the taxes due within the allotted period. The two criminal informations, having been filed on June 23, 1970, are well-within the five-year prescriptive period and are not time-barred. [Emphasis and underscoring supplied.] To reiterate, as to what interrupts prescription, Section 281 of the NIRC of 1997, as amended, provides that it is "when proceedings are instituted against the guilty persons." This is explained in Lim to mean the time when the Information is filed with the Court. s In counting the prescriptive period, the Court maintains its discussion in the assailed Decision, viz.: Upon perusing the records, no original copies of the Assessment Notices were provided. However, assuming this Court gives probative value to the photocopies of the Assessment Notices that petitioner presented, this will show that the Assessment Notices were personally served and received by respondent Star Asset on January 13, 2017. 8 G.R. Nos. L-48134-37. October 18. 1990.

RESOLUTION CTA EB Crim No. 129 (CTA Crim Case No. 0-995) People of the Philippines v. Star Asset Management NPL., Mark S. Frondoso and Joseph Ryan R. Sycip x------------------------------------------------------------------------------------------x Moreover, it was alleged in the Complaint-Affidavit that:9 10. Thereafter, on 11 January 2017, the Formal Assessment Notice (FAN) and Details of Discrepancies, were issued by then OIC-Regional Director CLAVELINA S. NACAR assessing and demanding payments of the tax liabilities for taxable year 2013 m the total amount of Php47,161,037.13 representing deficiency on Income Tax and Expanded Withholding Tax, inclusive of surcharge and interest. Said FAN was served on STAR ASSET on 13 January 2017. Petitioner persistently invokes that the assessment has become final, executory, and unappealable because respondents failed to file a protest within 30 days from receipt of the FAN.lD Accordingly, since no protest was filed within 30 days from January 13, 2017, or until February 12, 2017, the FAN attained finality upon the lapse of the period on February 13, 2017, in accordance with Section 228 of the NIRC of 1997, as amended. 11 Thus, pursuant to Lim and RMC No. 101-90, petitioner had five (5) years counted from February 13, 2017, or until February 13, 2022, to file the Information in Court. The Information dated March 9, 2022, was filed with this Court only on December 6, 2022. Clearly, the government's right to institute a criminal action against respondents-accused had already prescribed for more than nine (9) months when the Information was filed on December 6, 2022. 9 Par. 1O, Joint Complaint-Affidavit, Annex ..N... Petition for Review, EB Docket, p. 67; Details of Discrepancies, Annex �'p,�� EB Docket, p. 87. 10 Petition for Review, pars. 45-47, EB Docket pp. 20-22. 11 SEC. 228. Protesting of Assessment.- When the Commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his findings: Provided, however, That a pre-assessment notice shall not be required in the follO\ving cases: Such assessment may be protested administrath�elv bv filing a request for reconsideration or n!investigation within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules and regulations. Within si:-.:ty (60) days from filing of the protest, all relevant suppm1ing documents shall have been submitted; otherwise, the assessment shall become final.

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