PEOPLE OF THE PHILIPPINES v. SMALLVILLE INFORMATION TECHNOLOGY ENTERPRISE CORPORATION ANGELBERT BALASICO, THELMA BALASICO (9 F Vicente Madrigal Building, 6793 Ayala Ave., 1227 Makati City)

CTA Form No. X (For DCC ) 111111111111 1111111111 11111 111111111111111111111111111111 11111 11111 1111111111111 24-000456 -0005 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY Fl RST DIVISION CTA CRlM. CASE NO. 0-1203 PEOPLE OF THE PHILIPPINES, Plaintiff, - versus - SMALLVlLLE INFORMATION NOTICE OF RESOLUTION TECHNOLOGY ENTERPRISE CORPORATlON, ANGELBERT BALASICO and THELMA BALAS!CO, Accused. To: CITY PROSEC T O R OJ ' 00 G. VENT RA ' ZA SR. ASST. C ITY PROSECUTOR EOM '0 H. SEN A SR. ASST. C ITY PROSECUTOR PAU LO A. TALBAN Department of Justice Orti ce of the City Prosecutor- Makati City 16th Floor. Makati City Hall ( cw Bu ilding) J.P. Rizal. Brgy. Poblac ion Makati City ATT Y. A LB ERT C. ARPON ATT Y. CARL FITRI A. H USS I 1 ATTY. JOCELY N P. L UMBR ES ATTY. RHODA 0. QUIAMBAO 13urcau of Internal Revenue - Revenue Region No. SA 36th Floor. bport bank Plm:a 13uilding Sen. Gil Puyat Avenue corner Chi no Roccs Avenue Makati City GREE TIN GS: You are hereby notifi ed by these presents that on March 26, 2025, a Resolution was rendered in th e above-entitled case, copy of which is attached hereto. Quezon C ity, Philippines, March 27,2025. Atty. M Executi

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION ( PEOPLE OF THE PHILIPPINES, CTA CRIM. CASE NO. 0-1203 Plaintiff, For: Violation of Section 255 in relation to Section 256 of National -versus- Internal Revenue Code of 1997, as amended SMALLVILLE INFORMATION Members: TECHNOLOGY ENTERPRISE CORPORATION, ANGELBERT DEL ROSARIO, P.J. , Chairperson, BALASICO and THELMA BACORRO-VILLENA, and BALAS ICO CUI-DAVID, JJ. 9/F Vicente Madrigal Building, 6793 Ayala Ave. , 1227 Makati Promulgated: City, Accused. RESOLUTION In a Resolution dated October 8 2024,1 this Court directed plaintiff to submit its proof of service of the Subpoena dated January 9, 2024, supposedly served on accused Smallville Information Technology Enterprise Corporation, Angelbert Balasico, and Thelma Balasico. In its Compliance with Manifestation2 filed on November 6, 2024, plaintiff manifested that the Subpoena dated January 9, 2024 had been inadvertently addressed to Level 21, Tower 2, The Enterprise Center, 6766 Ayala Avenue Makati instead of 9/F Vicente Madrigal Bldg., which is the true and correct address of accused Angelbert Balasico and Thelma Balasico. Due to th is procedural lapse, plaintiff admitted, accused were not notified of the scheduled preliminary investigation set on January 23 and 30, 2024. To rectify this lapse, plaintiff manifested that it would proceed to conduct another preliminary investigation to afford due process to accused. 1 CTA Docket, pp. 108-111 . 2CTADocket, pp. 11 3-114.

RESOLUTION People of the Philippines vs. Smallvil/e Information Technology Enterprise Corporation, Angelbert Balasico and Thelma Balasico CTA Crim. Case No. 0-1203 A preliminary investigation is required to be conducted before the filing of a complaint or information for an offense where the penalty prescribed by law is at least four (4) years, two (2) months and one (1) day without regard to the fine 3 In Atty. Roderick M. Santos and Alexander Andres vs. Judge Lauro Bernardo, Municipal Trial Court, Bocaue, Bulacan,4 the Supreme Court clarified that the need for a preliminary investigation depends upon the imposable penalty for the crime charged in the complaint or information filed. In this case, both the Joint Complaint-Affidavit5 and the lnformation6 charges accused with failure to pay income tax pursuant to Section 255 in relation to Section 256 of the National Internal Revenue Code of 1997, as amended. Such offense is penalized with a fine of not less than ten thousand pesos (r>1 0,000) and imprisonment of not less than one (1) year but not more than ten (1 0) years. Considering that the maximum imposable penalty for the offense charged against accused is ten (10) years, a preliminary investigation is required. In Johanne Edward B. Labay vs. Sandiganbayan, Third Division and People of the Philippines, 7 the Supreme Court explained that the right to a preliminary investigation is not a formal or technical right but a substantive one, to wit: The right to have a preliminary investigation conducted before being bound over to trial for a criminal offense and be formally at risk of incarceration or some other penalty is not a mere formal or technical right. It is a substantive right since the accused in a criminal trial is inevitably exposed to prolonged anxiety, aggravation, humiliation, not to speak of expense, and the right to an opportunity to avoid a painful process is a valuable right. The primary objective of a preliminary investigation is to free respondent from the inconvenience, expense, ignominy and stress of defending himself/herself in the course of a formal trial, until the 3 Section 1, Rule 112, Rules of Court. 4 AM. No. MTJ-07-1670, July 23, 2008. 5 CTA Docket, pp. 18-25. ' CTA Docket, pp. 5-6. 7 G.R. Nos. 235937-40, July 23, 2018.

RESOLUTION People of the Philippines vs. Smaffvil/e Information Technology Enterprise Corporation, Angelbert Balasico and Thelma Balasico CTA Crim. Case No. 0-1203 reasonable probability of his or her guilt has been passed upon in a more or less summary proceeding by a competent office designated by law for that purpose. Secondarily, such summary proceeding also protects the state from the burden of the unnecessary expense and effort in prosecuting alleged offenses and in holding trials arising from false, frivolous or groundless charges. 8 It may be true that, as a rule, in the absence of a preliminary investigation, the courts should, instead of dismissing the case, conduct the investigation or order the prosecutor to conduct it. 9 This rule, however, presupposes that the defendant has been properly subpoenaed by the prosecutor, is already participating in the judicial proceedings, and has timely raised the absence of a preliminary investigation. Nonetheless, jurisprudence abound confirming that in certain circumstances, the court is mandated to dismiss the case in the absence of preliminary investigation. In Labay, the Supreme Court noted that during the preliminary investigation by the Office of the Ombudsman, efforts to serve notices to petitioner therein Labay were unsuccessful as he was no longer employed in the office where the notices were sent and he was unknown at the given residential address. Despite this, the Ombudsman proceeded with the preliminary investigation without any counter-affidavit or participation from petitioner Labay, and eventually found probable cause to charge him. Petitioner Labay was made aware of these charges only when his daughter came across press releases about the case. Upon learning about the said proceeding, he twice sought a reinvestigation, arguing that he had been denied of his right to due process as he was not notified of the proceedings. The Ombudsman denied his requests, and proceeded with the preliminary investigation. The Supreme Court ruled that petitioner Labay's constitutional right to due process was violated when he was not furnished a copy of the complaint affidavit and its attachments during the preliminary investigation. As a result, the Supreme Court (1) cancelled and set aside the Resolutions issued by the Sandiganbayan, Third Division in the criminal cases, and, (2) ordered the Office of the Special Prosecutor to file motions to withdraw Information in the said criminal cases. 8 Rhodora M. Ledesma vs. Court of Appeals, G.R. No. 113216, September 5, 1997. ' The Minor Francisco Juan Larranaga vs. Court of Appeals, G.R. No. 130644, March 13, 1998.

RESOLUTION People of the Philippines vs. Smallville Information Technology Enterprise Corporation, Angelbert Balasico and Thelma Balasico CTA Crim. Case No. 0-1203 Similarly, in Rodrigo R. Duterte vs. Sandiganbayan, 10 the Supreme Court found that petitioners therein had no knowledge that they were the subject of a preliminary investigation. The order issued by the Graft Investigator failed to indicate that such preliminary investigation was being conducted. Consequently, the Supreme Court concluded that the preliminary investigation did not comply with procedural requirements. As a result, the Supreme Court ordered the dismissal of the criminal case against the accused, holding that they were not sufficiently apprised of the charges against them during the preliminary investigation. Based on the foregoing rulings, Labay requires that, at the very least, respondent must be served with a subpoena along with a copy of the complaint and its supporting affidavits and documents as required under Section 3(d), Rule 122 of the Revised Rules of Criminal Procedure. Moreover, Duterte underscores the requirement that during the preliminary investigation, respondent must be sufficiently apprised of the charges against them to ensure compliance with due process. In this case, accused were not only unaware of the charges against them, but were not in the first place served with subpoena along with the copy of the complaint and its supporting affidavits and documents. In Duterte, the Supreme Court held that even though the respondents therein had received a copy of the order from the Graft Investigator, the order itself failed to inform them that a preliminary investigation was being conducted. Here, where no notices were received whatsoever, there is even greater reason to conclude that accused had absolutely no knowledge that they were subjected to a preliminary investigation, let alone the proceedings before this Court. Section 3(d), Rule 122 of the Revised Rules of Criminal Procedure indeed allows the investigating officer to resolve the complaint based on the evidence presented by the complainant if the respondent cannot be subpoenaed, or if subpoenaed, does not submit counter-affidavits. However, this provision does not apply in the absence of a genuine effort to serve the subpoena. A review of the records reveals no indication that such an effort was made. Respondent cannot be considered "unreachable" when, in actuality, the subpoena was never properly issued due to a blatant error in the address. Rather than ensuring that accused was given a 1o G.R. No. 130191, April 27, 1998.

RESOLUTION People of the Philippines vs. Smallvil/e Information Technology Enterprise Corporation, Angelbert Balasico and Thelma Balasico CTA Grim. Case No. 0-1203 fair opportunity to participate in the preliminary investigation - by verifying why the notices were unserved and taking steps to remedy the same - plaintiff hastily proceeded with the investigation believing that indeed respondent was unreachable for purposes of conducting the preliminary investigation. As previously noted, plaintiff admitted that accused were not notified of the scheduled preliminary investigation. Verily, the conclusion reached by plaintiff in justifying the filing of the Information was rendered prematurely. Following Labay and Outerte, the case should be dismissed for failure to accord respondents with their right to due process. Indeed, accused's non-receipt of the subpoena, and their non- participation in the preliminary investigation through no fault of their own, violates their right to due process. Such violation warrants the dismissal of the present case. WHEREFORE, premises considered, the present case is hereby DISMISSED WITHOUT PREJUDICE. SO ORDERED. Presiding Justice ON OFFICIAL BUSINESS !IHAMtl#~ JEAN MARIE A. BACORRO-VILLENA LANEE S. CUI-DAVID Associate Justice Associate Justice