CTA Case No. EB CRIM-38 (Resolution on MR)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC PEOPLE OF THE PHILIPPINES, CTA EB CRIM. NO. 038 Petitioner, (CTA Crim. Case No. 0-014) -versus- JOEL C. MENDEZ, Respondent. )(--------------------------------------)( JOEL C. MENDEZ, CTA EB CRIM. NO. 039 Petitioner, (CTA Crim. Case No. 0 -014) Present: -versus- DEL ROSARIO, P.J., CASTANEDA, JR., BAUTISTA, UY, CASANOVA, F A B O N-V I C T O R I N O , MINDARO-GRULLA, RINGPIS-LIBAN, and MANAHAN, JJ. Promulgated: PEOPLE OF THE PHILIPPINES, Respondent. DEC 0 7 2017 3.'5P/M . ~ X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X RESOLUTION MANAHAN, J.: This resolves petitioner People of the Philippines' (People) Motion for Reconsideration (Re: Resolution dated September 8, 2017)1 filed on October 11, 2017 under CTA EB Crim. No. 038 and p etitioner Joel C. Mendez' Motion for ~ 1 Rollo, CTA EB Crim. Case No . 038, pp. 150- 156.

RESOLUTION CTA EB Crim. No. 038 & 039 (C.T.A. Crim. ase No. 0-014) Page 2 of6 Reconsideration2 filed on October 11, 2017 under CTA EB Crim. No. 039. The first m tion actually refers to the En Bane Decision dated September 8, 2017 (assailed decision) which seeks to set aside the a sailed decision and prays for the issuance of a new one tha will impose the deficiency income tax against the respondent Joel C. Mendez (Mendez). As to the second motion, petitioner Mendez seeks for the reversal and setting aside of the assail d decision and the issuance of a new one dismissing theca e against him. Under CTA EB Crim No. 038, petitioner People insists that the tax deficiency rna be collected in a court proceeding even without an assessme t. On the other hand, under CTA EB Crim. No. 039, petitioner Mendez argues hat the criminal case against him should be dismissed si ce the amount in the amended information is merely esti ated and not exact nor certain. CTA EB Crim. No. 038 Although the argume t of petitioner was already properly discussed and disposed of in the assailed decision, this Court shall reiterate its earlier di course on the instant case. As discussed in the assailed decision, Exhibit "AAA" 3 appears to be merely a co putation or a schedule of deficiency income tax which was not addressed to the respondent and it did not demand the paym nt of the tax liability within a fixed period. There was also no i dication that an assessment notice was mailed or sent to the t payer by the Commissioner which would satisfy the requisite of a formal assessment. Section 205 of the 1 97 National Internal Revenue Code (NIRC), as amended, requ�res that, in the judgement of the criminal case against an a cused, the tax liabilities which are the subject of the case hould be included. However, the provision expressly states hat such tax liabilities must be "as finally decided by the Com issioner." Now, the question is what is that "final decision" of the Commissioner of Internal evenue (CIR)? ~ 2 Id. at 157-160. 3 Docket, CTA Crim. Case No. 0-014,

RESOLUTION CTA EB Crim. No. 038 & 039 (C.T.A. Crim. ase No. 0-014) Page 3 of6 Paragraph 3.1.5 of evenue Regulations No. 18-2013 dated November 28, 201 refers to the Final Decision on Disputed Assessment (FD A) of the CIR. It also provides the requisites as to the conte ts of said FDDA which include the facts, the applicable 1 w, rules and regulations, or jurisprudence on which su h decision is based, and the same constitutes the final decisi n of the CIR. However, those requ sites were not even contained or attached to the said exhibi . Hence, the Court in Division had properly considered said xhibit as merely an estimate or a schedule. Such cannot be he basis of a civil liability that may be included in the judgme t of the criminal case. Petitioner should be aware that such requirement is expressly provided in the 1997 NIRC which is a tax statute. Tax statutes are to b construed strictly against the government and liberally �n favor of the taxpayer, for taxes, being burdens, are not o be presumed beyond what the applicable statute expressl and clearly declares.4 Further, the provisio of said law is very clear that in order for the deficiency t es to be included as civil liabilities in the final judgment of a riminal case, there must be a final assessment issued by the ommissioner. When the statute is clear and free from amb"guity, it must be given its literal meaning and applied with ut attempted interpretation. This is the plain meaning rule o verba legis, as expressed in the maxim index animi sermo r speech is the index of intention.5 CTA EB Crim. No. 039 Petitioner Mendez sh uld be aware that he was charged under Section 255 of th 1997 NIRC, as amended, which pertains to a criminal offe se for failure to file his income tax return (ITR) in taxable ye 2001. Section 255 of the sai law provides that: SEC. 255. Failure to File etum, Supply Correct and Accurate Infonnation, Pay Tax, Withhold and Remit Tax and Refund~ 4 Republic of the Philippines v. Interme iate Appellate Court et al., G.R. No. L-69344, Apri126, 1991. 5 Milagros Amores v. House of Repres ntatives Electoral Tribunal et al., G.R. No. 189600, June 29, 2010.

RESOLUTION CTA EB Crim. No. 038 & 039 (C.T.A. Crim. ase No. 0-014) Page 4 of6 Excess Taxes Withheld on Compensation. - Any person required under this C de or by rules and regulations promulgated thereunder to pay any tax, make a return, keep any record, or supp y correct the accurate information, who willfully fails to pa such tax, make such return, keep such record, or supply c rrect and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensati n, at the time or times required by law or rules and re lations shall, in addition to other penalties provided by aw, upon conviction thereof, be punished by a fine of ot less than Ten thousand pesos (P10,000) and suffer im risonment of not less than one (1) year but not more than t n (10) years. (Emphasis supplied) Any person who attempt to make it appear for any reason that he or another has i fact filed a return or statement, or actually files a return or statement and subsequently withdraws the same ret rn or statement after securing the official receiving seal or tamp of receipt of internal revenue office wherein the sam was actually filed shall, upon conviction therefore, be unished by a fine of not less than Ten thousand pesos (P10,000) but not more than Twenty thousand pesos (P20,00 ) and suffer imprisonment of not less than one (1) year bu not more than three (3) years. As discussed in the assailed decision 6 and in the abovementioned provision, the elements of the crime of failure to file a return are as folio 1. The accused person required to make or file a return; 2. He failed file such return at the time required by law; 3. The failure to mak or file the return was willful. Nowhere in the a� re-quoted enumeration does the amount of tax deficiency a pear as an element in order for the offender to be convicted of the said crime. The amount becomes material only wh n the issue is about the imposition of civil liability which has een already amply discussed in the assailed decision. As cited in the cases f Adamson v. Court ofAppeals7 and Commissioner of Intema Revenue v. Pascor Realty and&li'JIIt., 6 Rollo, Decision dated September 8, 017, p. 127. 7 G.R. Nos. 120935 & 124557, May 2 , 2009.

RESOLUTION . CTA EB Crim. No. 038 & 039 (C.T.A. Crim. ase No. 0-014) Page 5 of6 Development Corporation8, ne of the cases that may be filed in court without the necessit of a tax assessment is the failure to file a return. However, s ch assessment becomes necessary when the payment of tax s is imposed as part of the civil liability in the final adjudi ation of the criminal case pursuant to Section 205 of the 1997 IRC, as amended. In fine, since the Co rt has determined that all of the elements of said offense re present, petitioner Mendez was adjudged criminally liable i the instant case. WHEREFORE, prem�ses considered, both motions are hereby DENIED for lack f merit. Accordingly, the Decision dated September 8, 2017 i hereby AFFIRMED. SO ORDERED. ~--7p~~ CATHERINE T. MANAHAN Associate Justice WE CONCUR: <2~-t;c.~/~ LOVEL~R. BAUTISTA Jtf'ANITO C. CASTANED.K,~JR. ,Associate Justice Associate Justice (I maintain my Dissenting Opinion) E~P.� UY CAESAR A. CASANOVA Associate Justice Associate Justice s G.R. No. 128315, June 29, 1999.

RESOLUTION CTA EB Crim. No. 038 & 039 (C.T.A. Crim. ase No. 0-014) Page 6 of6 .... ~ \l.M~.c~~ . FABON-VICTORI 0 CIELITO N. MINDARO-GRULLA Associate Justice ,A;\.._ . RINGPIS-LIBAN Assoc�ate Justice