PEOPLE OF THE PHILIPPINES v. STAR ASSET MANAGEMENT NPL INC., 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 THIRD DIVISION PEOPLE OF THE PHILIPPINES, CTA Crim. Case No. 0-994 (NPS Docket No. XVI-INV- Plaintiff, 21F-00222) -versus- For: Violation of Section 255, in relation to Sections 253(d) and 256 of the NIRC of 1997, as amended STAR ASSET MANAGEMENT Members: NPL INC., MARK S. FRONDOSO, and JOSEPH MANAHAN, Chairperson, and RYAN R. SYCIP, REYES-FAJARDO, JL Unit 3A, One Orion Building, 11th Avenue corner 38th Street, Bonifacio Global City, Taguig, Metro Manila, Accused. Promulgated: (All-at-Large) s~~~ �:'-�/-_-:!_.-- X X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RESOLUTION For action are: 1. accused's Motion to Dismiss/ Motion to Quash Information -with- Motion to Hold Issuance or Quash Warrants of Arrestl, filed on December 13, 2022, without comment from the prosecution;2 2. prosecution's Compliance (On the Resolution of the Honorable Court of Tax Appeals dated 06 June 2023), filed on June 26, 2023;3 Docket, pp. 135-166. Pe r Records Verification dated April 5, 2023, ld. , unpaged . /d. , unpaged . ~

RESOLUTION CfA Crim. Case No. 0-994 3. accused's Manifestation with Urgent Motion, filed on June 29, 2023;4 and, 4. accused's Supplemental Motion to Dismiss/Motion to Quash Information with Motion for Partial Reconsideration [Re: Resolution dated 6 June 2023], filed on July 10, 2023,5 with Comment/ Opposition (To the Supplemental Motion to Dismiss/Motion to Quash Information with Motion for Partial Reconsideration dated 10 July 2023) from the prosecution filed via registered mail on August 7, 2023. Prosecution's Compliance (On the Resolution of the Honorable Court of Tax Appeals dated 06 June 2023) In the Resolution dated June 6, 2023, the Court found the prosecution's Information defective 6 because the facts charged therein do not constitute an offense. Thus, the prosecution was directed to file an Amended Information, curing said defect, within ten (10) days, from receipt of said resolution, lest accused's Motion to Dismiss/Motion to Quash Information would be granted, pursuant to Section 4, Rule 117 of the Rules of Court, as amended. 4 Id., unpaged. 5 Id., unpaged. 6 That on or about 18 February 2021, in Taguig City, and within the jurisdiction of this Honorable Court, accused MARK S. FRONDOSO and JOSEPH RYAN R. SYCIP, being the President and Treasurer, respectively, of Star Asset Management NPL Inc., which is engaged in the business of investing in and acquiring non-performing assets of financial institutions, with Tax Identification No. 006-587-868-000, and who is required by law, rules and regulations to file an accurate income tax return and to pay the correct income tax, did then and there knowingly, willfully and unlawfully fail to pay the deficiency income tax in the amount of TWENTY-NINE MILLION NINE HUNDRED EIGHTY-NINE THOUSAND ONE HUNDRED SIXTY-ONE and 24/100 (P29,989,161.24) PESOS, exclusive of surcharge and interest for taxable [year] 2013, despite receipt of the Preliminary Assessment Notice, with Details [of] Discrepancies on 20 December 2016, and Formal Assessment Notice, with Details of Discrepancies, and Assessment Notice, on 13 January 2017, including prior and post-notices and demands to pay, the last of which being the Demand Before Suit dated 14 February 2021, and without filing any protest, to the damage and prejudice of the Government of the Republic of the Philippines in the aforesaid amount. CONTRARY TO LAW. ~

RESOLUTION CTA Crim. Case No. 0-994 On June 26, 2023, the prosecution filed its Compliance (On the Resolution of the Honorable Court of Tax Appeals dated 06 June 2023), submitting the Amended Information7 dated June 22, 2023, the accusatory portion of which states: PdddNwAaOH2ucrNpwaFwahaen0eoonsiNeUnmRtiom1ghdtisrtllerdht.i3raNEieuiOfadhcaepciwoslgennDiNTcDhpa0srna,eftt1dmt0imriRDeeuniin4Tenso6sottiraledEeiaOahn-ehnlnnenn5tssiyFDecsaoSlsng8u2tdtt1oseit,Og7hjnr4f3NbmEputaae-ae[pdoo/r8atirsoIro1gJerelunhaiGs,6fytea0sefs]enaei8,itjdHrtnacp0dtlroo-udaeDaseeimut0yiTxrdcshitf,0(aipne,poJtoiYoeaPs0wir2caOaefrconu2yd,tr-0ebeclyhrieSNn9fnia2stoteice2da,Eaiho1stanI9ptuove0cntN,hfiPb8aatifec1dDtdenHp9uonEhltua7ot1yh,ceatsfche,n1rfd8iit,meTiaowni6RwadnaeeistHf1nloiesofeYGhFThla.ifcsHtswu2OicoeiAoWnhoslnic4nSibuooniUnedvesN)hotttrfEdncinte.hafSusPio2oiNcPDtrbrtonaAi0rhRmunryEneuTeirgraAe.tmNsiSvyleetiDbYrinciosSOeqpenDemlrgesf-nts2eYurcenSiNaectsii0klopiOttix,CtenoCi,r2InhnmanmeNarIN1oMeooenwggrPrd,efxubEwecaEy,iiaDciertnnttiatienultbnhbAhrHandenu,saareexyMgm,s2ysUnagTniTpisl0nacRevfyadaNIeoa1lacpnogLmxean,seg6suDnarrdwsLdpt,uoewcstdIo-mRuIhti,endtnqaAfagOBiebedeEetonultxssllresonnNtidDiftaNsCuMfiuPrct,tuecboiilrpiPrlFnNfeesSrlAtctleoiaeeyLsssogyIoNhcosfXRmy,raiaStynaImIdTKiattatreNanunceothhinegYnnhonaecaindeeEnSedtdtle,.n-rd-,.t CONTRARY TO LAW. The prosecution's Amended Information is still defective and insufficient. The flaw in the original pointed out in the Resolution dated June 6, 2023: Information was ct2rFftbmaaeoi0runxxs1naosap3tsninfee.rtndocirceeHtNiorittuasaiusevostllTorereneYioalant,yhfvavsa,t2enteeihniw0nrrdtoed1mmuvif3ltfpeeleSi.etsfornonynutoHntitcslssnslpeie:eiy,pganscc,iycfush(ima1enatbr)i,itrleeoehgeaqwninSeednnutd'Aesdgii.tcoBroMIofenanSirpd!cnerfA,aqeoddbycuMraytmtithtrhIlhiia'caaasnnetotwtcigroIoPSpTtntnmhrAooeoedcreMsfnaouiiI-tlndetIneipaotefxeoafanonar;inntrnfimolaeetaeharndncadmnedctgtiduiatlhonoar(gen2agtTet)tpfedderaoareaosliyaclfseniooscnescsuwutrousTrsnimtecenhoYorhdgete,f 7 Docket, unpaged. 8 Boldafacing supplied. @

RESOLUTION CTA Crim. Case No. 0-994 iornawnOenamnqanetoueur'scrinrtaerehdcennYieoscstedaeneatn.d.s,s9tcd,sniIoutpnourfcudeftaaiirecousveainusdleeoaearn,lnmntetotrche,ifotnegodmthtiShcttpssooeemlncattitsioahsintocsaitatcdntuoluut4esriefo,aofiftRennpicfaourCotlonlTrewcmrAei1aasgag1ssth7Caimtoiaronninatfms.oddttI.ehtbtaeChibenseaRysdiuapneteclhrfeeceoeNspusrlospmuoye.rmfedorC0dpos-eotof9icouuto9uefrrn4dttti,h,tohoieanniferss. QMAcuocatuisoshenIdn'tsfoormDaistmioinSssu/pMpoletmioennttaol RcwPCreaiaTmvrsAteiicnniCuuAnalrelsacitmtrcCialtu.yxous,Cdteoetedafdhfs(eeaeNnbdoNIsedRreoyisCg.to,hi)0nnu,a-daant9lsd9aItae4nhnmr,oefSioteshernfemtcidhvrteaiaeogdttinr.oto(h2n5ue8)ni1-cnydreoiCafmwrTtaihAnrpearraCl1ena9rstci9cimt7rniio.gpNnCttaihivatseiesoeednxpNiatseilonmrI.giniou0stdsie-sa9rhln9feoa4odrl,f. lrttauhhwenasnt ctiphnoTuegmhrcsorpauoflsaauteinhgnitehsttnpoibrottseethfsebocCarrSoeirpurmetptimdhrveeebemnypDetep/CerOripeoopsadupcrrrtoftmiospriretutiniolooitfnnnf.eg,oInfitstnheeJxesPupespopltuapircinloeneisssveh.(tcDhaLubaeOtelitJ,eot)Jhnbre.ytlco0foislllpusinencgtteihaorelsf The Court agrees with accused's additional stance. ptaroeretmcasolcoglrytniiSpoietzneiceoxtstnitooi.enJnxq2gtuui3Ianni(sscghht)pi,e.oa1d1rnRtAioucismlfuecloatr1nhirm1,ga7tSitnheoatcehflteiilointahnscbetrai2iln8miRt1cyueelsoaesfoswrathohgeoferrfeofCNeucoInnRrusiderCmtf,,ioinsaraasstlbhalaaeimamrgbreeerinladnidntdyetebdodiys,f, 9 aSGVnei.lRyclat.oriNbofanot,h.3ev2.. 3fGCo4rlo6lou1our8wnt,dioSnsf.egAp-pgtpereomTauhlbsnee,draes1tc:6ca,lu.,2s0eG1d.9Rm.. Nayo.m2o2v77e7t7o, June 15, 2020. 10 quash the complaint 11 or information on (g) That the criminal action or liability has been extinguished 12 See Article 89(5) of the Revised Penal Code. �

RESOLUTION CTA Crim. Case No. 0-994 Page 5 of10 lays down the prescriptive period for offenses punishable under said Code: SEC. 281. Prescription for Violations of any Provision of this Code. - All violations of any provision of this Code shall prescribe after five (5) years. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. The prescription shall be interrupted when proceedings are instituted against the guilty persons and shall begin to run again if the proceedings are dismissed for reasons not constituting jeopardy. ....13 In resolving the issue of prescription, the following shall be considered: (1) the period of prescription for the offense charged; (2) the time the period of prescription started to run; and (3) the time the prescriptive period was interrupted.14 The first consideration-the period of prescription for tax offenses punishable under the NIRC, as amended, is five (5) years. The second consideration-prescription shall commence from: 1) commission of the tax offense, if known at that time; or 2) from discovery of such tax offense and institution of judicial proceedings for its investigation and punishment. Pertinently, Tupaz v. Ulep (Tupaz)15 declared that willful failure to pay tax is committed: ... after service of notice and demand for payment of the deficiency taxes upon the taxpayer.... This is so because prior to the finality of the assessment, the taxpayer has not committed any violation for nonpayment of the tax. The offense was committed only after the finality of the assessment coupled with taxpayer's willful refusal to pay the taxes within the allotted period.... 13 Boldfacing supplied. 14 Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Han. Desierto, et al., G.R. No. 135715, April13, 2011. 15 G.R. No. 127777, October 1,1999. �

RESOLUTION CTA Crim. Case No. 0-994 Page 6 of10 The third consideration-prescription is interrupted when proceedings are instituted against the guilty persons. Lim, Sr., et al. v. Court of Appeals (Lim, Sr.) 16 clarified that the circumstance which would interrupt the running of the prescriptive period for tax offenses under the NIRC, as amended, is the filing of requisite Information in Court: 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 alloted 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. 17 Section 2, Rule 9 of the Revised Rules of the Court of Tax Appeals (RRCTA), too, confirmed the dictum in Lim, Sr. To be precise, the institution of the criminal action shall interrupt the running of the prescriptive period. Such institution refers to the filing of Information in Court: 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 laws enforced by the Bureau of Customs, the Commissioner of Customs must approve their filing. (Rules of Court, Rule 110, sec. 2a; n) The institution of the criminal action shall interrupt the running of the period of prescription. (Rules of Court, Rule 110, sec. 1, par. 2a)18 16 G.R. Nos. L-48134-37, October 18, 1990. 17 Boldfacing supplied. 18 Boldfacing supplied. �

RESOLUTION CTA Crim. Case No. 0-994 Prescinding from the above observations, the tax offense in CTA Crim. Case No. 0-994 is barred by prescription. Specifically, the Bureau of Internal Revenue's Joint Complaint Affidavit divulged that the Formal Assessment Notice and Details of Discrepancies dated January 11, 2017 covering TY 2013 were served to and received by Star Asset Management NPL Inc. (SAMI) on January 13, 2017,19 There being no administrative protest filed by SAMI within thirty (30) days from receipt thereof, said final assessment attained immutability on February 12, 2017. SAMI, through accused, failed to pay the tax due therein. Following Tupaz, the tax offense was committed on February 12, 2017. Counting five (5) years from February 12, 2017, the prosecution has until February 12, 2022 to file the requisite Information with the Court, pursuant to Lim Sr. and Section 2, Rule 9 of the RRCTA. A fortiori, the original Information in CTA Crim. Case No. 0-994, belatedly filed on December 6, 2022, is barred by prescription under Section 281 of the NIRC, as amended. As a result, the government relinquished its right to prosecute accused in this case. On this point, the pronouncement articulated in People v. Pacificador2� decreed: The statute [of limitations] is not a statute of process, to be scantily and grudgingly applied, but an amnesty, declaring that after a certain time oblivion shall be cast over the offense; that the offender shall be at liberty to return to his [or her] country, and resume his [or her] immunities as a citizen; and that from henceforth he [or she] may cease to preserve the proofs of his [or her] innocence, for the proofs of his [or her] guilt are blotted out. Hence, it is that statutes of limitation are to be liberally construed in favor of the defendant, not only because such liberality of construction belongs to all acts of amnesty and grace, but because the very existence of the statute [of limitations] is a recognition and notification by the legislature of the fact that time, while it gradually wears out proofs of innocence, has assigned to it fixed and positive periods in which it destroys proofs of guilt.2I The Court is mindful of the principle invoked by the prosecution in Lee, Jr., whereby the filing of the complaint before the DOJ suspends the running of the prescriptive period. Yet, this may 19 Docket, pp. 17-29. 20 G.R. No. 139405, March 13,2001, citing People v. Moran, 44 Phil. 389 (1923). 21 Boldfacing supplied. @

RESOLUTION CTA Crim. Case No. 0-994 apacnpsudoroenndatsitmrscrbehraeesiaspnsbttad,lievpettephhduele.npideededrsioruocisdtnhtprefeiotnnhNresiIsioRoifncCnfeanLsusoeienmfsbd, eepcScrorraev.Suesearcsecperdtipipioltbtinicyrvae3ebRf5ele4erppseu(inrnbtiooloitwcdhthiAs2ec8cco1stauv)sNseoeprofei.snntpgs3hei3eoc2noiN6fffi.oeIc2Rnfa2sltCIehlnyse, Motion for Partial Reconsideration [Re: Resolution dated 6 June 2023] Rv(Ama3oueu0aivtt)ddheh-eodnofarAourpiyiretcutyychrApusateNuousvredaoiidodnin.otdgtaeMLsstbfoosAreeeomaeb2rmnt0avo1tsorshe2taeihad0dnret0vdot0aehudn3sdemas5aet4ounes4Ofpsf8imoorincdfdnveeeanraiSrtttlwseA.NiddhMTiosoC.hDs1!euof-ebi0yamcl0eeneepdy.cmxloeatpbnhileundearntii-nt4dnAh,eftefoh2rf0rraiSmed1tq5eatacuvhtitiiiesirtooenLntndhuehal2ttaltt.he3dawirrnnotaodyofsf fbRtoheeracptqortuonhTavseishedhnareiorrndguaguugtirmhaoi nnneignti[sntRtshfeCoe:rraotRmirmsieaaesmltdo.ioelbunnyttia/oOtnhndpedpaaaorctseecidutmiso6eandtJt,euirtnnhseetoh2fe0pid2rro3eM]fseeanocrstueietoinnowonhftoigccr ohrPouamunrnttueidsarsstl Accused are mistaken. sathoneuIDnnfdeToeporramrSrteaemitctiteeoirnnoatntwoe2,fi2tjt0huhsoetthfiBcetehIRCe(DoNpuOeIrRrJts),C,opa,nolanossenslaegmswwsehitnothdhefetidrlhee:edqputrihsoeisteeccoaumutitpohlnoariwinthtyobteoffiloderdoe bctlbthahoueeiwnthsdanCenulonfoacdfomStcoeefe.iredvcct-hi.elCoebd2fi2yoGvb0rityo.llhecvFeatgrheoniarremGdmlnBmioconauvrfenairfenmdleirctanMiaeunumcroanstodleidfoenoaenItcforntfttifoteohPohfrnerrenostaacthBaulheeenteRudhdreiPoernvehprageiciurtlniooyniucpvooeeApeffericsnydttIhihenioanisotnlseglfsrCsabntAneoiaanrdxdlbisesertRissionotheuugoravgtrluoeehlndtntthdhubiieeeeennrr 22 An Act to Establish Prescription for Violations Provide When Prescription Shall Begin of Special Acts and Municipal Ordinances and to �

RESOLUTION CTA Crim. Case No. 0-994 enforcement of any fine, penalty or forfeiture under this Code shall be filed in court without the approval of the Commissioner.~ The records reveal that Ellen Gay C. Teoxon, Rhodora C. Balazo, and Mohammad Ali Rodi executed the Joint Complaint Affidavit on June 25, 2021,24 So was the Certification in the DOJ Investigation Data Form subscribed by said persons.25 The authority to file criminal charges against SAMI, Manuel T. Frondoso, Mark S. Frondoso, Mr. Joseph Ryan R. Sycip, and Franchette M. Acosta was with prior approval from then Commissioner of Internal Caesar R. Dulay, through his Letter-Referral dated June 25, 2021. 26 For this reason, accused Motion for Partial Reconsideration [Re: Resolution dated 6 June 2023] must be denied. WHEREFORE, the Court RESOLVES to: 1. GRANT accused's Motion to Dismiss/ Motion to Quash Information -with- Motion to Hold Issuance or Quash Warrants of Arrest and Supplemental Motion to Dismiss/Motion to Quash Information; 2. DENY accused's Motion for Partial Reconsideration [Re: Resolution dated 6 June 2023]; 3. QUASH the original and amended Information in CTA Crim. Case No. 0-994; 4. DISMISS CTA Crim. Case No. 0-994 solely because: (1) the facts charged therein do not constitute an offense; and (2) prescription of criminal action; and, 5. MOOT accused's Manifestation with Urgent Motion. SO ORDERED. 23 Boldfacing supplied. 24 Docket, pp. 184-187. 25 Id. at p. 181. 26 Id. at pp. 15-16. The date is found on the upper right portion of page 1 thereof. ~

RESOLUTION CTA Crim. Case No. 0-994 c~-7-~ CATHERINE T. MANAHAN Associate Justice ~ ~t. ~ik!-~�~ MARIAN IV{JF. RE�fS-:_FAJ'ARDO Associate Justice �