BIR Ruling

September 10, 1970 The Philippine National Bank Manila Attention: Mr . E . Villatuya Acting President Gentlemen : This refers to your letter dated August 13, 1970 denying our request for a list of payments made by the PNB from 1962 to 1969 to contractors, dealers and suppliers and your letter dated August 18, 1970 informing this Office that you cannot legally comply with the Subpoena Duces Tecum issued to you in connection with the said request. cdt Section 16 of Republic Act No. 1300, which is the Charter of that Bank reads as follows: "Sec. 16. Confidential Information . The Superintendent of Banks and the Auditor General, or other officers designated by law to inspect or investigate the conditions of the National Bank, shall not reveal to any person other than the President of the Philippines, the Secretary of Finance, and the Board of Directors the details of the inspection or investigation, nor shall they give any information relative to the funds in its custody, its current accounts or deposits belonging to private individuals, corporations or any other entity, except by order of a Court of competent jurisdiction." It will be noted from the foregoing provision that the confidential information refers only to the details of the inspection or investigation made on the Bank by officials mentioned therein and to funds in its custody, its current accounts or deposits belonging to private individuals, corporations, or any other entity. It is, therefore, clear that the data being requested by this Office from that Bank are not considered confidential information within the purview of Section 16 of Republic Act No. 1300. You, however, contended that the list being requested by this Office cannot be furnished without court order pursuant to Article VI, Section 13 of the Bank's By-Laws which is quoted as follows: "Art. VI, Sec. 13 Prohibition of Officers & Employees of the Bank to divulge Bank's Secret . In addition to the prohibition contained in Sec. 16 of Republic Act No. 1300, the Officers and employees of the Bank shall not reveal to any person other than the President of the Philippines, the Monetary Board and the Board of Directors or any Member thereof, the details of the transactions nor shall give any information relative to the funds in its custody, its current accounts or deposits belonging to private individuals corporation or any other entity, except by order of a court of competent jurisdiction on any officer duly authorized by law or competent authority to conduct investigation." This Office believes that the foregoing provision of your by-laws is void insofar as it includes within the prohibition "information on details of the transactions" of the Bank because this additional prohibition is not found in its Charter. A by-law may regulate the exercise of a corporate power, but it cannot enlarge or alter the powers conferred by the charter or by statute. (Peck v. Elliott, 79 Feb. 10, 38 L.R.A. 616.) cd Section 7-A. of the National Internal Revenue Code, as amended by R.A. No. 6110, reads as follows: "SEC. 7-A. Power of Commissioner of Internal Revenue to obtain information on potential taxpayers . When it comes to the knowledge of the Commissioner of Internal Revenue that certain offices of the national and local governments, such as the Office of Registrar of Deeds, the Securities and Exchange Commission, the Philippines Patent Office, those of mayors and treasurers, the Government Service Insurance System, the Social Security System and others, possess valuable information for discovery of potential taxpayers, the Commissioner or his deputies shall obtain that information upon proper request from the offices concerned. It shall be the duty of those officers to furnish the desired information within thirty days from receipt of the request of the Commissioner of Internal Revenue or his deputies." You also contended that the above provision applies only to offices of the national and local governments and to government institutions such as the GSIS and the SSS and other similar government enterprises but not to banking institutions like that Bank. It is believed that this contention is untenable. It should be noted that the above provision of law clearly implies that the information shall be obtained from government offices. Moreover, the provision enumerated certain government offices and added the word "others" clearly implying also that the information can be obtained from other government offices other than those enumerated therein. Since it cannot be denied that the Philippine National Bank is a government office, it is clear that it is one of those where this Office can obtain information pursuant to Section 7-A of the Tax Code, as amended. In view thereof, it is believed that you can now see your way clear in granting our request and complying with the Subpoena Duces Tecum issued to you. cdti Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue