Mandatory Compliance With the Subpoena Duces Tecum Issued for the Production of Combined Cash Journal

March 5, 1958 BIR RULING NO. 163-58 Visayan Manufacturing Co., Inc. Room 400, Maritima Bldg. Dasmarias, Manila Gentlemen : Reference is made to your letter of the 4th instant, requesting information on whether or not, under the following circumstances, you are duty bound to comply with the subpoena duces tecum issued against you for the production of your combined cash journal for the years 1955 and 1956: "The undersigned corporation, by virtue of the resolution of all its stockholders dated February 9, 1958 transferred its principal office from La Paz, Iloilo City to Manila, Philippines. Such transfer as embodied in the Amended Articles of Incorporation was registered with the Securities and Exchange Commission of February 12, 1958 and thereafter payment of the C-14 was made in the City of Manila under O.R. Serial No. 1194082. "By virtue of the said transfer of the principal office of the Corporation from Iloilo City to Manila, all corporate books and books of accounts of the Corporation were also transferred to Manila. In fact the income tax return of the Corporation was already filed here in Manila, which income tax return is for the year 1957. In the filing of said income return, the new address of the Corporation at Rm. 400 Maritima Bldg., was specifically stated. "Among the books of accounts which were transferred to the new address were the Combined Cash Journals for 1955 and 1956 including their respective supporting vouchers. Atty. Rodulfo Serraon, B.I.R. examiner of the Regional Office at Iloilo requested for the production of the hereinabove mentioned books at their office at Iloilo City. The undersigned believing that all the books of accounts of corporations must be kept in the principal office of the corporation naturally refused to send the said books to Iloilo, stating however, that the same books are ready for inspection at any time by any representative of the Bureau of Internal Revenue, at its principal office at Rm. 400 Maritima Building, Dasmarias St., Manila. cdt "It appears that Atty. Serraon has not been satisfied with the reason for the non-production of the said books at Iloilo City, so last Feb. 28, 1958, a subpoena duces tecum for the production of the said books was tendered to the former President of the Corporation at Iloilo City. Naturally the former President could not produce the asked for books. Because of the non-production of the said books, we have been reliably informed that a subpoena duces tecum for the production of the same books at Iloilo City has been directed to the undersigned, which subpoena duces tecum has not as yet been received." In answer thereto, I have the honor to inform you that, pursuant to Section 20 of Revenue Regulations No. V-1 (Bookkeeping Regulations), all books of accounts shall be kept at all times at the place of business of the taxpayer, subject to inspection of any internal revenue officer, and upon demand, the same must be immediately produced and submitted for inspection. When required by inspecting officers, the owner, bookkeeper, or manager shall give the necessary explanations regarding the items in the entries contained in said books. Since, as alleged in your said letter, your principal office has been transferred from Iloilo City to Manila and your books of accounts, including the aforementioned cash journal for 1955 and 1956, are now kept therein, compliance with the subpoena duces tecum would mean much expense and trouble on your part, it being necessary that the person who has knowledge of the entries contained in the journal in question appear before the internal revenue official who is to conduct the examination of the books for the purpose of explaining any item in said entries. If the case be that even after having changed your place of business, Examiner Rudolfo Serraon still finds a need to examine the aforesaid book, he can, as an alternative, request the City Revenue Agent, Manila, to make the examination and furnish him the needed data. Accordingly, your query is answered in the negative. cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Deputy Commissioner of Internal Revenue