BIR Ruling [UN-005-95]

January 3, 1995 BIR RULING [UN-005-95] 1st Indorsement Returned to the Assistant Commissioner (Collection Service), the within papers bearing on his request for opinion as to whether a final clearance can be issued to Mr. Carlos R. Paredes, Revenue Collection Agent presently assigned in Mandaluyong City who is about to retire, without deducting from the retirement pay which the latter would receive, the value of the unsettled dishonored checks still appearing as his balance in the books of the Revenue Accounting Division. Gleaned from the attached records, Mr. Paredes was formerly assigned in Guiguinto, Bulacan where he served as Collection Agent thereat from September, 1960 up to September, 1966, inclusive. During his stint as Collection Agent of said municipality, Mr. Paredes received from Philippine Alcohol Industry Co., Inc. twenty-three (23) checks in payment of the latter's specific taxes totalling P263,491.82. All of the said checks were however, dishonored by the drawee bank. Mr. Paredes then forwarded the said dishonored checks to the Chief Revenue Officer (now Revenue District Officer) of Malolos, Bulacan who acknowledged the receipt thereof per Certification dated August 1, 1966. A criminal complaint was filed against the responsible official of Philippine Alcohol Industry Co., Inc. which was docketed as I.S. No. 3472 entitled "BIR vs. Enrique Cortez, et. al." for violation of Sections 124 and 183 of the National Internal Revenue Code. The case was set for trial on October 11, 1968 before the Provincial Fiscal of Malolos, Bulacan with Mr. Paredes as the principal witness. However, for some unknown reasons, the case was dismissed on December 19, 1968 (see Certification dated October 24, 1994 issued by the Administrative Officer of the Office of the Prosecutor of Malolos, Bulacan). On top of everything, the reproduction of the microfilm reels of said case could not now be done, the same having been damaged by flood due to the clogging of the canteen sewerage above the Records Division. Based on the foregoing, it is our opinion that Mr. Paredes cannot be held accountable for those unsettled dishonored checks belonging to the Philippine Alcohol Industry Co., Inc. The records do not show any negligence on the part of Mr. Paredes which would make him accountable for those unredeemed checks. On the contrary, there are three points to justify the issuance of a clearance in his favor. First, he immediately forwarded to his superior the dishonored checks in compliance with Revenue Memorandum Circular No. 27-66. Second, on the basis of his report a criminal complaint was filed against the responsible official of Philippine Alcohol Industry Co., Inc. in connection with the said dishonored checks. And, finally, almost thirty (30) years had elapsed from the date those checks were dishonored by the drawee bank. Certainly, it would be unfair to hold Mr. Paredes accountable after all these years. Accordingly, you are hereby directed to issue a national clearance to Mr. Carlos R. Paredes without deducting the value of the unredeemed checks from whatever retirement benefits he is entitled to receive upon his retirement. cdtech LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue