People v. Kintanar

THIRD DIVISION [C.T.A. CRIM. CASE NOS. 0-031 & 0-032. February 23, 2011.] PEOPLE OF THE PHILIPPINES , plaintiff, vs . BENJAMIN G. KINTANAR , accused. RESOLUTION COTANGCO-MANALASTAS , J p : Submitted before this Court is a Motion for Reconsideration filed by accused on October 12, 2010, with a prayer that the Decision 1 of this Court promulgated on September 27, 2010 be reconsidered and set aside and an order be issued by this Court dismissing the instant complaint acquitting herein accused of the offense charged. Accused's Motion for Reconsideration of the Decision of this Court promulgated on September 27, 2010 bears the allegation that the evidence presented by the prosecution is insufficient to justify the findings therein and that serious errors in the application of law may have been committed in arriving at the verdict. The dispositive portion of the assailed Decision is quoted hereunder: xxx xxx xxx "WHEREFORE , premises considered, Court finds and so holds that: 1. In CTA Criminal Case No. 0-031, accused Benjamin G. Kintanar, Jr., is GUILTY BEYOND REASONABLE DOUBT of violation of Section 255 of the National Internal Revenue Code of 1997, as amended, and is hereby sentenced to suffer an indeterminate penalty of imprisonment of one (1) year as minimum, to two (2) years as maximum, and is ORDERED to pay a fine in the amount of P10,000.00, with subsidiary imprisonment in case accused has no property with which to meet the said fine, pursuant to Section 280 of the NIRC of 1997, as amended. As regards civil liability, accused is hereby ORDERED TO PAY deficiency income tax for the taxable year 2000 in the amount of EIGHT MILLION TWO HUNDRED FIFTY ONE THOUSAND SIX HUNDRED TWO AND 72/100 PESOS (P8,251,602.72), inclusive of the surcharge and interest, plus 20% delinquency interest per annum from the total amount of P8,251,602.72, counted from April 12, 2005, 2 until fully paid, pursuant to Section 249(C)(3) of the NIRC of 1997, as amended; and 2. In CTA Criminal Case No. 0-032, accused Benjamin G. Kintanar, Jr., is GUILTY BEYOND REASONABLE DOUBT of violation of Section 255 of the National Internal Revenue Code of 1997, as amended, and is hereby sentenced to suffer an indeterminate penalty of imprisonment of one (1) year as minimum, to two (2) years as maximum, and is ORDERED to pay a fine in the amount of P10,000.00, with subsidiary imprisonment in case accused has no property with which to meet the said fine, pursuant to Section 280 of the NIRC of 1997, as amended. As regards civil liability, accused is hereby ORDERED TO PAY deficiency income tax for the taxable year 2001 in the amount of TEN MILLION SEVEN HUNDRED THIRTY THOUSAND THREE HUNDRED NINETY ONE AND 18/100 PESOS (P10,730,391.18), inclusive of the surcharge and interest, plus 20% delinquency interest per annum from the total amount of P10,730,391.18, counted from April 12, 2005, 3 until fully paid, pursuant to Section 249(C)(3) of the NIRC of 1997, as amended. No costs. SO ORDERED." xxx xxx xxx The prosecution failed to file its Comment on accused's Motion for Reconsideration. Hence, the foregoing Motion was submitted for resolution. In light of all the arguments interposed by the parties and careful re-evaluation of the records at hand, the Court finds no compelling reason to deviate or reverse its ruling enunciated in the assailed Decision dated September 27, 2010. IDTHcA It is readily apparent that accused's motion is hinged principally on the alleged failure to prove the element of "willfulness", voluntariness or intent to not file a tax return. Accused alleges that his willfulness to not file tax returns for taxable years 2000 and 2001 were founded on remote suppositions and conjectures in discord with law. Accused likewise claims that for lack of any direct proof of voluntariness or intent to not file a tax return, the assailed Decision relied on vague notion of indifference and evident lack of concern as bases to create an inference that accused knowingly and wilfully failed to file his Income Tax Return (ITR) for the years 2000 and 2001 and that there was no proof, either direct or circumstantial, that would warrant a finding of his alleged 'willful' failure to make or file a return. It is now settled in our jurisdiction that direct evidence of the commission of the crime is not the only matrix from which the trial court may draw its conclusions and findings of guilt. Circumstantial evidence is of a nature identical to direct evidence. It is equally direct evidence of minor facts of such a nature that the mind is led, intuitively or by a conscious process of reasoning, to a conclusion from which some other fact may be inferred. No greater degree of certainty is required when the evidence is circumstantial than when it is direct. In either case, what is required is that there be proof beyond reasonable doubt that a crime was committed and that accused-appellant committed it. 4 It must be borne in mind that direct evidence is not a condition sine qua non to prove the guilt of an accused beyond reasonable doubt. For in the absence of direct evidence, the prosecution may resort to adducing circumstantial evidence to discharge its burden. Crimes are usually committed in secret and under conditions where concealment is highly probable. If direct evidence is insisted on under all circumstances, the prosecution of vicious felons who commit heinous crimes in secret or secluded places will be hard, if not impossible, to prove. 5 Proof of willfulness may be, and usually is, shown by circumstantial evidence alone. 6 The foregoing disquisitions simply confirm that this Court's reliance on circumstantial evidence in the finding of guilt or drawing of conclusion is fully justified in our rules and jurisprudence. In the assailed Decision, We have itemized and exhaustively discussed the prevailing circumstances in this case which indubitably points to accused willfulness in his failure to file his income tax returns for 2000 and 2001. Pertinent portion of the said Decision reads: xxx xxx xxx "This Court will now look into the factual circumstances of the case at bar. For his defense, accused vehemently denied the charges against him for willful failure to file his income tax returns for taxable years 2000 and 2001. Accused claims that he hired Ms. Marina Mendoza, a former employee of the BIR and an accountant, to help him in the preparation and filing of his income tax return, and that he supplied all the data and documents she needed for its preparation. Having relied on Ms. Mendoza's knowledge on filing the ITR, accused in effect is saying that he did not willfully fail to comply with his legal duty to file the income tax returns. On the other hand, Ms. Marina Mendoza vehemently denied that she has any involvement in the filing of the ITRs of accused Benjamin G. Kintanar, Jr. She admits having met the accused when accused and his sister, Ms. Jeniffer K. Abad went to the former's house, but she asserts that insofar as the preparation of accused ITRs is concerned, she merely gave him an advice on how to prepare an ITR. Further, Ms. Mendoza reiterated that she did not receive any compensation for the advices she had given the accused, and when asked about the checks she received from accused, she clarified that the checks constitute as installment payments for jewelries that the accused purchased from her son-in-law, Mr. Dong Morenos. Lastly, Ms. Mendoza firmly denied, upon being presented the ITRs of the accused for 2000 and 2001, having prepared the ITRs of the accused. Accused had knowledge of his obligation to file his income tax return for his income earned as an independent distributor of FLPPI. This inference can be proved by the testimonies of the accused and Ms. Marina asserting that for the purpose of preparing and filing of his ITRs for 2000 and 2001, he hired Ms. Marina Mendoza but the signatures in the ITRs are his; he provided all the details including personal circumstances. Clearly he had knowledge of his obligation that is why he allegedly hired another person to file in his behalf. Also, " willfulness " is a state of mind that may be inferred from the circumstances of the case. Thus, proof of willfulness may be, and usually is, shown by circumstantial evidence alone. ITCcAD After a painstaking analysis of the testimonial and documentary evidence presented by the prosecution and the defense, the Court is of the well considered view and so holds that the attendant circumstances in this case, admitted and proven during the proceedings, satisfactorily proved the element of " willfulness " on this charge against the accused. Simply put, based on the prevailing circumstances in this case, the accused knowingly, voluntarily and intentionally failed to file his income tax returns for the taxable years 2000 and 2001. Records show that the Bureau of Internal Revenue sent at least three (3) notices to accused Benjamin Kintanar, Jr. for the examination of his books of accounts and other accounting records for all internal revenue taxes. First one was Letter of Authority (LOA) No. 00029663 dated March 28, 2003 (Exhibits "A" to "A-3") received by Mr. Kintanar on April 3, 2003 as shown by his signature (Exhibit "A-3"). Despite receipt of the LOA, the spouses did not submit the documents requested. Second Request for the Presentation of Records dated April 21, 2003 (Exhibit "B") and received on April 23, 2003, and then a Final Notice for presentation and/or production of the required records/documents dated May 5, 2003 (Exhibit "C") were served and allegedly received by the spouses. Upon failure of the spouses to present or submit the required documents, a Subpoena Duces Tecum dated June 11, 2003 (Exhibits "D" to "D-2") was issued to them commanding them to appear before the Chief Prosecution Division in order to enforce compliance in the presentation of their books of accounts and other accounting and tax records. No response was received by the BIR from the spouses in any of these notices. Consequently, a Formal Letter of Demand dated February 26, 2004 (Exhibits "F" to "F-7") including Assessment Notices (Exhibits "G" to "G-7") were issued for the payment of deficiencies on taxes. It was only at this point when accused Benjamin G. Kintanar, Jr. manifested a hint of concern or interest by sending a Letter dated August 31, 2004 (Exhibits "H" to "H-3") protesting the deficiency assessments for lack of factual and legal basis, together with photocopies of his income tax returns for 2000, 2001 and 2002, and undertaking to submit additional documents within sixty (60) days therefrom. On September 30, 2004 a Letter (Exhibits "I" to "I-1") was issued by Mr. Arnel SD. Guballa, Chief of the National Investigation Division, reminding the spouses that no documents have yet been received by their office and that they have sixty (60) days from the date the protest was filed or until November 3, 2004 to submit their supporting documents otherwise, the assessment shall become final, executory and demandable. However, despite said undertaking of accused to submit additional documents and reminder from Mr. Gubally, * accused did not submit any document. Hence, a Final Decision on Disputed Assessment dated December 13, 2004 (Exhibits "J" to "J-5") was issued informing the spouses about the denial of their protest for non-submission of required documents within the sixty (60) day reglementary period. Another circumstance which convinced this Court to infer the presence of " willfulness " on the part of the accused not to file his income tax returns is his admission that he signed the ITRs but failed to read all the contents , and that he did not personally file his ITR and did not verify from the BIR if his ITRs were actually filed." xxx xxx xxx As pointed out in the assailed Decision, "willfulness" in criminal tax violations means a voluntary, intentional violation or disregard of a known legal duty." 7 "Willfulness" is a state of mind that may be inferred from the circumstances of the case. 8 Such "[w]ilfulness is suggested by a pattern of failing to file for consecutive years in which returns should have been filed. 9 This may include years prior or subsequent to the prosecution period." 10 "Willfulness may also be inferred from such acts as mailing tax protest materials to the IRS, disregarding IRS warning letters , and filing contradictory forms." 11 "There is also an element of common sense in establishing willfulness in a failure to file case. Thus, willfulness can be shown by such factors as: the background of the defendant; the filing of returns in prior years; 12 that the defendant was a college graduate with accounting knowledge; that the defendant was familiar with books and records and operated a business; 13 that the defendant earned a large gross income." 14 A perusal of the foregoing list of acts, from which willfulness may be inferred, instantly shows that the circumstances obtaining in this case perfectly fits some of the above-enumerated acts, i.e. , [i] pattern of failing to file for consecutive years; [ii] disregarding BIR warning letters; [iii] that the defendant earned a large gross income; foregoing acts were established and comprehensively discussed in the assailed Decision. Moreover, another point strongly militating against the accused, and thereby fortifies the finding of "willfulness" in this instance is the fact that accused consciously avoided every opportunity to learn or acquire the knowledge relating to his legal duty to file income tax returns. As oft repeated, "willfulness" means a voluntary, intentional violation or disregard of a known legal duty, however, lack of knowledge or ignorance is not a defense if the defendant purposely sought to avoid knowledge. 15 Such conscious avoidance aptly calls for the use of the principle of "ostrich instruction" which is also known as "deliberate ignorance", "conscious avoidance", "willful blindness", or a "Jewell instruction". 16 An "ostrich instruction" is appropriate when a defendant " claims a lack of guilty knowledge and there are facts and evidence that support an inference of deliberate ignorance. " 17 The application of this principle is appropriate in instances when " a person suspects a fact, realizes its probability, but refrains from obtaining final confirmation in order to be able to deny knowledge if apprehended. " 18 When it can be inferred from the evidence at hand that defendant purposely contrived to avoid learning all the facts, the government may be entitled to an instruction on deliberate ignorance. 19 The evidence must support a conclusion that defendant "consciously avoided any opportunity to learn what the tax consequences were." 20 CcHDaA As can be gleaned from the records of this case, accused testified and interposed as part of his defense that he allegedly relied on a certain Ms. Marina Mendoza to file his income tax return, then merely supplied data and documents needed for the preparation, and afterwards he signed the ITR's without reading the contents and without verifying the basic information. When his books of accounts became the subject of the BIR's examination, accused consciously avoided or deliberately ignored the several notices and even failed to carry out his very own undertaking to submit the documents within 60 days from his protest. These notices should have alerted the senses of the accused and prompted him to take hold of this opportunity to learn and know more about the irregularities surrounding his tax obligations. However, the foregoing circumstances tell us that, instead of taking heed of the notices that were persistently brought to his attention, or taking positive actions to rectify the possible errors, accused consciously avoided and deliberately ignored the opportunity to learn or acquire the knowledge about his legal duty to file income tax returns. Evidently, the established facts in this case support an inference of "willfulness" on the part of the accused for consciously avoiding any opportunity to learn what the tax consequences were. Accused also emphasized that in charges for fraudulent filing of return it is grave error to simply infer or presume fraudulent intent to evade taxes in the absence of direct evidence, citing the case of Aznar, et al. vs. Court of Tax Appeals, et al. 21 Also, accused made reference to the case of Commissioner of Internal Revenue vs. Air India, et al. , 22 where it was held that the willful neglect to file the required tax return or the fraudulent intent to evade the payment of taxes cannot be presumed. The government, however, need not prove "evil motive or a bad purpose." 23 "Demonstration of a good purpose is not a defense to a charge of willful failure to file. If it is shown that the taxpayer intentionally violated a known duty, the reason for doing so is irrelevant." 24 In the case of United States v. McCorkle , 511 F.2d 482 (7th Cir. 1975) ( en banc ), the argument of the defendant that to prove a willful failure to file the government had to establish an intent to defraud was rejected by the court. Also, it is significant to note that unlike the accused in this present instance, the petitioner in the case of Aznar, et al. vs. Court of Tax Appeals, et al. 25 during the investigation of his tax liabilities cooperated readily with the BIR and there is no indication in the record of any act of bad faith committed by him, thus, it is not accurate for the accused to fully rely on the said case as the acts exhibited by accused from which "wilfulness" was inferred are in checkered contrast with the acts displayed by petitioner in the Aznar case. The last key argument of accused pertains to the alleged imbalance in the appreciation of the respective evidence of the parties. Accused avers that this Court erred in appreciating the weight, probity and value of the evidence for the defense, while taking in all the evidence offered by the prosecution as credible and of significant probative value, the evidence for the accused were disregarded haphazardly. We find the above contention of the accused untenable. The admissibility of evidence should not be confused with its probative value. Admissibility refers to the question of whether certain pieces of evidence are to be considered at all, while probative value refers to the question of whether the admitted evidence proves an issue. Thus, a particular item of evidence may be admissible, but its evidentiary weight depends on judicial evaluation within the guidelines provided by the rules of evidence. 26 A painstaking evaluation was made on the pieces of evidence presented by both parties before this Court concluded and afforded full credence to the prosecution's evidence and deny giving such weight and credence to the pieces of evidence presented by the defense. A perusal of the assailed Decision belies accused asseverations, pertinent portion of which is quoted hereunder: xxx xxx xxx After a careful evaluation of the records at hand, this Court is satisfied and so holds that the prosecution satisfactorily laid down the pieces of evidence needed to prove that there is no record of filing of the required Income Tax Returns within the reglementary period, in any of the revenue districts of the Bureau of Internal Revenue, where accused resided, at specific points in time, prior to or during the taxable years 2000 and 2001. Full credence is accorded by this Court to the Certification issued, affirmed and testified to by Atty. Barroga, OIC, Assistant District Officer of the BIR RDO No. 52, Paraaque City, to the effect that accused Benjamin G. Kintanar, Jr., did not file his ITRs for the years 1999, 2000 and 2001. Said certification corroborates another Certification issued by the former Revenue District Officer Carmelita R. Bacod on September 17, 2002 in response to the request of the Tax Fraud Division reflected on the Access Letter dated July 18, 2002. Likewise, the same weight is given to the Certification issued, affirmed and testified to by Romeo Naranjo, assigned as Revenue District Officer of Revenue District Office No. 43, Pasig City, which essentially states that accused Benjamin G. Kintanar and spouse Gloria V. Kintanar have not filed any return in their office and that they are not registered in their district. Above finding is fortified by another Certification dated September 26, 2007, signed by Victoria T. De Leon, Head Revenue Executive Assistant of the Information Systems Operations Service of the BIR, in behalf of Assistant Commissioner Alberto Pio De Roda, which substantially states that based on the ITS of the BIR accused Benjamin G. Kintanar, Jr. is a registered Professional Taxpayer, however, BIR has no record of accused having filed his ITRs for the years 1999-2001. aEcTDI For his part, accused presented Exhibits "6" and "11" to substantiate his claim that he filed his ITRs for the years 2000 and 2001 with the BIR RDO No. 40, Cubao, Quezon City, through Ms. Marina Mendoza, who was a former employee at the BIR Revenue District Office, Quezon City. We are not convinced. A careful examination of the ITRs presented by accused belies his claim, for the said ITRs are of doubtful authenticity, materially flawed with the following irregularities surrounding its existence, to wit : 1) The subject ITRs are incomplete in itself, as both failed to indicate the Community Tax Certificate (CTC) Number, Place and Date of issuance and the Amount paid (Boxes 107-110); 2) The subject ITRs contain an address (Blk. 73, Lot 24, Lagro Subdivision, Quezon City) which, as admitted by the accused, had never been the legal residence of his family; 3) The subject ITRs bear the stamp "Received" by RDO No. 40 of Cubao, Quezon City, which is not the district office that has jurisdiction over the accused given address (Lagro Subdivision, Quezon City) in the subject ITRs, hence, even if authentic, were filed at the wrong venue; and 4) The accused admitted that he did not read all the contents of the subject ITRs and just relied on Ms. Marina Mendoza as to its preparation and filing. Moreover, Court cannot give-in and afford credit to the above ITRs on the ground that a stamp received by BIR-RDO No. 40 seemingly appears on the face of the document. This Court is of the considered view that ITRs are public documents, specifically falling under Section 19(c) of Rule 132 of the Rules of Court which refers to "public records of private documents required by law to be entered therein" . As such, Section 27, Rule 132 of the Rules of Court declares: SEC. 27. Public record of a private document. An authorized public record of a private document may be proved by the original record, or by a copy thereof, attested by the legal custodian of the record, with an appropriate certificate that such officer has the custody. As can be gleaned from the foregoing provision, in order to convince this court to accord probative value on the ITRs presented, accused must prove the existence of the subject ITRs in the records of BIR RDO No. 40, either by presenting the original record of BIR RDO No. 40, or by a copy thereof, attested by the appropriate officer of BIR RDO No. 40, with an appropriate certificate that such officer has the custody. Clearly, the accused failed on this point. xxx xxx xxx In view of our foregoing disquisitions, the Court no longer deems it necessary to resolve other issues posed by accused. WHEREFORE , premises considered, accused's Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED. TEAaDC (SGD.) AMELIA R. COTANGCO-MANALASTAS Associate Justice Lovell R. Bautista and Olga Palanca-Enriquez, JJ., concur. Footnotes 1. Rollo , pp. 1185-1232. 2. Exhibit "J-5", p. 544, date when the accused received the Final Decision on Disputed Assessment dated December 13, 2004 (Exhibit "J"). 3. Exhibit "J-5", p. 544, date when the accused received the Final Decision on Disputed Assessment dated December 13, 2004 (Exhibit "J"). 4. People vs. Bernal, G.R. Nos. 132791 & 140465-66, September 02, 2002 citing People vs. Oscar Oliva, et al. , G.R. No. 106826, January 18, 2001. 5. People vs. Sevilleno , G.R. No. 152954, March 10, 2004 citing People v. Guihama , G.R. No. 126113, 25 June 2003; People v. Navarro , G.R. No. 132218, 24 July 2003. 6. United States v. Grumka , 728 F.2d 794, 796-97 (6th Cir. 1984); United States v. Gleason , 726 F.2d 385, 388 (8th Cir. 1984); United States v. Marabelles , 724 F.2d 1374, 1379 (9th Cir. 1984). 7. Black's Law Dictionary, 8th ed., p. 1630; Cheek vs. United States , 498 U.S. 192 (1991). 8. Black's Law Dictionary, 6th ed., p. 1599. 9. United States v. Greenlee , 517 F.2d 899, 903 (3d Cir. 1975). 10. United States v. Upton , 799 F.2d 432, 433 (8th Cir. 1986); United States v. Farris , 517 F.2d 226, 229 (7th Cir. 1975). 11. United States v. Shivers , 788 F.2d 1046, 1048 (5th Cir. 1986). 12. United States v. Briscoe , 65 F.3d 576, 588 (7th Cir. 1995); United States v. Hauert , 40 F.3d 197, 199 (7th Cir. 1994); United States v. Birkenstock , 823 F.2d 1026, 1028 (7th Cir. 1987); United States v. Bohrer , 807 F.2d 159, 161 (10th Cir. 1986); United States v. Shivers , 788 F.2d 1046, 1048 (5th Cir. 1986). 13. United States v. Segal, 867 F.2d 1173, 1179 (8th Cir. 1989). 14. Bohrer, 807 F.2d at 161. 15. United States v. Kelm, 827 F.2d. 1319 (9th Cir. 1987). 16. United States v. Jewell, 532 F.2d 697 (9th Cir. 1976). 17. United States v. Craig , 178 F.3d 891, 896 (7th Cir. 1999). 18. Jewell, 532 F.2d at 700 n.7. 19. United States v. Mapelli, 971 F.2d at 286. 20. United States v. Bussey , 942 F.2d 1241, 1428 (8th Cir. 1992). 21. G.R. No. L-20569, August 23, 1974. 22. G.R. No. 72443, January 29, 1988. 23. United States v. Powell, 955 F.2d 1206, 1211 (9th Cir. 1991). 24. United States v. Dillon , 566 F.2d 702, 703 (10th Cir. 1977) (attempt to test constitutionality of income tax laws). 25. G.R. No. L-20569, August 23, 1974. 26. Lepanto Consolidated Mining Company vs. Moreno Dumapis, et al. , G.R. No. 163210, August 13, 2008 citing PNOC Shipping & Transport Corporation v. Court of Appeals , 358 Phil. 38 (1998).