People v. Dimson

THIRD DIVISION [C.T.A. CRIM. CASE NOS. 0-071 and 0-085. July 2, 2014.] PEOPLE OF THE PHILIPPINES , plaintiff, vs .BIENVENIDO S. DIMSON , accused. DECISION RINGPIS-LIBAN , J p : Accused Bienvenido S. Dimson ("Accused") is being charged in his capacity as President/General Manager of Dimson (Manila), Inc. ("Dimson") in two criminal complaints for violation of Section 255 in relation to Sections 253 (d) and 256 of the National Internal Revenue Code of 1997, as amended, for failure of Dimson to pay its deficiency taxes for taxable years 1999 and 2000, for the income it earned from the joint venture projects it entered into with Concrete Aggregates Corporation and Manila Amman Trading, J.M. Luciano Construction, Inc., Hilmarc's Construction Corporation, and Daewoo Construction & Engineering Limited. Accused has his business address at Couperville Mansions, 17 East Riverside, San Francisco del Monte, Quezon City (with former address at 1599 Antonio Maceda Street, Sampaloc, Manila). The prosecution, on the other hand, is represented by the Bureau of Internal Revenue ("BIR"),the government agency primarily tasked to collect internal revenue taxes for the support of the government, with office at the BIR National Office Building, Diliman, Quezon City. Accused was charged under these two Informations, which read: EDcIAC CRIMINAL CASE NO. 0-071 1 "That on or about January 24, 2004 and continuously up to the present, in the City of Manila, the said accused, being then a business man with business address at Couperville Mansions, 17 East Riverside, San Francisco del Monte, Quezon City ,in the said City, did then and there willfully, unlawfully fail, refuse and neglect to pay Deficiency Income Tax (sic) in the amounts of P3,749,829.17 and P6,281,354.85, respectively, due from said corporation for the taxable year 2000 in the total amount of P10,031,184.02 under BIR Assessment Notice No. 32-2000, despite notice of said assessment, without formally protesting against or appealing the same, and repeated demands made upon him to do so, to the damage and prejudice of the Government of the Republic of the Philippines in the aforesaid sum of P10,031,184.02, Philippine Currency. CONTRARY TO LAW." CRIMINAL CASE NO. 0-085 "That on or about March 10, 2005, and for some time prior thereto, in the City of Manila, Philippines, the said accused, being then the general manager of Dimson (Manila),Inc. ("Dimson" for brevity),with business address at Couperville Mansions, 17 East Riverside (near Roosevelt Avenue corner East Riverside) San Francisco del Monte, Quezon City, having filed their internal revenue tax for the year 1999, and after an examination and audit of the same, it has been found that there is due and collectible from said accused, to wit: Kind of Tax Year Date Amount Def. Income Tax 1999 12-29-03 Php52,278,862.00 Def. VAT 1999 12-29-03 14,571,893.19 Def. EWT 1999 12-29-03 1,165,291.66 under BIR Assessment/Demand Notice No. 32-99, did then and there wilfully and unlawfully fail, refuse and neglect to pay said deficiency income tax and deficiency value added tax (VAT),and without formally protesting against or appealing the same, despite due assessment, notice and demand to do so, to the damage and prejudice of the Republic of the Philippines in the total amount of Php68,016,046.85, Philippine Currency. CONTRARY TO LAW." DHaEAS These two cases were ordered consolidated on September 17, 2008. 2 Accused voluntarily surrendered before this Court and posted the required bail bonds for his provisional liberty by way of cash bonds in the amounts of Php8,000.00 3 for Criminal Case No. 0-071 and Php20,000.00 for Criminal Case No. 0-085. 4 During the arraignment on August 4, 2008, accused entered a plea of "Not Guilty" to both charges with the assistance of his counsel, Atty. Abraham Espejo. After the termination of the pre-trial held on September 17, 2008, 5 the parties presented their respective evidence. Trial ensued and, to prove their cases, the prosecution presented twelve (12) witnesses, as follows: 1) Gloria S. Maliwanag, Revenue Officer III, RDO No. 32; 2) Maria Angeles G. Rosales, Revenue Officer, RDO No. 28, Novaliches; 3) Conrado Lorenzo, Revenue Officer I, RDO No. 32; 4) Eleuteria B. Sagun, Chief Revenue Reviewer of the Assessment Division, BIR Manila; 5) Ma. Paz L. Arcilla, Revenue Officer IV, Assessment Division, BIR Manila; ECTIcS 6) Ma. Celerina D. Jugo, Computer Operator II; 7) Ronan P. Martinez, Supervisor, Revenue District No. 31; 8) Teresita Maglunog, OIC-Asst. Chief, Admin. Division, BIR Manila; 9) Fe Gaoiran, Unit Head, Records Section, Philippine Postal Corporation; 10) Felicidad dela Rosa, Revenue Officer, RDO No. 29, Manila; 11) Ceferina Ong, Chief Revenue Officer, RDO No. 6; and 12) Atty. Mary Anne V. Morales-Lagura, Securities Counsel III, Securities and Exchange Commission. On September 16, 2011, 6 the prosecution filed its Formal Offer of Evidence then rested its case with the admission of its documentary evidence on February 14, 2012. 7 On the other hand, the defense presented three (3) witnesses, namely: accused Bienvenido S. Dimson, Efren Mercado Canlas, and Adelaida Casinas. The defense filed its Formal Offer of Evidence on October 24, 2012 8 and rested its case with the admission of its documentary evidence on March 1, 2013. 9 cADaIH The prosecution submitted its Memorandum on June 21, 2013 10 while the defense submitted its Memorandum on June 25, 2013. 11 The case was submitted for decision in the Resolution dated July 3, 2013. 12 THE FACTS The facts as culled from the records are as follows: Criminal Case No. 0-071 deals with deficiency EWT and Income Tax for the taxable year 2000, while Criminal Case No. 0-085 deals with deficiency EWT, VAT and Income Tax for the taxable year 1999. CRIMINAL CASE NO. 0-085 (TAXABLE YEAR 1999) Dimson filed, on April 13, 2000, its income tax return ("ITR") for taxable year 1999. No payment was made by Dimson because it declared in its ITR that its Prior Years Excess Credits (26A) 13 in the amount of Php2,961,317.04 exceeded the income tax due in the amount of Php752,751.87 (22B). 14 The BIR eventually discovered the non-payment of taxes for taxable year 1999 when Revenue Officers Conrado C. Lorenzo and Group Supervisor Jose C. Capistrano conducted an investigation. By virtue of the Letter of Authority dated October 25, 2000, 15 these revenue officers were authorized to examine the books of accounts of Dimson. DIAcTE Requests, 16 Subpoenas Duces Tecum 17 and Notices 18 from the BIR were likewise served on Dimson. However, the company failed to present its books of account and other accounting records which were needed in the investigation. Thus, the revenue officers made their assessment and computation based on the evidence available in their file. They found out that in taxable year 1999, Dimson's total deficiency taxes amounted to Php68,016,046.85. 19 On September 28, 2001, Rolando Relos, accountant of Dimson, executed a Waiver of the Defense of Prescription under the Statute of Limitations of the NIRC. 20 Thereafter, the BIR issued a PAN dated December 11, 2003. 21 On December 29, 2003, the BIR issued a Formal Notice of Demand 22 and Assessment Notice on EWT, 23 Formal Notice of Demand 24 and Assessment Notice on VAT, 25 and Formal Notice of Demand 26 and Assessment Notice on Income Tax, 27 all stamp-marked "DISPUTED". On January 20, 2004, accused wrote to the BIR, which letter 28 was captioned "Reply-Preliminary Assessment Notice",stating that they "received the PAN dated December 11, 2003 during the last week of December 2003" and that they were "formally protesting the findings stated in the assessment report." ISDHcT In response, the BIR informed accused that the record of the case was forwarded to Revenue District Office No. 32. 29 On January 20, 2005, the BIR notified the accused that Dimson's 1999 internal revenue tax liabilities were for final review. Said letter was endorsed by the chief of the Assessment Division to the chief of the Collection Division to enforce collection. 30 On March 10, 2005, the BIR issued a Final Notice Before Seizure. 31 On March 22, 2005, 32 accused wrote the BIR acknowledging receipt of the Final Notice Before Seizure and formally protesting Collection Notice No. 32-1-99. 33 On April 5, 2005, 34 the BIR received another letter from the accused, captioned: "Re: Request for Cancellation of Final Notice of Dimson (Manila),Inc. Before Seizure". On May 18, 2005 at 2:00 p.m.,Dimson 35 received a Warrant of Distraint and/or Levy No. 032-02305 issued by the BIR. On May 25, 2005, accused filed before BIR Revenue District Officer Benito Wong, an Urgent Appeal, appealing the aforestated Warrant of Distraint and/or Levy. 36 On June 2, 2005, accused sent a letter 37 to the BIR, addressed to Director Misajon, regarding its Request for Appointment to Discuss Warrant of Distraint and/or Levy No. 032-02305. cDAITS Thereafter, on August 18, 2005, 38 Ceferina M. Ong, Chief of Collection Division, forwarded the case of Dimson to the Chief of Legal Division for appropriate action. In response, on October 18, 2005, Regional Director Alfredo V. Misajon ("Director Misajon") issued a letter addressed to accused 39 denying the appeal of the accused and requesting him to pay the taxes due. The letter reads in part: "In reply, this Office maintains that the aforesaid deficiency income, VAT and EWT assessments were issued with factual and legal bases. Assessment Notices together with the details of expense disallowance were duly issued to DIMSON, yet despite ample time given to the latter to refute the aforesaid assessments through substantial documentary evidence, DIMSON failed to do so. On the other hand, DIMSON'S allegation that its Joint Venture Managers, CONCRETE AGGREGATE CORPORATION AND J. M. LUCIANO CONSTRUCTION, have allegedly paid DIMSON's taxes for taxable year 1999 is bereft of legal basis. Section 22(B) of the 1997 Tax Code provides: "(B) The term corporation shall include partnerships, no matter how created or organized, joint-stock corporation, joint accounts (cuentas en participacion) ,associations, or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government. 'General professional partnership' are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derive (sic) from engaging in any trade or business" (Emphasis supplied) EHTIcD From the foregoing, this Office opines that DIMSON must file separate income tax returns and/or VAT returns on its net income from its two (2) joint venture projects less its proportionate share in the joint venture expenses because the joint venture is not embraced within the meaning of the term 'corporation', hence, not subject to corporate income tax imposed under Section 27 (A) of the 1997 Tax Code (BIR Ruling No. 002-97, January 14, 1997).The joint venture being exempt from corporate income tax is not required to file quarterly and final adjustment returns (BIR Ruling No. 020-82, January 26, 1982) . Even assuming arguendo that DIMSON is right that the income taxes for the aforesaid joint projects were erroneously paid by the joint venture through its Joint Managers, an automatic credit against DIMSON's deficiency income, VAT and EWT liabilities cannot be allowed. Instead, a claim for refund should be filed by the Joint Managers within two years from the alleged erroneous payment of taxes. (Section 229, 1997 Tax Code) . Accordingly, this Office respectfully requests DIMSON to pay the aforesaid 1999 income, VAT, and EWT assessments. This is our final decision on the matter." On January 26, 2006, Director Misajon issued a recommendation letter 40 addressed to the City Prosecutor of Manila, recommending the immediate criminal prosecution of accused as president/general manager and responsible officer of Dimson for failure to pay the internal revenue tax obligations of Dimson. On February 13, 2006, accused filed a "Request for Reinvestigation of Dimson 1999 to 2003 Tax Returns" dated February 9, 2006. 41 In response, on February 17, 2006, Director Misajon issued a letter 42 which denied the request for reinvestigation for lack of factual and legal bases. The pertinent portions of the said letter read as follows: cTECHI "Thus, DIMSON's instant request for reinvestigation is hereby DENIED for lack of factual and legal bases. Relative to the 1999 case, a criminal complaint was filed against you as President and General Manager of Dimson entitled "PEOPLE OF THE PHILIPPINES vs. BIENVENIDO S. DIMSON" docketed under I.S. No. 06A-01868 for violation of Sections 255 and 253(d) of the 1997 Tax Code, which case is now pending preliminary investigation before Assistant Prosecutor NORMA ZARTIGA GO of the office of the City Prosecutor, Manila. Filing of similar complaint will follow with respect to 2000 and 2002 cases." On June 6, 2008, 43 the Department of Justice filed before this Court Criminal Case No. 0-085. CRIMINAL CASE NO. 0-071 (TAXABLE YEAR 2000) Dimson filed on April 5, 2001 its income tax return for taxable year 2000. No payment was made by Dimson because it declared in its ITR that its Prior Years Excess Credits (26A) 44 in the amount of 2,208,565.17 exceeded the income tax due in the amount of Php733,993.44 (22B) 45 Revenue Officer Ma. Angeles Rosales and Group Supervisor Benjamin V. Cruz, Jr. discovered the non-payment of taxes due for taxable year 2000 when they conducted an audit. Thus, by virtue of a Letter of Authority dated October 30, 2002, 46 the said revenue officers were authorized to examine the books of accounts of Dimson for the taxable year 2000. BIR Notices 47 were served on Dimson. However, despite receipt of the notices, the company failed to present the documents required by the BIR. Hence, the revenue officers made the assessments based on the available records in their file. Based on their findings, the total deficiency taxes for taxable year 2000 amounted to Php10,031,184.02. 48 AaCTcI Hence, on December 9, 2003, 49 the BIR issued a Preliminary Assessment Notice ("PAN"). On January 22, 2004, the Final Demand Letter 50 and Assessment Notice on EWT 51 and the Final Demand Letter 52 and Assessment Notice on Income Tax for taxable year 2000 53 were issued. These notices were received by Dimson on January 26, 2004. 54 On July 7, 2004, the BIR issued a Final Notice before Seizure. 55 On July 19, 2004, accused filed a Protest Letter 56 refuting the assessment because "they received the assessment only on July 14, 2004" and stating they would present additional documents that would justify circumstances surrounding transactions for taxable year 2000. On July 26, 2004, accused sent a follow-up letter 57 stating that they had not replied earlier due to the fact that they abandoned in haste their office in Maceda, Sampaloc, Manila. On November 26, 2004, 58 accused filed "a Very Urgent Appeal" 59 stating that "they did not receive the assessment before the same became final." On the same date, accused also sent the BIR a "Request for the Cancellation and/or Suspension of Your Final Notice Before Seizure Regarding Assessment". 60 On January 18, 2005, accused filed a letter 61 "Re: Assessment No. 32-2000",explaining that their declared gross income of Php416,260,424.76 for the year 2000 came from their share in the joint venture ("JV") projects with Daewoo Construction and Hilmarc's Construction and that out of their reported income, only Php5.5 million in rentals was received by the company. The balance of Php410.76 million representing their contract portion share in the JV projects was actually received and disbursed by both Daewoo and Hilmarc's Construction as authorized managing officers. The taxes due for the total contract amount of the JV projects have already been reported and paid by both Daewoo Construction and Hilmarc's Construction. CSTHca In response to that, on June 1, 2005, Director Misajon issued a letter 62 stating that the 30-day period 63 within which the accused could protest the assessment had already lapsed since the Assessment Notice 32-2000 dated January 22, 2004 was received on January 26, 2004. On August 4, 2005, Edna L. Tesorero ("Chief Tesorero"),Chief of Collection Section, issued a 1st Notice 64 to Dimson relative to its tax liability for collection. On August 26, 2005, a 2nd Notice 65 was issued. On August 18, 2005, accused sent a letter 66 to Chief Tesorero acknowledging receipt of BIR's 1st Notice and requesting reconsideration of the said assessment on the ground that the taxes being collected had already been paid by their joint venture managers and the incomes were simply reflected in their return to comply with the Department of Public Works and Highways ("DPWH") requirement. On August 15, 2005, the BIR issued a Warrant of Distraint and/or Levy 67 against the accused. It was received by Angel Cordero on August 30, 2005. 68 In a letter 69 dated September 8, 2005, accused acknowledged receipt of the Warrant of Distraint and/or Levy and requested the cancellation of the assessment. Thereafter, on October 26, 2005, 70 Ceferina M. Ong, Chief of Collection Division, forwarded the case of Dimson to the Chief of Legal Division for appropriate action. On January 20, 2006, 71 the BIR denied the request in this wise: IEHaSc "In reply, this Office maintains that the aforesaid deficiency income and EWT assessments were issued with factual and legal bases. Assessment Notices together with the details of expense disallowance were duly issued to Dimson. More importantly, the aforesaid income and EWT assessments have become final, executory, and demandable for DIMSON's failure to protest said assessments within the thirty (30)-day period prescribed by Section 228 of the 1997 Tax Code. Moreover, DIMSON's allegation that its Joint Venture Managers, DAEWOO CONSTRUCTION and HILMARC'S CORPORATION have allegedly paid DIMSON'S taxes for taxable year 2000 is bereft of legal basis. Section 22(B) of the 1997 Tax Code provides: "(B) The term corporation shall include partnerships, no matter how created or organized, joint-stock corporation, joint accounts (cuentas en participacion) ,associations, or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government. "General professional partnership" are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derive (sic) from engaging in any trade or business" (Emphasis supplied) DSEaHT From the foregoing, DIMSON must file income tax return on its net income from its two (2) joint venture projects less its proportionate share in the joint venture expenses because the joint venture is not embraced within the meaning of the term "corporation", hence, not subject to corporate income tax imposed under Section 27(A) of the 1997 Tax Code (BIR Ruling No. 002-97, January 14, 1997).The joint venture being exempt from corporate income tax is not required to file quarterly and final adjustment returns (BIR Ruling No. 020-82, January 26, 1982) . Even assuming that DIMSON is right that the income taxes for the aforesaid joint projects were erroneously paid by the joint venture through its Joint Managers, an automatic credit against DIMSON's deficiency income and EWT liabilities cannot be allowed. Instead, a claim for refund should be filed by the Joint Managers within two years from the alleged erroneous payment of taxes. (Section 229, 1997 Tax Code) . Accordingly, this Office resolves to deny the request for reconsideration and respectfully requests DIMSON to pay the aforesaid 2000 income and EWT assessments immediately upon receipt hereof. This is our final decision on the matter." DACTSa On February 10, 2006, 72 Director Misajon issued a recommendation letter addressed to the City Prosecutor of Manila recommending the immediate prosecution of accused as president/general manager and responsible officer of Dimson for failure to pay internal revenue tax obligations of the corporation. On December 28, 2007, 73 the Department of Justice filed before this Court Criminal Case No. 0-071. THE PROSECUTION'S EVIDENCE The prosecution presented evidence to prove that Dimson declared income, received all notices and assessments pertinent thereto, and was therefore required to pay the tax; that Dimson failed to pay the tax due; and that the failure to pay the tax was willful. First, they presented the ITRs that Dimson filed for taxable years 1999 74 and 2000. 75 Next, they presented witnesses who testified that Dimson received the notices and assessments relevant to the BIR's efforts to collect the taxes due, to wit: In Criminal Case No. 0-071, prosecution witness Ma. Angeles Rosales testified that she served upon the taxpayer the letter of authority together with the first notice of the BIR and its checklist of items for examination on November 7, 76 and that these were received by Ms. Joanne Ortega ("Ms. Ortega"). 77 Shortly thereafter, she followed up through a phone call when the documents would be ready. After two months passed, she served the second notice 78 of the request for presentation of records 79 on January 7, 2002 80 which was also received by Ms. Ortega. 81 She further testified that the purpose of these BIR notices was "to afford due process." 82 A third and final notice was served on February 28, 2003 which was received by Cora Orsillo ("Ms. Cora"). 83 After receipt of the documents of Dimson, witness Rosales prepared an assessment which she submitted to the Assessment Division for approval. 84 DTAaCE BIR Examiner Gloria Maliwanag testified that the Checklist of Requirements served on the taxpayer was received by Ms. Ortega on November 7, 2007, 85 along with the Letter of Authority; 86 and that the second notice to the taxpayer was received on January 7, 2002, and the final notice on February 28, 2002, 87 by Ms. Cora. 88 Revenue Officer Ronan P. Martirez testified that he personally served a Tax Verification Notice on the accused on March 2, 2004 but it was received by a man, 89 not the accused, whose name he could not recall; 90 that he could not tell whether the man who received the TVN was a Dimson employee; and that the man, who was dressed in house clothes, said he was only a caretaker of the place as the Dimson office had already been closed. 91 Philippine Postal Corporation Records Unit Head Fe P. Gaoiran testified that the letter with registry number 803356 that was delivered to Dimson was received by Ms. Cora on January 26, 2004. 92 RDO 29 Revenue Officer Felicidad dela Rosa testified that the warrant that she personally served at 17 East Riverside New Roosevelt Ave. San Francisco del Monte 93 was received by an Angel Cordero ("Mr. Cordero") on August 30, 2005, 94 but that she did not personally know Mr. Cordero or whether he was an authorized representative or officer of the company. 95 aHSTID In Criminal Case No. 0-085, prosecution witness, Revenue Officer Conrado Lorenzo, testified that the taxpayer was furnished a copy of the Letter of Authority and a written preliminary request for the books of accounts on October 25, 2000, and that these were received for Dimson by one Peter Castillo on November 7, 2000. 96 The second notice or request for documents was received by Ms. Cora 97 while the final notice to the taxpayer was initialed by "the taxpayer" on March 29, 2001. 98 He further testified that a subpoena duces tecum dated October 26, 2001 99 was served by a BIR messenger and was received by Ms. Cora 100 at the official address of Dimson. 101 He also sent a request for a preliminary conference to the company as regards the result of the Preliminary Assessment which was received by Rolando T. Raul. 102 His findings as to income tax deficiency, on the other hand, were received by one Rolando Rios. 103 Revenue Officer Felicidad dela Rosa also testified that when she served the Warrant of Distraint, she did not meet the accused personally, 104 and that the warrant was received by Ms. Ortega. 105 The prosecution contends that the accused's non-payment of his tax liability was willful. Accused could have very well known that he could be held liable for the taxes due on whatever income that was reported in the filed ITRs of Dimson. If indeed it was a mere mistake and he had no intention to defraud the government, as the accused claims, he could have simultaneously explained the situation upon filing the ITRs for taxable years 1999 and 2000, or he could have done so right after filing the ITRs with the BIR. He should not have waited for the BIR to discover the unpaid taxes and collect the same before he explained his side. Other than the bare and self-serving asseverations of accused and his witnesses that no income was received from the said joint venture projects, accused failed to present any iota of documentary evidence to support such claim sufficient to defeat the assessments made by the BIR. cSIADH THE DEFENSE OF THE ACCUSED Accused argued that the corporation did not receive any income for taxable years 1999 and 2000 from the joint ventures for it to be liable for alleged tax deficiencies. Accused claims that Dimson is not required to pay the taxes subject of the assessments, because none of the income from the joint venture projects was received by Dimson, inasmuch as the corporation was "kicked out" from all four (4) of the joint ventures before their projects could start. 106 Hence, Dimson was not able to participate because it was not able to produce the capitalization requirement demanded by the joint ventures. In declaring income from the JV Projects in Dimson's ITRs for taxable years 1999 and 2000, accused justified his actions by saying that the income declared was purely "statistical income", 107 and he had done this upon the suggestion of someone from the Department of Public Works and Highways ("DPWH") Bids Committee. 108 Accused claims he was forced to heed the "suggestion" to be able to renew Dimson's annual accreditation by the DPWH as a construction contractor. 109 Alternatively, he described this "suggestion" as "DPWH mandatory reportorial requirements," but failed to indicate the legal basis for such. 110 On the other hand, the accused also denied being served formal letters of demand and assessment notices. In his Counter-Affidavit dated April 21, 2006, he stated: "s. ...Dimson has never received any BIR assessments since Dimson has already abandoned its former office in haste sometime in March 2003. Hence, Dimson had really no opportunity to review and contest the assessments sent to them and in effect, therefore, the tax liability, if there is any, of Dimson has not been determined yet since no proper assessment (s) [sic] ;" The accused also testified under oath on May 16, 2012 that he never saw any BIR examiner who talked to him personally and nobody ever visited his office to check the book of accounts of his corporation; 111 and that he never met any of the prosecution witnesses before the case against him was filed. 112 To prove that accused was bumped off from the joint ventures and that the taxes were paid by the joint venture partners of the company, the accused presented the following: DIEACH 1. Joint Affidavit 113 of Manila Amman Trading Corp. thru its President, Philip V. Ordonez, and Concrete Aggregates Corp. thru its General Manager Arleo E. Magtibay, stating that the Joint Venturers Concrete Aggregates Corporation and Manila Amman Trading Corporation jointly consent to the relief of equipment and financial responsibility of Dimson in the Quirino Highway contract with DPWH and they jointly certify that the additional financial and equipment requirements of the project in lieu of Dimson are deemed sufficient to cover all the project requirements. 114 2. Certification 115 dated March 7, 2007, issued by Emmanuel A. Rapadas, General Manager of Concrete Aggregates Corporation, stating that the construction of Quirino Highway project was constructed by the Joint Venture of Concrete Aggregates/Dimson (Manila),Inc./Manila Amman Trading was undertaken solely by the Authorized Managing Office (AMO) Concrete Aggregates Corporation & Manila Amman Trading without any participation of Dimson and that all project revenue were received and all the taxes were paid by Concrete Aggregates Corporation & Manila Amman Trading to the BIR RDO No. 121 Quezon City. 116 IAETSC 3. Certification 117 dated January 30, 2007, issued by Efren M. Canlas, Authorized Managing Partner of Hilmarc's Construction Corporation, stating that the construction of Luneta Waterfront Development Project under the contract by the Hilmarc's/Dimson Joint Venture was solely undertaken by the Authorized Managing Office (AMO) Hilmarc's Construction Corporation without any participation of Dimson and that all the project revenues were reported under the name of the Joint Venture. The joint venture is duly registered under Revenue District Office #40 and its Tax Identification Number is 208-362-850 and that all the taxes were received and paid under the name of the joint venture. 4. Cover Sheet of Concrete Aggregates Corporation submitted on April 16, 2001 118 to prove that Concrete Aggregates Corporation's income covers the income obtained from the joint venture. 5. Audited Financial Statement of Daewoo Construction & Engineering Company Limited 119 to prove that Daewoo's income covers the income obtained from the joint venture project. 6. Affidavit of Adelaida Escasinas 120 stating that Dimson did not receive any income from the joint venture projects. Mr. Efren Canlas testified on August 15, 2012, that Dimson (Manila),Inc. is part of the joint venture between Hilmarc and Dimson, however when the Luneta Waterfront Development project was about to start, Dimson could not comply with their agreement on the authorized capitalization, hence, as the lead contractor, Hilmarc proceeded with the project using the name of the joint venture. The project was completed with no participation on the part of Dimson but the project was still under the name of the joint venture. All the tax liabilities were settled under the name of the joint venture. Dimson did not receive any income since it was no longer a part of the project. SaHTCE Adelaida Escasinas testified on September 26, 2012, that she was an employee of Dimson from 1974 to 2008. Since 1980 she worked as a solo cashier. She did not receive any income, money or check with regard to the joint venture projects of Dimson. 121 She identified an undated affidavit which she executed and marked as Exhibit "27". THE ISSUES The issues to be resolved as agreed upon by the parties in the Pre-Trial Order 122 are as follows: A. In CTA Criminal Case No. 0-071: 1. Whether or not the accused is liable for income tax despite his resignation from the joint venture and the other joint venture partners have paid the tax; 2. Whether or not the filing of the Income Tax Return by the accountant holds the accused liable; 3. Whether or not the Dimson's actual receipt of its deficiency Income Tax and Expanded Withholding Tax Assessments was on July 14, 2004 as alleged by Dimson or on January 26, 2004 as alleged by the Bureau of Internal Revenue (BIR); ICAcaH 4. Whether or not the 2000 Deficiency Income and Expanded Withholding Tax Liabilities of Php3,749,828.17 and Php6,281,354.85, respectively, issued by the BIR against Dimson have become final, executory and demandable; and 5. Whether or not the accused as President and General Manager of Dimson shall be liable to the resultant Deficiency Income Tax and Expanded Withholding Tax liabilities of Php3,749,828.17 and Php6,281,354.85, respectively, for taxable year 2000 due to his act of willful non-payment of tax pursuant to Section 255 in relation to Sections 253 (4) and 256 of the 1997 Tax Code. B. In CTA Crim. Case No. 0-085: 1. Whether or not the accused is liable for income tax despite his resignation from the Joint Venture and the other joint venture partners have paid the tax; 2. Whether or not the filing of the Income Tax Return by the accountant holds the accused liable; 3. Whether or not the 1999 Deficiency Income Tax, VAT and Expanded Withholding Tax liabilities of Php52,278,862.04, Php14,671,893.19 and Php1,165,291.66, respectively, issued by the BIR against Dimson have become final, executory and demandable; and STIcaE 4. Whether or not the accused, as President and General Manager of Dimson shall be liable to the resultant deficiency Income Tax, VAT and Expanded Withholding Tax liabilities of Php52,278,862.04, Php14,671,893.19 and Php1,165,291.66, respectively, for taxable year 1999 due to his act of willful non-payment of tax pursuant to Section 255 in relation to Section 253 (d) and 256 of the 1997 Tax Code. To the mind of this Court, there is only one main issue and that is whether or not accused is guilty of the crimes charged and liable to pay the deficiency taxes. THE RULING OF THE COURT "A judgment is the law's last word in a judicial controversy. It may therefore be defined as the final consideration and determination of a court of competent jurisdiction upon the matters submitted to it, in an action or proceeding. A more precise definition is that a judgment is the conclusion of the law upon the matters contained in the record, or the application of the law to the pleadings and to the facts, as found by the court or admitted by the parties, or deemed to exist upon their default in a course of judicial proceedings." 123 The Supreme Court has ruled in the case of Commissioner of Internal Revenue vs. Pascor Realty and Development Corporation, et al. , 124 that "a criminal complaint is instituted not to demand payment, but to penalize the taxpayer for violation of the Tax Code. The relevant provisions of the National Internal Revenue Code (NIRC) of 1997 invoked by the prosecution are as follows: "Sec. 255. Failure to File Return, Supply Correct and Accurate Information, Pay Tax, Withhold and Remit Tax and Refund Excess Taxes Withheld on Compensation. Any person required under this Code or by rules and regulations promulgated thereunder to pay any tax ,make a return, keep any record, or supply any correct and accurate information, who willfully fails to pay such tax ,make such return, keep such record, or supply such correct and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation, at the time or times required by laws or rules and regulations shall, in addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less than Ten thousand pesos (P10,000.00) and suffer imprisonment of not less than one (1) year but not more than ten (10) years. CDaTAI xxx xxx xxx Sec. 253. General Provisions. ... (d) In the case of associations, partnerships or corporations, the penalty shall be imposed on the partner, president, general manager, branch manager, treasurer, officer-in-charge, and the employees responsible for the violation." Sec. 256. Penal Liability of Corporation. Any corporation, association or general co-partnership liable for any of the acts or omissions penalized under this Code, in addition to the penalties imposed herein upon the responsible corporate officers, partners, or employees, shall, upon conviction for each act or omission, be punished by a fine of not less than Fifty thousand pesos (P50,000.00) but not more than One hundred thousand pesos (P100,000.00)." (Underscoring supplied) The prosecution must prove beyond reasonable doubt the following three (3) essential elements before a taxpayer can be held liable under Section 255 of the NIRC: CITDES 1. The accused is a person required to pay tax; 2. The accused failed to pay such tax at the time required by law; and 3. The failure to pay the tax was willful. In the first element , there is no question that Dimson is a juridical person required to pay its taxes under Sec. 23 (E) of NIRC,to wit: "SEC. 23. General Principles of Income Taxation in the Philippines. Except when otherwise provided in this Code: . . . (E) A domestic corporation is taxable on all income derived from sources within and without the Philippines; . . . An additional duty is imposed by Sec. 52 of the NIRC on corporations, thus: "SEC. 52. Corporation Returns. (A) Requirements. Every corporation subject to the tax imposed, except foreign corporations not engaged in trade or business in the Philippines, shall render, in duplicate, a true and accurate quarterly income tax return and final or adjustment return in accordance with the provisions of Chapter XII of this Title. The return shall be filed by the president, vice-president or other principal officer, and shall be sworn to by such officer and by the treasurer or assistant treasurer. (B) Taxable Year of the Corporation. A corporation may employ either calendar or fiscal year as a basis for filing its annual income tax return: Provided, That the corporation shall not change the accounting period employed without prior approval from the Commissioner in accordance with the provisions of Section 47 of this Code. . . ." (Emphasis supplied.) aAEHCI In the Amended Articles of Incorporation, 125 accused has been elected as Treasurer of the corporation. In the General Information Sheet, 126 the following are the officers of Dimson: 1. Melba D. Legasa Chairman 2. Bienvenido S. Dimson President 3. Gilbert P. Dimson Vice President 4. Marilou D. Lerma Member 5. Angel Cordero Member 6. Gloria Sadang Corporate Secretary 7. Lucita D. Ramos Treasurer Under Sec. 256 of the NIRC which we previously quoted, penal liability for violations of Sec. 255 is pinned upon the responsible officer of the corporation, specifically, accused Bienvenido S. Dimson, the President of Dimson. As regards the second element ,this Court finds that the prosecution has sufficiently established that there are deficiency income taxes in both cases. To impute on accused criminal liability for non-payment of tax, the prosecution must prove that accused was aware that there was demand on him to pay deficiency taxes. As borne out by the facts of this case, in Criminal Case No. 0-085, the BIR issued a PAN dated December 11, 2003; that on December 29, 2003, the BIR issued FANs and Formal Letters of Demand on EWT, VAT and Income Tax demanding payment of tax deficiency amounting to Php68,016,046.85 and that the said deficiency taxes should be paid on or before January 30, 2004. 127 Since accused ignored the demand to pay, the BIR was constrained to enforce its collection by issuing a Warrant of Distraint and/or Levy dated May 9, 2005. 128 DaTICc With regard to Criminal Case No. 0-071, the BIR issued a PAN dated December 9, 2003; that on January 22, 2004, the BIR issued FANs and Formal Letters of Demand on EWT and Income Tax demanding payment of tax deficiency amounting to Php10,031,184.02 and that said deficiency taxes should be paid on or before February 23, 2004. 129 Again, accused disregarded the demand to pay, thus the BIR issued a Warrant of Distraint and/or Levy dated August 15, 2005. 130 Based on the evidence presented, it is clear that notices were sent to the accused and the same were received by him and that he in fact sent a number of letters 131 to the BIR questioning the issuance of the assessment notices and acknowledging receipt of the notices. Thus, he has knowledge of the tax deficiency being demanded by the BIR. Considering that accused failed to sufficiently refute the assessments in both cases, the assessment notices became final and demandable. Therefore, accused non-payment on said due dates justifies the second element of Section 255 of the NIRC. We now come to the third element of the crime. Did accused willfully fail to pay the assessed tax liabilities in both cases at the time it was legally required to be paid, to the damage and prejudice of the government? Accused repeatedly argue that the Dimson did not receive any income for taxable years 1999 and 2000 from the JV projects for it to be liable on the alleged tax deficiencies because it merely declared statistical income in its ITRs in order to comply with the DPWH requirements. TCaAHI An act or omission is "willfully" done, if done voluntarily and intentionally and with specific intent to do something the law forbids, or with specific intent to fail to do something the law requires to be done; that is to say, with bad purpose either to obey or to disregard the law. 132 Clearly, therefore, to attribute to accused a "willful failure to pay" the tax, it must be shown that such failure or omission by accused was done knowingly, intentionally and with the specific intent not pay the tax. In other words, it must be shown that accused was aware of his obligation to pay the tax, but he nevertheless voluntarily, knowingly and intentionally failed to pay it. And although "willfullness" is a state of mind that may be inferred from the circumstances of the case, 133 and proof of willfulness may be, and usually is, shown by circumstantial evidence alone, 134 in this case, we have direct admissions by the accused. The declarations of the accused under cross examination by special prosecutor Atty. Leonardo B. Quanico Jr. 135 are most revealing: Q Mr. Witness, you said that you were kicked out from the joint venture agreement, how come that you were able to reflect an income in your Income Tax return from these projects you entered into for the taxable year 1999, taxable year 2000? A For a background, every year the DPWH renews the accreditation of contractors, so contractors are required to submit certain documents including their Income Tax return to find out that all joint ventures' members have declared their shares for the joint ventures' shares and income. TDcAIH Q Mr. Witness, are you aware that if you report a particular income in the Income Tax Return, it means that you earned that income so you are liable for a corresponding taxes [sic] amicable [sic] to that income? A When we submitted originally our income tax return to the DPWH, they found out that we did not declare our portion of income on the projects completed when we were members of the joint venture, we told them that we were kicked out, so the DPWH people said that if we cannot submit to them that document, even if it shows only statistical income, it would place them into bad light because if the joint venture member did not declare his income when he was a member of the joint venture project, they might be suspected that there is a connivance between the DPWH and the contractor involved in not reporting of their shares of income. So, they suggested that to be accredited and to be truth [sic] ,more manifested that we should submit to the BIR even a statistical report even if the income was not received by the contractor. Q Why in the first place did you reflect the same in the Income Tax Return when in fact you were alleged that you were not able to generate income for the said project, what is your purpose for reflecting such income in your ITR for taxable year 1999 and taxable year 2000? A Initially, we did not reflect it in our ITR submitted to the BIR, but then the DPWH forced us to indicate it even if it's statistical, otherwise they would be suspected of being in connivancing [sic] in Tax Evasion Case for not reporting an income so we were forced to put the statistical Income Tax Return. caADSE And on cross-examination by Justice Manalastas; 136 Q Mr. Dimson, considering that you have been contracting business with the government for so many years, you must have a big construction company to be able to go on a joint venture with these companies such as Daewoo and Concrete Aggregates, would you say that your construction company is a big one? A The reason why we entered into a joint venture is to increase the limit ceiling of our capability because contractors are limited, we can only have projects double of the amount what you have accomplished before. Q How many employees do you have in your construction company? A Over 100, [y]our Honors. Q So I supposed you also hired an accountant? A Yes, [y]our Honors. Q Would it be safe to say that your accountant is the one who prepared the income tax return for you for submission to the BIR? A Yes, [y]our Honors, following the suggestion of the DPWH. Q Did she or he not advise you that there is no such thing as statistical income, and that all income reported in your ITR would be considered income and you have to pay taxes for it? cAISTC A When I told the accountant that this was the suggestion of the bids committee, so they will not be suspected of being tax evader, it should be the statistical financial statement, it should be the statistical something like that, [y]our Honors. Q Did your accountant agree to the reporting of your statistical income? A It was suggested by the DPWH. xxx xxx xxx. Q You did not think that you will be made to pay taxes on the income that you reported? A Because the fact that we received no income, we were sure that no taxes will be ...(interrupted) Q You received no income according to you but you reported income in your Income Tax Return? A Yes, our intention is to show the BIR ..(interrupted) Q How would the BIR know that you received no income when you reported in your income statement that you actually received income? A Before the case was filed before the Honorable CTA, we have written the BIR a letter, detailing or explaining in details why we reported this income just the fact that we submitted certificates for our joint venture managers that we were disassociated; that these joint venture members paid all the taxes in totality of all the projects. TECIaH Q Are you saying before this Court that you reported income and later on when the BIR was trying to collect taxes from you, you wrote and said, you actually did not receive any income, is that how it happened? A Yes, we explained to them that we were forced by the DPWH just to get an accreditation plus the fact that we were kicked out and we have a certificate that the projects were completed without any participation of Dimson. Q Considering that you have 100 employees in your company and you were being assisted by an accountant, you reported statistical income when you didn't receive any income according to you? A Because it was the suggestion of the DPWH, we thought that there was nothing wrong with that. xxx xxx xxx. Q You are saying that you did not receive any income but you reported income in your income tax return? A Yes. Q What should the BIR believe now? That actually you received income or you did not receive income? A We have documents to show that the other joint venture members completed the projects without our participation. HSDaTC Q But you reported your income in your ITR? A That was our honest mistake, [y]our Honors. The defense of "honest mistake" deserves scant consideration for a number of reasons. First, accused is estopped from denying an act that he admits having committed, regardless of his explanation that there was no criminal intent behind its commission. Through estoppel, an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. 137 The principle of estoppel, enshrined in Article 1431 of our Civil Code, 138 can be made to apply to a criminal case for tax evasion. Thus, Section 2 (a) Rule 131 of the Rules of Court provides: "Sec. 2. Conclusive presumptions. The following are instances of conclusive presumptions: (a) Whenever a party has by his own declaration, act or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot in any litigation arising out of such declaration, act or omission be permitted to falsify it." (Underscoring supplied) Second, accused cannot be permitted to invoke a patently illegal act that of inducing the DPWH to renew his corporation's accreditation through misrepresentation to give his corporation an unwarranted advantage to exculpate him from criminal liability. AcHSEa In the landmark case of Ungab vs. Cusi, et al. , 139 the Supreme Court ruled that the penetration of the crime of violation of Section 255 of the NIRC is grounded upon knowledge of the taxpayer that he has made an fraudulent/inaccurate return with the intention to evade and defeat a part or all of the tax. Thus: "The contention is made, and is here rejected, that an assessment of the deficiency tax due is necessary before the taxpayer can be prosecuted criminal for the charges preferred. The crime is complete when the violator has, as in this case, knowingly and willfully filed fraudulent returns with intent to evade and defeat a part or all of the tax. 140 An assessment of a deficiency is not necessary to a criminal prosecution for willful attempt to defeat and evade the income tax. A crime is complete when the violator has knowingly and willfully filed a fraudulent return with intent to evade and defeat the tax. The penetration of the crime is grounded upon knowledge on the part of the taxpayer that he has made an inaccurate return, and the government's failure to discover the error and promptly to assess has no connections with the commission of the crime. 141 (Emphasis supplied) The willfulness of the act of the accused was manifested through its failure to make the necessary amendments or corrections in the ITRs, if they truly had no intention to defraud the government. The prosecution was able to prove that the accused was properly notified by the BIR regarding the assessment notices, but accused did not submit evidence to refute the assessments other than its argument that it indicated the income "for purposes of complying with the DPWH requirement." If accused had no intention of violating our tax laws, why did accused file false ITR's, ignore the notices of the BIR requesting them to submit their books of accounts and other corporate records for investigation by the revenue officer, then fail to pay the taxes due upon demand by the BIR? Besides, it is only at the time of the trial that accused produced evidence as to his non-payment of taxes. The certifications were executed only on March 7, 2007 142 and January 30, 2007, 143 during the time that these cases were already pending trial. Other than the certifications, no other evidence were presented to show that the taxes due from the joint venture projects of the accused were paid and shouldered by the joint venture partners of the accused. In all criminal prosecutions, the burden of proof is on the prosecution to establish the guilt of the accused beyond reasonable doubt. It has the duty to prove each and every element of the crime charged in the Information to warrant a finding of guilt for the said crime or for any other crime necessarily included therein. 144 In the appreciation of evidence in criminal cases, it is a basic tenet that the prosecution has the burden of proof in establishing the guilt of the accused for the offense with which he is charged. Ei incumbit probation qui dicit non qui negat; i.e. ,"he who asserts, not he who denies, must prove." The conviction of appellant must rest not on the weakness of his defense, but on the strength of the prosecution's evidence. 145 CONCLUSION After careful consideration of the testimonial and documentary evidence presented by both parties, the Court finds that the prosecution was able to establish the guilt of the accused beyond reasonable doubt on the crimes charged. IAEcCa As regards the penalties, accused was charged for violation of Section 255 of the NIRC. The imposition of a fine of Php10,000.00 for each crime is proper. Also, the imposition of the penalty of imprisonment of one (1) year for both cases is also proper under the circumstances. This is without prejudice to Section 280 of the NIRC, which provides for the imposition of subsidiary penalty in case the accused has no property to pay such fine. Furthermore, Dimson is ordered to pay a fine of Php100,000.00 for both cases pursuant to Section 256 of the NIRC. The civil liability of the accused in this case is deemed instituted herewith pursuant to R.A. No. 1125, as amended by Section 7 (b) 1 of R.A. No. 9282, which provides that "the criminal action and the corresponding civil action for the recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly determined in the same proceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filing of such civil action separately from the criminal action will be recognized." Section 253 (a) of the NIRC provides that "Any person convicted of a crime penalized by this Code shall, in addition to being liable for the payment of the tax, be subject to the penalties imposed herein: Provided, That payment of the tax due after apprehension shall not constitute a valid defense in any prosecution for violation of any provision of this Code or in any action for the forfeiture of untaxed articles." TDCcAE A corporation is an artificial entity created by operation of law. ...It has a personality separate and distinct from that of its stockholders and from that of other corporations to which it may be connected. 146 Unfortunately for the accused, this case falls under one of the instances wherein the separate juridical entity of Dimson may be disregarded and the corporate veil may be pierced. The doctrine of piercing the corporate veil applies only in three (3) basic areas, namely: 1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud cases or when the corporate entity is being used to justify a wrong, protect fraud, or defend a crime; or 3) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. 147 In the case of Aratea v. Suico , 148 the Supreme Court said that "[the] legal fiction may be disregarded if it is used as a means to perpetrate fraud or an illegal act, or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, or to confuse legitimate issues. 149 Furthermore, although piercing the veil of corporate fiction is frowned upon, it "can only be done if it has been clearly established that the separate and distinct personality of the corporation is used to justify a wrong, protect fraud, or perpetrate a deception." 150 In conjunction with Sec. 31 of the Corporation Code of the Philippines, 151 this Court finds that, as borne out by the facts of this case, the accused has assented to patently unlawful acts of the corporation in order to gain unwarranted advantage with the DPWH, and has acted with gross negligence in directing the affairs of the corporation by failing, despite numerous opportunities and the reasonable passage of time, to correct or amend the tax returns subject of these cases to the detriment of the corporation. As a consequence therefore, the accused is held jointly and severally liable with Dimson for its deficiency taxes for taxable year 1999 and 2000. ESCTaA WHEREFORE ,premises considered, judgment is hereby rendered: 1. In Criminal Case No. 0-085, finding accused Bienvenido S. Dimson, GUILTY BEYOND REASONABLE DOUBT, of violating Section 255 of the Internal Revenue Code of 1997, as amended, and he is hereby SENTENCED to suffer a penalty of one (1) year imprisonment and is ORDERED TO PAY a fine in the amount of Php10,000.00, with subsidiary imprisonment in case accused has no property with which to meet the said fine, or unable to pay such fine, pursuant to Section 280 of the NIRC of 1997, as amended. Dimson (Manila), Inc. is hereby ordered to pay a fine of Php100,000.00 pursuant to Section 256 of the NIRC. As regards the civil liability, accused Bienvenido S. Dimson is held jointly and severally with Dimson (Manila), Inc. and is ordered to pay deficiency income in the amount of Php68,016,046.85 for taxable year 1999, inclusive of penalties, surcharges and interests, plus 20% delinquency interest per annum counted from April 15, 2000 until full payment thereof, pursuant to Section 249(C) (3) of the NIRC of 1997 as amended. 2. In Criminal Case No. 0-071, finding accused Bienvenido S. Dimson, GUILTY BEYOND REASONABLE DOUBT, of violating Section 255 of the Internal Revenue Code of 1997, as amended, and he is hereby SENTENCED to suffer a penalty of one (1) year imprisonment and is ORDERED TO PAY a fine in the amount of Php10,000.00, with subsidiary imprisonment in case accused has no property with which to meet the said fine, or unable to pay such fine, pursuant to Section 280 of the NIRC of 1997, as amended. IaDcTC Dimson (Manila), Inc. is hereby ordered to pay a fine of Php100,000.00 pursuant to Section 256 of the NIRC. As regards the civil liability, accused Bienvenido S. Dimson is held jointly and severally with Dimson (Manila), Inc. and is ordered to pay deficiency income in the amount of Php10,031,184.02 for taxable year 2000, inclusive of penalties, surcharges and interests, plus 20% delinquency interest per annum counted from April 15, 2001 until full payment thereof, pursuant to Section 249(C) (3) of the NIRC of 1997 as amended. SO ORDERED. (SGD.) MA. BELEN M. RINGPIS-LIBAN Associate Justice Lovell R. Bautista and Esperanza R. Fabon-Victorino, JJ., concur. Footnotes 1. Amended Information, Docket, Volume 1, p. 48 (Crim. Case No. 0-071). 2. Minutes of the hearing, Docket, p. 138 (Crim. Case No. 0-071) and p. 13 (Crim. Case No. 0-085). 3. Under Official Receipt No. 2904526 A, dated June 17, 2008, Docket, p. 113 (Crim. Case No. 0-071). 4. Under Official Receipt No. 2904527 A, dated July 28, 2008, Docket, p. 95 (Crim. Case No. 0-085). 5. Minutes of the hearing, Docket, p. 138 (Crim. Case No. 0-071) and p. 13 (Crim. Case No. 0-085). 6. Docket, p. 981. 7. Docket, p. 1066. 8. Docket, p. 1370. 9. Docket, p. 1599. 10. Docket, p. 1614. 11. Docket, p. 1625. 12. Docket, p. 1642. 13. Annual Income Tax Return (BIR Form No. 1702) Exhibit "D" (Crim. Case No. 0-085). 14. Ibid. 15. Exhibit "E",BIR Record, p. 131 (Crim. Case No. 0-085). 16. Exhibit "F",BIR Record, p. 128 (Crim. Case No. 0-085). 17. Exhibit "J",BIR Record, p. 132 (Crim. Case No. 0-085). 18. Exhibit "G",BIR Record, p. 129, Exhibit "H",BIR Record, p. 130 (Crim. Case No. 0-085). 19. BIR Assessment Notice No. 32-99, Exhibit "AA",BIR Record, p. 163, Exhibit "Y",BIR Record, p. 160 and Exhibit "W",BIR Record, p. 157 (Crim. Case No. 0-085). 20. Exhibit "P",BIR Record, p. 142 (Crim. Case No. 0-085). 21. Exhibit "U",BIR Record, pp. 154 & 155 (Crim. Case No. 0-085). 22. Exhibit "W",BIR Record, p. 157 (Crim. Case No. 0-085). 23. Exhibit "X",BIR Record, p. 158 (Crim. Case No. 0-085). 24. Exhibit "Y",BIR Record, p. 160 (Crim. Case No. 0-085). 25. Exhibit "Z",BIR Record, p. 161 (Crim. Case No. 0-085). 26. Exhibit "AA",BIR Record, p. 163 (Crim. Case No. 0-085). 27. Exhibit "BB",BIR Record, p. 164 (Crim. Case No. 0-085). 28. Docket, p. 001395, Letter dated January 19, 2004. 29. Exhibit "CC", BIR Record, p. 174 (Crim. Case No. 0-085). 30. Exhibit "HH",BIR Record (Crim. Case No. 0-085) p. 189; endorsed by Enriqueta R. Rodeles, Chief, Assessment Division. 31. Exhibit "II",BIR Record, p. 206 (Crim. Case No. 0-085). 32. BIR Record, p. 209, (Crim. Case No. 0-071). 33. The March 22, 2005 letter bears a stamp receipt of the BIR dated February 22, 2005. 34. BIR Record, pp. 228 to 230, (Crim. Case No. 0-085). 35. Actual receipt by Joanne Ortega. Exhibit "JJ",BIR Record, p. 242 (Crim. Case No. 0-085). 36. Dated May 19, 2005, BIR Record, p. 252 (Crim. Case No. 0-085). 37. BIR Record, pp. 263 and 264 (Crim. Case No. 0-085). 38. Exhibit "LL",BIR Record, p. 273 (Crim. Case No. 0-085). 39. Exhibit "MM",BIR Record, pp. 274 and 275 (Crim. Case No. 0-085). 40. Exhibit "OO" BIR Record, pp. 300-301 (Crim. Case No. 0-085). 41. Exhibit "V",BIR Record, pp. 339 to 341 (Crim. Case No. 0-085). 42. Exhibit "NN",BIR Record, pp. 342 and 343 (Crim. Case No. 0-085). 43. Docket, p. 1, Criminal Case No. 0-085. 44. Annual Income Tax Return (BIR Form No. 1702),Exhibit "C" (Crim. Case No. 0-071). 45. Ibid. 46. Exhibit "E",BIR Record, p. 17 (Crim. Case No. 0-071). 47. Exhibits "G" and "H" (Crim. Case No. 0-085). 48. BIR Assessment Notice No. 32-2000, Exhibit "AA",BIR Record, p. 86 and Exhibit "Y",BIR Record, p. 84 (Crim. Case No. 0-071). 49. Exhibit "T",BIR Record, pp. 80 and 81 (Crim. Case No. 0-071). 50. Exhibit "Y",BIR Record, p. 84 (Crim. Case No. 0-071). 51. Exhibit "Z",BIR Record, p. 85 (Crim. Case No. 0-071). 52. Exhibit "AA",BIR Record, p. 86 (Crim. Case No. 0-071). 53. Exhibit "BB",BIR Record, p. 87 (Crim. Case No. 0-071). 54. Exhibit "HH",BIR Record, p. 129 (Crim. Case No. 0-071). 55. Exhibit "EE",BIR Record, p. 90 (Crim. Case No. 0-071). 56. Dated July 16, 2004. Exhibit "U",BIR Record, p. 93 (Crim. Case No. 0-071). 57. BIR Record, pp. 94 and 95 (Crim. Case No. 0-071). 58. BIR Record, pp. 104 and 105 (Crim. Case No. 0-071). 59. Said letter was received by Revenue Region #6, Collection Section, on November 26, 2004. A copy of the same letter was received by Revenue Region #6, Assessment Division on April 5, 2005. 60. BIR Record, pp. 121 to 123 (Crim. Case No. 0-071). 61. Dated January 17, 2005. BIR Record, pp. 103 and 104, (Crim. Case No. 0-071). 62. Exhibit "II",BIR Record, p. 130 (Crim. Case No. 0-071). 63. From receipt of the assessment. 64. Exhibit "LL",BIR Record, p. 175 (Crim. Case No. 0-071). 65. Exhibit "MM",BIR Record, p. 176 (Crim. Case No. 0-071). 66. BIR Record, pp. 177 and 178 (Crim. Case No. 0-071). 67. Exhibit "NN",BIR Record, p. 184 (Crim. Case No. 0-071). 68. Id. 69. BIR Record, pp. 185 and 186 (Crim. Case No. 0-071). 70. Exhibit "OO",BIR Record, p. 193 (Crim. Case No. 0-071). 71. Exhibit "PP",BIR Record, pp. 194 and 195 (Crim. Case No. 0-071).Letter dated January 20, 2006, addressed to Mr. Bienvenido S. Dimson and signed by Dir. Misajon. 72. Exhibit "QQ",BIR Record, pp. 223-225 (Crim. Case No. 0-071). 73. Docket, Volume 1, p. 1 (Criminal Case No. 0-071). 74. Exhibit "C",BIR Record, p. 31 (Crim. Case No. 0-085). 75. Exhibit "C",BIR Record, p. 11 (Crim. Case No. 0-071). 76. The Letter of Authority indicates that it was received on 11/7/02. 77. TSN dated April 20, 2009, pp. 24-25. 78. Exhibit "G",BIR Records, p. 15 (Crim. Case No. 0-071). 79. Dated December 9, 2002. 80. The second request for presentation of records indicates that it was received on 1/7/02, which should be 1/7/ 03 . 81. TSN dated April 20, 2009, pp. 31-32. 82. TSN dated April 20, 2009, p. 33. 83. TSN dated April 20, 2009, p. 37. Cora Orsillo's name is spelled differently throughout various documents, sometimes being spelled as Orcillo, Orollo-Cabrera, Ortullio, Orfolio, but all pertaining to the same person referred to as "Ms. Cora" in this Decision. 84. TSN dated April 20, 2009, p. 45. 85. TSN dated March 22, 2010, p. 23, should be November 7, 2002. 86. TSN dated March 22, 2010, p. 45. 87. TSN dated March 22, 2010, p. 24. 88. TSN dated March 22, 2010, p. 48. 89. But the TVN bears the signature of a certain "Cora" dated 3/2/2004. 90. TSN dated July 7, 2010, pp. 30-37. 91. TSN dated July 7, 2010, p. 66. See also p. 71. 92. TSN dated September 13, 2010, p. 15. 93. TSN dated September 13, 2010, p. 42. 94. TSN dated September 13, 2010, p. 43. 95. TSN dated September 13, 2010, p. 60. 96. TSN dated June 29, 2009, p. 23. 97. TSN dated June 29, 2009, p. 40. 98. TSN dated June 29, 2009, p. 41. 99. Exhibit "J",BIR Records, (Crim. Case No. 0-085). 100. TSN dated June 29, 2009, p. 44. 101. TSN dated August 10, 2009, p. 20. 102. TSN dated October 5, 2009, p. 47. 103. TSN dated October 5, 2009, p. 51. 104. TSN dated April 27, 2011, p. 19. 105. TSN dated April 27, 2011, p. 20. 106. TSN dated May 16, 2012, pp. 24-25. 107. TSN dated June 13, 2012, p. 37. 108. TSN dated June 13, 2012, p. 54. 109. TSN dated June 13, 2012, pp. 13-16, 37, 53. See also Supplemental Counter-Affidavit of Bienvenido S. Dimson subscribed on December 7, 2006 before the Assistant City Prosecutor of Manila. 110. Personal letter to BIR Commissioner Jose Mario C. Buag dated January 16, 2007. 111. TSN dated May 16, 2012, p. 35. 112. TSN dated May 16, 2012, p. 36. 113. Exhibit "1",Docket, p. 001385. 114. Docket, p. 001385. 115. Exhibit "2",Docket, p. 001389. 116. Docket, p. 001389. 117. Exhibit "3",Docket, p. 001390. 118. Exhibits "16" and "16-A",Docket, p. 001426. 119. Exhibits "18" and "18-A" Docket, p. 001472. 120. Exhibit "27",Docket, p. 001504. 121. TSN dated September 26, 2012, p. 12. 122. Dated October 15, 2008, Docket, pp. 149 to 160. 123. Gotamco vs. Chan Seng and Razon ,46 Phil. 542. 124. G.R. No. 128315, June 29, 1999. 125. Signed and subscribed before a Notary Public on June 29, 1959, Exhibit "A",Docket page 191. 126. For the Year 2008, Exhibit "B",Docket page 199. 127. Exhibits "BB","Z" and "X" (Crim. Case No. 0-085). 128. Exhibit "JJ" (Crim. Case No. 0-085). 129. Exhibits "Y" and "AA" (Crim. Case No. 0-071). 130. Exhibit "NN" (Crim. Case No. 0-071). 131. In Crim. Case No. 0-085 ,Dimson sent to the BIR the following letters: Dimson's Letter dated March 22, 2005, BIR Record, pp. 192-209; Dimson's Letter dated April 2, 2005, BIR Record, pp. 211 to 231; Dimson's Urgent Appeal dated May 19, 2005, BIR Record, pp. 243-252; Dimson's Letter dated May 31, 2005, BIR Record, pp. 253-264; Dimson's Letter dated February 9, 2006, BIR Record, pp. 303-341; while in Crim. Case No. 0-071 ,Dimson sent to the BIR the following letters: Dimson's Protest letter dated July 16, 2004, BIR Record, p. 93; Dimson's follow-up Letter dated July 26, 2004, BIR Record, pp. 94-95; Dimson's Letter dated January 17, 2005, BIR Record, pp. 103-104; Dimson's Urgent Appeal dated November 26, 2004, BIR Record, pp. 105-106; Dimson's Letter dated April 5, 2005, BIR Record, pp. 107-123; Dimson's Letter dated September 9, 2005, BIR Record, pp. 135-171; Dimson's Letter dated August 17, 2005, BIR Record, pp. 177-178; Dimson's Letter dated September 6, 2005, BIR Record, pp. 185-186; Dimson's Letter dated January 16, 2007 with Attachments, BIR Record, pp. 230-257; Dimson's Letter dated May 29, 2007, BIR Record, pp. 260-287. 132. Black's Law Dictionary, 6th Edition, p. 1599. 133. Ibid. 134. United States vs. 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). 135. TSN dated June 13, 2012, pp. 13-16. 136. TSN dated June 13, 2012, pages 51 to 65. 137. British American Tobacco vs. Jose Isidro N. Camacho, in his capacity as Secretary of the Department of Finance and Guillermo L. Parayno Jr. in his capacity as Commissioner of the Bureau of Internal Revenue , G.R. No. 163583, August 20, 2008, en banc, per Justice Consuelo Ynares-Santiago, citing Article 1431 of the Civil Code. 138. Article 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disapproved as against the person relying thereon. 139. G.R. No. L-41919-24, May 30, 1980, 97 SCRA 877. 140. Ibid. ,citing Guzik v. U.S. ,54 F2d 618. 141. Ibid. ,citing Merten's Law of Federal Income taxation, Vol. 10, Sec. 55A.05, p. 21. 142. Exhibit "2". 143. Exhibit "3". 144. Leonila Batulanon vs. People of the Philippines , G.R. No. 139857, September 16, 2006. 145. People of the Philippines vs. Nenita B. Hu ,G.R. No. 182232, October 6, 2008 citing People vs. Corpuz ,459 Phil. 100. 146. Supra ,citing Philippine National Bank v. Hydro Resources Contractors Corporation ,G.R. No. 167530, March 13, 2013. 147. Supra at Note 113. 148. G.R. No. 170284, March 16, 2007, 518 SCRA 501, 507 citing Prudential Bank v. Alviar ,502 Phil. 595 (2005). 149. Id. 150. Kukan International Corporation v. Reyes ,G.R. No. 182729, September 29, 2010, 631 SCRA 596, 628. 151. Corporation Code of the Philippines ,Sec. 31. Liability of directors, trustees or officers . Directors or trustees who wilfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.