People v. Kintanar

SECOND DIVISION [C.T.A. CRIM. CASE NO. O-033. August 26, 2009.] For: Violation of Section 255 of R.A. No. 8424 PEOPLE OF THE PHILIPPINES , plaintiff, vs . GLORIA V. KINTANAR , accused. [C.T.A. CRIM. CASE NO. O-034. August 26, 2009.] For: Violation of Section 255 of R.A. No. 8424 PEOPLE OF THE PHILIPPINES , plaintiff, vs . GLORIA V. KINTANAR , accused. DECISION UY , J p : Accused Gloria V. Kintanar is charged before this Court with the crime of Violation of Section 255 of Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997, as amended, 1 under the following Informations, which read as follows: Criminal Case No. O-033 "'That on or about the 16th day of April, 2001, in Paraaque City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen residing in the Philippines, who is engaged in business and earning income as distributor of Forever Living Products Philippines, Inc., with obligation under the law to file her Income Tax Return (ITR) for the taxable year 2000 on or before the 15th day of April 2001, did, then and there, willfully, unlawfully and feloniously fail to file her ITR with the Bureau of Internal Revenue for the year 2000, to the damage and prejudice of the Government in the estimated amount of P1,329,319.95 exclusive of penalties, surcharges and interest.' CONTRARY TO LAW." Criminal Case No. O-034 "'That on or about the 16th day of April, 2002, in Paraaque City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen residing in the Philippines, who is engaged in business and earning income as distributor of Forever Living Products Philippines, Inc., with obligation under the law to file her Income Tax Return (ITR) for the taxable year 2001 on or before the 15th day of April 2002, did, then and there, willfully, unlawfully and feloniously fail to file her ITR with the Bureau of Internal Revenue for the year 2001, to the damage and prejudice of the Government in the estimated amount of P1,517,242.12 exclusive of penalties, surcharges and interest.' CONTRARY TO LAW." The two cases were ordered consolidated on July 9, 2007. 2 Accused voluntarily surrendered before this Court and posted the required bail bonds for her provisional liberty by way of cash bonds in the amount of P20,000.00 for each case. 3 Upon arraignment, 4 accused assisted by defense counsel de parte, Atty. Salvador V. Quebral, entered a plea of "Not Guilty" to both charges. After the termination of the pre-trial held on September 26, 2007, 5 the parties presented their respective evidence. The prosecution presented seven (7) witnesses to establish accused's culpability, namely: Simplicio Cabantac, Romeo Naranjo, Atty. Christina Barroga, Julio Alcasabas, Michael Cajandab, Carmencita Flores, and Assistant Commissioner Alberto Pio de Roda. Thereafter, the prosecution rested its case with the admission of its evidence. 6 On the other hand, the defense presented two (2) witnesses, the accused herself, Gloria V. Kintanar and her spouse, Benjamin G. Kintanar, Jr. Upon admission of its documentary evidence, both parties were ordered to file their simultaneous memoranda, within thirty (30) days from notice. 7 Accused filed her Memorandum on March 6, 2009, 8 while the prosecution submitted its Memorandum on May 12, 2009. 9 Thus, this case was deemed submitted for decision on May 15, 2009. 10 IcSEAH Evidence of the Prosecution On the basis of a confidential information reaching the office of Revenue Officer Simplicio V. Cabantac, Jr., presently the Section Chief of the National Investigation Division of the Bureau of Internal Revenue (BIR), regarding the alleged tax evasion scheme of certain taxpayers, namely spouses Benjamin G. Kintanar, Jr. and Gloria V. Kintanar, for non-filing of tax returns, an Access Letter dated July 18, 2002 addressed to the Revenue District Officer of Revenue District No. 52, Paraaque City was issued by Armando R. Rosimo, Chief of the Tax Fraud Division, requesting for photocopies of documents pertaining to spouses Kintanar, with both postal address at No. 2 Granada St., Merville Subd., Paraaque City, for the years 1996 to 2001, to wit: "1. Income Tax Returns (ITR) with Financial Statements; 2. Value Added Tax (VAT) Returns (Monthly & Quarterly); 3. Percentage Tax Returns (Monthly & Quarterly); EDcIAC 4. BIR Registration Certificate." 11 Another Access Letter dated July 19, 2002 12 was also issued addressed to the Managing Director of Forever Living Products Philippines, Inc. (FLPPI), authorizing the investigating team to secure a certification as to the total income payments/commissions and bonuses earned by Spouses Benjamin G. Kintanar, Jr. and Gloria V. Kintanar, together with the amount of taxes withheld for calendar years 1996 to 2001. In response to the two (2) Access Letters: Revenue District Officer Carmelita R. Bacod, of Revenue District Office No. 52, Paraaque City, issued a Certification dated September 17, 2002 13 stating that as per verification made from the available records of its office, Spouses Benjamin G. Kintanar, Jr. and Gloria V. Kintanar, have no record on file for the years 1999-2001; 14 while, Michael T. Cajandab, Comptroller of FLPPI, sent a letter-reply dated January 20, 2003 indicating therein the total income of accused Gloria V. Kintanar for calendar years 1999, 2000 and 2001, to wit: EcHTDI "Applicable Year Amount of Income Payments Amount of Tax Withheld 1999 4,488,164.90 448,816.49 2000 7,311,489.10 731,148.91 2001 8,311,075.09 831,107.51" 15 As a result of the foregoing initial investigation conducted, it was found that spouses Benjamin G. Kintanar, Jr. and Gloria V. Kintanar are distributors or independent contractors of FLPPI, and are listed as among the top distributor of the said company. Consequently, Letter of Authority (LOA) No. 0029663 dated March 28, 2003 16 was issued against the spouses Benjamin G. Kintanar, Jr. and Gloria V. Kintanar for the examination of their books of accounts and other accounting records for the period covering taxable years 1999, 2000 and 2001. The LOA was allegedly received personally by the husband of accused Gloria V. Kintanar on April 3, 2003, as shown by his signature thereon marked as Exhibit "F-3". IAETSC Despite receipt thereof, the required documents were not submitted and a Second Request for Presentation of Records dated April 21, 2003 17 and Final Notice 18 were duly served upon spouses again at their postal address. The non-submission by the Kintanar spouses of the requested documents led to the issuance of a Subpoena Duces Tecum dated June 11, 2003 19 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. Again, the spouses did not comply, and a Letter dated September 3, 2003 was issued by Armando R. Rosimo, Chief of Tax Fraud Division to the Kintanar spouses informing them that the results of the investigation conducted on their internal revenue taxes for taxable years 1999 to 2002 had already been submitted to their office and requiring them to present their side, otherwise, they shall be deemed to have waived their right to a conference. On December 9, 2003, a Preliminary Assessment Notice 20 was issued against the spouses informing them that deficiency taxes were found against them for taxable years 1999 to 2002 together with complete details of discrepancies, and giving them fifteen (15) days to explain the discrepancies found against them. As there was no compliance once more by the spouses, a Memorandum dated February 26, 2004 21 was submitted by the investigation team regarding the spouses' failure to file their protest with the recommendation for the issuance of a Formal Letter of Demand and Assessment Notice against the spouses. Thereafter, a Formal Letter of Demand dated February 26, 2004 22 including Assessment Notices 23 were issued for the payment of discrepancies on taxes but no payment of taxes was made by the spouses. And although accused's spouse Benjamin G. Kintanar, Jr. sent a Letter dated August 31, 2004 24 informing the BIR that they have received Assessment Notices and manifesting their protest thereon for lack of factual and legal basis, together with photocopies of their joint income tax returns for 2000, 2001 and 2002, and undertaking to submit additional documents within sixty (60) days therefrom, no documents were submitted. In the Letter dated September 30, 2004, 25 Arnel SD Guballa, Chief of the National Investigation Division, informed 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. The spouses' non-compliance thereto resulted in the issuance of a Final Decision on Disputed Assessment dated December 13, 2004 26 informing the spouses about the denial of their protest for non-submission of required documents within the sixty (60) day reglementary period. The spouses were also informed that the Integrated Tax System computerized records and certification from revenue district office of Paraaque do not reflect that they had filed and paid their taxes for taxable years 1999 to 2001; that they also failed to present original copies of their ITRs within the sixty (60) day period mandated by law. TCacIE On the basis of the data and documentary evidence gathered, the prosecution found accused Gloria V. Kintanar liable for deficiency income taxes arising from income earned from FLPPI, computed as follows: "For taxable year 2000, she earned income in the amount of P7,311,489.10 but did not report the same to the prejudice of the government in the amount of P1,329,319.95 exclusive of interest, penalties and surcharges; For taxable year 2001, she earned income in the amount of P8,311,075.09 but did not report the same to the prejudice of the government in the amount of P1,517,242.12 exclusive of interest, penalties, surcharges." 27 Moreover, the prosecution submits that contrary to the assertion of the Kintanar spouses that they filed their income tax returns for taxable years 2000 and 2001, allegedly through their accountant, Marina Mendoza, investigations disclosed that no such returns were actually filed. This valuable information was derived using the Information Systems Operations Service (ISOS) at the Central Office of the BIR, as well as through Access Letters addressed to the district offices where the accused had their past residences in Paraaque, in Pasig, and in Cubao, Quezon City, verifying whether the Kintanar spouses filed their respective returns at said districts. Apparently, the said inquiries yielded negative data on the alleged filing of income tax returns by the Kintanar spouses at any of the places aforementioned for the taxable years 1999, 2000 and 2001. cDECIA In view of the foregoing findings, these two Criminal Case Nos. O-033 and O-034 were filed against accused Gloria V. Kintanar. Evidence of the Defense For her defense, accused Gloria V. Kintanar vehemently denies the allegations in the informations that she willfully, unlawfully and feloniously failed to file her Income Tax Returns (ITRs) for the taxable years 2000 and 2001, and claims that she filed the said ITRs on March 28, 2001 and April 5, 2002, as evidenced by Exhibits "9", "9-A", 28 "10" and "10-A". 29 However, she said that she did not personally file the said ITRs but her husband, and that she has no personal knowledge about the actual filing of the said returns. Presently, her current residence is at Unit 122 Doa Juana Townhomes, Doa Juana Subdivision, Rosario Pasig City. During the taxable years 2000 and 2001, however, her residence was at No. 2 Granada St., Merville Park Subdivision, Paraaque City. She admits receiving income from Forever Living Products, Philippines, Inc. (FLPPI) since 1996 up to the present and is paid commission by FLPPI through check payments, which she either encashes or clears through her bank account at BPI-North Greenhills where she maintains Account No. 2575004248. Admittedly, she knows Michael Cajandab as the Comptroller of FLPPI. To corroborate her testimony, her husband, Benjamin G. Kintanar, Jr., testified that as one of the top-dealers of FLPPI, he earned income therefrom during the taxable years 2000 and 2001, and that he and his wife, the accused in these cases, were filing joint ITRs from the time they got married in 1997 until 2004. According to him, since 1998, his accountant was a certain Marina Mendoza, and he gave documents to her, particularly W2 Forms (Creditable Tax Withheld Certificates) from FLPPI, and let her do everything relative to tax matters. He admitted that he only browsed through the ITRs before signing the same, and because he did not read these, he does not know the address stated in his ITRs and until now, he does not know where his accountant filed their ITRs. He also said that he resided in St. Francis II, Pasig City for 27 years since 1972 until 1997 and transferred to Merville, Paraaque from 1997 until about 2005 or 2006. Thereafter, he allegedly went back to reside in Oranbo, Pasig City until the present, and that he is registered with the RDO of Pasig City. THE ISSUE WHETHER OR NOT ACCUSED GLORIA V. KINTANAR IS LIABLE FOR VIOLATION OF SECTION 255 OF THE 1997 NATIONAL INTERNAL REVENUE CODE, AS AMENDED. THE COURT'S FINDINGS AND RULING Accused Gloria V. Kintanar is charged before this Court in the two (2) above-captioned cases for failure to file her Income Tax Returns (ITRs) for taxable years 2000 and 2001 in violation of the first paragraph of Section 255 of the National Internal Revenue Code (NIRC) of 1997, as amended, and not Republic Act No. 8424 . 30 TIaEDC Section 255 of the NIRC of 1997, as amended, provides: "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 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 on compensation, at the time or times required by law 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) and suffer imprisonment of not less than one (1) year but not more than ten (10) years." (Emphasis Ours) The undisputed facts are admitted in the Pre-Trial Order dated October 1, 2007, 31 the relevant portions of which state: DCSETa "II. Statement of Facts A. Admitted 1. Accused Gloria Vivar Kintanar, a Filipino citizen and resident of the Philippines , is married to Benjamin Gatpayat Kintanar, Jr. 2. Accused and her husband are engaged in the business and earning income in the form of commissions as distributors or independent contractors of Forever Living Products Philippines, Inc. , a multi-level marketing firm and a duly registered domestic corporation, during taxable year 1999, 2000, and 2001, and prior years thereto. 3. As distributors or independent contractors, accused and her husband are not employees of Forever Living Products Philippines, Inc., and only earn commission income for selling or distributing the company's products. 4. For taxable years 2000 and 2001, accused and her husband were consistently ranked among the company's top product distributors, earning substantial amount of income. 5. Accused received from Forever Living Products Philippines, Inc., commission income. 6. As married individuals who do not derive(d) income purely from compensation, accused and her spouse are obligated under the Tax Code, in particular Sections 51 (A)(1), 51 (B), 51 (C), 51 (D), 74 (A) and 74 (B), to file income tax returns for taxable years 2000 and 2001, on or before the 15th day of April 2001 and 15th day of April 2002, respectively, to include the income of both spouses . 7. That Gloria V. Kintanar is legally married to Benjamin G. Kintanar." (Emphasis Ours) Section 255 covers four (4) different situations, each of which constitutes a failure to perform, in a timely manner, an obligation imposed by the NIRC of 1997, as amended, namely: cSEaTH (1) To pay an estimated tax or taxes; (2) To make (file) a return; (3) To keep records; and (4) To supply information. The identical charge against accused in these two (2) consolidated cases is her alleged failure to make or file a return for the taxable years 2000 and 2001 on her supposed taxable incomes which caused damage and prejudice to the government in the estimated amounts of P1,329,319.95 and P1,517,242.12 in Criminal Case Nos. O-033 and O-034, respectively, exclusive of penalties, surcharges and interest. To establish the offense of failure to make or file a return, the prosecution must prove three (3) essential elements beyond reasonable doubt, to wit: (1) That the accused was a person required to make or file a return; (2) That accused failed to make or file the return at the time required by law; (3) That the failure to make or file the return was willful. Required by Law to Make or File A Return . The return referred to in these two cases pertains to the filing of an income tax return arising from the supposed income earned by accused for the taxable years 2000 and 2001. Accused's duty to make/file an income tax return is specifically mentioned in Sections 51 and 74 of the NIRC of 1997, as amended, the pertinent portions of which read: " SEC. 51. Individual Return . (A) Requirements. (1) Except as provided in paragraph (2) of this Subsection, the following individuals are required to file an income tax return : (a) Every Filipino citizen residing in the Philippines ; xxx xxx xxx (4) The income tax return shall be filed in duplicate by the following persons: (a) A resident citizen on his income from all sources ; xxx xxx xxx (D) Husband and Wife . Married individuals, whether citizens, resident or nonresident aliens, who do not derive income purely from compensation, shall file a return for the taxable year to include the income of both spouses, but where it is impracticable for the spouses to file one return, each spouse may file a separate return of income but the returns so filed shall be consolidated by the Bureau for purposes of verification for the taxable year." (Emphasis Ours) ECTHIA " SEC. 74. Declaration of Income Tax for Individuals . (A) In General. Except as otherwise provided in this Section, every individual subject to income tax under Sections 24 and 25(A) of this Title, who is receiving self-employment income , whether it constitutes the sole source of his income or in combination with salaries, wages and other fixed or determinable income, shall make and file a declaration of his estimated income for the current taxable year on or before April 15 of the same taxable year . In general, self-employment income consists of the earnings derived by the individual from the practice of profession or conduct of trade or business carried on by him as a sole proprietor or by a partnership of which he is a member. Nonresident Filipino citizens, with respect to income from without the Philippines, and nonresident aliens not engaged in trade or business in the Philippines, are not required to render a declaration of estimated income tax. The declaration shall contain such pertinent information as the Secretary of Finance, upon recommendation of the Commissioner, may, by rules and regulations prescribe. An individual may make amendments of a declaration filed during the taxable year under the rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner." (Emphasis Ours) HaTAEc Worthy of emphasis is the admission of accused that she is aware of her obligation under the provisions of the NIRC to make and file a return within the time required by law, as appearing in Section II (B) (6) of the Pre-Trial Order dated October 1, 2007, wherein the accused admitted that "as married individuals who do not derive(d) income purely from compensation, accused and her spouse are obligated under the Tax Code, in particular Sections 51 (A) (1), 51 (B), 51 (C), 51 (D), 74 (A) and 74 (B), to file income tax returns for taxable years 2000 and 2001, on or before the 15th day of April 2001 and 15th day of April 2002, respectively, to include the income of both spouses" . 32 Accused also admitted earning commission income from selling or distributing products of Forever Living Products Philippines, Inc. (FLPPI), wherein she and her husband were consistently ranked among the company's top product distributors, earning substantial amount of income during taxable years 2000 and 2001. Notwithstanding said admissions however, the prosecution presented as its witness, Michael Cajandab, Comptroller of FLPPI, who testified that FLPPI paid accused her income and bonuses for the years 1999, 2000, and 2001, as stated in his Letter/Certification dated on January 20, 2003. 33 Consequent to having earned substantial income, accused is therefore obligated under the law to file her annual income tax returns for all the taxable years that she has been earning income within the Philippines, particularly, the taxable years in question, namely, 2000 and 2001. Return Not Filed at Time Required by Law. The venue for the filing of the required income tax return and the period within which to file the same are likewise provided in Section 51, Subsections (B) and (C) (1), to wit: " SEC. 51. Individual Return . xxx xxx xxx (B) Where to File . Except in cases where the Commissioner otherwise permits, the return shall be filed with an authorized agent bank, Revenue District Officer, Collection Agent or duly authorized Treasurer of the city or municipality in which such person has his legal residence or principal place of business in the Philippines, or if there be no legal residence or place of business in the Philippines, with the Office of the Commissioner. cDIaAS (C) When to File . (1) The return of any individual specified above shall be filed on or before the fifteenth (15th) day of April of each year covering income for the preceding taxable year. xxx xxx xxx" Investigations conducted by the authorized officials of the Bureau of Internal Revenue disclose that no Income Tax Returns for the taxable years 2000 and 2001 were filed by accused within the reglementary period, or on or about April 16, 2001 (for Criminal Case No. O-033) and April 16, 2002 (for Criminal Case No. O-034) up to the present. This finding is strongly supported by the testimonies and certifications presented by the prosecution attesting to the fact that, contrary to the strong assertion of accused, there is no record of filing of the required income tax returns by accused, through her husband, in any of the revenue districts of the Bureau of Internal Revenue, where they may have resided, at specific points in time, prior to or during the taxable years 2000 and 2001. IaDTES At the outset, the prosecution established the legal residence of the accused during the years 2000 and 2001, where the accused as a taxpayer was supposed to register, file her income tax returns, and pay the corresponding income taxes due thereon, in accordance with Section 51 (B) and (C) of the NIRC of 1997, as amended. As admitted by the accused in her direct examination, she was a resident of No. 2 Granada St., Merville Park Subdivision, Paraaque City, during the taxable years in question, and she should therefore have filed her income tax returns at said place. Proceeding therefrom, Atty. Christina C. Barroga, the incumbent OIC-Assistant Revenue District Officer of Revenue District Office (RDO) No. 52, of Paraaque City, testified that based on available records of their office, the accused has no record on file for the years 1999 to 2001; hence, she caused the issuance of a Certification dated July 20, 2007, 34 certifying to the fact that accused Gloria V. Kintanar, with Tax Identification Number (TIN) 206-631-823, is not a registered taxpayer of RDO No. 52 of Paraaque City, and thus corroborating the earlier Certification dated September 17, 2002 35 previously issued by the former Revenue District Officer of RDO No. 52, Carmelita R. Bacod. AEIHaS In relation to the information derived through the BIR-Integrated Tax System (ITS) that the name and TIN of the accused appeared in RDO No. 54 of Trece Martires City, Cavite, the prosecution presented Julio G. Alcasabas, the Revenue District Officer of RDO No. 54, who clarified that the accused Gloria V. Kintanar, of No. 2 Granada, Merville Subd., Paraaque City, was registered in their district office as "one-time transaction taxpayer" (ONETT) on June 28, 2000, and that they received tax payments on March 27, 2003 representing one-time transaction for capital gains and documentary stamp tax, but negated the existence at RDO No. 54 of any Income Tax Returns filed by the accused for taxable years 1999 to 2001, as shown by a Certification dated July 26, 2007 36 which he issued, in conformity with the Certifications issued by Anicia C. Santos, Chief of the Document Processing Section 37 and by Lourdes A. Isleta, Chief of the Taxpayer Service Section, Lourdes A. Isleta, 38 both of Revenue District Office No. 54, of Trece Martires City. To bolster the foregoing assertions, Assistant Commissioner Alberto A. Pio de Roda of the Information Systems Operations Service (ISOS) assigned at the BIR National Office, issued a Certification dated September 24, 2007 39 stating that the BIR has no record of the accused having filed her ITRs for the years 1999 to 2001. On the other hand, to prove the alleged joint filing of her Annual Income Tax Returns with her husband, the accused presented Exhibits "9" and "10" purporting to be the ITRs for taxable years 2000 40 and 2001, 41 respectively, as well as two undated Certifications 42 issued by a certain Ernesto T. Kho, the Revenue District Officer of RDO No. 28, Novaliches City, which except for the specific taxable year involved, identically read as follows: " CERTIFICATION This is to certify that the verification and processing of the income tax return and other accounting records of Mr. Benjamin Kintanar Jr. with postal address at B73, L24, Lagro Subd., Novaliches, Quezon City, for taxable year 2000 43 has been investigated and completed. This certification is issued upon the request of the above-subject taxpayer. Signed Ernesto T. Kho Revenue District Officer TIN: 113-600-149 " A careful examination of the ITRs presented by accused reveals that the same 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 TIN of the accused, and the Community Tax Certificate (CTC) Number, Place and Date of issuance and the Amount paid (Boxes 6, 107-110, respectively); 2) The subject ITRs contain an address (Blk. 73, Lot 24 Lagro Subdivision, Quezon City) which, as admitted by the Kintanar spouses, had never been their legal residence; 3) The subject ITRs bear the stamping "Received" by RDO No. 40 of Cubao, Quezon City, which is NOT the district office that has jurisdiction over the spouses' given address (Lagro Subdivision, Quezon City) in the subject ITRs, hence, even if authentic, were filed at the wrong venue; and aHECST 4) The husband of the accused, who purportedly caused the preparation of the subject ITRs, clearly admitted that he did not even read the contents of the subject ITRs and does not know up to the present where these were supposedly filed by Marina Mendoza. Furthermore, the prosecution was able to prove that no ITR was filed, either by the accused or her husband, or by anyone on their behalf, for the taxable years 2000 and 2001 at RDO No. 40, as testified to by Romeo E. Naranjo, the highest ranking official of RDO No. 40, which has jurisdiction over Cubao, Quezon City, where the supposed ITRs were purportedly filed. This was further verified by Geraldine C. Marias, Chief of Document Processing Section of said district. As regards the two undated, identically worded Certifications from RDO No. 28, Novaliches, Quezon City, the same are tainted with various defects, to wit: 1) On the face of the document: it is undated and does not bear the official dry seal of the BIR; 2) Although RDO No. 28, Novaliches, Quezon City, is the revenue district which has jurisdiction over the address (Blk. 73, Lot 24, Novaliches, Quezon City) reflected in accused's ITRs for taxable years 2000 and 2001, it appears however that said ITRs were filed at RDO No. 40, Cubao, Quezon City, as shown by the stamping "Bureau of Internal Revenue, Received, RDO 40, Cubao, Quezon City". Thus, RDO No. 28 is not the proper revenue district to verify and process the said ITRs. The Certifications did not mention what returns were indeed verified and processed by the signatory, hence no evidentiary value; and cDIHES 3) The defense did not present, nor was there an attempt to present Ernesto T. Kho, the supposed signatory of the Certifications to attest to the truthfulness, authenticity and due execution of the same. In light of the foregoing inconsistencies, the Certifications are accorded no probative value. Moreover, granting for the sake of argument that the Certifications were validly issued, the same nevertheless have no favorable effect upon herein accused Gloria V. Kintanar because said Certifications refer only to her husband, Benjamin G. Kintanar, Jr., and not to the spouses Kintanar. Willfulness in Non-Filing of Return. According to Black's Law Dictionary: " Act is 'willful' within meaning of section of Internal Revenue Code imposing penalty for willful failure to pay federal income and social security taxes withheld from employees if it is voluntary, conscious and intentional; no bad motive or intent to defraud the United States need be shown, and a 'reasonable cause' or 'justifiable excuse' element has no part in definition . Harrington v. U.S. , C.A.R.I., 504 F.2d 1306, 1315." 44 (Emphasis Ours) HCEISc Further, it is also stated therein that "willfulness" is a state of mind that may be inferred from the circumstances of the case. 45 Thus, proof of willfulness may be, and usually is, shown by circumstantial evidence alone. 46 Clearly therefore, to convict accused for willful failure to file income tax returns, it must be shown that such failure or omission by accused, was done knowingly, intentionally and with the specific intent not to file the said returns. In other words, it must be shown that accused was aware of her obligation to file annual income tax returns, but she nevertheless, voluntarily, knowingly and intentionally failed to file the required returns. Bad motive or intent to defraud the government need not be shown. We look into the factual circumstances in these cases. For her defense, accused denied the charges filed against her for willful failure to file her income tax returns for taxable years 2000 and 2001, as it was her husband who took charge of the filing of their required income tax returns and this matter was admitted by her husband. Having thus delegated the supposed filing of the required income tax returns to her husband, accused in effect is saying that she did not willfully fail to comply with her legal duty to file the required income tax returns. For his part, accused's husband claims that he hired an accountant, a certain Marina Mendoza, to handle their tax concerns, thereby likewise saying he also did not willfully fail to file the required tax returns. Considering however that said Marina Mendoza was never presented in court, the testimony of accused's husband being self-serving, and the checks 47 presented to prove alleged payment for services rendered by Marina Mendoza, are accorded no probative value. Even considering that the alleged agent, Marina Mendoza, was the person tasked by accused's husband to file their required ITRs, this agreement is merely internal between them, and is not a valid defense that can be raised by accused in these cases arising from the supposed agent's non-compliance with the obligation to file the required returns for and on behalf of accused. It is a settled principle in agency that a principal is liable for the acts/omissions of his/her agent within his/her express authority because the act/omission of such agent is the act/omission of the principal. Under this rule, the principal (accused) is bound by the acts of her agent (her husband or a certain Marina Mendoza) because of the apparent authority which she knowingly permitted the agent to assume. Accused's reliance on her husband to file the required ITRs without ensuring full compliance thereon, is considered as a willful act on her part to delegate the performance of her legal duty to her husband tantamount to "deliberate ignorance" or "conscious avoidance" on her part to determine the facts surrounding the filing of the required income tax returns. The Court notes that even the accused's husband, who allegedly caused the hiring of an agent for the preparation and filing of their ITRs for the said taxable years, admitted that he merely browsed over the contents of their subject ITRs. The evident lack of concern on the part of the Kintanar spouses appear to be voluntary and considered as intentional disregard of their tax responsibilities to the government. Worst, accused even presented fabricated and flawed ITRs purporting to be received by a revenue district of which she is not a resident. Even assuming that the subject ITRs were actually filed, still, these were misfiled and she was apparently remiss in her duty of ensuring appropriate filing at the proper revenue district office. Her utter lack of participation in preparing and filing of her ITRs is a clear indication of deliberate lack of concern on her part to learn how she is to perform her tax obligations under the National Internal Revenue Code of 1997, as amended. We take note that the NIRC of 1997 is a special law. It is well settled that any violation of a special law is considered mala prohibita . Being so, except for the requirement in Section 255 that the omission be willful, proof of criminal intent to commit such violation is unnecessary. In acts mala prohibita , the only inquiry is, "has the law been violated?". 48 Thus, when dealing with acts mala prohibita , the Supreme Court said in the case of United States vs. Go Chico that: cAaTED ". . . it is not necessary that the appellant should have acted with criminal intent. In many crimes, made such by statutory enactment, the intention of the person who commits the crime is entirely immaterial. This is necessarily so. If it were not, the statute as a deterrent influence would be substantially worthless. It would be impossible of execution. In many cases, the act complained of is itself that which produces the pernicious effect the statute seeks to avoid. In those cases, the pernicious effect is produced with precisely the same force and result whether the intention of the person performing the act is good or bad." 49 In these cases, the non-filing of an income tax return being a statutory offense or malum prohibitum , the lack of intent to commit the crime is unavailing as a defense. 50 The Supreme Court further explained in the case of Garcia vs. Court of Appeals, 51 that in crimes that are mala prohibita , the criminal acts are not inherently immoral but become punishable only because the law says they are forbidden. With these crimes, the sole issue is whether the law has been violated. Criminal intent is not necessary where the acts are prohibited for reasons of public policy. ECTAHc Hence, the material element of "willfulness" in the crime charged in these cases should not be equated with criminal intent. Knowledge of a taxpayer's obligation to file the required return and the voluntary failure to comply therewith in the manner required by law will suffice. Having painstakingly considered all 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 of the crime charged in these consolidated cases for violation of Section 255 of the NIRC of 1997, as amended. As regards the civil liability of accused in these consolidated cases to pay deficiency income taxes, the same are deemed instituted herewith pursuant to Republic Act No. (RA) 1125, 52 as amended by Section 7 (b) (1) of Republic Act No. 9282, 53 which provides that the criminal action and the corresponding civil action for the recovery of civil liability for taxes and penalties shall at all time 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 . cECaHA Records reveal that on February 26, 2004, the BIR issued a Formal Letter of Demand 54 together with Assessment Notice Nos. ES-IT-1999-0083, 55 ES-VAT-1999-0084, 56 ES-IT-2000-0085, 57 ES-VAT-2000-0086, 58 ES-IT-2001-0087, 59 ES-VAT-2001-0088, 60 ES-IT-2002-0089, 61 and ES-VAT-2002-0090, 62 which were admittedly received by the husband of the accused on August 10, 2004. Accused's husband, Benjamin G. Kintanar, Jr., protested these assessments in a letter dated August 31, 2004 63 which was received by the BIR on September 3, 2004. However, as no supporting documents were attached to the letter-protest, the BIR, through Arnel SD. Guballa, Chief of National Investigation Division, sent a letter to the spouses on September 30, 2004 informing them that the BIR has not yet received the documents in support of their protest, and that they have sixty (60) days from the date of filing of their protest to submit the required documents. 64 acEHSI Subsequently, on December 13, 2004, the BIR issued a Final Decision on Disputed Assessment 65 which was received by the spouses on April 12, 2005 66 denying the protest. Neither of the spouses appealed the same with this Court thereby making the assessments 67 issued against them final, executory and demandable due to the spouses' failure to file a valid protest. Section 228 of the NIRC of 1997, as amended, clearly provides that the taxpayer, should file a protest within thirty (30) days from receipt of the assessment, and within sixty (60) days therefrom, the taxpayer should submit all the required documents in support of his protest. The accused failed to establish that they have submitted any document in support of their protest, after the letter-protest sent by her husband on September 3, 2004. Further, even granting that a valid protest was filed at the administrative level, the assessments have nevertheless attained finality for failure of the accused to judicially appeal the final decision 68 within thirty (30) days from receipt thereof. Consequently, accused is barred from disputing the correctness of the subject assessments and absent any proof of irregularities in the performance of duties, an assessment duly made by a Bureau of Internal Revenue examiner and approved by his superior officers will not be disturbed. All presumptions are in favor of the correctness of tax assessments. 69 STaCcA However, considering that the criminal cases filed before this Court pertain only to the non-filing of income tax returns for taxable years 2000 and 2001 by accused, what are deemed simultaneously instituted herewith shall be limited only to the corresponding civil liability of accused for deficiency income taxes, inclusive of all civil penalties, surcharges, and interests, for the said taxable periods. Accordingly, accused is hereby found liable to pay the assessed income tax deficiencies for taxable years 2000 and 2001, in accordance with the subject assessments 70 issued against her, which have become final and demandable, to wit: Taxable Year 2000 2001 Deficiency Income Tax P1,329,319.95 P1,517,242.12 Surcharge 664,659.98 758,621.06 Interest 3/31/04 1,162,490.30 871,655.60 TOTAL AMOUNT P3,156,470.22 71 P3,147,518.77 7 72 ============ ============ Section 255 of the NIRC of 1997, as amended, provides that upon conviction, a fine of not less than Ten thousand pesos (P10,000.00) and imprisonment of not less than one (1) year but not more than ten (10) years shall be imposed. There being no indication that the accused is disqualified from the scope of the Indeterminate Sentence Law, 73 the same shall apply. Therefore, the imposable penalty shall not exceed the maximum fixed by law, which is 10 years, and the minimum penalty, shall not be less than 1 year, the minimum prescribed by the law violated. 74 In the instant cases, considering that there are two informations filed against accused, docketed as Criminal Case Nos. O-033 and O-034, both for failure to file Income Tax Returns for the taxable years 2000 and 2001, respectively, the imposition of a fine of P10,000.00 for each case is proper, as well as the indeterminate penalty of imprisonment of one (1) year as minimum, to two (2) years as maximum for each violation. Moreover, Section 280 of the NIRC of 1997, as amended, provides the imposition of subsidiary penalty in the event that accused has no property with which to meet the fine imposed upon him by the court or is unable to pay such fine. WHEREFORE , judgment is hereby rendered: 1) In Criminal Case No. O-033, finding accused Gloria V. Kintanar, 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 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, or unable to pay such fine, pursuant to Section 280 of the NIRC of 1997, as amended. aHECST As regards the civil liability, accused is ORDERED to PAY deficiency income tax for taxable year 2000, the amount of P3,156,470.22, inclusive of penalties, surcharges and interests, plus 20% delinquency interest per annum counted from April 12, 2005 75 until full payment thereof, pursuant to Section 249 (C) (3) of the NIRC of 1997, as amended; and 2) In Criminal Case No. O-034, finding accused Gloria V. Kintanar, 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 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, or unable to pay such fine, pursuant to Section 280 of the NIRC of 1997, as amended. DTCAES As regards the civil liability, accused is ORDERED to PAY deficiency income tax for taxable year 2001, the amount of P3,147,518.77, inclusive of penalties, surcharges and interests, plus 20% delinquency interest per annum counted from April 12, 2005 76 until full payment thereof, pursuant to Section 249 (C) (3) of the NIRC of 1997, as amended. No Costs. SO ORDERED . (SGD.) ERLINDA P. UY Associate Justice Olga Palanca-Enriquez, J., concurs. Juanito C. Castaeda, Jr., J., I dissent, but concur as regards civil liability only. Separate Opinions CASTAEDA, JR. , J., concurring and dissenting opinion : With due respect to my esteemed colleagues, I dissent as to the finding that the accused is guilty beyond reasonable doubt for willful failure to file her income tax returns (ITRs) for the year 2000 and 2001 under Section 255 of the NIRC and at the same time concur that the accused is civilly liable for the reason solely that the assessments are already final and executory. ADCEcI The assessments in these cases have become final and executory due to the failure of the accused to file an appeal to the Court of Tax Appeals within thirty (30) days from receipt of the decision denying the protest as stated in the fifth paragraph, Section 228 1 of the 1997 NIRC which provides in pertinent part: If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision , or from the lapse of the one hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable . (Underline Ours) . EcTCAD In these consolidated criminal cases, the Final Decision on Disputed Assessment 2 dated December 13, 2004, was received on April 12, 2005. The accused did not appeal such adverse decision to this Court, thus, the assessments became final and executory. Accordingly, the accused is liable to pay the income tax deficiencies for taxable years 2000 and 2001, in the amount of P3,156,470.22 and P3,147,518.77, respectively, plus 20% delinquency interest per annum counted from April 12, 2005 until payment thereof, pursuant to Section 249 (C) (3) of the 1997 NIRC, as amended. However, as to the criminal aspect, I dissent from the majority opinion. The accused cannot be found guilty beyond reasonable doubt for the willful failure to file ITRs for the years 2000 and 2001 for the following reasons: 1. The nature and character of the crime charged is determined by the facts alleged in the body of the information; 2. Willfulness is an essential element of the crime charged; 3. Proof beyond reasonable doubt is needed to convict the accused; 4. The husband is the one who filed the income tax returns and assumed responsibility for the filing thereof; and 5. No evidence was presented to show that the accused willfully failed to file the spouses' joint income tax returns. SAHIaD Allegations in the body of the information prevail The character of the crime is not determined by the caption or the preamble of the information or by the specification of the provision of law alleged to have been violated, but by the recital of the ultimate facts and circumstances in the complaint or information. 3 Stated otherwise, it is the body of the information, not the caption or title that prevails. In these consolidated criminal cases, accused Gloria V. Kintanar was charged with violation of Section 255 of R.A. 8424 4 as indicated in the caption of the information. Based on the allegations in the information which are quoted hereunder, accused Gloria V. Kintanar, however, is only charged with failure to file the income tax returns for taxable years 2000 and 2001. ASEcHI The information in CTA Crim. Case No. O-033 reads: "That on or about the 16th day of April, 2001, in Paraaque City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen residing in the Philippines, who is engaged in business and earning income as distributor of Forever Living Products Philippines, Inc., with obligation under the law to file her Income Tax Return (ITR) for the taxable year 2000 on or before the 15th day of April 2001, did, then and there, willfully, unlawfully and feloniously fail to file her ITR with the Bureau of Internal Revenue for the year 2000 , to the damage and prejudice of the Government in the estimated amount of P1,329,319.95 exclusive of penalties, surcharges and interest." (Underline Ours) . On the other hand, the information in CTA Crim. Case No. O-034 reads: "That on or about the 16th day of April, 2002, in Paraaque City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen residing in the Philippines, who is engaged in business and earning income as distributor of Forever Living Products Philippines, Inc., with obligation under the law to file her Income Tax Return (ITR) for the taxable year 2001 on or before the 15th day of April 2002, did, then and there, willfully, unlawfully and feloniously fail to file her ITR with the Bureau of Internal Revenue for the year 2001 , to the damage and prejudice of the Government in the estimated amount of P1,517,242.12 exclusive of penalties, surcharges and interest." (Underline Ours) . HDITCS Considering that the allegations in the information prevail over the provision of the law in the caption of the information, it follows that the accused is charged with the offense of failure to make or file the ITRs for the taxable years 2000 and 2001. 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. 5 Every criminal conviction requires of the prosecution to prove two things: the fact of the crime, i.e. , the presence of all the elements of the crime for which the accused stands charged, and the fact that the accused is the perpetrator of the crime. 6 We agree with the majority decision that the elements for the offense of failure to make or file a return are the following: (1) That the accused was a person required to make or file a return; (2) That accused failed to make or file the return at the time required by law; and (3) That failure to make or file the return was willful. The first 2 elements were duly established by the prosecution that the accused was a person liable to make the returns in year 2000 and 2001 but failed to file these returns at the time required by law. However, as to the element of "willfulness", no proof was presented to show beyond reasonable doubt that the accused deliberately failed to file the income tax returns. aCcSDT Willfulness is an essential element Willful in the tax crimes statutes means a voluntary, intentional violation of a known legal duty and bad faith or bad purpose need not be shown. 7 In this connection, the fact that the 1997 NIRC is a special law does not necessarily result in the conclusion that the tax offenses/crimes mentioned therein are already mala prohibita. In his Concurring Opinion in the case of People vs. Quijada , 8 Justice Hermosisima, Jr. stated that: "The index of whether or not a crime is malum prohibitum is not its form, that is, whether or not it is found in the Revised Penal Code or in a special penal statute, but the legislative intent that underlies its continuing existence as part of the law of the land". 9 His brilliant elaboration on this point is quoted as follows: ScaCEH In general, it may be said that there must be malus animus or a criminal intent. But there is also a class of crimes known as crimes mala prohibita which, on the broad grounds of public policy, criminalize certain acts without the usual requisite proof of the intent of the actor to commit the crime. "In the case of The State vs. McBrayer (98 N.C, 623) this court stated: 'It is a mistaken notion that positive, willful intent to violate the criminal law is an essential ingredient in every criminal offense, and that where there is an absence of such intent there is no offense, this is especially true as to statutory offenses. When the statute plainly forbids an act to be done, and it is done by some person, the law implies conclusively the guilty intent, although the offender was honestly mistaken as to the meaning of the law he violates. When the language is plain and positive, and the offense is not made to depend upon the positive, willful intent and purpose, nothing is left to interpretation.' TcSAaH xxx xxx xxx Care must be exercised in distinguishing the difference between the intent to commit the crime and the intent to perpetrate the act. The accused did not consciously intend to commit a crime; but he did intend to commit an act, and that is, by the very nature of things, the crime itself-intent and all. The working of the law is such that the intent and the act are inseparable. The act is the crime." Indeed, to distinguish between crimes mala in se and mala prohibita by simply pointing out that the former refer to felonies in the Revised Penal Code while the latter are punished under special laws, does not amount to much, for there are indeed felonies that are penalized regardless of the felon's criminal intentions, and conversely, there are also special offenses that require proof of criminal intent. Whether or not in a given case the statute is to be construed as forbidding the doing of an act and criminalizing the same without regard to the intent of the perpetrator of the act, is to be determined by the court by considering the subject matter of the prohibition as well as the language of the statute, thereby ascertaining the intention of the lawmaker. The index of whether or not a crime is malum prohibitum is not its form, that is, whether or not it is found in the Revised Penal Code or in a special penal statute, but the legislative intent that underlies its continuing existence as part of the law of the land . HADTEC " Considering the nature of the offense, the purpose to be accomplished, the practical methods available for the enforcement of the law, and such other matters as throw light upon the meaning of the language, the question in interpreting a criminal statute is whether the intention of the legislature was to make knowledge of the facts an essential element of the offense, or to put upon everyone the burden of finding out whether his contemplated act is prohibited, and of refraining from it if it is ." xxx xxx xxx As has been aforesaid, in determining whether or not an offense is malum prohibitum or not, the relevant inquiry must concern the legislative intent as to the requirement of criminal intent or lack thereof. 10 . . . (Citations omitted; bold print ours) In this case, considering that the word "willful" is present in Section 255 of NIRC, thus, willful, deliberate intent to violate the law must be present. Accordingly, the question of whether or not the law is violated should be followed by the question whether there was deliberate intent to violate the law. If willfulness is not shown, the accused cannot be guilty of the said crime. Proof beyond reasonable doubt is necessary for conviction Under our justice system, it is absolutely necessary to prove guilt beyond reasonable doubt in order to convict the accused of the criminal charges in this case. AHaDSI Only substantial evidence, or that relevant evidence that a reasonable mind might accept as adequate to support the conclusion, is needed to find the taxpayer civilly liable for deficiency taxes, inclusive of regular civil penalties, before this Court. 11 . . . It is well settled that in passing upon petitions for review of the decisions of the Court of Tax Appeals, this Court is generally confined to questions of law. The findings of fact of said Court are not to be disturbed unless clearly shown to be unsupported by substantial evidence (Rules of Court, Rule 44, Section 2. Republic Act 1125, Sections 18-19.) Substantial evidence has been construed to mean not necessarily preponderant proof as is required in ordinary civil action, but such kind of "relevant evidence as a reasonable man might accept as adequate in support of a conclusion". (De Lamera vs. Court of Agrarian Relations, et al. , 17 SCRA 368.) . . . 12 On the other hand, to make the taxpayer civilly liable for fraud penalties, clear and convincing proof is necessary. The rule in fraud cases is that proof "must be clear and convincing", 13 that is, it must be stronger than the "mere preponderance of evidence" which would be sufficient to sustain a judgment on the issue of correctness of the issue of correctness of the deficiency itself apart from the fraud penalty. 14 In the hierarchy of evidentiary values, substantial evidence is somewhat less than preponderance while clear and convincing evidence is more than mere preponderance of evidence but is less than the highest degree of proof beyond reasonable doubt required in criminal cases. 15 Clear and convincing proof is ". . . more than mere preponderance, but not to extent of such certainty as is required beyond reasonable doubt as in criminal cases . . ." while substantial evidence ". . . consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance . . ." Consequently, in the hierarchy of evidentiary values, We find proof beyond reasonable doubt at the highest level, followed by clear and convincing evidence, preponderance of evidence, and substantial evidence, in that order. 16 ESTDcC For purposes of determining merely the civil liability of the taxpayer for fraud penalties arising from willful failure to file returns, the Supreme Court, in the case of Commissioner of Internal Revenue vs. Air India , 17 ruled: The tax liability of the private respondent thus settled, We come now to the propriety of the 50% surcharge and the interest imposed upon it by the Commissioner of Internal Revenue. The 50% surcharge or fraud penalty provided in Section 72 of the National Internal Revenue Code is imposed on a delinquent taxpayer who willfully neglects to file the required tax return within the period prescribed by the law, or who willfully files a false or fraudulent tax return, to wit DACIHc "Sec. 72. Surcharges for failure to render returns and for rendering false and fraudulent returns . In case of willful neglect to file the return or list required under this Title within the time prescribed by law, or in case a false or fraudulent return or list is willfully made, the Commissioner of Internal Revenue shall add to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of the amount of such tax or deficiency tax. In case of any failure to make and file a return or list within the time prescribed by law or by the Commissioner or other internal revenue officer, not due to willful neglect, the Commissioner of Internal Revenue shall add to the tax twenty-five per centum of its amount, except that, when a return is voluntarily and without notice from the Commissioner or other officer filed after such time, and it is shown that the failure to file it was due to a reasonable cause, no such addition shall be made to the tax. The amount so added to any tax shall be collected at the same time in the same manner and as part of the tax unless the tax has been paid before the discovery of the neglect, falsity, or fraud, in which case the amount so added shall be collected in the same manner as the tax." On the other hand, the same Section provides that if the failure to file the required tax return is not due to willful neglect, a penalty of 25% is to be added to the amount of the tax due from the taxpayer. We have gone through the allegations of the petitioner as well as the Memorandum submitted by the Solicitor General on behalf of the Commissioner and on the basis of the same. We are not convinced that the private respondent can be considered to have willfully neglected to file the required tax return thereby warranting the imposition of the 50% fraud penalty provided in Section 72. At the most, there is the barren claim that such failure was fraudulent in character, without any evidence or justification for the same. The willful neglect to file the required tax return or the fraudulent intent to evade the payment of taxes, considering that the same is accompanied by legal consequences, cannot be presumed. At this point, We call attention to the pronouncement of this Court in Aznar v. Court of Tax Appeals , to wit DEScaT "The lower court's conclusion regarding the existence of fraudulent intent to evade payment of taxes was based merely on a presumption and not on evidence establishing a willful filing of false and fraudulent returns so as to warrant the imposition of the fraud penalty. The fraud contemplated by law is actual and not constructive. It must be intentional fraud, consisting of deception willfully and deliberately done or resorted to in order to induce another to give up some legal right. Negligence, whether slight or gross, is not equivalent to the fraud with intent to evade the tax contemplated by the law. It must amount to intentional wrongdoing with the sole object of avoiding the tax. It necessarily follows that a mere mistake cannot be considered as fraudulent intent, and if both petitioner and respondent Commissioner of Internal Revenue committed mistakes in making entries in the returns and in the assessment, respectively, under the inventory method of determining tax liability, it would be unfair to treat the mistakes of the petitioner as tainted with fraud and those of the respondent as made in good faith." HcSaTI There being no cogent basis to find willful neglect to file the required tax return on the part of the private respondent, the 50% surcharge or fraud penalty imposed upon it is improper. 18 (Citation Omitted) In the case of Commissioner of Internal Revenue vs. Japan Air Lines, Inc ., 19 this ruling was reiterated. Nowhere in the records of the case can be found that JAL deliberately failed to file its income tax returns for the years covered by the assessment. There was not even an attempt by petitioner to prove the same or justify the imposition of the 50% surcharge. All that petitioner did was to cite the provision of law upon which the surcharge was based without explaining why it was applicable to respondent's case. Such cannot be countenanced for mere allegations are definitely not acceptable. The willful neglect to file the required tax return or the fraudulent intent to evade the payment of taxes, considering that the same is accompanied by legal consequences, cannot be presumed ( CIR vs. Air India, supra ). The fraud contemplated by law is actual and constructive. It must be intentional fraud, consisting of deception willfully and deliberately done or resorted to in order to induce another to give up some legal right. Negligence, whether slight or gross, is not equivalent to the fraud with intent to evade the tax contemplated by the law. It must amount to intentional wrongdoing with the sole object of evading the tax (Aznar v. Court of Tax Appeals , G.R. No. L-20569, August 23, 1974, 58 SCRA 519). 20 ACaDTH The prosecution merely alleged willful failure to file ITRs in the informations filed against the accused and merely introduced evidence that the accused failed to file her ITRs for the years 2000 and 2001 without proving deliberate intent on the part of the accused to file said returns. Evidence introduced by the prosecution in this case falls far short of the clear and convincing evidence criteria for the imposition of civil fraud penalties, much less the higher degree of proof beyond reasonable doubt required in criminal cases. The husband admitted filing the return and assumed responsibility Since "willfulness", enmeshed as it must with "intent" and "state of mind" is hardly susceptible of proof by direct evidence, circumstantial evidence is admissible on that issue. 21 HECaTD The test to determine whether or not the circumstantial evidence on record are sufficient to convict the accused is that the series of circumstances duly proved must be consistent with each other and that each and every circumstance must be consistent with the accused's guilt and inconsistent with his innocence. 22 It must exclude the possibility that some other person has committed the offense. 23 In this case, the evidence for the prosecution failed to meet the test on circumstantial evidence. The evidence for the prosecution has proven that the accused has the duty to file income tax returns and that there was failure to file such returns for taxable years 2000 and 2001 but there is no proof that the accused was the one responsible for the omission either directly or indirectly. In this case, the accused believed that her husband filed their joint income tax returns. 24 The following testimony of the accused shows such belief: SDITAC xxx xxx xxx ATTY. FRANCIA Q Madam Witness, in your Judicial Affidavit, you stated that you filed your Income Tax Returns covering the taxable years 2001 and 2002 on March 28, 2001 and April 5, 2002, is that correct? MS. KINTANAR A Actually, my husband filed that. ATTY. FRANCIA Q So that means, so, Madam Witness, so, you confirm that you did not personally file the returns? MS. KINTANAR A No, my husband. ATTY. FRANCIA Q So, suffice it to say, you have no personal knowledge of actual filing of the said returns? MS. KINTANAR A Yes. xxx xxx xxx JUSTICE CASTAEDA All right, clarification. Did you file the return? MS. KINTANAR My husband. xxx xxx xxx The above testimony of the accused was corroborated by her husband, Benjamin Kintanar, who admitted that it was he who filed the joint Income Tax Returns thru an accountant: 25 aTADcH xxx xxx xxx JUSTICE CASTAEDA . . . Before you proceed, I just want to ask a clarificatory question. The essence of your testimony for these years 2000 and 2001 is that you filed Income Tax Return as jointly spouses. So, it was you who filed on behalf of the spouses? MR. KINTANAR A. My accountant. JUSTICE CASTAEDA Your accountant but is it upon your instruction? MR. KINTANAR A. I just give my documents to my accountant and he was the one who filed. JUSTICE CASTAEDA So, it was you, not your wife, Ms. Gloria Kintanar, on your behalf? ( sic ) MR. KINTANAR A. Yes, your Honors. xxx xxx xxx ATTY. ORTIZ xxx xxx xxx Q. Mr. Witness, you stated also in your Affidavit that you jointly filed your ITR, if I may presumed, your wife. How long have you been filing your joint ITR's? IaEASH xxx xxx xxx MR. KINTANAR A. We filed the joint ITR since we got married. ATTY. ORTIZ Q. And when did you get married? MR. KINTANAR A. 1997. ATTY. ORTIZ Q. So, is it safe to assume that since 1997, you have been filing your joint ITR until the present? MR. KINTANAR A. I think up to 2004 only. ATTY. ORTIZ Q. So, from 2005, you filed your ITR's separately? MR. KINTANAR A. Yes, your Honors. ATTY. ORTIZ Q. And you also stated that you filed your joint ITR's thru an accountant. Is that correct? MR. KINTANAR A. Yes, your Honors. ATTY. ORTIZ Q. And may we know the name of the Accountant? MR. KINTANAR A. Your Honors, Mrs. Marina Mendoza. ATTY. ORTIZ Q. And is it safe to presume again, Mr. Witness, that in filing your joint ITR from 1997 or 1995, she has been assisting you in the filing of your joint ITR's? MR. KINTANAR A. In fact, we hired Mrs. Marina Mendoza in 1998. Hindi ko na matandaan, ang tagal na. Hindi ko na maalala, sa tagal na po talaga. ITSaHC xxx xxx xxx. Considering that the husband hired an accountant 26 to file the income tax returns, it is normal for a person like the accused to rely on her spouse that indeed the income tax returns were filed. In effect, accused did not deliberately fail to file her 2000 and 2001 ITRs. Although there may be negligence or inadvertence on the part of the accused, willfulness in the failure to file the returns is absent. Inadvertence has been said to constitute justification for failure to file a return. 27 No evidence was presented to show that the accused willfully failed to file the joint income tax returns What has been established by unrebutted evidence, consisting of the testimony of the Kintanar spouses, is that the accused did not actively participate in the filing of their joint 2000 and 2001 ITRs, having relied on her husband to do so. There is no showing that she willfully, deliberately or intentionally failed to file such returns with reasonable certainty. Based on the foregoing, the prosecution failed to prove the "willfulness" requirement. Consequently, the accused Gloria V. Kintanar, while civilly liable for deficiency income taxes, should be acquitted of the crime of willful failure to file her 2000 and 2001 ITRs due to reasonable doubt. AaEcDS Footnotes 1. Republic Act No. 8424 is the amending statute of the National Internal Revenue Code consisting of a total of only eight (8) Sections; and Section 3 thereof reproduces the entire provisions of the NIRC, as amended, where Section 255 is found. 2. Resolution, CTA Crim. Case No. O-034, Docket, p. 248. 3. Official Receipt No. 2904507, CTA Crim. Case No. O-033, Docket, p. 49; Official Receipt No. 2904508, CTA Crim. Case No. O-034, Docket, p. 203. 4. Resolution dated August 22, 2007, Docket, pp. 126-127. 5. Docket, p. 137. 6. Exhibits "A" to "RRR", Resolution dated June 4, 2008, CTA Crim. Case No. O-033, Docket, p. 955. 7. Ibid. 8. CTA Crim. Case No. O-033, Docket, pp. 1070-1074 (as admitted in the Resolution dated March 10, 2009). 9. CTA Crim. Case No. O-033, Docket, pp. 1096-1154. 10. Resolution dated May 15, 2009, CTA Crim. Case No. O-033, Docket, p. 1155. 11. Access Letter dated July 18, 2002, Exhibit "A", CTA Crim. Case No. O-033, Docket, p. 691. 12. Access Letter dated July 19, 2002, Exhibit "B", CTA Crim. Case No. O-033, Docket, p. 692. 13. Exhibit "E", CTA Crim. Case No. O-033, Docket, p. 695. 14. Exhibit "C", CTA Crim. Case No. O-033, Docket, p. 693. 15. Letter dated January 20, 2003, Exhibit "E", CTA Crim. Case No. O-033, Docket, p. 695. 16. Exhibits "F", "F-1" to "F-3", CTA Crim. Case No. O-033, Docket, pp. 696-698. 17. Exhibits "G" to "G-1". 18. Exhibits "H" to "H-1". 19. Exhibits "I" to "I-1". 20. Exhibits "K" to "K-4". 21. Exhibits "L" to "L-1". 22. Exhibits "M" to "M-7". 23. Exhibits "N" to "N-7". 24. Exhibit "O". 25. Exhibit "P". 26. Exhibits "Q" to "Q-5". 27. Paragraph 21 (b) and (c), Affidavit of Revenue Officer Simplicio V. Cabantac, Jr., CTA Crim. Case No. O-033, Docket, pp. 804-810, at p. 809. 28. Annual Income Tax Return for 2000, CTA Crim. Case No. O-033, Docket, pp. 1015-1016. 29. Annual Income Tax Return for 2001, CTA Crim. Case No. O-033, Docket, pp. 1017-1018. 30. Sec. 3 of Republic Act No. 8424 provides: "Sec. 3. Presidential Decree No. 1158, as amended by, among others, Presidential Decree No. 1994 and Executive Order No. 273, otherwise known as the National Internal Revenue Code, is hereby further amended to read as follows: . . . (citing the entire codal provisions of NIRC of 1997)". 31. CTA Crim. Case No. O-033, Docket, p. 152. 32. Ibid. 33. Exhibit "E", CTA Crim. Case No. O-033, Docket, p. 695. 34. Exhibit "X", CTA Crim. Case No. O-033, Docket, p. 799. 35. Exhibit "C", CTA Crim. Case No. O-033, Docket, p. 693. 36. Exhibit "W", CTA Crim. Case No. O-033, Docket, p. 793. 37. Exhibit "W-1", CTA Crim. Case No. O-033, Docket, p. 794. 38. Exhibit "W-2", CTA Crim. Case No. O-033, Docket, p. 795. 39. Exhibit "KKK", CTA Crim. Case No. O-033, Docket, p. 911. 40. CTA Crim. Case No. O-033, Docket, pp. 1015-1016. 41. CTA Crim. Case No. O-033, Docket, pp. 1017-1018. 42. Exhibits "13" and "14", CTA Crim. Case No. O-033, Docket, pp. 1021-1022. 43. Taxable year referred to in Exhibit "13", and as taxable year 2001 in Exhibit "14". 44. Black's Law Dictionary, 6th Edition, p. 1599. 45. Ibid. 46. 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) . 47. Exhibits "11" and "12". 48. United States vs. Go Chico, 14 Phil. 128 (1909) . 49. Ibid. , at p. 131 (also cited in Rosa Lim vs. People of the Philippines, G.R. No. 130038, September 18, 2000, En Banc) . 50. People vs. Barton, CA-G.R. No. 16671, December 12, 1975, cited in Vitug and Acosta, Tax Law and Jurisprudence, Second Edition, 2000, p. 185. 51. G.R. No. 157171, March 14, 2006. 52. An Act Creating the Court of Tax Appeals. 53. An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, As Amended, Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes. 54. Exhibit "M". 55. Exhibit "N". 56. Exhibit "N-1". 57. Exhibit "N-2". 58. Exhibit "N-3". 59. Exhibit "N-4". 60. Exhibit "N-5". 61. Exhibit "N-6". 62. Exhibit "N-7". 63. Exhibit "O". 64. Exhibit "P". 65. Exhibits "Q" to "Q-4". 66. Exhibit "Q-5". 67. Exhibits "N" to "N-7". 68. Exhibits "Q" to "Q-4". 69. Republic vs. Court of Appeals, G.R. No. L-38540, 30 April 1987, 149 SCRA 351, 357 . 70. Exhibit "Q-4", Docket, p. 736. 71. Total should have been P3,156,470.23. 72. Total should have been P3,147,518.78. 73. Act No. 4103 as amended by Act No. 4225. 74. Section 1 of Act No. 4103 as amended by Act No. 4225, otherwise known as the Indeterminate Sentence Law. 75. As the Final Decision on Disputed Assessment dated December 13, 2004 (Exhibit "Q") provides that the subject income tax assessments (inclusive of civil penalties, surcharges, and interests) for taxable years 2000 and 2001 shall be paid immediately upon receipt thereof (Exhibit "Q-2"), delinquency interest shall be counted from April 12, 2005 (Exhibit "Q-5"), the date the accused received the same. 76. Ibid. CASTAEDA, JR., J., concurring and dissenting opinion: 1. Protesting of Assessment. 2. Exhibits Q-Q5, Division Docket (C.T.A. Crim. No. O-033), pp. 732-736. 3. Rodolfo D. Pactolin vs. Sandiganbayan, et al. G.R. No. 161455, May 20, 2008, 554 SCRA 136, 145 citing Olivarez vs. Court of Appeals , G.R. No. 163866, July 29, 2005, 465 SCRA 482. 4. should be Section 255 of the 1997 NIRC, amended, which provides: "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 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 law 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) and suffer imprisonment of not less than one (1) year but not more than ten (10) years. xxx xxx xxx 5. Leonila Batulanon vs. People of the Philippines , G.R. No. 139857, September 15, 2006, 502 SCRA 35, 51 citing People vs. Caingat , 426 Phil. 782, 792; 376 SCRA 387, 396 (2002). 6. People of the Philippines vs. Anita Ayola, et al. , G.R. No. 138923, September 4, 2001, 364 SCRA 451, 460 citing People of the Philippines vs. Santos , 333 SCRA 319 (2000). 7. Mertens (Law of Federal Income Taxation) Chapter 47.05, page 28, Volume 13, see U.S. v. Green , 757 F2d 116, 85-1 USTC 9178 (CA7 1985), in which the Court, citing U.S. v. Moore , 627 F2d 830 (CA 1980) and U.S. v. Verkuilen , 690 F2d 648, 82-2 USTC 9618 (CA7 1982), upheld the conviction of a tax protester for willful failure to file returns. 8. G.R. Nos. 115008-09, July 24, 1996, 259 SCRA 191, 265-279. 9. People v. Quijada, ibid. , 269. 10. Ibid., 268-270. 11. Commissioner of Internal Revenue v. Tours Specialists, Inc ., G.R. No. 66416, 21 March 1990, 183 SCRA 402, 407; Ynson v. Court of Appeals , 327 Phil. 191, 207 (1996). See also CIR v. Ms. Juliane Baier-Nickel, G.R. 153793, August 29, 2006, 500 SCRA 87; 101 citing Transglobe International, Inc. v. Court of Appeals, 361 Phil. 727, 738; 302 SCRA 57, 68 (1999). 12. Commissioner of Internal Revenue v. Manila Machinery & Supply Company, G.R. No. L-25653, February 28, 1985, 135 SCRA 8, 14. 13. Griffiths vs. Commissioner of Internal Revenue , 50 F [2d] 782. 14. Frank A. Madas vs. Commissioner of Internal Revenue , 40 BTA 572. 15. Manalo vs. Roldan-Confesor, G.R. No. 102358, November 19, 1992, 215 SCRA 808, 819. 16. Ibid. , 819 (Citations omitted). 17. G.R. No. L-72443, January 29, 1988, 157 SCRA 648. 18. Commissioner of Internal Revenue vs. Air India, ibid. , 654-656. 19. G.R. No. 60714, October 4, 1991, 202 SCRA 450. 20. Commissioner of Internal Revenue vs. Japan Air Lines, Inc., ibid. , 458. 21. Balter, H.G., Fraud Under Federal Tax Law, Second Edition-1953, p. 394 citing U.S. v. Commerford, (CCA-2, 1933) 64 F. (2d) 28, 30, 1933 CCH 9255; Paschen v. U.S. , (CCA-7, 1934) 70 F. (2d) 491, 1934 CCH 9234; Tinkoff v. U.S. , (CCA-7, 1936) 86 F. (2d) 868, 37-1 USTC 9057; U.S. v. Rosenblum , (CA-7, 1949) 176 F. (2d) 321, 329, 49-1 USTC 9314. Gaunt v. U.S. (CA-1, 1950) 184 F. (2d) 284, 50-2 USTC 9412, cert. den. (1951) 95 L. Ed. 280, where the court held that while evidence of mere understatement of income, standing alone, is not proof of willfulness, such evidence may, however, support a conviction in the light of all the circumstances under which the understatement of income took place. 22. Supra , Note 6, citing People vs. Rondero , 320 SCRA 383 (1999). 23. Supra , Note 6. 24. TSN, June 4, 2008, pp. 13-16. 25. TSN, July 2, 2008, pp. 33-39. 26. Ibid. 27. 47B C.J.S. page 580, 1985 Edition, Footnote 1 as follows: U.S. v. Burton , C.A. Tex. 1984, 737 F.2d 439 U.S. v. Buras, C.A. Cal. 1980, 633 F.2d 1356 U.S. v. Wilson , C.A. Fla. 1977, 550 F.2d 259 U.S. v. McCorkle , C.A. III.1975, 511 F.2d 482, certiorari denied 96 S.Ct. 43, 423 U.S. 826, 46 L.Ed.2d 43 U.S. v. Rosenfield, C.A.Pa.1972, 469 F.2d 598, certiorari denied 93 S.Ct. 1899, 411 U.S. 932, 36 L.Ed.2d 391. Negligence Willfulness requires that failure be committed purposely with awareness of action, not just negligently or inadvertently. U.S. v. Merritt , C.A. Tex. 1981, 639 F.2d 254.