Petalver v. Commissioner of Internal Revenue

TWELFTH DIVISION [CA-G.R. SP No. 42886. March 29, 2001.] BRAULIO C. PETALVER , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N ENRIQUEZ , JR. , J p : This is a petition for review under Rule 48 of the 1997 Rules of Civil Procedure, wherein petitioner seeks to review the Decision dated September 2, 1996 of the Court of Tax Appeals, in C.T.A Case No. 5066, entitled "Braulio C. Petalver versus Commissioner of Internal Revenue", the dispositive portion of which reads, as follows: "WHEREFORE, in the light of all the foregoing, the Court finds the instant petition for review without merit and therefore DENIES the same Petitioner is hereby ORDERED to PAY the respondent the amounts of P33,000.00 representing penalties imposed under Sections 250 and 251 of the Ta x co de, and P307,839.27 deficiency income tax and VAT inclusive of surcharge, plus 20% interest from the date prescribed for payment until is fully paid pursuant to Section 249 of the same Code. SO ORDERED." Petitioner alleged that the Court of Tax Appeals committed reversible error in holding that he had tax liabilities for the year 1990 when the security agency which he owned and operated ceased operating since September 1, 1989. The facts, as culled from the records, are as follows: 1) Petitioner was the operator/proprietor of the defunct Mayon Private Detective and Watchman Agency (security agency) for brevity; 2) In 1991, petitioner's wife filed and paid, for and on his behalf, his Income Tax Return for the year 1990; 3) Based on the income and deductions declared in said income tax return, the Bureau of Internal Revenue (BIR) office in Valenzuela sent petitioner a Letter of Authority No. OAS 3704, dated May 7, 1993, requesting him to present his books of accounts and other documents needed in the examination of his return for the year 1990; 4) Instead of obliging with the BIR's request, petitioner informed the BIR that he had ceased operating his security agency since September 1, 1989, in accordance with the "Cease Operation" order dated 25 August 1989, from the Philippine Constabulary Supervisory Unit for Security and Investigation Agencies (PC-SUSIA); 5) Respondent however, was not convinced that petitioner's security agency indeed ceased its operation, hence, assessment notice and demand letters were sent to petitioner as follows: Assessment Demand No . Amount Due Year Covered 01-21 OJB 000075-90/93 P296,983.23 1990 Demand No. 14119 217,937.50 1990 Demand No. 0139 33,000.00 1990 6) Petitioner protested to the above-detailed assessment and demand letters and insisted that he had no tax liabilities for 1990, considering that he had ceased operations. 7) Petitioner's protest was denied by the BIR's Regional Director in a letter dated January 14, 1994. Aggrieved by said letter, petitioner brought the matter before the Court of Tax Appeals which rendered an adverse decision. Petitioner now elevates his case before Us seeking to reverse the decision rendered by the Court of Tax Appeals and declare petitioner to have no tax deficiencies for the year 1990, raising the following issues: "1) Whether or not petitioner's security agency had already ceased its operations effective September 1, 1989 as per order of PC-SUSIA; 2) Whether or not, despite its cessation of operations, the petitioner was still required to file an income tax return on the basis of a non-existent (defunct) security agency; 3) whether or not the presumption relied upon by the respondent referring to Section 44(g) of the T ax Co de, as amended by Executive Order No. 37, applies in the case to the income tax return filed by another in the name of the petitioner without his knowledge, consent and authority; 4) whether or not the respondent through her subordinate, Feny R. Yabao, had knowledge about the closure and cessation of business operations of the petitioner when they made such assessments against him; 5) whether or not the "best evidence available" rule applies in this case." The petition is without merit. We see no reason to disturb the factual findings of the Court of Tax Appeals. Well-settled in the rule that the findings of facts of a special court such as the Court of Tax Appeals exercising particular expertise on the subject of tax generally binds even the Supreme Court (Commissioner of Internal Revenue vs. Court of Appeals, 301 SCRA 152 ). Taxes are the lifeblood of the government and should be collected without unnecessary hindrance. (Commissioner of Internal Revenue vs. Algue Inc . , 158 SCRA 9) , and tax assessments by tax examiners are presumed correct and in good faith (Sy Po vs. Court of Appeals, 164 SCRA 524) . The taxpayer has the duty to prove otherwise. In the absence of proof of any irregularities in the performance of duties, an assessment duly made by a Bureau of Internal Revenue examiner and approved by the superior officers will not be disturbed (Commissioner of Internal Revenue vs. Wyeth Suaco Laboratories, Inc., et Al . , G . R . No . 76281, Sept . 30, 1991) . Petitioner contends that the business operation of his security agency has ceased upon the order of the PC-SUSIA in its letter dated 25 August 1989. His assertions, though, cannot prevail over the presumption of regularity in the performance of official duties. In fact, petitioner was given the chance to assail the correctness of the assessments, by asking him to submit his security agency's books of accounts. However, petitioner failed to oblige, instead, he insisted that he had no books of accounts to be submitted as his security agency had ceased operation since September 1989. This is untenable, the failure of a taxpayer to present his books of accounts for examination for the taxable year will compel the commissioner of Internal Revenue to resort to the power conferred upon him under Section 16 of the Tax Code (Sy Po vs. Court of Tax Appeals, supra) . Petitioner further insists that his wife was not authorized to make the entries in the income tax return filed for and on his behalf and thus, Section 44(g) of the Tax Code, as amended, which provides that a signed return is prima facie evidence that such return was actually signed by the taxpayer, does not apply to the present case ( Rollo, p. 7). We disagree. Records reveal that petitioner, when asked if he did file his income tax return in 1990, answered in the positive. In other words, petitioner would admit the existence of the return if it is favorable to him and deny the same when it works to his advantage. This is an indication on the part of the taxpayer of his intention to deprive the government of the taxes due. As pointed out by the Court of Tax Appeals: "The Court observes the immateriality of whether or not petitioner has authorized his wife to file his 1990 Income Tax Return. It is likewise not material whether or not he has authorized his wife to make entries in the said return. The Court believes that for Section 44(g) of the Tax Code to apply, it is sufficient that petitioner admits that it was his wife who filed his 1990 income tax return. The authority of the husband allowing his legal wife to make the entries therein is of no moment. No legal wife in her sane mind, will file an Income Tax Return which is not lawfully due to be filed, and much more to declare entries therein that will incriminate her husband. The return filed by petitioner's wife showed income realized and expenses incurred in 1990 from operating the security agency business of petitioner. Such return has complied substantially with law." We cannot, therefore, disturb the above findings of the Court of Tax Appeals, the same being supported by substantial evidence. WHEREFORE, in view of the foregoing, the petition for review is hereby DISMISSED for lack of merit. The Resolution dated December 11, 1996 and the Decision dated September 02, 1996 promulgated by the Court of Tax Appeals are hereby AFFIRMED. SO ORDERED. Reyes and Velasco, Jr . , JJ . , concur.