EN BANC
[G.R. No. 60787. March 27, 1990.]
KISCHINCHAND CHELLARAM (MANILA) INC., petitioner, vs. COURT OF TAX APPEALS, ET AL., respondents.
RESOLUTION
Gentlemen:
Quoted hereunder, for your information, is a resolution of the Court En Banc datedMarch 27, 1990:
This petition seeks to set aside the decision of the Court of Tax Appeals sustaining the tax assessments of respondent Collector of Internal Revenue involving deficiency income and advance sales taxes due from petitioner for the period from 1953 to 1957. Petitioner raises the following issues: cd
1. Whether or not the loss of the records of petitioner while they were in the possession of respondent Commissioner of Internal Revenue and/or his agents, resulting in the inability of petitioner to defend itself against what it considers unjust and erroneous assessments, constitutes deprivation of its constitutional right to due process sufficient to nullify the assessments in question; and
2. Whether or not the seizure of properties of petitioner by respondent and/or, his agents and the failure of respondent to account for said properties constitute taking of property without due process of law sufficient to invalidate the said assessments. (Rollo, p 5)
We find the petition devoid of merit, the basic or threshold issue being factual and there being insufficient showing that respondent court had committed any reversible error in the questioned judgment.
Settled is the rule that the factual findings of the Court of Tax Appeals are binding upon this Court and can only be disturbed on appeal if not supported by substantial evidence on appeal if not supported by substantial evidence (Aznar vs. Court of Tax Appeals, et al., 58 SCRA 519 [1974]; La Suerte Cigar and Cigarette Factory, et al. vs. Court of Tax Appeals, et al., 134 SCRA 29 [1985]; Sy Po vs. Court of Tax Appeals, et al., 164 SCRA 524 [1988]).
The claim of petitioner that the receipts or sales invoices are missing is not true. A review of the records of the Court of Tax Appeals discloses that the said receipts and sales invoices are not missing but are attached to Volume I, B.I.R. Record. Moreover, even assuming the truth of petitioner's allegation that the said invoices and receipts are missing, the same is not sufficient to overcome the presumption that the assessment is valid. Respondent commissioner has the power to make assessments based on the best evidence obtainable as provided in Section 16 (a) of the Tax Code, which reads:
"(a) Failure to submit required reports, statements, etc. — When a report required by law as a basis for the assessment of any national internal revenue tax shall not be forthcoming within the time fixed by law or regulation or when there is reason to believe that any such report is false, incomplete, or erroneous, the Commissioner of Internal Revenue shall assess the proper tax on the best evidence obtainable." casia
In the present case, the disputed assessments were arrived at by respondent commissioner on the basis of the seized books of accounts and other accounting records of petitioner and the report of investigation conducted by the Bureau of Internal Revenue, and not only from the alleged missing receipts and sales invoices. The burden of proof is on the taxpayer contesting the validity or correctness of an assessment to prove nor only that the Commissioner of internal Revenue is wrong but that the taxpayer is right (Tan Guan vs. Court of Tax Appeals, et al., 19 SCRA 903 [1967]), otherwise the presumption in favor of the correctness of the tax assessment stands (Interprovincial Autobus Co., Inc. vs. Collector of Internal Revenue, 98 Phil. 290 [1956]; Collector of Internal Revenue vs. Bohol Land Transportation Co., 107 Phil. 967 [1960]).
All presumptions are in favor of the correctness of tax assessments. The good faith of tax assessors and the validity of their actions are presumed. They will be presumed to have taken into consideration all the facts to which their attention was called. No presumption can be indulged that all of the public officials of the state in the various countries who have to do with the assessment of property for taxation will knowingly violate the duties imposed upon them by law. As a logical outgrowth of the presumption in favor of the validity of assessments, when such assessments are assailed, the burden of proof is upon the complaining party. It is incumbent upon the property owner clearly to show that the assessment was erroneous, in order to relieve himself from it (51 Am. Jur., pp. 620-621). In the case at bar, petitioner failed to discharge his onus probandi, hence the presumption in favor of the correctness of the tax assessments stands.
There is here no denial of due process nor was there a taking of property without due process of law. The seizure was executed pursuant to a valid search warrant issued on September 19, 1958 by the then City Court of Manila. Petitioner was granted ample opportunity to present evidence to prove that the assessment made by the Commissioner of Internal Revenue is erroneous. He was allowed to examine and sort out the seized books of accounts and other accounting records in the custody of respondent court. The decision of the Court of Tax Appeals is clear in this regard: cdt
"The records show that upon order of this Court as moved by petitioner, all the pertinent records and documents which were seized and in the possession of the Constabulary-Revenue-customs Service Group including those bearing on the instant case were forwarded and delivered to the custody of this Court under covering letter dated October 12, 1959 of the Executive Coordinator of the Service Group, and, together with the records of the Bureau of Internal Revenue pertinent to the case, were made available for petitioner's examination and scrutiny. . . ." (Rollo, p. 13)
WHEREFORE, the petitioner is DENIED and the decision of respondent Court of Tax Appeals is hereby AFFIRMED.
Very truly yours,
DANIEL T. MARTINEZClerk of Court
BY: LUZVIMINDA D. PUNOAssistant Clerk of Court