Cta 2d Co 00656 D 2019may29 Oth Wilfull Intent

Republic of the Philippines
COURT OF TAX APPEALS

Quezon City
SECOND DIVISION
PEOPLE OF THE CTA CRIM . CASE NO. 0 - 656

PHILIPPINES, For: Violation of Section 255 of the
Plaintiff, National Internal Revenue Code of
1997, as amended
-versus-
ANALIZA SAN MIGUEL

DAVID,
Accused.
x-------------------------x
PEOPLE OF THE CTA CRIM . CASE NO. 0 - 657
For: Violation of Section 254 of the
PHILIPPINES,
National Internal Revenue Code of
Plaintiff, 1997, as amended
-versus-
ANALIZA SAN MIGUEL

DAVID,
Accused.
x-------------------------x CTA CRIM . CASE NO. 0 - 658
PEOPLE OF THE For: Violation of Section 255 of the
PHILIPPINES, National Internal Revenue Code of
Plaintiff, 1997, as amended
-versus- Members:
CASTANEDA, JR., Chairperson,
and
ANALIZA SAN MIGUEL MINDARO-GRULLA, JJ.
DAVID,
Accused. Promulgated :
Jl
~ l" ? 9 ?0,9 ~
x--------------------------------- ~~}~~~g ____________ ------x
DECISION
MINDARO- GRULLA, J.:
SL!bmitted for decision on March 27, 2019 are the

three (3) above -entitled consolidated cases.
People of the Philippines vs. Analiza San Miguel David
CTA Crim. Case Nos. 0-656 to 0-658
DECISION Page 2 of 25
Accused Analiza San Miguel David is charged before

this Court with the crimes of Violation of Sections 254 and
255 of the National Internal Revenue Code of 1997, as
amended, under the following Informations, which read as
follows:
Criminal Case No. 0-656 (Violation of Section

255 of the NIRC of 1997, as amended)-
"That sometime in April 2012 or until the

scheduled deadline for the filing of the annual Income
Tax Return (ITR) in Magalang Pampanga, and within the
jurisdiction of this Honorable Court, the above-named
accused Analiza San Miguel David, did, then and there,
willfully and unlawfully fail to file her income tax return
on the income she earned for taxable year 2011 and to
pay the corresponding income tax for said year in the
amount of TWENTY NINE MILLION EIGHT HUNDRED
FORTY ONE THOUSAND NINE HUNDRED SIXTY SIX
PESOS (P29,841,966.00), exclusive of surcharges and
interest, to the damage and prejudice of the
government.'
CONTRARY TO LAW. "1

254 of the NIRC of 1997, as amended) -

scheduled deadline for the filing of the annual Income
Tax Return (ITR), in Magalang, Pampanga, and within
the jurisdiction of this Honorable Court, the above-
named accused Analiza San Miguel David, did, then and
there, willfully and unlawfully attempt to evade or
defeat tax by not declaring all the income she earned in
her tax return for taxable year 2010, which resulted
in her income tax deficiency in the amount of TWO
MILLION ONE HUNDRED EIGHTY TWO THOUSAND
THREE HUNDRED SEVENTY THREE PESOS
(P2,182,373.00), exclusive of surcharges and interest,
to the damage and prejudice of the government.'
CONTRARY TO LAW. ''2
1 CTA Crim. Case No. 0-656, Docket, pp. 6-7.

2
CTA Crim. Case No. 0-657, Docket, pp. 6-7.
L

255 of the NIRC of 1997, as amended) -

scheduled deadline for the filing of the Annual Income
Tax Return (ITR), in Magalang, Pampanga, and within
the jurisdiction of this Honorable Court, the above-
named accused Analiza San Miguel David, a registered
taxpayer required to file return and pay income tax did,
then and there willfully and unlawfully fail to file her
income tax return on the income she earned for taxable
year 2012 and to pay the corresponding income tax for
said year in the amount of FOUR MILLION EIGHTY
THREE THOUSAND THREE HUNDRED EIGHTY THREE
60/100 PESOS (P4,083,383.60), exclusive of surcharges
and interest, to the damage and prejudice of the
government.'
CONTRARY TO LAW. II]
Accused Analiza San Miguel David voluntarily

appeared before the Regional Trial Court ("RTC") Office of
the Executive Judge, Angeles City and submitted herself
to the jurisdiction of the Court by posting a cash bond for
her provisional liberty. 4
The three (3) cases were ordered consolidated in the

Resolution dated April 3, 2018. 5
Upon arraignment6 , the accused Analiza San Miguel

David, whose identity was confirmed to be the same
person charged in the informations and assisted by
defense counsel, Atty. Kristine Keith N. Colle, entered a
plea of "Not Guilty" to all charges.
The Preliminary Conference 7 and Pre-trial 8 were

held on May 28, 2018 and June 21, 2018, respectively.
3
4
CTA Crim. Case No. 0-656, Docket, pp. 78-97; CTA Crim. Case No. 0-657,
Docket, pp. 70-92.
5
6 Ibid. pp. 120-123.
7 Ibid. pp. 124-133.
8
Ibid. p. 145.
L
After the termination of the pre-trial, the case was set for
the presentation of the parties' respective evidence.
Trial proceeded during which the prosecution

presented four (4) witnesses, namely:
1. Ms. Lalaine S. Flores,
2. Ms. Melba B. Tayag,
3. Mr. Raul Q. Magtagnob, and
4. Mr. Fortunato B. Tagle.
Ms. Lalaine S. Flores, an Administrative Assistant V

assigned at the Collection Section of RDO 21A- North
Pampanga, testified that Group Supervisor Raul Q.
Magtagnob requested for the details about the filing and
payment of annual income tax of Analiza San Miguel
David for taxable years 2011 and 2012. Ms. Lalaine S.
Flores testified that Arlene A. Tayag, Administrative
Assistant III Collection Section of RDO 21A- North
Pampanga prepared and signed a Certification that
Analiza San Miguel David with TIN: 260-569-997 has not
filed her Annual Income Tax Return for taxable years
2011 and 2012; that it was verified through the
Integrated Tax System that Analiza San Miguel David did
not pay her Annual Income Tax Return for taxable years
2011 and 2012; and that Ms. Lalaine S. Flores signed the
Certification which was forwarded to former RDO Corazon
R. Balinas.
Ms. Melba B. Tayag, Revenue Officer I at Client

Support Section of RDO 21A- North Pampanga, testified
that Group Supervisor Raul Q. Magtagnob requested for
the registration details of Analiza San Miguel David; that
after checking the records she prepared and signed the
Certification dated May 13, 2016 containing the details
about the registration details of Analiza San Miguel David;
that said Certification was noted and signed by Elaine D.
Cruz, Chief of Client Support Section of RDO 21; and that
the said Certification was likewise signed by RDO Renata J.
Mina.
Mr. Raul Q. Magtagnob, Chief Revenue Officer II at

the National Investigation Division, testified that a Letter
L
People of the Philippines vs. Analiza San. Miguel David
of Authority was issued against Analiza San Miguel David,

a registered taxpayer and proprietor of 136 Dolores
Filling Station, and he was one of those authorized to
examine the tax compliance of Analiza San Miguel David
for the period January 1, 2010 to December 31, 2012;
that he was able to secure a copy of Analiza David's 2010
Financial Statements; that Certification from PTT was
secured covering the PTT's sales for 2010 to 2012 to 136
Dolores Filling Station and 364 Refilling Station; that
after several notices and a subpoena duces tecum issued
against Analiza David, she failed to appear and submit her
book of accounts; that a joint-complaint affidavit was filed
against Analiza David with approval of former
Commissioner of Internal Revenue Kim Henares; that the
filing of the criminal complaint was based on the
underdeclaration of sales for 2010 in the amount of
Php6,858,254.00 and a certification of for non-filing of
annual income tax return for 2011 and 2012.
Mr. Fortunato B. Tagle, Special Investigator II at

the National Investigation Division, testified that a Letter
of Authority was issued against Analiza San Miguel David
and he was one of those authorized to examine the tax
compliance of Analiza San Miguel David for the period
January 1, 2010 to December 31, 2012; that after several
notices and a subpoena duces tecum issued against
Analiza David, she failed to appear and submit her book of
accounts; that a joint-complaint affidavit was filed against
Analiza David with approval of former Commissioner of
Internal Revenue Kim Henares; that they were able to
secure a Certification from PTT Philippines Corp. of the
amount of fuel which were delivered for sale to 136
Dolores Fuel Filling Station from which the
underdeclaration of sales in the amount of
Php6,858,254.00 for 2010 was made and a certification
for non-filing of annual income tax return for 2011 and
2012.
The prosecution, after the formal offer of its

documentary exhibits and their admissions, formally
rested its case. The documentary exhibits are as follows:
Exhibits Description
P-1 Letter-referral addressed to Secretary of

Justice from former BIR Commissioner Kim S.
Jacinto-Henares consisting of two (2) pages.
P-2 Joint Complaint-Affidavit executed on June

02, 2016 by Revenue Officers Fortunato B.
Tagle, Vicente J. Velario, Marcial M. Padilla
and Raul Q. Magtagnob consisting of six (6)
pages.
P-3 Audited Financial Statements filed by Analiza

S. David as proprietor of 136 Dolores Fuel
Filling Station filed with the BIR for taxable
year 2010 consisting of seven (7) pages.
P-4 Certification issued by Revenue District Office

No. 21A-North Pampanga on May 13, 2016.
P-5 Letter of Authority SN:eLA201100060752;

LOA-211-2013-00000194 dated October 09,
2013 with its attached List of Requirements.
P-5-a List of Requirements dated October 18, 2013.
P-6 Second Notice
P-7 Final Notice
P-8 Subpoena Duces Tecum SDT No. RR4-D-

2014-090 issued on September 23, 2014.
P-9 Certification issued by Revenue District Office

No. 21A-North Pampanga on May 30, 2016.
P-10 Certification from PTT Philippines Corporation

dated September 16, 2014.
P-11 Judicial Affidavit of Lalaine S. Flores.
In defense, accused through counsel, presented

three (3) witnesses, namely:
1. Mr. Larry Aquino,
2. Analiza San Miguel David, and
3. Diosdado P. San Miguel.
L
Mr. Larry Aquino, Barangay Captain in Barangay

Dolores, Magalang, Pampanga from October 2007 to June
2013, testified and identified the Certification issued by
the Office of the Punong Barangay on February 19, 2013
stating that 136 Fuel Filling Station operated by Analiza S.
David is not existing since December 31, 2011; that a
new owner in the name of Diosdado P. San Miguel applied
for a barangay permit of 364 Refilling Station.
Accused Analiza San Miguel David testified that

she came to know that she did not file her annual Income
Tax Return (ITR) for 2011 and 2012 only when she got
hold of the documents pertaining to the case; that she
thought that her external bookkeeper had filed the ITR
considering that she is paying her taxes monthly as
evidenced by the Quarterly VAT Returns, Monthly VAT
Returns and official receipts from the BIR; that she
stopped her business 136 Fuel Filling Station in the end of
2011; that her brother Diosdado San Miguel took over
under the business name of 364 Refilling Station in 2018;
and that there were deliveries for the first three months of
2018 under 136 Fuel Filling Station although said
deliveries are on account of 364 Refilling Station; and that
she paid the correct taxes for 2010 as evidenced by the
Monthly VAT Declarations, Quarterly VAT Declarations,
Revenue Official Receipts; Quarterly Income Tax Returns
and Annual Income Tax Returns for 2010.
The defense, after the formal offer of its

documentary exhibits and their admissions, formally
rested its case. The documentary exhibits are as follows:
Exhibits Description
A-1 Certificate of Registration Three Six Four Fuel

Refilling Station.
A-2 Certification from the Office of the Punong

Barangay of Dolores Magalang Pampanga dated
19 February 2013
A-3 Affidavit of Closure dated 11 March 2013.
A-4 Monthly Value Added Tax Declaration for Jan

2010 bearing an amount of P1,988.57.
A-5 Revenue Official Receipt No. 03134130.
A-6 Monthly Value Added Tax Declaration for Feb

2010 with total amount payable of P2,067.89.
A-8 Quarterly Value Added Tax Return for Period 01-

31-10 to 03-31-10 with total amount payable of
P1,846.35.
A-10 Monthly Value Added Tax Declaration for April

A-ll Revenue Official Receipt No. 03955896.
A-12 Monthly Value Added Tax Declaration for May


P2,632.15.
A-16 Monthly Value Added Tax Declaration for July

A-18 Monthly Value Added Tax Declaration for August


P4,561.45.
A-22 Monthly Value Added Tax Declaration for October

L
A-24 Monthly Value Added Tax Declaration for

November 2010 with total amount payable of
P6,328.95.

P6,343.66.
A-28 Quarterly Income Tax Return for First Quarter of

2010 with total amount payable of P854.00.
A-30 Quarterly Income Tax Return for Second Quarter

of 2010 with total amount payable of P2,237.00.
A-32 Quarterly Income Tax Return for Third Quarter of

A-34 Annual Income Tax Return for year 2010 with

total amount payable of P16,154.00.
A-36 Monthly Value Added Tax Declaration for January


February 2011 with total amount payable of
P4,166.75.
A-40 Quarterly Value Added Tax Return for Period

January 31, 2011 to March 31, 2011 with total
amount payable of P1,286.40.
A-42 Monthly Value Added Tax Declaration for April

A-44 Monthly Value Added Tax Declaration for May


April 30, 2011 to June 30, 2011 with total
A-48 Monthly Value Added Tax Declaration for July

A-50 Monthly Value Added Tax Declaration for August

A-52 Quarterly Value Added Tax Return for Period July

31, 2011 to September 30, 2011 with total
amount payable of P5, 184.75.
A-54 Monthly Value Added Tax Declaration for October


November 2011 with total amount payable of
P4,910.75.

October January 31, 2011 to December 31, 2011
with total amount payable of P5,112.30.
A-60 Quarterly Income Tax Return for First Quarter of

2011 with total amount payable of P965.00.
A-62 Quarterly Income Tax Return for Second Quarter

of 2011 with total amount payable of P3,431.62.
A-64 Quarterly Income Tax Return for Third Quarter of

2011 with total amount payable of P6, 402.07.
A-66 Monthly Value Added Tax Declaration for January

2012 with total amount payable of P1,866. 75.

February 2012 with total amount payable of
P3,598.54.

January 31, 2012 to March 31, 2012 with total
A-73 Monthly Value Added Tax Declaration of

Diosdado San Miguel for April 2012 bearing the
amount of P15,837.43.

Diosdado San Miguel for May 2012 bearing the

Diosdado San Miguel for July 2012 bearing the

Diosdado San Miguel for August 2012 bearing
the amount of P6,256.25.
A-79 Quarterly Value Added Tax Return of Diosdado P.

San Miguel for the Third Quarter of 2012 bearing

Diosdado San Miguel for October 2012 bearing
the amount of P12,823. 77.

Diosdado San Miguel for November 2012 bearing
A-83 Quarterly Value Added Tax Return of Diosdado P.

San Miguel for the Fourth Quarter of 2012
bearing the amount of P19,782.50.
A-84 Quarterly Income Tax Return of Diosdado P. San

Miguel for First Quarter of 2012 bearing an

Miguel for Second Quarter of 2012 bearing an

Miguel for Third Quarter of 2012 bearing an
A-87 Annual Income Tax Return of Diosdado P. San

Miguel for First Quarter of 2012.
A-89 Certification dated June 29, 2018.
A-90 DTI Certificate of Registration of Three Six Four

Fuel Refilling Station under the name of Diosdado
Pangilinan San Miguel
A-92 Mayor's Permit dated January 26, 2018 issued to

Three Six Fuel Refilling Station.
A-93 Judicial Affidavit of Analiza San Miguel David.
A-95 Judicial Affidavit of Diosdado San Miguel.
Thereafter, both prosecution and defense were

ordered 9 to file their simultaneous memoranda within
thirty (30) days from notice. In compliance, the accused
filed her Memorandum on March 7, 2019. Thus, as per
Resolution dated March 27, 2019, 10 considering the report
by the Records Division that no memorandum has been
filed for the prosecution, the case was deemed submitted
for decision.
9 CTA Case No. 0-656 Docket, Vol. II, pp.585-586.

10 Ibid. p. 616.
!..
This Court is confronted with these issues:
"1. Whether or not the accused attempted to

evade or defeat payment of income tax by not
declaring all her income for taxable year 2010,
2. Whether or not the accused intentionally

failed to file her annual income tax return and pay
the corresponding taxes due for taxable years 2011
and 2012,
3. Whether or not accused is innocent of the

charges filed against her, and
4. Whether or not accused has willful intention

to defraud the government. "11
In sum, the main issue is whether accused is guilty

beyond reasonable doubt of the crimes as charged.
Accused, in her memorandum argues that the

prosecution failed to prove that there was willfulness or
deliberate intent on the part of the accused to evade or
defeat the payment of income taxes. Accused argues that
if there was deliberate intent to evade taxes, she would
have likewise omitted to file the monthly returns and
quarterly VAT returns for taxable year 2010; that the
prosecution failed to prove that the accused under-
declared her income; and that the accused did not
intentionally fail to file her annual income tax return for
2011 and 2012 on the ground that the certification from
PTT is not authenticated and 136 Dolores Filling Station
closed operation on December 31, 2011;
We resolve.
11
CTA Case No. 0-656 Docket, Vol. II, pp.585-586.
Criminal Case No. 0-657

For: Violation of Section 254 of
the National Internal Revenue
Code of 1997, as amended
Accused Analiza San Miguel David was charged with

attempt to evade or defeat the payment of income tax for
taxable year 2010, under Section 254 of the NIRC of 1997,
as amended, docketed as Crim. Case No. 0-657.
Section 254 of the NIRC of 1997, as amended,

provides:
"Sec. 254. Attempt to Evade or Defeat Tax. -Any person

who willfully attempts in any manner to evade or defeat
any tax imposed under this Code or the payment
thereof shall, in addition to other penalties provided by
law, upon conviction thereof, be punished by a fine of
not less than Thirty thousand ([Php]30,000) but not
more than One hundred thousand pesos ([Php]100,000)
and suffer imprisonment of not less than two (2) years
but not more than four (4) years: Provided, That the
conviction or acquittal obtained under this Section shall
not be a bar to the filing of a civil suit for the collection
of taxes."
To sustain a conviction for attempt to evade or

defeat tax under Section 254 of the NIRC of 1997, as
amended, the following elements must be established:
1) An attempt in any manner to evade or defeat

any tax imposed under the NIRC or the payment
thereof; and
2) Such attempt to evade or defeat tax or the
payment thereof is willful.
In Commissioner of Internal Revenue v. The Estate

of Benigno P. Toda, Jr., 12 the Supreme Court held that tax
evasion connotes the integration of three (3) factors:
12 G.R. No. 147188, September 14, 2004.
L
1. The end to be achieved, i.e., the payment

of less than that known by the taxpayer to
be legally due, or the non-payment of tax
when it is shown that a tax is due;
2. An accompanying state of mind which is

described as being "evil", in "bad faith",
"willful", or "deliberate and not accidental";
and
3. A course of action or failure of action which

is unlawful.
It is necessary for plaintiff to prove beyond

reasonable doubt that (1) there was non-declaration and
non-payment of income tax legally due from the accused
and (2) there was "willfulness" or deliberate intent on the
part of accused to evade or defeat the payment of income
taxes. The second element under Section 254 of the NIRC
of 1997, as amended, is dependent on the first element,
that is, the taxpayer did not pay the tax due. In other
words, there can be no willful failure to evade tax, if there
is in fact no requirement to pay the same. Thus, to prove
the elements of the offense under Section 254 of the
NIRC of 1997, as amended, the prosecution is burdened
to establish the following:
1. Offender is required to pay the tax imposed

under the NIRC;
2. Offender attempts in any manner to evade

or defeat any tax imposed, or the payment
thereof; and
3. The attempt to evade or defeat any tax

imposed, or the payment thereof was willful;
In this case, it is essential for plaintiff to prove -

(1) that accused is a registered taxpayer in the
Philippines;
(2) that for taxable year 2010, the accused is

required to pay income tax and did not pay the tax due or
paid the income tax less than that is ought to be due; and
(3) that the non-payment or payment of less than
that is ought to be due was willful.
As to the first element, plaintiff was able to establish

that accused Analiza San Miguel David is a registered
taxpayer of Revenue District Office No. 21A- North
Pampanga with Tax Identification No. 260-569-997-000
and that she is the proprietor of 136 Dolores Fuel Filling
Station. 13
As to the second element, plaintiff failed to establish

that for taxable year 2010, the accused is required to pay
income tax and did not pay the tax due or paid the
income tax less than that is ought to be due.
It is an established fact that for taxable year 2010,

accused Analiza San Miguel David filed her Income Tax
Return and paid the tax due therein, thus, the question is
whether the amount of income tax paid by accused is less
than what is due. Plaintiff's sole documentary evidence
to prove the attempt to evade or defeat the payment of
income tax for taxable year 2010 is Exhibit "P-10", a
Certification from PTT Philippines Corporation (PTT) dated
September 16, 2014, which states the sales of PTT to 136
Dolores Fuel Filling Station for 2010. Plaintiff contends
that there was underdeclaration of purchases which
resulted to the underdeclaration of sales, underdeclaration
of income and finally underdeclaration of tax due.
However, a finding of underdeclaration of

purchases does not in itself result in the imposition of
income tax and VAT. 14 Indeed, there are three (3)
elements for the imposition of income tax. First, there
must be gain or profit. Second, the gain or profit is
realized or received, actually or constructively. And third,
it is not exempted by law or treaty from income tax.
13 Exhibit "P-4".
14
CTA EB No. 1054 (CTA Case No. 8345), January 13, 2015.
Income tax is based on income received from any

property, activity or service. 15 Income must be proven,
and such income should have been earned, received or
realized by the taxpayer. A conclusion that an
underdeclaration of purchases will automatically result to
underdeclaration of tax is presumptive in nature and
required further collaborating evidence to prove the
underdeclaration of sales. Here, plaintiff failed to prove
that such underdeclaration of purchases resulted to
underdeclaration of income tax. There is no evidence or
testimony submitted to show that income resulted from
the unaccounted purchases and that income was actually
received by 136 Dolores Fuel Filling Station for 2010.
Accordingly, mere reliance on the fact that there is

underdeclared purchase is not enough basis for the Court
to conclude a fact that there were underdeclared sales
and underdeclared net income resulting to underdeclared
income tax.
As to the third element, plaintiff likewise failed to

establish that the attempt to evade or defeat any tax
imposed, or the payment thereof was willful. To reiterate,
underdeclaration of purchases does not automatically
result to underdeclaration of tax. Plaintiff failed to
present evidence to prove and connect that the
underdeclaration of purchases is part of a scheme to
under declare sales to reduce net income and income tax.
There is not enough basis to conclude beyond reasonable
doubt that there is willful failure to evade tax.
It is important to note that for income tax purposes,

a taxpayer is free to deduct from its gross income a lesser
amount, or not to claim any deduction at all. What is
prohibited by the income tax law is to claim a deduction
beyond the amount authorized therein. 16 Likewise, there
is not enough basis to conclude beyond reasonable doubt
that accused willfully underdeclared the sales for 2010.
15 Commissioner of Internal Revenue v. Court of Appeals, G.R. No. 108576,

January 20, 1999.
16 Commissioner of Internal Revenue vs. Phoenix Assurance Co. Ltd., G.R. No. L-
19727, May 20, 1965.

Criminal Case No. 0-656 and

Criminal Case No. 0-658
For: Violation of Section 255 of
the National Internal Revenue
Code of 1997, as amended
Accused Analiza San Miguel David was likewise

charged with failure to file her Income Tax Returns (ITRs)
for taxable years 2011 and 2012 in violation of the first
paragraph of Section 255 of the NIRC of 1997, as
amended, docketed as Crim. Case No. 0-656 and Crim.
Case No. 0-658.
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)
To sustain a conviction for failure to make or file a

return under Section 255 of the NIRC of 1997, as
amended, the following elements must be established:
1. Accused is a person required by the NIRC

or rules and regulations to make or file a
return;
2. Accused failed to make or file the return at

the time or times required by law or rules
and regulations; and
3. The failure to make or file the return was

willful.
As to the first element, is the accused required to file

a return? Thus, it is necessary to determine who are those
required to file an income tax return. Sections Sl(A) and
74 of the NIRC of 1997, as amended, provide:
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;
(b) Every Filipino citizen residing outside the

Philippines, on his income from sources within the
Philippines;
(c) Every alien residing in the Philippines, on

income derived from sources within the Philippines; and
(d) Every nonresident alien engaged in trade or

business or in the exercise of profession in the
Philippines.
(2) The following individuals shall not be required

to .71e an income tax return:
(a) An individual whose gross income does not

exceed his total personal and additional exemptions for
dependents under Section 35: Provided That a citizen
of the Philippines and any alien individual
engaged in business or practice of profession
within the Philippines shall file an income tax
return, regardless of the amount of gross income;
XXX XXX XXX.
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
f_
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 supplied)
In relation thereto, Section 32(A)(2) of the NIRC of

1997, as amended, defines what gross income is, to wit:
SEC. 32. Gross Income. -
(A) General Definition. - Except when otherwise

provided in this Title, gross income means all
income derived from whatever source, including
(but not limited to) the following items:
XXX XXX XXX.
(2) Gross income derived from the conduct of

trade or business or the exercise of a profession;
(Emphasis supplied)
In this case, plaintiff was able to establish that the

accused Analiza San Miguel David is a registered taxpayer
of Revenue District Office No. 21A- North Pampanga with
Tax Identification No. 260-569-997-000 and that she is
the proprietor of 136 Dolores Fuel Filling Station. 17 The
accused admitted in her testimony 18 that she operated
136 Dolores Fuel Filling Station since 2008. The accused
17 Exhibit "P-4"
18 Exhibit "A-93"
likewise confirmed that there were sales in 2011 and 2012

whereby monthly VAT declarations and quarterly VAT
Returns were filed with official receipts from the BIR 19 •
Based on these pieces of evidence, the Court is

convinced that 136 Dolores Fuel Filling Station received
income payments for taxable years 2011 and 2012 from
conducting business. Accordingly, accused, as the sole
proprietor of 136 Dolores Fuel Filling Station is required
by law to file ITRs for taxable years 2011 and 2012. After
establishing that the accused is required by law to file
ITRs for 2011 and 2012, the prosecution now has the
burden to prove that the accused failed to make or file a
return at the time required by law.
As to the second element, plaintiff was able to

establish through the Certification 20 that accused Analiza
San Miguel David did not file her Income Tax Returns for
taxable years 2011 and 2012. Moreover, the accused
admitted in her testimony that she failed to file her ITRs
for 2011 and 2012 21 but in her defense claimed she came
to know that she was not able to file the ITRs only in 2017,
when she received the records of the case. She claimed
she thought that her external bookkeeper has submitted
the ITR for 2011 considering that she was paying tax
monthly and quarterly. Likewise, accused thought that
she does not need to file her ITR for 2012 considering
that 136 Dolores Fuel Filling Station stopped operation in
December of 2011. Hence, the Court finds that despite
having sales and filing the monthly VAT declarations and
quarterly VAT Returns and paying the VAT payable therein,
the accused, nevertheless, still failed to file an ITR for
taxable years 2011 and 2012.
As to the third element, it requires that the failure to

make or file the return was willful. The term "willful" in
tax crime statutes means a voluntary, intentional violation
of a known legal duty and bad faith or bad purpose need
19 Exhibits "A-36- to A-70"

20 Exhibit "P-9"
21 Exhibit "A-93"
not be shown. 22 According to Black's Law Dictionary 23 , 21

the term "willful" is defined as:
"An act or omission is 'willfully' done, if done

voluntarily and intentionally and with the specific intent
to do something the Jaw forbids, or with the specific
intent to fail to do something the Jaw requires to be
done; that is to say, with bad purpose to either to
disobey or to disregard the Jaw. xxx.
A willful act may be described as one done

intentionally, knowingly, and purposely, without
justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly, or inadvertently. A
willful act differs essentially from a negligent act. The
one is positive and the other negative.
Act is 'wi/lful' within meaning of section (sic) 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."
As to how willfulness is proven, the CTA in People v.

Bienvenido 5. Dimson 24 , explained:
"xxx "willfulness" is a state of mind that

may be inferred from the circumstances of the
case, and proof of willfulness may be, and
usually is, shown by circumstantial evidence
alone, xxx. (Citations omitted and underscoring
supplied)
Consequently, a Certification 25 alone that the

accused Analiza San Miguel David did not file her Income
Tax Returns for taxable years 2011 and 2012 is not
enough to prove that the failure to file the ITR is willful,
22
Mertens (Law of Federal Income Taxation) Chapter 47.05, p. 28, Vol. 13 cited
in People of the Philippines vs. Estel ita Delos Angeles, CTA Crim. Case No. 0-027,
November 25, 2009.
23
6th Edition, St. Paul Minn. West Publishing Co., 1990, p. 1599.
24
CTA Crim. Case Nos. 0-071 and 0-085, July 2, 2014.
25
Exhibit "P-9"
L
since the prosecution is burdened to establish by other

evidence the positive act or state of mind that lead to the
non-filing of ITR was willful. 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. 26
Incidentally, while this Court frown upon the bare

allegation and self-serving statements that the failure to
file the ITR is because of the entrusting of the same to a
bookkeeper or accountant, for the duty and obligation to
file tile ITR is incumbent and remains with the taxpayer,
it is a well-entrenched rule in jurisprudence that the
conviction of the accused must rest, not on the weakness
of the defense, but on the strength of the prosecution.
The bu,..den is on the prosecution to prove guilt beyond
reasonable doubt, not on the accused to prove her
innocence. 27
Applying the same to the instant case, the willful

failure to file an ITR was not fully established by the
prosecution. Perusal of the evidence of the prosecution as
well as the cross examination of the accused by the
prosecution reveals the lack of evidence and the failure to
elicit tec;timonies to prove a positive act or state of mind
of the accused that the non-filing was willful. A
certification 28 that a taxpayer did not file her ITR in itself
is not enough to prove that the failure to file the ITR is
willful.
Moreover, records show that accused was consistent

in filing the monthly VAT declarations and Quarterly VAT
Returns and paying the VAT payable due therein 29 • The
consistent compliance in filing and paying the VAT for
2011 negates the alleged willfulness in not filing of ITR for
2011. Moreover, as for the non-filing of ITR for 2012,
accused was able to present evidence that she stopped
26 People of the Philippines vs. Gloria Kintanar, CTA CRIM Case Nos. 0-033 & 0-
034, August 26, 2009.
27
Boac, et al. vs. People of the Philippines, G.R. No. 180597, November 7, 2008,
570 SCRA 533
28 Exhibit "P-9"
29 Exhibits "A-4" to "A-65"
operating the 136 Dolores Fuel Filling Station in December

of 2011. There was likewise no evidence presented by
the prosecution which would indicate that the accused
was previously delinquent in filing her ITR for the previous
years which may hint that the accused might have been
aware that the non-filing of the ITR for 2011 was highly
probable, and that she continuously refused the
compliance with her tax obligations.
Thus, the Court finds that the prosecution was not

able to prove beyond reasonable doubt that the accused
willfully failed to file her ITRs for taxable years 2011 and
2012. Consequently, lacking the element of "willfulness",
the Court acquits the accused of the crime of willful failure
to file ITRs for 2011 and 2012 under Section 255 of the
NIRC of 1997, as amended.
As to the civil aspect of these consolidated cases, the

same is deemed simultaneously instituted and jointly
determined with the instant criminal cases pursuant to
Section 7(b)(1) of Republic Act (RA) No. 1125 30 , as
amendP.d by RA No. 9282, which provides that "the filing
of a 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."
In Ungab v. Cusi 31 , the Supreme Court held that

"there is no requirement for the precise computation and
assessment of the tax before there can be a criminal
prosecution under the Code." Thus, while an assessment
is not required in the prosecution of the criminal cases,
the final determination of the Commissioner as to the tax
liability is necessary in order for the Court to rule on the
civil liability. 32
However, no assessment notices were presented to

prove the assessment of deficiency income tax against
30
An Act C:·eating the Court of Tax Appeals
31
G.R. No. L-41919, May 30, 1980.
32
People v. Dr. Vicente Gana Castillo and Dr. Ma. Teresa Chan Castillo, CTA Crim.
Case No. 0-219, October 7, 2013.
accused Analiza San Miguel David, therefore, there is no

basis for the Court to rule upon the civil liability of the
accused.
WHEREFORE, premises considered, accused

Analiza San Miguel David is ACQUITTED in CTA
Criminal Case Nos. 0-656, 0-657, and 0-658 for
failure of the prosecution to prove her guilt beyond
reasonable doubt. Accordingly, for insufficiency of
evidence, no civil liability is herein imposed.
SO ORDERED.
~N.M~-6~
CIELITO N. MINDARO-GRULLA
Associate Justice
I CONCUR:
Q..,a..-.M.t;: C · ~OlA I Q. .
.1liANITO C. CASTANED)f,JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were

reached in consultation before the cases were assigned to the writer
of the opinion of the Court's Division.
Sh.t~~ c.~~.Q.
J'tJANITO C. CASTANEo'.lf,jR,
Associate Justice
2nd Division Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and

the Division Chairperson's Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation
before the cases were assigned to the writer f the ·nion of the
Court's Division.
Presiding Justice

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Republic of the Philippines

COURT OF TAX APPEALS

PEOPLE OF THE CTA CRIM . CASE NO. 0 - 656

ANALIZA SAN MIGUEL

ANALIZA SAN MIGUEL

MINDARO- GRULLA, J.:

SL!bmitted for decision on March 27, 2019 are the

Accused Analiza San Miguel David is charged before

Criminal Case No. 0-656 (Violation of Section

"That sometime in April 2012 or until the

CONTRARY TO LAW. "1

Criminal Case No. 0-657 (Violation of Section

"That sometime in April 2011 or until the

CONTRARY TO LAW. ''2

1 CTA Crim. Case No. 0-656, Docket, pp. 6-7.

Criminal Case No. 0-658 (Violation of Section

"That sometime in April 2013 or until the

CONTRARY TO LAW. II]

Accused Analiza San Miguel David voluntarily

The three (3) cases were ordered consolidated in the

Upon arraignment6 , the accused Analiza San Miguel

The Preliminary Conference 7 and Pre-trial 8 were

Trial proceeded during which the prosecution

Ms. Lalaine S. Flores, an Administrative Assistant V

Ms. Melba B. Tayag, Revenue Officer I at Client

Mr. Raul Q. Magtagnob, Chief Revenue Officer II at

of Authority was issued against Analiza San Miguel David,

Mr. Fortunato B. Tagle, Special Investigator II at

The prosecution, after the formal offer of its

P-1 Letter-referral addressed to Secretary of

P-2 Joint Complaint-Affidavit executed on June

P-3 Audited Financial Statements filed by Analiza

P-4 Certification issued by Revenue District Office

P-5 Letter of Authority SN:eLA201100060752;

P-5-a List of Requirements dated October 18, 2013.

P-6 Second Notice

P-7 Final Notice

P-8 Subpoena Duces Tecum SDT No. RR4-D-

P-9 Certification issued by Revenue District Office

P-10 Certification from PTT Philippines Corporation

P-11 Judicial Affidavit of Lalaine S. Flores.

In defense, accused through counsel, presented

Mr. Larry Aquino, Barangay Captain in Barangay

Accused Analiza San Miguel David testified that

The defense, after the formal offer of its

A-1 Certificate of Registration Three Six Four Fuel

A-2 Certification from the Office of the Punong

A-3 Affidavit of Closure dated 11 March 2013.

A-4 Monthly Value Added Tax Declaration for Jan

2010 bearing an amount of P1,988.57.

A-5 Revenue Official Receipt No. 03134130.

A-6 Monthly Value Added Tax Declaration for Feb

A-7 Revenue Official Receipt No. 03137112.

A-8 Quarterly Value Added Tax Return for Period 01-

A-9 Revenue Official Receipt No. 03562185.

A-10 Monthly Value Added Tax Declaration for April

A-ll Revenue Official Receipt No. 03955896.

A-12 Monthly Value Added Tax Declaration for May