PEOPLE vs GLORIA KINTANAR

C.T.A. EB CRIM. NO. 006. | December 3, 2010

PEOPLE OF THE PHILIPPINES, respondent, vs. GLORIA V. KINTANAR, petitioner.

Summary: Gloria Kintanar, engaged in the business and earning income as distributor of Forever Living
Products Philippines, was charged with violation of Section 255 of NIRC for willfully failing to file her ITR for
years 2000 and 2001. This was based on an investigation conducted by BIR after receiving confidential
information for the alleged tax evasion scheme of spouses Kintanar. CTA found her guilty beyond
reasonable doubt of the violation of Section 255 as she 1) is a person required to file a return, 2) failed to
make or file a return at the time required by law and 3) willfully failed to file one. Petitioner cannot find
solace on her claim that her husband hired an accountant, who was tasked to handle the filing and payment
of their tax obligations. Petitioner testified that she does not even know how much was her tax obligation,
nor did she bother to inquire or determine the facts surrounding the filing of her ITRs. Such neglect or
omission is tantamount to "deliberate ignorance" or "conscious avoidance".

FACTS:
 In two (2) separate Informations Gloria V. Kintanar (hereafter "petitioner"), a Filipino citizen
engaged in the business and earning income as distributor of Forever Living Products Philippines,
Inc., was charged with Violation of Section 255 of RA No. 8424 for willfully, unlawfully and
feloniously failing to file her ITR with BIR for the years 2000 and 2001. Petitioner pleaded "not
guilty" to the crimes charged.

THE PROSECUTION'S EVIDENCE

 Based on a confidential information received by the National Investigation Division of the BIR on
the alleged tax evasion scheme of spouses Benjamin G. Kintanar Jr. and Gloria V. Kintanar for non-
filing of income tax returns, Chief Rosimo, Chief of the Tax Fraud Division, requested RDO 52,
Parañaque City to furnish it with photocopies of spouses Kintanar's ITR, VAT Returns, Percentage
Tax Returns and BIR Registration Certificate.
 Chief Rosimo issued another Access Letter to Forever Living Products Philippines, Inc. ("FLPPI") to
furnish it with certification of the total income payments/commissions and bonuses earned by
spouses Kintanar, together with the amount of taxes withheld for calendar years 1996 to 2001, as
distributors or independent contractors of FLPPI.
 RDO No. 52 issued a Certification stating therein that spouses Kintanar have no record or file for
the years 1999 to 2001. FLPPI sent a letter-reply, indicating therein the total income of Gloria V.
Kintanar for calendar years 1999 to 2001.
 After a thorough preliminary investigation, the investigating team found that spouses Kintanar
were able to generate a large amount of income, as distributors or independent contractors of
FLPPI.
 The spouses failed to comply with all of the ff: Letter of Authority requiring them to submit
documents, subpoena tuces decum ordering them to appear before the Chief Prosecuting Division
and bring books of accounts and other accounting records and a Preliminary Assessment Notice
giving them 15 days to explain discrepancies.
 They filed a protest after receiving a Formal Letter of Demand with Assessment Notices. But Chief
of NID informed them that no documents were received and spouses Kintanar have 60 days from
the time the protest was filed within which to submit supporting documents.
 As they failed again to reply, a Final Decision on Disputed Assessment was issued by the BIR,
indicating therein that spouses' protest against their alleged deficiency income tax and VAT was
denied; thus, the assessment had become final, executory and demandable.
 Based on said investigation, and the documents obtained, the prosecution found that petitioner
failed to file her ITRs for the years 1999 to 2001 and found her liable for deficiency income taxes,
arising from income earned from FLPPI.

THE DEFENSE'S EVIDENCE

 Petitioner Gloria V. Kintanar substantially testified that she filed her ITRs for taxable years 2000
and 2001; that she has no personal knowledge of actual filing of said returns because it was her
husband who filed their ITRs; that she receives commission from FLPPI from 1996 up to the
present, through check payments
  Benjamin G. Kintanar Jr. substantially testified that he is the husband of petitioner; that he is
involved in networking business; and is one of the top dealers of FLPPI and obtained his income
from said company from years 1999 to 2001; that he was the one who filed their ITRs; that they
filed joint ITRs from years 1997 to 2004, through their hired accountant, Marina Mendoza; that it
was Mendoza who prepared the ITRs and to whom they relied on preparing such; that he gave all
the documents necessary for filing the ITRs, to Mendoza; that he just browsed the ITRs; thus, he
has no knowledge of the amount and address stated therein and where their ITRs were filed.

THE FORMER SECOND DIVISION'S RULING

 The testimonial and documentary evidence adduced by the prosecution was given credence and
petitioner was found guilty beyond reasonable doubt of Violation of Section 255 of the NIRC

ISSUE:
1) W/N ACCUSED IS GUILTY BEYOND REASONABLE DOUBT OF VIOLATION OF SECTION 255 OF NIRC –
YES

RATIO:
 Section 255 of the NIRC of 1997 contemplates four different situations punishable by law, each of
which constitutes failure to perform in a timely manner, an obligation imposed by the NIRC, to wit:
1) To pay any tax;
2) To make a return;
3) To keep any record; and
4) To supply correct and accurate information.
 The elements of Violation of Section 255 of the NIRC of 1997, for failure to make or file a return,
are, as follows:
1) The accused is a person required to make or file a return;
2) The 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.
 As proven by the prosecution, all the aforementioned elements are present in this case.

1. PERSON REQUIRED TO MAKE OR FILE A RETURN

 Considering that petitioner earned a substantial income, as distributor/independent contractor of
FLPPI; she is, therefore, required to make or file her annual income tax return, pursuant to Section
51 (Individual Return) and Section 74 (Declaration of Income Tax for Individuals) of NIRC.

PETITIONER FAILED TO MAKE OR FILE THE RETURN AT THE TIME REQUIRED BY LAW
 Upon thorough investigation and from the evidence adduced by the prosecution, petitioner has no
record of filing of the required ITRs, within the reglementary period, with any of the RDOs of the
BIR.
 As petitioner was a resident of No. 2 Granada St., Merville Park Subdivision, Parañaque, for the
years 2000 and 2001, she should have filed her ITRs in Parañaque City. However, there is no
record of filing of the required ITR and petitioner is not even a registered taxpayer of said revenue
district. The only existing record of petitioner is that she was registered as a "one-time transaction
taxpayer" for capital gains and documentary stamp tax, at RDO No. 54 of Trece Martires City,
Cavite.
 For her defense, petitioner presented 2 ITRs for taxable years 2000 and 2001 as well as 2 undated
Certifications issued by a certain Ernesto T. Kho but we cannot give credence to said exhibits as
the same are of doubtful authenticity and materially flawed with irregularities (such as failure to
indicate TIN, indicating a different address, filing at wrong RDO).

THE FAILURE TO MAKE OR FILE A RETURN WAS WILLFUL

 Petitioner claims that she did not actively participate in the filing of her joint ITRs with her husband
and entrusted the fulfillment of such duty to her husband; that her husband hired a certain Marina
Mendoza, an accountant, who was tasked by her husband to handle the filing and payment of their
tax obligations; thus, there was no voluntary, intentional, deliberate, or malicious failure to file a
return on her part. Petitioner's contention cannot be sustained.
 Willful in the tax crimes statutes means voluntary, intentional violation of a known legal duty, and
bad faith or bad purpose need not be shown.
  An act or omission is "willfully" done if done voluntarily and intentionally and with specific intent to
do something the law forbids, or with specific intent to fail to do something the law requires to be
done; that is, with bad purpose to either disobey or disregard the law. (Black's Law Dictionary)
 First, the prosecution has clearly established that under the law, petitioner and her husband, as
married individuals, who do not derive income purely from compensation, are obliged to file their
ITRs for taxable years 2000 and 2001 for the income they earned, as distributors/independent
contractors of FLPPI. Thus, petitioner's sole reliance on her husband to file their ITRs is
not a valid reason to justify her non-filing, considering that she knew from the start
that she and her husband are mandated by law to file their.
 Second, being an experienced businesswoman, and having been an independent
distributor/contractor of FLPPI since 1996, petitioner ought to know and understand all the matters
concerning her business.
 Hence, the natural presumption is that petitioner knows what are her tax obligations under the
law. As a businesswoman, she should have taken ordinary care of her tax duties and obligations
and she should know that their ITRs should be filed, and she should have made sure that their
ITRs were filed. She cannot just left entirely to her husband the filing of her ITRs.
 Petitioner cannot find solace on her claim that her husband hired an accountant, who
was tasked to handle the filing and payment of their tax obligations. This allegation was a
bare testimony of petitioner's husband, and yields nothing, but mere uncorroborated statements.
 Furthermore, the Court finds no affirmative acts on the part of the petitioner to make sure that her
obligation to file her ITRs had been fully complied with. Petitioner testified that she does not
even know how much was her tax obligation, nor did she bother to inquire or
determine the facts surrounding the filing of her ITRs. Such neglect or omission, as
aptly found by the Former Second Division, is tantamount to "deliberate ignorance" or
"conscious avoidance".
 The evidence adduced by the prosecution has also established that petitioner was duly informed
that no ITRs were filed, nor recorded under her name. There were several notices sent to her by
the BIR to comply with her tax obligations, but she opted not to comply.
 Despite the several notices given to petitioner starting from April 3, 2003, the evidence on record
shows that only a protest letter made by petitioner's husband dated August 31, 2004 was the reply
given by the petitioner. It took petitioner more than one year to send said reply. Evidently, such
non-compliance with the BIR's notices clearly shows petitioner's intent not to file her
ITRs.

HELD: WHEREFORE, premises considered, the present Petition for Review is hereby DENIED. The assailed
Decision dated August 26, 2009 and Resolution dated November 26, 2009 of the Former Second Division
are hereby AFFIRMED. SO ORDERED.