Camp John Hay (Photo courtesy of CJH)
MANILA – The Court of Tax Appeals (CTA) has upheld a Department of Justice (DOJ) ruling to dismiss criminal charges filed in 2015 by the Bureau of Internal Revenue (BIR) against Camp John Hay Hotel Corp. (CJHHC) for alleged refusal to comply with a subpoena to produce financial records.
In a 26-page decision promulgated October 15 and written by Associate Juanito Castañeda, Jr., the CTA Second Division sided with two DOJ resolutions dated June 20, 2017 and Feb. 5, 2020 which said the BIR “failed to provide evidence that the company was informed of whatever records and documents that needed to be presented and submitted”.
“As correctly observed by the assailed (DOJ) resolution, the accusation of the appellant (BIR) that the appellee (CJHHC) failed to comply with the subpoena duces tecum (production of evidence) is sweeping and misleading because the appellee, as shown from the records, actually appeared and produced the books of accounts and accounting records of the company,” the CTA said.
The case originally assigned for preliminary investigation to the Quezon City Prosecutor’s Office alleged the firm failed to obey BIR summons.
The violation, upon conviction, is punishable with a fine of PHP5,000 to PHP10,000 and imprisonment of one to two years.
The case was eventually elevated through a petition for review to the DOJ.
The court noted that since BIR representatives armed with a letter of authority were able to conduct an audit and examination of petitioner’s records at CJHHC’s office without any indication that it was prevented from doing so, “it can reasonably be inferred that it (BIR) was able to access and examine whatever is lacking in the submitted documents as of July 9, 2014”.
The CTA said that if after such audit and examination there are still documents which have not been submitted or presented, “prudence dictates that private respondent should have been informed”.
“We cannot agree with petitioner that there was failure on the part of private respondent (CJHHC) to submit the other subpoenaed documents. Without other convincing evidence to show such failure, we agree with the investigating prosecutor and the DOJ that petitioner has not given sufficient proof to warrant the filing of an information against private respondent,” the CTA said.
The CTA added that “in the absence of the accounting records of a taxpayer, his tax liability may be determined by estimation” and explained that “to hold otherwise would be tantamount to holding that skillful concealment is an invincible barrier to proof”. (PNA)
