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Nos. L­41919­24. May 30, 1980.

QUIRICO P. UNGAB, petitioner, vs. HON. VICENTE N.
CUSI, JR., in his capacity as Judge of the Court of First
Instance, Branch 1, 16TH Judicial District, Davao City,
THE COMMISSIONER OF INTERNAL REVENUE, and
JESUS N. ACEBES, in his capacity as State Prosecutor,
respondents.

Criminal Procedure; Taxation; National Internal Revenue
Code; Preliminary investigation; Authority of State Prosecutor to
investigate and prosecute violations of the National Internal
Revenue Code independently of the City Fiscal; Case at bar.—The
respondent State Prosecutor, although believing that he can
proceed independently of the City Fiscal in the investigation and
prosecution of these cases, first sought permission from the City
Fiscal of Davao City before he started the preliminary
investigation of these cases, and the City Fiscal, after being
shown Administrative Order No. 116, dated December 5, 1974,
designating the said State Prosecutor to assist all Provincial and
City fiscals throughout the Philippines in the investigation and
prosecution of all violations of the National In­

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* SECOND DIVISION

878

878 SUPREME COURT REPORTS ANNOTATED

Ungab vs. Cusi, Jr.

ternal Revenue Code, as amended, and other related laws,
graciously allowed the respondent State Prosecutor to conduct the
investigation of said cases, and in fact, said investigation was
conducted in the office of the City Fiscal.

Jurisdiction of the Court of First Instance over criminal prosecution for violations of the National Internal Revenue Code. While there can be no civil action to enforce collection before the assessment procedures provided in the Code have been followed.— What is involved here is not the collection of taxes where the assessment of the Commissioner of Internal Revenue may be reviewed by the Court of Tax Appeals. 1974. Same. 97. Petition for reconsideration of assessment of deficiency taxes suspends the prescriptive period for the collection of taxes. CONCEPCION JR. he discovered that the petitioner failed to report his income derived from sales of banana saplings. Same. the protest of the petitioner against the assessment of the District Revenue Officer cannot stop his prosecution for violation of the National Internal Revenue Code. Jr. 1961. accused. 1973. 1964. Same.” and to restrain the respondent Judge from further proceeding with the hearing and trial of the said cases. Prescription. for the calendar year ending December 31. Cusi. not the prescriptive period of a criminal action for violation of law. and 1965 of the Court of First Instance of Davao. it has been ruled that a petition for reconsideration of an assessment may affect the suspension of the prescriptive period for the collection of taxes. 1963. all entitled: “People of the Philippines. Accordingly. Ungab. the respondent Judge did not abuse his discretion in denying the motion to quash filed by the petitioner. Same. Same..: Petition for certiorari and prohibition with preliminary injunction and restraining order to annul and set aside the informations filed in Criminal Case Nos. Same. 1960. BIR Examiner Ben Garcia examined the income tax returns filed by the herein petitioner. versus Quirico Ungab. 1980 879 Ungab vs. 1962. 879 VOL. Obviously. As .—Besides. Computation and assessment of deficiency taxes is not a pre­requisite for criminal prosecution under the Code. It is not disputed that sometime in July. there is no requirement for the precise computation and assessment of the tax before there can be a criminal prosecution under the Code. MAY 30. but a criminal prosecution for violations of the National Internal Revenue Code which is within the recognizance of Courts of First Instance. Quirico P. J. plaintiff. but not the prescriptive period of a criminal action for violation of law. In the course of his examination.

81.” to the Tax Fraud Unit of the Bureau of Internal Revenue. was fully convinced that the petitioner had filed a fraudulent income tax return so that he submitted a “Fraud Referral Report. inclusive of surcharge.00. 880 880 SUPREME COURT REPORTS ANNOTATED Ungab vs.a result. (2) For failure to pay a fixed annual tax of P50. Jr. . depriving thereby the government of its due revenue in2 the amount of P15. the Special Investigation Division of the Bureau of Internal Revenue found sufficient proof that the herein petitioner is guilty of tax evasion for the taxable year 1973 and recommended his prosecution: (1) For having filed a false or fraudulent income tax return for 1973 with intent to evade his just taxes due the government under Section 45 in relation to Section 72 of the National Internal Revenue Code. in accordance with Section 183 of the National Internal Revenue Code.00 or a total of P175. business tax and forest charges for the year 1973 and inviting petitioner to an informal conference where the petitioner.872. however. the petitioner wrote the BIR District Revenue Officer protesting the assessment. was accurately stated. or a total of unpaid fixed taxes of P100. the BIR District Revenue Officer at Davao City sent a “Notice of Taxpayer” to the petitioner informing him that there is due from him (petitioner) the amount of P104. Upon receipt of the notice. BIR Examiner Ben Garcia. as reported in his income tax returns for the said year.00 a year in 1973 and 1974.00 plus penalties of P75. Cusi. representing income.35 to the ______________ 1 Rollo. claiming that he was only a dealer or agent on commission basis in the banana sapling business and that his income. Davao Fruit Corporation.580. on the total sales of P129. 134. duly assisted by counsel. as a producer of banana poles or saplings.980. (3) For failure to pay the 7% percentage tax. p. After examining the records of the case.59. may present 1 his objections to the findings of the BIR Examiner.

in relation to Secs. from January. 15 881 VOL. 1960—Violation of Sec. dated December 12. 11. in relation to Secs. for _______________ 2 Id. 1974. 1973. 1973. 1974. the Commissioner of Internal 3Revenue approved the prosecution of the petitioner. 1980 881 . 141. 1962—Violation of Sec. if the evidence warrants. 116 dated December 5. as amended. 72 of the National Internal Revenue Code. and 208 of the National Internal Revenue Code. for the quarter ending December 31..In a second indorsement to the Chief of the Prosecution Division. Thereafter.. p. filed six (6) informations against the petitioner with the Court of First Instance of Davao City. 5 Id. 3 Id. 182 (a). 183 (a). in Administrative Order No. 1973 to December. 186 and 209 of the National Internal Revenue Code. 97. 186. 186 and 209 of the National Internal Revenue Code. MAY 30. 4 Id. conducted a preliminary investigation of the case.. 45. and other related laws. pp. p. (4) Criminal Case No. 183 (a). 140. to wit: (1) Criminal Case No. (2) Criminal Case No... in relation to Sec. 1963—Violation of Sec. receipts and earnings in his business as producer of banana saplings and to pay the percentage tax due6 thereon. for failure to render a true and complete return on the gross quarterly sales. 136. 1973. 178. in relation to Secs. for engaging in business as producer of saplings. p. and to whom the case was assigned. and finding probable cause. State Prosecutor Jesus Acebes. without first 5 paying the annual fixed or privilege tax thereof. (3) Criminal Case No. of all violations of the National Internal Revenue Code. who had been designated to assist all Provincial and City Fiscals throughout the Philippines in the investigation and prosecution. 13 6 Id. for filing a fraudulent income tax return 4 for the calendar year ending December 31. 1961—Violation of Sec. p.

p. However. and 1965 of the Court of First Instance of Davao. accused. a temporary restraining order was issued by the Court. 1962. for failure to render a true and complete return on the gross quarterly sales. Whereupon. 186 and 209 of the National Internal Revenue Code. On September 16. 1961. 1965—Violation of Sec. 17... Ungab vs.. 1975. and (2) the trial court has no jurisdiction to take cognizance of the above­entitled cases in view of his pending protest 10 against the assessment made by the BIR Examiner. and to pay the percentage tax due thereon. 19. and to pay the percentage tax due7 thereon. 21.” The petitioner seeks the annulment of the informations filed against him on the ground that the respondent State Pro­ _______________ 7 Id. 23. 1963. 1973. 1964. for failure to render a true and complete return on the gross quarterly sales. 1964—Violation of Sec. 1973. p. Jr. As prayed for. receipts and earnings as producer of banana saplings. and to pay the percentage tax due thereon. 9 Id. 1975. Cusi. versus Quirico Ungab. 183 (a). 1973. plaintiff. 183 (a). in relation to Secs. all entitled: “People of the Philippines. (6) Criminal Case No. the petitioner filed the instant recourse. 10 Id. 1960. p.. for the quarter ending on September 930. the petitioner filed a motion to quash the informations upon the grounds that: (1) the informations are null and void for want of authority on the part of the State Prosecutor to initiate and prosecute the said cases. failure to render a true and complete return on the gross quarterly sales receipts and earnings in his business as producer of saplings. 8 Id. in relation to Secs. . ordering the respondent Judge from further proceeding with the trial and hearing of Criminal Case Nos. p. receipts and earnings in his business as producer of banana saplings for the quarter ending on June 830. (5) Criminal Case No. 186 and 209 of the National Internal Revenue Code. 11 the trial court denied the motion on October 22. for the quarter ending on March 31.

should be observed before such authority may be exercised. the Secretary of Justice may either appoint as acting provincial or city fiscal. Orendain. except when it can be patently shown to the court having cognizance of the case that said fiscal is intent on prejudicing the interests of justice. 40. The same sphere of authority is true with the prosecutor directed and authorized under . provided that no such appointment may be made without first hearing the fiscal concerned and never after the corresponding information has already been filed with the court by the corresponding city or provincial fiscal without the conformity of the latter. 882 882 SUPREME COURT REPORTS ANNOTATED Ungab vs. in the opinion of the Secretary of Justice it is advisable in the public interest to take a different course of action. for any reason. to handle the investigation or prosecution exclusively and only of such case.. as follows: “In view of all the foregoing considerations. and since “appropriate circumstances are not extant to warrant the intervention of the State Prosecution to initiate the investigation. Cusi. p. in any instance where a provincial or city fiscal fails. it is the ruling of this Court that under Sections 1679 and 1686 of the Revised Administrative Code. refuses or is unable. any practicing attorney or some competent officer of the Department of Justice or office of any city or provincial fiscal. with complete authority to act therein in all respects as if he were the provincial or city fiscal himself. 11 Id. with the same complete authority to act independently of and for such city or provincial fiscal. temporarily to assist such city of provincial fiscal in the discharge of his duties. enumerated by this12 Court in its decision in the case of Estrella vs. said informations are null and void. The petitioner argues that while the respondent State Prosecutor may initiate the investigation of and prosecute crimes and violations of penal laws when duly authorized.” The ruling adverted to by the petitioner reads. the provisions of the Charter of Davao City on the functions and powers of the City Fiscal will be meaningless because according to said charter he has charge of the prosecution of all crimes committed within his jurisdiction. secutor is allegedly without authority to do so. Jr. sign the informations and prosecute these cases. certain requisites. or appoint any lawyer in the government service. to investigate or prosecute a case and. otherwise.

although believing that he can proceed independently of the City Fiscal in the investigation and prosecution of these cases. as amended. regarding the nature of the power of the Secretary of Justice over fiscals as being purely over administrative matters only was not really necessary. 37 SCRA 640. MAY 30. No.R. as indicated in the above relation of the facts and discussion of the legal issues of said case. first sought permission from the City Fiscal of Davao City before he started the preliminary investigation of these cases. The respondent State Prosecutor. 97. said investigation 13 was conducted in the office of the City Fiscal. L­19811. 883 VOL. 1971. supra. dated December 5. Section 3 of Republic Act 3783. for the resolution thereof. and other related laws. 1980 883 Ungab vs. The petitioner also claims that the filing of the informations was precipitate and premature since the Commissioner of Internal Revenue has not yet resolved his protests against the assessment of the Revenue District Officer. In any event. to any extent that the opinion therein may be inconsistent herewith. The contention is without merit. Liwag. What is involved here is not the collection of taxes where the assessment of the Commissioner of Internal Revenue may be reviewed by the Court of Tax Appeals. Contrary to the petitioner’s claim. February 27. after being shown Administrative Order No. The observation in Salcedo vs. Jr. as amended and/or inserted by Republic Act 5184. but a criminal prosecution for violations of the National Internal Revenue Code which is within the cognizance of courts of first instance.______________ 12 G. 1974. the same is hereby modified. While there can be no civil action to enforce collection before the . graciously allowed the respondent State Prosecutor to conduct the investigation of said cases. designating the said State Prosecutor to assist all Provincial and City fiscals throughout the Philippines in the investigation and prosecution of all violations of the National Internal Revenue Code. and in fact. the rule therein established had not been violated. and the City Fiscal. 116. Cusi.” The contention is without merit. and that he was denied recourse to the Court of Tax Appeals.

35. SO ORDERED. WHEREFORE. as in this case. Jr. knowingly and willfully filed fraudulent 14 returns with intent to evade and defeat a part or all of the tax.” “An assessment of a deficiency is not necessary to a criminal prosecution for willful attempt to defeat and evade the income tax. With costs against the petitioner. and the government’s failure to discover the error and promptly to 15assess has no connections with the commission of the crime. that an assessment of the deficiency tax due is necessary before the taxpayer can be prosecuted criminally for the charges preferred. the petition should be. but not the prescriptive 16 period of a criminal action for violation of law. and is here rejected. it has been ruled that a petition for reconsideration of an assessment may affect the suspension of the prescriptive period for the collection of taxes. The perpetration of the crime is grounded upon knowledge on the part of the taxpayer that he has made an inaccurate return. p. The crime is complete when the violator has. The temporary restraining order heretofore issued is hereby set aside. A crime is complete when the violator has knowingly and willfully filed a fraudulent return with intent to evade and defeat the tax. .” Besides. “The contention is made. there is no re­ _____________ 13 Rollo. Cusi.assessment procedures provided in the Code have been followed. 884 884 SUPREME COURT REPORTS ANNOTATED Ungab vs. Obviously. as it is hereby dismissed. the respondent Judge did not abuse his discretion in denying the motion to quash filed by the petitioner. Accordingly. the protest of the petitioner against the assessment of the District Revenue Officer cannot stop his prosecution for violation of the National Internal Revenue Code. quirement for the precise computation and assessment of the tax before there can be a criminal prosecution under the Code.

of Customs vs. (Acgt. was designated to sit in the Second Division. a member of the First Division. Navarro.. The City may appeal from a decision of the City Board of Assessment Appeals in the matter of grant of exemption .. Gonda. 1980 885 Ungab vs. Petition denied. 79 SCRA 408).A. de Castro. of Internal Revenue vs. May 23. Ching Lak alias Ang You Chu. 97. 1125 within which the taxpayer may question any ruling of the Commissioner of Internal Revenue before the Court of Tax Appeals is jurisdictional. 25 SCRA 754). ________________ 14 Guzik vs. 55A. Joseph. 16 People vs. The 30­day period fixed by R. concur. 54 F2d 618. Comm’r. (Actg. Inc.—As a rule. 21. the law must be taken as it is devoid of judicial addition or substraction. MAY 30. The Supreme Court is bound by the findings of facts of the Court of Appeals. MERALCO. 15 Merten’s Law of Federal Income Taxation. (Vera vs. Auditor General. JJ. 10. An heir is not solidarity liable for the payment of the inheritance tax due from a co­heir. Vol.05.      Barredo (Chairman). (Resins. Jr. Thus. vs. the term “insulating oil” includes the term “insulator” and qualifies the MERALCO for exemption from the tax on importation of insulators as expressly provided for in its franchise. (Cordero vs. Comm’r. Internal revenue taxes cannot be the subject of compensation or set­off because the government and the taxpayer are not mutually creditors and debtors of each other. A tax refund partakes of the nature of an exemption and thus cannot be allowed unless granted by law in the most explicit and categorical language. Justice Pacifico P. 5 SCRA 895). Abad Santos and De Castro. * Mr. 18 SCRA 331). 1958. Notes. L­10609. 885 VOL. any claim for exemption from tax is strictly construed against the taxpayer. where the law is clear and unambiguous. Aquino. U. Sec.S. 77 SCRA 469). However. p. (Ibid). Cusi.

65 SCRA 142). (Commissioner of Internal Revenue vs. Ayala Securities Corporation. The Court of Tax Appeals has exclusive jurisdiction on matters involving internal revenue and customs duties. (Commissioner of Internal Revenue vs. Fraud is a question of fact and the circumstances constituting fraud must be alleged and proved in the court below. (Secretary of Finance vs.. Court of Tax Appeals. Board of Cebu City vs. Cu Unjieng. All rights reserved. from real property tax in favor of taxpayer. Inc. Cusi. existence is final and cannot be reviewed here unless clearly shown to be erroneous. (Commissioner of Internal Revenue vs. (Commissioner of Internal Revenue vs. 62 SCRA 68). ——o0o—— © Copyright 2018 Central Book Supply. Fraud is never lightly to be presumed because it is a serious charge. Kiener Co. Agana. P. 12 SCRA 645). 70 SCRA 214).. 66 SCRA 1). Court of Tax Appeals may take cognizance of issue on interest not raised before the Commissioner of Internal Revenue where the latter himself presented it to Tax Court for resolution. The finding of the trial court as to its existence and non­ 886 886 SUPREME COURT REPORTS ANNOTATED Ungab vs. . Jr. 70 SCRA 214). Ayala Securities Corporation.J. Ltd. Findings of fact of Court of Tax Appeals are conclusive upon the Supreme Court. (Mun. Assessment made beyond five­year prescription period no longer binding on tax payer.