G.R. No. 258873 - People vs. Abdul Azis Y Sampaco a.k.a. Mohammad Macapundag Guimbor and Alibair Macadato Y Macadato

Jose P. Fernandez died on November 7, 1987. A petition to probate his will was filed with Branch 51, RTC Manila, which appointed retired Justice Arsenio P. Dizon and Atty. Rafael Arsenio P. Dizon (petitioner) as Special and Assistant Special Administrators of the estate.
By letter dated October 13, 1988, Justice Dizon informed the BIR of the estate proceedings. Multiple extensions were granted for filing the estate tax return due to uncollated assets and claims.

On March 14, 1990, Justice Dizon authorized Atty. Jesus M. Gonzales to sign and file the estate tax return. On April 17, 1990, Gonzales filed a return showing NIL net estate and tax due. On April 27, 1990, BIR issued Certifications Nos. 2052 and 2053 confirming full payment and clearance to transfer properties.
Justice Dizon died in August 1990. On October 22, 1990, the probate court appointed petitioner as sole administrator. Petitioner sought authority to sell estate properties to satisfy claims of major creditors: Equitable Banking Corp., Banque de L’Indochine et de Suez, Manila Banking Corp., and State Investment House, Inc.

On November 26, 1991, the BIR’s Assistant Commissioner for Collection issued Assessment Notice No. FAS-E-87-91-003269, demanding P66,973,985.40 as deficiency estate tax (including surcharge, interest, and penalties).
Petitioner moved for reconsideration on December 12, 1991; denied by the BIR Commissioner on April 12, 1994. On June 2, 1994, petitioner filed a petition for review with the Court of Tax Appeals (CTA).

At the CTA trial, petitioner submitted extensive documentary evidence. The BIR presented one witness, revenue examiner Alberto Enriquez, who identified but did not formally offer working papers. The CTA admitted these documents under the Vda. de Oñate exception, recalculated a deficiency of P37,419,493.71 plus interest, and denied the petition on June 17, 1997.
On April 30, 1999, the Court of Appeals (CA) affirmed the CTA decision. Its resolution of November 3, 1999 denied petitioner’s motion for reconsideration. Petitioner then sought certiorari review before the Supreme Court.

Whether the CTA and the CA erred in admitting evidence not formally offered by the BIR, contrary to Section 34, Rule 132 of the Rules of Court and binding jurisprudence.

Whether the CA erred in affirming the CTA’s deficiency estate tax assessment by disallowing full deduction of creditor claims based on post-death compromises rather than the date-of-death valuation.