G.R. No. 127710 - Garcia vs. Office of the Ombudsman

Petitioner Azucena B. Garcia served as Department Manager III for Administration at the National Development Company (NDC), a government-owned corporation.
In 1991, NDC initiated an early retirement program designed to provide tax-exempt retirement and separation benefits to its employees.

In March 1995, petitioner availed of the early retirement program under Republic Act No. 1616.
NDC approved her application and subsequently disbursed her retirement benefits.

Private respondents—comprising the controller, disbursing officer, and assistant general manager of NDC—deducted withholding tax on the portion of the provident fund benefits that exceeded her personal contribution.
The deduction was based on the prevailing interpretation by the Commissioner of Internal Revenue that such excess benefits were taxable.

Petitioner lodged a protest against the deduction, requesting a refund of the taxes remitted to the Bureau of Internal Revenue, contending that the amount was tax-exempt.
Following the refusal of her request by the private respondents, petitioner filed a complaint with the Office of the Ombudsman on March 8, 1996.
The complaint was filed on the ground that the respondents had violated Section 3(e) of Republic Act No. 3019 by causing her undue injury.

The Office of the Ombudsman, after receiving responses from the involved parties, dismissed the complaint on September 30, 1996.
Petitioner elevated the matter via appeal, specifically a petition for review on certiorari, challenging the resolution of dismissal.

Whether the Ombudsman committed grave abuse of discretion in dismissing petitioner’s complaint for violation of Section 3(e) of Republic Act No. 3019.
Whether the private respondents’ act of deducting the withholding tax on petitioner’s provident fund benefits constituted:

Whether reliance on the prevailing opinion of the Bureau of Internal Revenue regarding the taxability of provident fund benefits justifies the actions of the private respondents.