G.R. No. 81446 - Po vs. Court of Tax Appeals

The petitioner, Bonifacia Sy Po, is the widow of the late Po Bien Sing, who died on September 7, 1980.
Po Bien Sing was the sole proprietor of Silver Cup Wine Factory in Talisay, Cebu, engaged in manufacturing and selling compounded liquors for the years 1964 to 1972.

A denunciation alleging tax evasion amounting to millions of pesos against Silver Cup led the Secretary of Finance to direct a Finance-BIR-NBI team to investigate under Finance Department Order No. 13-70, dated February 19, 1971.
A subpoena duces tecum and request for production of accounting records and related documents were issued on April 13, 1971, and May 3, 1971, respectively, but Po Bien Sing refused to produce the books of accounts.
The investigation team, with the Philippine Constabulary, raided the Silver Cup factory bodega, seizing 1,555 cases of alcohol products. Inventory lists from the seizure were recorded in multiple volumes.
Based on the investigation, the Commissioner of Internal Revenue assessed deficiency income taxes for 1966 to 1970 amounting to ₱7,154,685.16, and deficiency specific taxes for January 2, 1964, to January 19, 1972, amounting to ₱5,595,003.68.
The petitioner protested these assessments through letters in October 1972, which were subsequently referred for reinvestigation.
The reinvestigation report dated August 13, 1981, recommended upholding the assessments due to failure to present books of accounts.
Warrants of distraint and levy were issued on September 10, 1981, and received by the petitioner on October 14, 1981, prompting an appeal on October 29, 1981.

The investigation revealed the use and consumption of 20,105 drums of alcohol (81,288,787 proof liters) from 1964 to 1970 to manufacture compounded liquors without payment of corresponding taxes.
Testimonies of former employees indicated the use of untaxed distilled alcohol, clandestine storage in secret tunnels to evade inspections, and falsification of official records under the direction of Po Bien Sing.
The team imposed a 50% surcharge and monthly interest on the unpaid taxes pursuant to the prevailing National Internal Revenue Code provisions.

Whether the assessments of deficiency income and specific taxes against Po Bien Sing (and thus the petitioner) are valid and legal despite the non-submission of books and alleged discrepancies.

Whether the petitioner presented competent and relevant evidence to sufficiently rebut the presumption of correctness of the tax assessments.

Whether the Court of Tax Appeals erred in affirming the deficiency tax liabilities on the basis of substantial evidence.