A.C. No. 11774 - Ready Form, Inc. vs. Castillon, Jr.

Ready Form, Inc. participated in a public bidding conducted by the National Printing Office (NPO) on October 17, 2008.
The NPO Bids and Awards Committee (NPO-BAC) required all bidders to re-submit eligibility documents, including Income Tax Returns (ITRs) and financial documents stamped by the Bureau of Internal Revenue (BIR).

Following the re-submission, NPO-BAC imposed a one-year suspension on Ready Form (from December 22, 2008, to December 21, 2009) for alleged misrepresentation and misdeclaration by submitting what was claimed to be false ITRs and financial statements for 2007.
On September 18, 2009, Eastland Printink Corporation (Eastland) filed a Petition for Blacklisting with the NPO against Ready Form on several grounds:

As Eastland’s counsel, Atty. Castillon signed the Petition for Blacklisting on behalf of Eastland.
Ready Form alleged that Atty. Castillon violated Rules 1.01, 1.02, and 1.03 of Canon 1 of the Code of Professional Responsibility by allegedly using Ready Form’s ITR in the filing of the Petition for Blacklisting.
The alleged violation also implicated provisions of the National Internal Revenue Code (NIRC), particularly Sections 4 and 278, and Section 30.1 of the Implementing Rules and Regulations (IRR) of Republic Act No. 9184 (Government Procurement Reform Act).

In the Petition for Blacklisting, Ready Form’s audited financial statement (not its ITR) was attached as evidence.
Ready Form emphasized that the petition referred to its ITR, while Atty. Castillon maintained that only the financial statement, a document accessible via the Securities and Exchange Commission (SEC), was attached.
During the mandatory conference, both parties agreed to narrow the issue to whether the act of attaching the audited financial statement constituted a violation of the relevant NIRC provisions.

Proceedings before the Commission on Bar Discipline-Integrated Bar of the Philippines (CBD-IBP)

On April 4, 2014, Ready Form filed a Complaint-Affidavit before the CBD-IBP, seeking the disbarment of Atty. Castillon.
Atty. Castillon, in his position paper, denied obtaining or submitting Ready Form’s ITR, emphasizing that the document attached was the audited financial statement.
Commissioner Maria Editha A. Go-BiAas, after due proceedings, rendered a Report and Recommendation on July 21, 2016, absolving Atty. Castillon as Ready Form failed to prove the alleged procurement and use of its confidential ITR.
The IBP Board of Governors adopted Commissioner Go-BiAas’ findings on September 23, 2016, and resolved to dismiss the complaint.

Whether Atty. Castillon’s act of attaching Ready Form’s audited financial statement (which contains similar financial data to the ITR) in the Petition for Blacklisting violated:

Sections 4 and 278 of the National Internal Revenue Code (NIRC), which regulate the interpretation of tax laws and the safeguarding of confidential taxpayer information.
Rules 1.01, 1.02, and 1.03 of Canon 1 of the Code of Professional Responsibility, which require lawyers to adhere to strict standards of conduct.

Whether the alleged use of the audited financial statement— a document that is publicly available through the SEC— amounts to the unlawful use of confidential information or misrepresentation.

Whether the burden of proof regarding the procurement and submission of Ready Form’s ITR was met by the complainant.