Case Summary (G.R. No. 185209)
Key Dates
November 7, 1987 – Death of Jose P. Fernandez.
April 17, 1990 – Filing of estate tax return reporting nil estate tax liability.
April 27, 1990 – Issuance of BIR Certifications Nos. 2052 and 2053 clearing the estate for transfer of properties.
November 26, 1991 – BIR issues assessment notice demanding payment of P66,973,985.40.
June 17, 1997 – CTA denies petitioner’s petition for review.
April 30, 1999 – Court of Appeals (CA) affirms CTA decision.
January 20, 2000 – Petition for review on certiorari filed with the Supreme Court.
Applicable Law
1987 Philippine Constitution;
Tax Code of 1987 (formerly 1977 Code as amended) – particularly Sections 79 and 283(b);
Rules of Court, Rule 132, Section 34 (Revised Rules on Evidence);
Rule 45, Rules of Civil Procedure (Petition for Review on Certiorari).
Facts: Death and Probate Proceedings
Upon Fernandez’s death, Branch 51, RTC Manila, appointed retired Justice Arsenio P. Dizon and Atty. Rafael Dizon as Special and Assistant Special Administrators. In October 1988, they notified the BIR of the special proceedings. Due to pending collation of assets and liabilities, extensions for filing the estate tax return were granted.
Filing of Estate Tax Return and Initial Certifications
In March–April 1990, Atty. Jesus M. Gonzales, authorized by Justice Dizon, filed the estate tax return showing a net taxable estate of zero, after claiming deductions far exceeding the gross estate aggregate. On April 27, 1990, the BIR Regional Director issued certifications confirming full payment of estate taxes and authorizing property transfers.
Appointment of Administrator and Sale Authorization
Following Justice Dizon’s death in August 1990, the probate court appointed petitioner as sole administrator. Petitioner sought authority to sell estate properties to satisfy creditor claims, including loans by Equitable Banking Corporation, Banque de L’Indochine et de Suez, Manila Banking Corporation, and State Investment House, Inc.
BIR Assessment of Deficiency Estate Tax
On November 26, 1991, the Assistant Commissioner for Collection issued an assessment notice demanding P66,973,985.40 in deficiency estate tax, including surcharges, interest, and penalties for late filing and payment. Petitioner’s motion for reconsideration was denied in April 1994, prompting a CTA petition for review in June 1994.
CTA Proceedings and Evidence Presented
Petitioner relied solely on documentary evidence of asset inventories, creditor claims, estate tax return, certifications, and letters of administration. The BIR presented revenue examiner Alberto Enriquez, who identified internal audit reports, working papers, and the assessment notice as respondent’s exhibits. Petitioner objected to the formal admissibility of BIR’s documents.
CTA Decision on Evidence Admission and Computation of Deficiency
On June 17, 1997, the CTA admitted BIR documents under the exception in Vda. de Oñate v. Court of Appeals, finding them duly identified and part of BIR records. It computed a revised deficiency estate tax of P37,419,493.71 plus 20% interest, disallowing the full claims of creditors as deductions.
CA Affirmation and Issues in Petition for Certiorari
The CA, on April 30, 1999, affirmed the CTA, rejecting arguments that the earlier estate tax return and certifications precluded re-assessment. Petitioner’s issues included the inadmissibility of unoffered evidence, the binding effect of initial certifications, the disallowance of valid creditor claims, and alleged double imputation of property values.
Supreme Court’s Findings on Evidence Admission
The Court held that, under Section 34, Rule 132 of the Rules of Court, no evidence may be considered without formal offer. The Vda. de Oñate exception applies strictly only if documents are both duly identified by testimony and incorpora
...continue readingCase Syllabus (G.R. No. 185209)
Procedural History
- Petition for Review on Certiorari filed January 20, 2000 under Rule 45 seeking reversal of the CA Decision of April 30, 1999 (docketed CA-G.R. SP No. 46947).
- CA had affirmed the CTA Decision of June 17, 1997 (docketed CTA Case No. 5116) which denied petitioner’s challenge to the BIR’s deficiency estate tax assessment.
- Petitioner moved for reconsideration in CA; denied by CA Resolution of November 3, 1999.
- Supreme Court granted review to resolve issues on evidence admissibility and computation of deficiency estate tax.
Facts
- Jose P. Fernandez died November 7, 1987; probate of his will was filed in RTC Manila Branch 51 (Sp. Proc. No. 87-42980).
- Retired Justice Arsenio P. Dizon and Atty. Rafael Arsenio P. Dizon were appointed Special and Assistant Special Administrators of the Estate.
- BIR granted extensions to file estate tax return pending collating of assets and claims.
- On March 14, 1990, Justice Dizon authorized Atty. Jesus M. Gonzales to file the estate tax return; on April 17, 1990 a NIL estate tax return was filed with BIR Regional Office, showing gross estate P14,315,611.34, deductions P187,822,576.06, net taxable estate NIL.
- BIR issued Certifications Nos. 2052 and 2053 on April 27, 1990 confirming full payment and transferability of real and personal properties.
- Justice Dizon died August 1990; petitioner appointed sole administrator October 22, 1990.
- Petitioner sought court authority to sell estate properties to pay creditors (Equitable Banking Corp., Banque de L’Indochine et de Suez, Manila Banking Corp., State Investment House, Inc.).
BIR Assessment and Administrative Proceedings
- November 26, 1991: BIR issued Estate Tax Assessment Notice No. FAS-E-87-91-003269 demanding P66,973,985.40 as deficiency estate tax, including tax, surcharges, interest, compromise penalties, and formalities penalties.
- December 12, 1991: Atty. Gonzales filed motion for reconsideration; denied by BIR Commissioner’s letter dated April 12, 1994.
- Petitioner received denial May 3, 1994; filed petition for review with