Case Summary (G.R. No. 242362)
Procedural Antecedents
The BIR filed a complaint-affidavit with the Department of Justice alleging petitioner operated as a sole proprietor under several trade names and addresses and failed to file income tax returns for taxable years 2001–2003. State Prosecutor Juan Pedro Navera found probable cause for non-filing for taxable years 2001 and 2002 and for failure to supply correct information for taxable year 2003. An Information was filed with the CTA charging a violation of Section 255, RA No. 8424 (Tax Reform Act of 1997), with an arraignment held and a plea of not guilty entered on March 5, 2007.
Alleged Businesses and Addresses
The BIR alleged operation under multiple trade names and registrations for taxable years 2001–2003, including: Mendez Body and Face Salon and Spa (various RDOs in Quezon City, Cubao, East Makati), Mendez Body and Face Skin Clinic (East Makati), Weigh Less Center / Mendez Weigh Less Center (RDO Nos. 21 and 4, Calasiao Pangasinan). The Information described petitioner as sole proprietor of a "Weigh Less Center" with principal office at No. 31 Roces Avenue, Quezon City, and branches in Quezon City, Makati, San Fernando and Dagupan.
Original Information and Essential Allegation
Original Information charged that on or about April 15, 2002, petitioner, a duly registered taxpayer and sole proprietor, willfully failed to file his income tax return for taxable year 2001, causing estimated damage to the government. The core allegation was failure to file the income tax return required for the taxable year 2001, which necessarily implicates the filing deadline in April of the succeeding year.
Motion to Amend and Amended Information
On May 4, 2007, the prosecution filed a Motion to Amend Information with leave of court. The amended information described the accused as doing business under the name/ style of "Weigh Less Center / Mendez Medical Group" and listed branches in Quezon City, Muntinlupa City, Mandaluyong City and Makati City, while alleging failure to file the income tax return for income earned for taxable year 2001. The amended text added certain phrases and changed some branch locations.
CTA First Division Resolution Granting Amendment
The petitioner failed to file a timely comment to the motion. On June 12, 2007, the CTA First Division granted the prosecution’s motion, holding the amendments were formal and did not change the offense charged (violation of Section 255). The CTA found that additions such as the phrase "Mendez Medical Group," the changes in branch locations, and the insertion "for income earned" merely supplied additional precision and did not alter the nature of the offense or deprive the accused of defenses.
Petitioner's Challenge to the Amendment
Petitioner filed a petition for certiorari and prohibition under Rule 65, contending the amendment was substantial under Section 14, Rule 110, Revised Rules of Criminal Procedure. He argued the additional allegations changed the prosecution’s theory, would cause surprise, and would affect his defense. Specific complaints were: (a) change in alleged branch locations (deletion of San Fernando and Dagupan and addition of Muntinlupa and Mandaluyong) would undercut his defense that those branches only registered in 2003 and thus did not exist in 2001; (b) a discrepancy in the alleged date of commission (allegedly changing from 2001 to 2002) would require different evidence; and (c) addition of the entity "Mendez Medical Group" deprived him, at preliminary investigation, of the opportunity to contest the existence or operation of that entity.
Respondents’ Position on Remedy and Merits
Respondents argued that certiorari was the wrong remedy and that appeal to the CTA en banc was the appropriate remedy under Rule 9, Section 9 of the Rules of the CTA. Substantively, respondents maintained the amended information did not change the nature or cause of the accusation, did not cause surprise, and did not prejudice petitioner’s rights, noting that many of the facts in the amendment were already addressed during the preliminary investigation and that the original information already referred to taxable year 2001.
Issues Presented to the Supreme Court
- Whether certiorari under Rule 65 was the proper remedy to assail the CTA’s resolutions. 2. Whether the prosecution’s amendments, made after arraignment, were substantial under Section 14, Rule 110, such that they should have been denied.
Court’s Preliminary Consideration on Proper Remedy
The Court held petitioner correctly invoked certiorari under Rule 65 because after the CTA denied reconsideration of the admission of the amended information, appeal to the CTA en banc under Rule 9, Section 9 was not an available remedy. The Court explained appeals under Section 9 and Rule 43 of the Rules of Court apply to final judgments or orders; the CTA’s resolution admitting the amendment was interlocutory as it resolved incidental matters and did not terminate a stage of the proceeding. Therefore, certiorari was the proper remedy.
Legal Standard on Amendment of Information (Section 14, Rule 110)
Section 14 permits amendment of a complaint or information in form or substance without leave before plea; after plea, formal amendments require leave of court and must be without prejudice to the accused’s rights. Jurisprudence defines "substantial" amendments as those altering recitals of fact constituting the offense or affecting jurisdiction. A constitutional right implicated is the accused’s right under the 1987 Constitution to be informed of the nature and cause of the accusation, exercised during arraignment when the accused begins preparing a defense on the basis of the information read to him.
Jurisprudential Guidance on Formal vs. Substantial Amendments
The Court summarized precedents: amendments changing only penalty range (Almeda) or supplying supervening facts that do not alter the nature of the offense (Teehankee) are formal. Amendments are substantial when they (i) charge a different offense, (ii) alter the prosecution’s theory so as to cause surprise and affect the form of defense, or (iii) render defenses available under the original information inapplicable after amendment (Montenegro, Matalam).
Application: Alleged Change in Date and the Phrase "for income earned"
The Court found confusion in the parties’ pleadings about the alleged year of commission but concluded the Information’s allegation that the failure related to taxable year 2001 necessarily situates the failure to file in April 2002 (the deadline to file for taxable year 2001). The Court held the insertion of the phrase "for income earned" merely supplied precision (it is inherent that an ITR covers income earned in the taxable year) and was therefore a formal amendment that did not prejudice petitioner.
Application: Addition of "Mendez Medical Group" and Change in Branches
Under the NIRC, a resident professional must file an income tax return covering income from all sources and must file in the place of legal residence or principal place of business; a sole proprietor files a consolidated return irrespective of branch locations. The Court held that (a) the change/addition of branch locations did not alter the prosecution’s theory that petitioner failed to file the consolidated ITR for taxable year 2001; (b) the addition of "doing business under the name and style of Mendez Medical Group" mere
...continue readingCase Syllabus (G.R. No. 242362)
Case Caption and Decision
- G.R. No. 179962; Decision dated June 11, 2014; reported at 736 Phil. 181, Second Division; ponente: Brion, J.
- Petition for certiorari and prohibition under Rule 65 filed by Dr. Joel C. Mendez (petitioner) against the Court of Tax Appeals (CTA) resolutions dated June 12, 2007 and August 13, 2007, which (a) granted the prosecution’s Motion to Amend Information with leave of court, and (b) denied the petitioner’s motion for reconsideration.
- CTA Criminal Case No. 0-014; the Information filed October 10, 2005 (Records, Vol. 1 p. 1).
- Disposition by the Supreme Court: petition DISMISSED for lack of merit; costs against the petitioner. Concurring Justices: Carpio (Chairperson), Velasco, Jr., Del Castillo, and Perez. Justice designated as additional member: Velasco, Jr. (in lieu of Associate Justice Perlas-Bernabe).
Antecedent Facts (BIR Complaint and Preliminary Investigation)
- Bureau of Internal Revenue (BIR) filed a complaint-affidavit with the Department of Justice alleging that petitioner, as single proprietor, operated under several trade names and registration addresses during taxable years 2001–2003, including:
- Mendez Body and Face Salon and Spa (RDO No. 39 — South Quezon City; RDO No. 40 — Cubao)
- Mendez Body and Face Skin Clinic (RDO No. 47 — East Makati)
- Weigh Less Center (RDO No. 21)
- Mendez Weigh Less Center (RDO No. 4 — Calasiao, Pangasinan)
- BIR alleged petitioner failed to file income tax returns for taxable years 2001–2003 and evaded payment of correct taxes.
- Petitioner admitted operating as single proprietor under listed trade names in Quezon City, Makati, Dagupan and San Fernando but asserted that certain business establishments were registered only in 2003 and therefore did not exist at the time of the alleged failure to file.
- After preliminary investigation, State Prosecutor Juan Pedro Navera found probable cause for (a) non-filing of income tax returns for taxable years 2001 and 2002, and (b) failure to supply correct and accurate information for taxable year 2003, in violation of the National Internal Revenue Code (NIRC) — citing Sections 254, 255, 257, and 267 in relation to Sections 51(A)(1)(a), 56(a)(1) and 74(A) of the NIRC.
Original Information: Content and Allegations
- Original Information (Records, p. 327) charged violation of Section 255, NIRC, and alleged:
- Date and place: on or about 15th day of April, 2002, at Quezon City, within CTA jurisdiction.
- Petitioner described as duly registered taxpayer and sole proprietor of a “Weigh Less Center” with principal office at No. 31 Roces Avenue, Quezon City, and with several branches in Quezon City, Makati, San Fernando and Dagupan City.
- Charged with willfully failing to file Income Tax Return (ITR) for taxable year 2001, to the damage and prejudice of the Government in estimated amount of P1,089,439.08, exclusive of penalties, surcharges and interest.
- Arraignment: accused arraigned and pleaded not guilty on March 5, 2007.
- Procedural note: CTA initially dismissed without prejudice for lack of probable cause, then on motion for reconsideration reinstated the information (Records, pp. 167–173; 190–214; reinstatement Aug. 22, 2006, id. at 271–273).
Prosecution’s Motion to Amend and Amended Information
- Prosecution filed Motion to Amend Information with Leave of Court on May 4, 2007 (Rollo, pp. 54–56; Records, p. 484–486).
- Amended Information (Records, p. 485) read, in substance:
- Date/place allegation as before (on or about 15th day of April, 2002, at Quezon City).
- Petitioner described as “doing business under the name and style of ‘Weigh Less Center’ / ‘Mendez Medical Group’,” with several branches in Quezon City, Muntinlupa City, Mandaluyong City and Makati City.
- Charged with willfully failing to file ITR with the BIR for income earned for taxable year 2001, to the damage and prejudice of the Government in the estimated amount of P1,089,439.08, exclusive of penalties, surcharges and interest.
- Petitioner failed to file comment within required period; CTA First Division granted the prosecution’s motion on June 12, 2007 (Records, pp. 492–496; Rollo, p. 25).
- Justice Caesar Cassanova dissented from the CTA division’s grant of the motion (dissent at pp. 497–501).
CTA Division’s Rationale for Allowing the Amendment
- CTA characterized the prosecution’s amendment as merely formal, stating it “merely states with additional precision something already contained in the original information.”
- CTA found that:
- Both the original and amended Informations charged the same offense (violation of Section 255).
- The change in the business name to include the phrase “Mendez Medical Group” does not alter the fact that petitioner is charged with failure to file ITR.
- Changes in alleged branches of petitioner’s business do not relieve petitioner of duty to file an ITR nor affect CTA jurisdiction or nature of charge; only one ITR is demanded of every taxpayer.
- The insertion of “for income earned” is merely a normal subject matter of an income tax return and does not substantially change the information.
Petition to the Supreme Court: Grounds and Claims
- Petitioner filed a petition under Rule 65 after CTA denied his motion for reconsideration.
- Primary claim: prosecution’s amendment is a substantial amendment prohibited under Section 14, Rule 110 of the Revised Rules of Criminal Procedure because:
- Additional allegations alter prosecution’s theory of the case, causing surprise and affecting the form of defense.
- Specific contentions:
- Changing business location allegations (deleting San Fernando and Dagupan; adding Muntinlupa and Mandaluyong) would surprise petitioner and affect defense strategy.
- Alleged change in date of commission of crime from 2001 to 2002 alters defense because different taxable years require different defense evidence.
- Addition of “Mendez Medical Group” deprived petitioner, during preliminary investigation, of the right to present evidence against the operation/existence of this entity.
- In sum, petitioner argued the amendments changed the subject of the offense and were therefore substantial.
- Petitioner invoked precedents (e.g., Matalam v. Sandiganbayan; People v. Labatete) to support claim that amendment was substantial and prejudicial.
Respondents’ Comment and Contentions
- Respondents asserted petitioner availed of wrong remedy (arguing appeal to CTA en banc under Rule 9, Section 9 of Revised Rules of CTA was proper remedy), and that the petition was a substitute for a lost appeal.
- Alternatively, respondents argued that even assuming certiorari proper, CTA committed no jurisdictional error or grave abuse of discretion.
- Specific contentions:
- Amended information could not have caused surprise because amendments did not change nature and cause of accusation; offense remains failure to file ITR in 2002 for income earned in 2001 from operation of petitioner’s businesses.
- Change in date and inclusion of “Mendez Medical Group” were matters the petitioner was apprised of during preliminary investigation.
- Original information already alleged taxable year 2001; preparing a defense does