Cedric Lee. INQUIRER FILE PHOTO
Businessman Cedric Lee and estranged wife Judy Gutierrez pleaded not guilty to four counts of tax evasion charges.
READ: Cedric Lee co-accused pleads not guilty to malversation, graft
On the other hand, the tax court granted the request of co-accused John Ong to reschedule his arraignment after his lawyer said they will file an appeal for his client’s case. Arraignment was moved to Nov. 11.
All the three accused who are officials of Izumo Contractors are on provisional liberty after posting P20,000 bail for each of the four counts of cases filed against them.
Tax Court record showed that Izumo’s tax deficiency is over P74.3-million broken down to P31, 061,623.38 for 2006; P12,557,283.40 for 2007; P3,320,511.85 for 2008 and P27,359,816.61 for 2009 exclusive of surcharges and interest.
READ: Cedric Lee ordered arrested over P194M tax case
If surcharges and interest will be included, based on the complaint filed by the Bureau of Internal Revenue (BIR) before the Department of Justice (DOJ), the amount will be P194.47-million.
Based on the charge sheet filed by the DOJ, Lee’s firm Izumo Contractors underdeclared its income by 1,602 percent from 2006 to 2009.
“The manifest underdeclaration is more than tenfold…thus, a prima facie case thereby exists against all the respondents,” the DOJ resolution stated.
Lee denied the allegation saying it was the company’s accountant who prepared its income tax return (ITR).
But the DOJ said Lee’s “flimsy” defense “deserves minuscule if not nary a consideration.”
“No amount of delegation to an accountant or bookkeeper would extenuate any responsible officer of a corporation from the commission of any violation arising from such delegated act,” the DOJ said.
“Parenthetically, it is likewise quite ironic for the president of Izumo to merely feign personal knowledge of such important transactions involving the corporation in the guise that he is not an accountant,” the DOJ added.
On the other hand, the DOJ called “lame” the defense of Gutierrez-Lee and Ong that their titles were “merely for purposes of incorporation of Izumo.”
The DOJ said their defense should best be threshed out in a full-blown trial.
“Their astute denial of any participation or involvement as responsible officers of Izumo, are at best, self-serving statements with no probative value,” the DOJ said.
Investigation against Izumo stemmed from a confidential information received by the BIR against tax evasion committed by Izumo. A letter of authority was issued by the BIR for the examination of its books of accounts and other accounting records.
Izumo declared P5.54 million in its ITR in 2006; P9.14 million in 2007; P21.34 million in 2008 and P40.20 million in 2009. Comparing it from the certifications from their clients, probers discovered that their income in 2006 is P94.33 million; P46.07 million in 2007; P30.83 million in 2008 and P131.49 million in 2009 with a total of P76,218-million.
However, responses from clients of Izumo showed that Izumo received a total amount of P302.63 million in income payments.
Under Section 248 of the Tax Code, underdeclaration of taxable income by more than 30 percent is considered substantial and constitutes a prima facie case of fraud tantamount to tax evasion.