The Court of Tax Appeals (CTA) has denied the government’s plea to reverse its 2015 ruling that annulled the P2.9-billion tax assessment case against former president now Manila Mayor Joseph Estrada and his wife, former Senator Luisa Ejercito.
In its resolution promulgated March 29 but made public Thursday, the Tax Court’s Second Division chaired by Associate Justice Juanito Castañeda said the government, through the Bureau of Internal Revenue (BIR), failed to conduct an independent investigation on the case.
The Tax Court added that the BIR also failed to present important documents to prove that Estrada and his wife have committed tax evasion.
“Again the ‘prima facie correctness of a tax assessment does not apply upon proof that an assessment is utterly without foundation, meaning it is arbitrary and capricious…,’” the Tax Court said.
“Where the BIR has come out with a ‘naked assessment’ i.e. without any foundation character, the determination of the tax due is without rational basis,” the Tax Court added.
The BIR used as basis in its tax assessment the Jose Velarde account allegedly owned by Estrada.
The Jose Velarde account was one of the bases in filing the impeachment complaint and eventually the plunder case against Estrada.
But the Tax Court said to prove tax deficiency, the BIR should have presented evidence such as the taxpayer’s annual income tax returns or certificate of compensation payment/tax withheld or proof that no return was filed.
“Surprisingly, the said vital documents were neither seen during investigation nor presented before this court,” the Tax Court said.
It added that while the BIR used as bases in its tax assessment the Jose Velarde account, it did not even present before the court the copy of the Sandiganbayan decision convicting Estrada of plunder.
“Thus, when the case is up for trial, the judicial head is empty as to facts involved and it is incumbent upon the litigants to the action to establish by evidence the facts upon which they rely…The presumption of correctness of assessment being a mere presumption cannot be made to rest on another presumption…In view of the foregoing, the Court finds no cogent reason to reverse the ruling in the assailed decision,” the Tax Court said.
The decision is concurred in by Associate Justice Caesar A. Casanova.
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