Barcelon vs CIR (GR. No. 157064 August 7, 2006)

Barcelon, Roxas Securities, Inc. vs Commissioner of Internal Revenue
GR. No. 157064 August 7, 2006

Facts: Petitioner Barcelon, Roxas Securities Inc. (now known as UBP Securities, Inc.) is a corporation engaged in the trading of securities. On 14 April 1988, petitioner filed its Annual Income Tax Return for taxable year 1987. After an audit investigation conducted by the Bureau of Internal Revenue (BIR), respondent Commissioner of Internal Revenue (CIR) issued an assessment for deficiency income tax in the amount of P826,698.31 arising from the disallowance of the item on salaries, bonuses and allowances in the amount of P1,219,093,93 as part of the deductible business expense since petitioner failed to subject the salaries, bonuses and allowances to withholding taxes. This assessment was covered by Formal Assessment Notice No. FAN-1-87-91-000649 dated 1 February 1991, which, respondent alleges, was sent to petitioner through registered mail on 6 February 1991. However, petitioner denies receiving the formal assessment notice. On 17 March 1992, petitioner was served with a Warrant of Distraint and/or Levy to enforce collection of the deficiency income tax for the year 1987. Petitioner filed a formal protest, dated 25 March 1992, against the Warrant of Distraint and/or Levy, requesting for its cancellation. On 3 July 1998, petitioner received a letter dated 30 April 1998 from the respondent denying the protest with finality.

Issue: Whether or not section 44, Rule 130 is applicable.

Held: No. Section 44. Entries in official records. – Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein

The foregoing rule on evidence, however, must be read in accordance with this Court’s pronouncement in Africa v. Caltex (Phil.), Inc., where it has been held that an entrant must have personal knowledge of the facts stated by him or such facts were acquired by him from reports made by persons under a legal duty to submit the same.
 
There are three requisites for admissibility under the rule just mentioned: (a) that the entry was made by a public officer, or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or through official information.

In this case, the entries made by Ingrid Versola were not based on her personal knowledge as she did not attest to the fact that she personally prepared and mailed the assessment notice. Nor was it stated in the transcript of stenographic notes how and from whom she obtained the pertinent information. Moreover, she did not attest to the fact that she acquired the reports from persons under a legal duty to submit the same. Hence, Rule 130, Section 44 finds no application in the present case. Thus, the evidence offered by respondent does not qualify as an exception to the rule against hearsay evidence.

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