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BY ADRIAN STEWART CO
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Thursday, October 26, 2017
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MANILA – The Court of Tax Appeals affirmed an earlier decision to dismiss the P2.9-billion deficiency income tax assessment case against former president and now Manila mayor Joseph Ejercito Estrada over the Jose Velarde bank account.
Estrada was not given due process to answer his alleged tax deficiencies, and this makes the Bureau of Internal Revenue’s 1999 collection case against Estrada void, the CTA said in a decision released Wednesday.
“Due process requires that taxpayers be informed in writing of the facts and law on which the assessment is based … to aid the taxpayer in making a reasonable protest,” read part of the decision.
“To immediately ensue with tax collection without initially substantiating a valid assessment contravenes the principle in administrative investigations that taxpayers should be able to present their case and adduce supporting evidence,” the tax court ruled.
The case stemmed from the Sandiganbayan decision finding Estrada guilty of plunder, being the real owner of the multimillion-peso deposits at the erstwhile Equitable-PCI Bank under the name Jose Velarde.
But the CTA noted that the BIR cannot justify its assessment using this decision since tax courts cannot base its verdict on contents of records of other cases or take judicial notice of proceedings pending at other courts.
“The Sandiganbayan decision may only prove ownership of the said account,” said the CTA. “As regards the determination of tax deficiency in the tax assessment case, evidence … source documents or third-party information is elementary.”
“The cause of the cancelation of the subject tax assessment is not only the absence of an independent investigation but also the failure of respondents to introduce evidence to support the basis of their assessment,” the resolution read.
The controversial Jose Velarde account allegedly contained P3.2 billion at one point. It was Estrada who opened the account under that name, Equitable-PCI banker Clarissa Ocampo said in a testimony.
Estrada was convicted of plunder in 2007 but then President Gloria Macapagal-Arroyo pardoned him weeks later. He ran for president in 2010 but lost. He then embarked on a successful mayoral bid in Manila in 2013 and got re-elected in 2016./PN
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