77.

People vs Kintanar
CTA En Banc Decision
Facts:
> Gloria V. Kintanar is engaged in business and earning income as distributor of Forever Living Products
Philippines, Inc. (FLPPI) with obligation under the law to file her Income Tax Return (ITR) for the taxable year
2000. However, she failed to file her ITR with the BIR for the years 1999 to 2001 and found her liable for
deficiency income taxes, arising from income earned from FLPPI.

> Thus, two (2) separate information has been filed against Gloria V. Kintanar charging her with failure to make
or file her income tax returns (ITR), violating Section 255 of the 1997 National Internal Revenue Code (NIRC),
as amended.

> Kintanar claimed that she did not actively participate in the filing of her joint ITR with her husband since she
entrusted such duty to the latter who, in turn, hired an accountant to perform their tax responsibilities. She
testified that she did not know how much her tax obligation was; nor did she bother to inquire or determine the
facts surrounding the filing of her ITRs.

> Despite several notices and subpoena received by the accused, only an unsupported protest letter made by
her husband was filed with the Bureau of Internal Revenue (BIR).

> The Court of Tax Appeals (CTA) En Banc found her neglect or omission tantamount to deliberate ignorance
or conscious avoidance. As an experienced businesswoman, her reliance on her husband to file the required
ITR without ensuring its full compliance showed clear indication of deliberate lack of concern on her part to
perform her tax obligations. (This ruling was sustained by the Supreme Court (SC) in 2012.)

Issue:

Whether or not Kintanar deliberately and willfully disregarded her tax responsibilities to the Government by
non-filing of Income Tax Return.

Held:

Yes.

First, the prosecution has clearly established that under the law, petitioner and her husband, as married
individuals, who do not derive income purely from compensation, are obliged to file their ITRs for taxable years
2000 and 2001 for the income they earned, as distributors/independent contractors of FLPPI. Thus, petitioner's
sole reliance on her husband to file their ITRs is not a valid reason to justify her non-filing, considering that she
knew from the start that she and her husband are mandated by law to file their ITRS.
Second, being an experienced businesswoman, and having been an independent distributor/contractor of
FLPPI since 1996, petitioner ought to know and understand all the matters concerning her business. This
includes knowledge and awareness of her tax obligation in connection with her business. Petitioner should
know how much are her tax dues, the details stated on the ITRs, where the same are filed, and other important
facts related to the filing of her ITRs; after all, these matters concern her finances.
Under Rule 131, Section (3) (d) of the Rules on Evidence, it is presumed that a person takes ordinary care of
his concern. Hence, the natural presumption is that petitioner knows what are her tax obligations under the law.
As a businesswoman, she should have taken ordinary care of her tax duties and obligations and she should
know that their ITRs should be filed, and she should have made sure that their ITRs were filed. She cannot just
left entirely to her husband the filing of her ITRs
Petitioner cannot find solace on her claim that her husband hired an accountant, who was tasked to handle the
filing and payment of their tax obligations. This allegation was a bare testimony of petitioner's husband, and
yields nothing, but mere uncorroborated statements. Mere allegations are definitely not evidence (Coronel vs
Court of Appeals, 263 SCRA 35); thus, it cannot be used as basis for a court's decision. Furthermore, the Court
finds no affirmative acts on the part of the petitioner to make sure that her obligation to file her ITRs had been
fully complied with. Petitioner testified that she does not even know how much was her tax obligation, nor did
she bother to inquire or determine the facts surrounding the filing of her ITRs. Such neglect or omission, as
aptly found by the Former Second Division, is tantamount to "deliberate ignorance" or "conscious avoidance".
DOCTRINE:
The Supreme Court recently introduced the "Doctrine of Willful Blindness" in a landmark tax evasion case
decided in year 2012. Under this doctrine, the taxpayers deliberate refusal or avoidance to verify the contents
of his or her ITR and other documents constitutes "willful blindness" on his or her part. It is by reason of this
doctrine that taxpayers cannot simply invoke reliance on mere representations of their accountants or
authorized representatives in order to avoid liability for failure to pay the correct taxes.
As they say, "ignorance of the law excuses no one from compliance therewith." In order to be liable, it is
enough that the taxpayer knows his or her obligation to file the required return and he has failed to comply
thereto in the manner required by law.
Evidently, it is imperative for individual taxpayers like professionals to be knowledgeable with their tax
obligations, to be compliant with tax rules and regulations, and to be responsible for all information reported in
his or her ITR.
Based on the foregoing, the willful blindness doctrine was applied by the CTA, as sustained by SC on cases
where there is a natural presumption that the taxpayer knows his/her tax obligations under the law considering
the factual circumstances of the case, such as being a businesswoman or official of a company. This case set
a precedent that mere reliance on a representative or agent (i.e., accountant or husband) is not a valid ground
to justify any noncompliance in tax obligations. The taxpayer must inquire, check and validate whether or not
his/her representative or agent has complied with the taxpayers tax responsibilities.
Willful in tax crimes means voluntary, intentional violation of a known legal duty, and bad faith or bad purpose
need not be shown. It is a state of mind that may be inferred from the circumstances of the case; thus, proof of
willfulness may be, and usually is, shown by circumstantial evidence alone. Therefore, to convict the accused
for willful failure to file ITR or submit accurate information, it must be shown that the accused was (1) aware of

his/her obligation to file annual ITR or submit accurate information, and that (2) he/she, or his/her supposed
agent, nevertheless voluntarily, knowingly and intentionally failed to file the required returns or submit accurate
information. Bad faith or intent to defraud need not be shown.
As can be observed in the case, the accused knew that she had to timely file and supply correct and accurate
information of the joint ITR with the BIR in relation to the profession or the position she holds. The knowledge
was presumed based on the fact that Ms. Kintanar is an experienced businesswoman, having been an
independent distributor of a product for several years. However, despite this knowledge, the CTA found that
she voluntarily, knowingly and intentionally failed to fulfill her tax responsibilities by not participating in the filing
of the ITR and ensuring that everything was filed correctly and accurately.