SPOUSES EMMANUEL D. PACQUIAO PACQUIAO AND JINKEE J INKEE J. PACQUIAO vs. THE COURT OF TAX APPEALS and THE COMMISSIONER OF INTERNAL REVENUE; G.R. No. !""#$; A%&'( )* +!) FACTS, Manny Pacquiao received a Letter of Authority, dated March 25, 2010, from the Regional District !ce "RD# of the $ureau of %nternal Revenue "$%R# for the e&amination of his 'oo(s of accounts and other accounting records for the )eriod covering *anuary 1, 200+ to Decem'er 1, 200+- %t .as found that Pacquiao failed to /le his A returns for the years 200+ and 200- 3urthermore, he also failed to state his 4 sourced income for the year 200Pursu ursuan antt to this this,, the the res)o es)ond nden entt 6omm 6ommis issi sion oner er on %nterna %nternall Revenue evenue "6%R# "6%R# iss issued ued another another Letter Letter of Authori Authority, ty, dated *uly 27, 2010 "*uly LA#, authori8ing the $%R9s :ational %nve nvestigation Div Division ":%D# to e&ami amine the 'oo(s of accounts and other accounting records of 'oth Pacquiao and *in(ee for the last 15 years, from 15 15 to 200 he s)ouses countered that they .ere already su';ected su';ected to an investigation investigation for the years )rior to 2007 and no fraud has 'een found- Moreover, they cannot )roduce the necessary documents )ertaining to those years since it .as has already 'een dis)osed of and the )revious counsels that handled their cases and documents .ere already deaddead- Due to this, the 6%R resorted to the 'est evidence availa'le li(e third )arty information sources- 6onsequently, the 6%R issued a :oti :otice ce of %niti %nitial al As Asse sess ssme ment nt<%n <%nfor forma mall 6onfe 6onferrence ence ":%6 ":%6## informing them that 'ased on the 'est evidence o'taina'le, they .ere lia'le for de/ciency income ta&es inu'seq u'sequent uently, ly, a Prelim Prelimina inary ry Ass Assess essmen mentt :otice :otice "P "PA:# A:# .as issued for de/ciency income ta&es, 'ut also for their non< )ayment of their A A lia'ilities- his )rocess continued until the a 3inal inal Decisi Decision on on Dis)ut Dis)uted ed Ass Assess essmen mentt "3DDA# "3DDA# .as issued addressed to Manny only, informing him that the 6%R foun found d him him lia' lia'le le for for de/c de/cie ienc ncy y inco income me ta& ta& and and A for for
ta&a'le years 200+ and 200 .hich, inclusive of interests and surcharges, amounted to a total of P2,2=1,217,>-2 he 6%R )roceeded to e?ect @arrants of Distraint and Levy and arnishment on the )ro)erties of the )etitioners, .ho in turn, questioned such collection )rocess in the 6ourt of a& A))eals$efore the 6A in division, the )etitioners contended that the assessment of the 6%R .as defective 'ecause it .as )redicated on its mere allegation that they .ere guilty of fraud- hey also questioned the validity of the attem)t 'y the 6%R to collect de/ciency ta&es from *in(ee, arguing that she .as denied due )rocess- According to the )etitioners, as all )revious communications and notices from the 6%R .ere addressed to 'oth )etitioners, the 3DDA .as void 'ecause it .as only addressed to Pacquiao- hey also contended that the assessment .as merely 'ased on the B'est )ossi'le sourcesC and not actual transaction documents- Lastly, they argued that the methods resorted to 'y the 6%R are mere summary in nature and de)rives them of due )rocess he 6A econd Division issued a decision ordering the 6%R to desist from collecting on the de/ciency ta& assessments against the )etitioners- %n its resolution, the 6A noted that the amount sought to 'e collected .as .ay 'eyond the )etitioners9 net .orth, .hich, 'ased on Pacquiao9s tatement of Assets, Lia'ilities and :et @orth "AL:#, only amounted to P1,1+5,+>,=7-00- 6onsidering that the )etitioners still needed to cover the costs of their daily su'sistence, the 6A o)ined that the collection of the total amount of P,2+,51>,+>-5 from the )etitioners .ould 'e highly )re;udicial to their interests and should, thus, 'e sus)ended )ursuant to ection 11 of R-A- :o- 1125, as amendedo.ever, it also ordered )etitioners to de)osit the amount of P,2+,51>,+>-5 or )ost a 'ond in the amount of P>,>7,772,>1-5, an amount .hich is clearly 'eyond Pacquiao9s net .orth- his order .as then 'rought to the u)reme 6ourt under Rule =5-
ISSUE, @hether or not the 6A may dis)ense .ith the 'ond requirement
