Quirico Ungab vs Vicente Cusi, Jr.

Taxation – Tax Evasion – Protest – Criminal Case Against Taxpayer May Be Filed Sans A Final Assessment

In July 1974, Quirico Ungab filed his income tax return. He was subjected to a tax audit and the tax examiner was
convinced that Ungab filed a fraudulent return. He was issued an assessment demanding payment of P104k in taxes. At
the same time, the tax examiner recommended the filing of criminal cases of tax evasion against Ungab. Meanwhile,
Ungab filed a protest with the Commissioner of Internal Revenue (CIR).

Acting on the recommendation of the tax examiner, a state prosecutor filed 6 informations against Ungab for various
violations of the National Internal Revenue Code. The informations were filed with Court of First Instance of Davao
presided by Judge Vicente Cusi, Jr. Ungab filed a motion to quash the informations on the ground that his pending
protest with the CIR has not yet been acted upon hence the assessment is not yet final and executory and therefore the
trial court has no jurisdiction yet over the criminal cases.

ISSUE: Whether or not Ungab is correct.

HELD: No. What is involved here is not the collection of taxes where the assessment of the Commissioner of Internal
Revenue may be reviewed by the Court of Tax Appeals, but a criminal prosecution for violations of the National Internal
Revenue Code (NIRC) which is within the cognizance of courts of first instance (regional trial courts). While there can be
no civil action to enforce collection before the assessment procedures provided in the NIRC have been followed, there is
no requirement for the precise computation and assessment of the tax before there can be a criminal prosecution under
the Code. In fact, there is not even a requirement that an assessment first be issued before a criminal case for violation
of the NIRC be filed.

Quirico Ungab vs Vicente Cusi

FACTS: BIR Examiner Ben Garcia examined the income tax returns filed by Quirico P. Ungab, for the calendar year ending
December 31, 1973. In the course of his examination, he discovered that the petitioner failed to report his income
derived from sales of banana saplings. As a result, the BIR District Revenue Officer at Davao City sent a "Notice of
Taxpayer" to the petitioner informing him that there is due from him (Ungab) the amount of P104,980.81, representing
income, business tax and forest charges for the year 1973 and inviting petitioner to an informal conference where the
petitioner, duly assisted by counsel, may present his objections to the findings of the BIR Examiner. Upon receipt of the
notice, the petitioner wrote the BIR District Revenue Officer protesting the assessment, claiming that he was only a dealer
or agent on commission basis in the banana sapling business and that his income. BIR Examiner Ben Garcia, however,
was fully convinced that the petitioner had filed a fraudulent income tax return so that he submitted a "Fraud Referral
Report," to the Tax Fraud Unit of the BIR. Consequently, the Special Investigation Division of the BIR found sufficient
proof that the herein petitioner is guilty of tax evasion for the taxable year 1973 and recommended his prosecution.
Ungab filed a motion to quash the informations on the ground that his pending protest with the CIR has not yet been
acted upon hence the assessment is not yet final and executory and therefore the trial court has no jurisdiction yet over
the criminal cases.

ISSUE: Whether or not the contention of Ungab is correct

RULING: The contention is without merit. What is involved here is not the collection of taxes where the assessment of the
Commissioner of Internal Revenue may be reviewed by the Court of Tax Appeals, but a criminal prosecution for violations
of the National Internal Revenue Code which is within the cognizance of courts of first instance. While there can be no
civil action to enforce collection before the assessment procedures provided in the Code have been followed, there is no
requirement for the precise computation and assessment of the tax before there can be a criminal prosecution under the
Code.
Besides, it has been ruled that a petition for reconsideration of an assessment may affect the suspension of the
prescriptive period for the collection of taxes, but not the prescriptive period of a criminal action for violation of law.
Obviously, the protest of the petitioner against the assessment of the District Revenue Officer cannot stop his prosecution
for violation of the National Internal Revenue Code. Accordingly, the respondent Judge did not abuse his discretion in
denying the motion to quash filed by the petitioner.