G.R. No. 149549; February 26, 2004
BUREAU OF INTERNAL REVENUE and the FACT FINDING AND INTELLIGENCE BUREAU, Represented by Dir. AGAPITO B. ROSALES, petitioners, vs. LILIA B. ORGANO, respondent.

FACTS

Respondent Lilia B. Organo, a BIR Revenue Collection Officer, was administratively charged with Grave Misconduct and Dishonesty. The charge stemmed from her act of receiving, without specific authority, withholding tax returns and corresponding check payments from several taxpayers, including a substantial payment from the House of Representatives amounting to ₱22,841,517.84. She admitted receiving these and subsequently passing the documents and checks to a Revenue Clerk, Joel Marcelo, who was also unauthorized to receive them. Marcelo then deposited the checks into an unauthorized BIR bank account, from which funds were later withdrawn.
The Office of the Ombudsman found Organo guilty of Grave Misconduct and imposed the penalty of dismissal. On appeal, the Court of Appeals reversed the Ombudsman’s ruling, acquitting Organo of Grave Misconduct. The CA held that while she received and passed on the checks, there was no evidence proving she was aware the checks would be deposited into an unauthorized account or that she participated in the subsequent fraudulent encashment.

ISSUE

Whether the Court of Appeals erred in absolving respondent Lilia B. Organo of administrative liability for Grave Misconduct.

RULING

The Supreme Court partially granted the petition, modifying the CA Decision. The Court held that Organo was administratively liable, but only for Simple Misconduct, not Grave Misconduct. The legal logic centered on the violation of regulations safeguarding public funds and the degree of culpability. BIR regulations strictly prohibit revenue officers from directly receiving tax payments, which must be made directly to authorized government depositories. By admitting she received the checks without authority and facilitated their transfer to another unauthorized person, Organo deliberately disregarded these fundamental rules intended to prevent fraud and safeguard government funds.
Her actions, though not proven to be in conspiracy with the fraudulent encashment, constituted gross negligence and were essential in paving the way for the commission of fraud against the government. The Court ruled that her claim of merely assisting taxpayers and ignorance of the subsequent fraud did not exonerate her from administrative liability for violating custodial rules. However, the evidence did not establish the flagrant character of her violation required for Grave Misconduct. Thus, she was liable for Simple Misconduct. Applying the Civil Service Rules, the Court imposed a six-month suspension.