G.R. No. L-29306 May 29, 1970
TESTATE ESTATE OF GLICERIA A. DEL ROSARIO, deceased, CONSUELO S. GONZALES-PRECILLA, administratrix-appellee, vs. DR. JAIME ROSARIO and CHILDREN, FATHER LUCIO V. GARCIA, ANTONIO JESUS DE PRAGA, MARIA NATIVIDAD DE JESUS, oppositors-appellants.

FACTS

Special administratrix Consuelo S. Gonzales-Precilla submitted to the Court of First Instance of Manila an itemized statement of income and expenses for the year 1967 for the testate estate of Gliceria A. del Rosario, reflecting a total income of P129,923.99. Certain claimants (oppositors-appellants) filed an opposition to the accounting on two grounds: (1) the statement should have been certified by an independent certified public accountant pursuant to Section 334 of the National Internal Revenue Code, as amended, because the gross receipts exceeded P25,000.00 per quarter; and (2) certain expense items were not properly chargeable to the estate. The special administratrix replied, contending that Section 334 refers to income tax returns, not to an administrator’s accounting, and justified the questioned items. The lower court issued an order finding the opposition unmeritorious and approving the accounts. The oppositors appealed, contending the lower court erred in approving the statement of accounts (a) without the certification of an independent CPA and (b) without holding a hearing on the correctness and truth of the entries.

ISSUE

1. Whether Section 334 of the National Internal Revenue Code, requiring certification by an independent certified public accountant for entities with gross quarterly receipts exceeding P25,000.00, applies to statements of income and expenses submitted by an administrator in a special proceeding for estate settlement.
2. Whether the lower court erred in approving the statement of accounts without holding a hearing on their correctness and truth.

RULING

1. No. The requirement in Section 334 of the Tax Code does not apply to statements of income and expenses submitted by an administrator in a special proceeding for estate settlement. An examination of the legal provision shows the requirement is only for tax purposes. The law specifies that corporations, etc., whose gross quarterly sales, etc., exceed P25,000.00, shall have their books audited by independent CPAs “and their income tax returns accompanied with certified balance sheets, profit and loss statements…” Revenue regulations further prescribe that the accountant’s certificate shall be submitted and filed with the taxpayer’s income tax return. Nowhere can it be implied that Congress intended Section 334 to apply to accounts rendered to the court by an estate administrator. There is also no provision in the Rules of Court governing such a requirement. The protection for the oppositors is accorded by the bond posted by the special administratrix, conditioned upon her rendering true and just accounts, and by the hearing on the accounts held by the court.
2. No. The claim that the order should be set aside due to lack of a hearing is without merit. First, the question of whether there was a hearing is one of fact and may not be raised in this appeal. Second, this question was not raised in the court below and may not be raised for the first time on appeal. Third, a hearing, with previous notice, was held on June 1, 1968, at which only the administratrix and her counsel appeared—a fact finally admitted by the oppositors-appellants in their reply brief, although they contended it was not the proper hearing because the accounts lacked CPA certification, which is beside the point.
The order appealed from is affirmed, with costs against the oppositors-appellants.