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 …

Direct appeal to this Court from the order of the Court of First
Instance of Manila in its Special Proceeding No. 62618 approving the statement
of accounts for the year 1967 submitted by the special administratrix.

On May 27, 1968,
special administratrix Consuelo S. Gonzales-Precilla submitted to the court below, in connection with
the testate estate of Gliceria A. del
Rosario, an itemized statement of income and expenses for the year 1967.  The statement reflected a total income of
P129,923.99 during the year.  On May 28, 1968, certain claimants in the
special proceeding filed an opposition to the accounting on the grounds that
the statement of accounts should have been duly certified by an independent certified
public accountant, pursuant to Section 334 of the National Internal Revenue
Code, as amended, which requires such certification if – as in the present case
– the gross receipt is in excess of P25,000.00 per quarter; and that certain
expense items in the statement of accounts were not properly chargeable to the
estate.  On May 29, 1968, the special administratrix
filed a reply contending that Section 334 refers to income tax returns and not
to an accounting by the administrator of a decedent’s estate, and justi­fying
the particular items being questioned by the opposi­tors.

On June 1, 1968,
the court issued an order finding the opposition unmeritorious and approving
the accounts submit­ted by the special administratrix.  Hence, this appeal by the oppositors,
where they now contend that the lower court erred in approving the statement of
accounts of the special administratrix (a) without
the certification of an independ­ent certified public accountant and (b)
without holding a hearing on the correctness and truth of the entries therein.

There is no merit in this appeal.

The requirement in Section 334 of the Tax Code, as amended, that
the balance sheets, profit and loss statements, etc., of corporations,
companies, partnerships or persons whose gross quarterly sales, earnings,
receipts or output exceed P25,000.00 should be
certified by independent cer­tified public accountants, does not apply to
statements of income and expenses submitted to the court by the adminis­trator
in a special proceeding for the settlement of the estate of a decedent.  An examination of the said legal provision
shows that the requirement is only for tax pur­poses.  The law in question reads:

“SEC. 334.  Corporation, companies, partnerships, or
persons required to keep books of accounts. 
– All corporations, companies, partnerships, or persons required by law
to pay internal revenue taxes shall keep a journal and a ledger, or their
equivalents:  Provided, however,
That those whose gross quarterly sales, earnings, receipts, or output do not
exceed five thousand pesos shall keep and use a simplified set of Bookkeeping
Records duly authorized by the Secretary of Finance wherein all transactions
and results of operations are shown and from which all taxes due the Government
may readily and accurately be ascertained and determined anytime of the
year:  And provided, further, That
in the case of corpora­tions, companies, partnerships, or persons whose gross
quarterly sales, earnings, receipts, or output exceed twenty-five thousand
pesos, shall have their Books of Accounts audited and examined yearly by In­dependent
Certified Public Accountants and their in­come tax returns accompanied with
certified balance sheets, profit and loss statements, schedules list­ing
income-producing properties and the correspond­ing incomes therefrom
and other relevant statements.” (As amended by Rep. Acts
Nos. 438 and 658.)

Thus, under the first proviso, corporations, etc., whose gross
quarterly sales, etc., do not exceed P5,000.00, are required to keep and use a simplified
set of bookkeeping records wherein all transactions and results of operations
are shown “and from which all taxes due the government may readily and
accurately be ascertained and determined anytime of he year;” and in
the second proviso (the one in question), were he quarterly sales, etc., exceed
P25,000.00, the corporations, etc., concerned are required to have their books
of accounts audited and examined yearly by independent certified public
accountants “and their in­come tax returns accompanied with certified
balance sheets, profit and loss statements, schedules listing income-producing
properties and the corresponding incomes therefrom
and other relevant statements.” It is obviously for the reason that
the requirements Section 334 are for tax purposes that Section 8-A, Rev. Reg.
No. V-1, as inserted by Rev. Reg. No. V-20 (48 Off. Gaz., 13), issued by the Secretary of Finance, prescribes,
in connection with the second proviso of Section 334, that “[t]he
accountant’s certificate shall be dated, signed manually, and shall identify
without detailed enumeration the financial state­ments covered by the
certificate and shall be submitted and filed with the taxpayer’s income tax
return;” and that Sec. 8-B, Rev. Reg. No.,V-1, as
inserted by Rev. Reg. No. V-58 (53 off. Gaz., 6486), prescribes that “[c]orporations
x x x whose quarterly sales
x x x exceed P25,000, shall have their income tax returns accompanied with
com­parative profit and less statements x x x.” Nowhere from its provisions can it be implied,
even remotely, that Congress intended Section 334 to apply as well to accounts
rendered to the court by the administrator of an estate.  Neither is there, as conceded by the parties,
any provi­sion in the Rules of Court governing the matter.  The protection sought by the oppositors-appellants is, however, accorded to them both by
the bond posted by the special administratrix
conditioned upon her rendering true and just accounts of her administration
(Cf. Pacific Union Insurance Co. vs. Narvasa, etc.,
et al., G.R. No. L-10696, May 28, 1958), and by the hearing on the accounts held by the court.  This leads us to the other question raised by
the oppositors-appellants, namely, the alleged
absence of a hearing on the correctness and truth of the entries in the administratrix‘ statement of accounts.

We find no merit in the claim that the order under re­view should
be set aside on the ground that the administra­trix‘
accounts were approved without a hearing. 
First– The question of whether there was
such a hearing or not is one of fact, hence, may not be raised in this
appeal.  Second– This question was
not raised the court below, and may not be raised for the first time on appeal
(Rule 46, Section 18).  Third– A
hearing, with previous notice, was held on June 1, 1968, at which only the administra­trix and her counsel appeared; and this is
finally admit­ted by the oppositors-appellants in
their reply brief, although they now contend that it was not the proper hearing
required by law since the accounts were not yet in order, not having been
certified by an independent certified public accountant, which, of course, is
beside the point.

PREMISES CONSIDERED, the order pealed from is affirmed,
with costs against the oppositors-appellants.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, and Barredo, JJ., concur.

Castro, J., on official leave.