TAXATION LAW II | CIR v. Pascor Realty & Development Corp., G.R. no. 128315, June 29, 1999

CIR v. Pascor Realty & Development Corp., 

G.R. no. 128315, June 29, 1999


Facts On March 1, 1995, the Commissioner of Internal Revenue filed a criminal complaint before the Department of Justice against the PRDC, its President Rogelio A. Dio, and its Treasurer Virginia S. Dio, alleging evasion of taxes in the total amount of P10,513,671.00. Private respondents PRDC, et al. filed an Urgent Request for Reconsideration/Reinvestigation disputing the tax assessment and tax liability. On March 23, 1995, private respondents received a subpoena from the DOJ in connection with the criminal complaint filed by the Commissioner of Internal Revenue (BIR) against them. In a letter dated May 17, 1995, the CIR denied the urgent request for reconsideration/reinvestigation of the private respondents on the ground that no formal assessment has as yet been issued by the Commissioner. Private respondents then elevated the Decision of the CIR dated May 17, 1995 to the Court of Tax Appeals on a petition for review docketed as CTA Case No. 5271 on July 21, 1995. On September 6, 1995, the CIR filed a Motion to Dismiss the petition on the ground that the CTA has no jurisdiction over the subject matter of the petition, as there was no formal assessment issued against the petitioners. The CTA denied the said motion to dismiss in a Resolution dated January 25, 1996 and ordered the CIR to file an answer within thirty (30) days from receipt of said resolution. The CIR received the resolution on January 31, 1996 but did not file an answer nor did she move to reconsider the resolution.whether the revenue officers’ Affidavit-Report, which was attached to the criminal Complaint filed with the Department of Justice, constituted an assessment that could be questioned before the Court of Tax Appeals.


Held no. Assessment is deemed made only when the collector of internal revenue releases, mails or sends such notice to the taxpayer. Here, the revenue officers’ Affidavit merely contained a computation of respondents’ tax liability. It did not state a demand or a period for payment. Worse, it was addressed to the justice secretary, not to the taxpayers. Private respondents maintain that the filing of a criminal complaint must be preceded by an assessment. This is incorrect. Section 222 of the NIRC specifically states that in cases of failure to file a return, proceedings in court may be commenced without an assessment. Section 222 states that an assessment is not necessary before a criminal charge can be filed. A criminal complaint is instituted not to demand payment, but to penalize the taxpayer for violation of the Tax Code.







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