G.R. No.

128315 June 29, 1999

COMMISSIONER OF INTERNAL REVENUE, petitioner,
vs.
PASCOR REALTY AND DEVELOPMENT CORPORATION, ROGELIO A. DIO and VIRGINIA S. DIO, respondent

FACTS:

The BIR examined the books of account of Pascor Realty and Devt Corp. (PRDC) for the years 1986, 1987 and 1988,
from which a tax liability of P10.5M was found. Subsequently, the CIR filed a criminal complaint against PRDC with the
DOJ for tax evasion. Attached to the criminal complaint was a Joint Affidavit executed by the tax examiners. PRDC filed
an Urgent Request for Reconsideration/Reinvestigation with the CIR, disputing the tax assessment and tax liability, but
was denied upon the ground that no formal assessment has yet been issued by the Commissioner.

PRDC elevated the decision to the CTA. PRDC averred that the Joint Affidavit attached to the criminal complaint is
tantamount to a formal assessment notice and hence can be subjected to protest; that there is a simultaneous
assessment and filing of criminal case; that the same is contrary to due process because it is its theory that an
assessment should come first before a criminal case of tax evasion should be filed. 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. It ruled that the Joint Affidavit constitutes an assessment; that an
assessment is defined as simply the statement of the details and the amount of tax due from a taxpayer; thus the Joint
Affidavit which contains a computation of the tax liability of PRDC is in effect an assessment which can be the subject
of a protest. CA affirmed the CTA.

ISSUES:

1. Whether or not the criminal complaint for tax evasion can be construed as an assessment.
2. Whether or not an assessment is necessary before criminal charges for tax evasion may be instituted.

HELD:

1. No. An assessment not only contains a computation of tax liabilities, but also a demand for payment within a
prescribed period. It signals the time when penalties and interests begin to accrue against the taxpayer.

In the case at bar, the BIR examiners’ Joint Affidavit which was attached to the criminal complaint filed with the DOJ
against PRDC, did not constitute an assessment. The Joint Affidavit served the purpose of supporting and
substantiating the criminal complaint for tax evasion, and was not meant to be a notice of the tax due and a demand
to the taxpayer (PRDC) for payment thereof.

2. No. Section 222 of the NIRC specifically states that in cases where a false or fraudulent return is submitted or in
cases of failure to file a return such as this case, proceedings in court may be commenced without an assessment.
Furthermore, Section 205 of the same Code clearly mandates that the civil and criminal aspects of the case may be
pursued simultaneously.