CIR vs.

PASCOR
GR No. 128315, June 29, 1999

Facts:
A letter of authority was issued to examine the books of accounts and other
accounting documents of PASCOR. Due to that, a recommendation for the issuance of
assessment was given by the revenue officers who performed the examination.
Instead, the CIR filed with the DOJ a criminal complaint for tax evasion against
the president and treasurer of PASCOR. PASCOR assailed the said complaint by filing
an urgent request for reconsideration/reinvestigation. The CIR denied the said request.
Hence, the elevation of the issue to the CTA. In the CTA, the CIR assailed the petition
filed by the CTA on ground that it has no jurisdiction. However, the CTA ruled otherwise.
It denied the motion to dismiss by the CIR. It agreed with PASCOR that the criminal
complaint with the Joint Affidavits attached thereto constitutes as an assessment. The
CA, when the case was brought before it, affirmed the decision of the CTA.
Hence, the appeal to the Supreme Court.
Issue:
Whether or not the affidavits attached to the criminal complaint constitute as
assessment.
Held:
No. The affidavits cannot be considered as an assessment under the NIRC.
While it is true that assessment was not defined under the NIRC, the latter
provides for the specific functions and effects of an assessment. From thereon, it can be
gleaned that assessment cannot be considered as any document containing the tax due
for the taxpayer.

To start with, an assessment must be sent to and received by a taxpayer, and

must demand payment of the taxes described therein within a specific period. Thus, the
NIRC imposes a 25 percent penalty, in addition to the tax due, in case the taxpayer fails
to pay deficiency tax within the time prescribed for its payment in the notice of
assessment. Likewise, an interest of 20 percent per annum, or such higher rates as
may be prescribed by rules and regulations, is to be collected from the date prescribed
for its payment until the full payment.

The issuance of an assessment is vital in determining, the period of limitation

regarding its proper issuance and the period within which to protest it.

The affidavit attached to the criminal complaint cannot be an assessment. First, it

was not intended to the taxpayer but to the Secretary of Justice. Second, there is no
specific date indicated therein to which the taxpayer may ascertain the reckoning period
for any actions and remedies available to him.

It should be stressed that the said document is a notice duly sent to the taxpayer.
Indeed, an assessment is deemed made only when the collector of internal revenue
releases, mails or sends such notice to the tax payer.