G.R. No. 128315 - Commissioner of Internal Revenue vs. Pascor Realty and Development Corp.

By Letter of Authority No. 001198, BIR Commissioner authorized Revenue Officers Thomas T. Que, Sonia T. Estorco, and Emmanuel M. Savellano to audit the books and records of Pascor Realty and Development Corporation (PRDC) for taxable years 1986, 1987, and 1988.
The audit resulted in a recommendation to issue deficiency assessments of ₱7,498,434.65 for 1986 and ₱3,015,236.35 for 1987.

On March 1, 1995, the Commissioner of Internal Revenue filed before the Department of Justice (DOJ) a criminal complaint for tax evasion against PRDC, its President Rogelio A. Dio, and Treasurer Virginia S. Dio, alleging unpaid taxes totalling ₱10,513,671.00.
PRDC filed an Urgent Request for Reconsideration/Reinvestigation disputing the assessment; on May 17, 1995, the CIR denied the request for lack of a formal assessment.
On July 21, 1995, PRDC elevated the denial to the Court of Tax Appeals (CTA) as CTA Case No. 5271. On September 6, 1995, the CIR moved to dismiss for lack of a formal assessment; the CTA denied the motion on January 25, 1996, and ordered the CIR to file an answer within 30 days.
The CIR did not comply and instead filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court on June 7, 1996. The Court of Appeals partly affirmed the CTA in CA-G.R. SP No. 40853, and denied reconsideration on February 13, 1997.

Whether the criminal complaint for tax evasion, with an attached affidavit of revenue officers, constitutes a formal “assessment” under the National Internal Revenue Code (NIRC).
Whether a formal assessment is a prerequisite before instituting criminal charges for tax evasion.
Whether the CTA acquires jurisdiction to entertain an appeal in the absence of a formal assessment.