The children of pork barrel scam mastermind Janet Lim Napoles were acquitted by the Court of Tax Appeals (CTA) en banc of tax evasion charges filed by the Bureau of Internal Revenue (BIR).
In a seven-page decision issued on 8 June 2026 and penned by Associate Justice Marian Ivy F. Reyes-Fajardo, the CTA en banc affirmed the resolutions of the CTA Second Division dismissing the tax case against James Christopher Napoles and Jo Christine Napoles, president and treasurer, respectively, of JCLN Global Properties Development Corporation, on the ground of prescription.
The case stemmed from a complaint filed by the BIR for willful failure to supply correct and accurate information in the respondents' income tax return for taxable year 2010.
The respondents were alleged to have fraudulently declared only P1,742,073 in gross revenues for 2010 despite the company's income allegedly reaching P44,192,418, portions of which were reportedly used to acquire real properties during the same year.
The BIR accused them of deliberately concealing the acquisition of the properties, resulting in the alleged underdeclaration of income amounting to P36.06 million and the nonpayment of taxes amounting to P13.25 million, exclusive of interest and penalties.
However, the CTA Second Division dismissed the complaint on the ground of prescription in a resolution issued on 20 August 2024.
In its petition for review before the CTA en banc, the BIR argued that prescription had not yet set in because, under Section 281 of the National Internal Revenue Code (NIRC) of 1997, the discovery of the violation and the institution of proceedings operate concurrently to commence and interrupt the prescriptive period.
The BIR further argued that the filing of a criminal complaint with the prosecutor's office for purposes of preliminary investigation interrupts or suspends the running of the prescriptive period.
The respondents, however, maintained that the prescriptive period commenced on 17 September 2015 upon the filing by the BIR of the criminal complaint before the Department of Justice (DOJ). They argued that such filing did not interrupt the running of prescription, which continued uninterrupted until it lapsed on 17 September 2020. Consequently, when the information was filed before the CTA on 19 July 2024, the criminal action had already prescribed.
In upholding the ruling of the CTA Second Division, the CTA en banc noted that Section 281 of the NIRC provides that violations of the Code "shall prescribe after five years, reckoned from the date of commission of the offense, if known, or, if not known, from the discovery thereof."
It added that only the institution of judicial proceedings for the investigation and punishment of the offense interrupts the running of the prescriptive period.
The CTA pointed out that the BIR instituted the criminal complaint against the respondents by filing a joint complaint-affidavit and referral letter with the DOJ on 17 September 2015.
The DOJ subsequently issued a resolution on 1 December 2016 finding probable cause to indict the respondents for alleged violations of the NIRC.
"Reckoned from 17 September 2015, the five-year prescriptive period lapsed on 17 September 2020. Thus, when petitioner filed the Information before the Court in Division on 19 July 2024, the criminal action had already prescribed. The dismissal of CTA Crim. Case No. 0-1193 on the ground of prescription is justified," the CTA en banc declared.