G.R. No. L-19201
June 16, 1965
Facts
Sometime in 1957, MB Estate Inc. donated 10,000 in cash to Rev Fr. Crispin Ruiz, the then parish priest of Victorias. The respondent, Commissioner of Internal Revenue (CIR), issued an assessment for donee’s gift tax against the Catholic Parish of Victorias of which petitioner Rev. Fr. Casimiro Lladoc was the priest. Tax liability amount to P1,370 including surcharges, interests and compromise. Petitioner filed a protest and motion for reconsideration, which the CIR denied. Petitioner appealed to the Court of Tax Appeals (CTA) but the latter affirmed the decision of CIR, except for the imposition of compromise penalty.
Petitioner contends that the assessment of the gift tax, even against the Roman Catholic Church, would not be valid, for such would be a clear violation of the provisions of the Constitution. He also claimed that he should not be liable for the donee’s gift tax because he was not the parish priest in Victorias at the time of donation. Hence, petitioner prayed for the reversal of the decision of the CIR.
Issue
Whether or not the petitioner is exempt from paying donor’s tax pursuant to the provision of the Constitution which exempt religion from taxation?
Held
No. Section 22(3), Art. VI of The Constitution of the Philippines, exempts from taxation cemeteries, churches and personages or convents, appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious purposes. The exemption is only from the payment of taxes assessed on such properties enumerated, as property taxes, as contra-distinguished from excise taxes. The phrase “exempt from taxation,” as employed in the Constitution supra should not be interpreted to mean exemption from all kinds of taxes.
In this case, the Collector assessed a donee’s gift and not on the properties themselves. Gift tax is not within the exemption provided by the Constitution since it is not a property tax, but an excise tax imposed on the transfer of property by way of gift inter vivos.
Hence, petitioner is not exempt from paying said donation tax.