CASE DIGEST: Lladoc Vs Commissioner of Internal Revenue G.R. No. L-19201
CASE DIGEST: Lladoc Vs Commissioner of Internal Revenue G.R. No. L-19201
FACTS:
In 1957, the MB Estate Inc., donated P10,000 in cash to Rev. Fr. Crispin Ruiz, then parish priest
of Victorias, Negros Occidental and predecessor of herein petitioner, for the construction of a new
Catholic Church in the locality. The total amount was actually spent for the purpose intended.
In 1958, MB Estate filed the donor’s gift tax return. In 1960, the respondent Commissioner of
Internal Revenue issued an assessment for donee's gift tax against the Catholic Parish of Victorias,
Negros Occidental, of which petitioner was the priest. The tax amounted to P1,370.00 including
surcharges, interests of 1% monthly from May 15, 1958 to June 15, 1960, and the compromise for the
late filing of the return.
Petitioner protested to the assessment and requested the withdrawal thereof. The protest and
the motion for reconsideration presented to the Commissioner of Internal Revenue were denied. The
petitioner appealed to the Court of Tax Appeals. In the petition for review, the Rev. Fr. Casimiro Lladoc
claimed that at the time of the donation, he was not the parish priest in Victorias; that there is no legal
entity or juridical person known as the Catholic Parish Priest of Victorias and therefore, he should not be
liable for the donee's gift tax. It was also asserted 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.
ISSUE:
Whether or not for the assessed donee's gift is exempted from taxation?
HELD:
NO. The Court ruled that the donee’s gift is not exempted from taxation.
Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from taxation cemeteries, churches
and parsonages 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.
In this case, what the Collector assessed was a donee's gift tax; the assessment was not on the
properties themselves. It did not rest upon general ownership; it was an excise upon the use made of
the properties, upon the exercise of the privilege of receiving the properties (Phipps vs. Com. of Int. Rec.
91 F 2d 627). Manifestly, gift tax is not within the exempting provisions of the section just mentioned. A
gift tax is not a property tax, but an excise tax imposed on the transfer of property by way of gift inter
vivos, the imposition of which on property used exclusively for religious purposes, does not constitute
an impairment of the Constitution.