Case Digest (G.R. No. 215801)
Facts:
In the Matter of Declaratory Relief on the Validity of BIR Revenue Memorandum Circular No. 65-2012 (G.R. Nos. 215801 and 218924), January 15, 2020, Supreme Court First Division, Lazaro-Javier, J., writing for the Court.The disputes arose after the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 65-2012 (RMC No. 65-2012) on October 31, 2012, which declared that association dues, membership fees and other assessments/charges collected by condominium corporations constitute gross income subject to income tax, value-added tax (VAT) and applicable withholding taxes. First E-Bank Tower Condominium Corp. (First E-Bank), a non-stock, non-profit condominium corporation, filed a petition for declaratory relief on December 20, 2012 in the Regional Trial Court (RTC), Branch 146, Makati City, seeking to declare RMC No. 65-2012 invalid. First E-Bank alleged the Circular imposed oppressive tax liabilities (12% VAT and up to 32% withholding/income tax) on funds that unit owners contributed solely for maintenance and common expenses, and that the BIR issued the Circular without notice and hearing.
The RTC, by Resolution dated September 5, 2013, declared RMC No. 65-2012 invalid for exceeding the BIR’s authority, changing longstanding BIR practice, and violating due process; its December 18, 2013 Order denied the parties’ motions for reconsideration. Both First E-Bank and the BIR appealed to the Court of Appeals. On June 26, 2014 the Court of Appeals (Special Seventeenth Division, penned by Associate Justice Ramon M. Bato, Jr.) dismissed both appeals for lack of jurisdiction, holding that the Court of Tax Appeals (CTA) had exclusive jurisdiction over tax matters (citing Section 7 of RA 9282); the CA denied motions for reconsideration on November 27, 2014. First E-Bank then filed a Special Civil Action for Certiorari in the Supreme Court (G.R. No. 218924) alleging ...(Pro-only)
Issues:
- Was a petition for declaratory relief a proper remedy to seek invalidation of RMC No. 65-2012?
- Did the Court of Appeals validly dismiss the appeals for lack of jurisdiction?
- Is RMC No. 65-2012 valid?
- Is a condominium corporation engaged in trade or business?
- Are association dues, membership fees, and other assessments/charges subject to income tax, VAT, and withholding tax?
- Is First E-Bank entitled to the release o...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)