Case Digest (G.R. No. L-19445)
Facts:
Commissioner of Internal Revenue v. Bishop of the Missionary District of the Philippine Islands of the Protestant Episcopal Church in the U.S.A., G.R. No. L-19445, August 31, 1965, the Supreme Court En Banc, Regala, J., writing for the Court. The Commissioner of Internal Revenue (petitioner) appealed from a decision of the Court of Tax Appeals (Tax Court) ordering refund of P118,847 to the Bishop of the Missionary District of the Philippine Islands of the Protestant Episcopal Church in the U.S.A. (respondent).Respondent is a corporation sole registered with the SEC and administers temporalities and properties in the Philippines of the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the U.S.A. The Missionary District in the Philippines is a separate, duly incorporated religious society which owns and operates St. Luke's Hospital (Quezon City), Brent Hospital (Zamboanga City) and St. Stephen's High School (Manila).
Between 1957 and 1959 the Missionary Society in the U.S.A. and a donor in Canada shipped materials, supplies, equipment and other articles to the Missionary District for use in constructing and operating the Philippine hospitals and school. The Commissioner levied and collected compensating tax totaling P118,847 on those importations. The Bishop filed administrative claims for refund under Republic Act No. 1916 on the ground that the shipments were donations exempt from tax; as the two-year statutory period for recovery neared expiration he filed a petition for review in the Court of Tax Appeals and later two supplemental petitions covering other shipments.
On August 21, 1959 the Commissioner denied the refund claims, asserting among other things that St. Luke's Hospital was not a charitable institution and therefore not entitled to exemption; the Commissioner reiterated this position in his answer to a supplemental petition. After trial the Tax Court held the shipments exempt under RA 1916 and ordered refund of P118,847; the Tax Court denied the Commissioner's motion for reconsideration. The Commissioner appealed to the Supreme Court from the Tax Court decision.
In this appeal the Commissioner assigned errors asserting (1) the shipments were not donations because the Missionary District was merely a branch of the Missionary Society; (2) the Tax Court's finding that the Missionary Society purchased the materials with public contributions (making the contributors the real donors) rested on unco...(Subscriber-Only)
Issues:
- Are the imported materials and supplies donations exempt from compensating tax under Republic Act No. 1916, i.e., were they donated and received by a qualifying donee (distinct and duly incorporated international civic, religious or charitable organization)?
- Was the Court of Tax Appeals' finding that the real donors were contributors who funded the Missionary Society supported by sufficient evidence, or did it rest on uncorroborated testimony?
- Does the admission of paying patients by St. Luke's Hospital negate its charitable character under RA 1916, and may the Secretary of Finance limit the sta...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)