G.R. No. 189218 - Our Lady of Lourdes Hospital vs. Spouses Capanzana

On December 14, 2007, the Bureau of Internal Revenue (BIR) issued Audit Results/Assessment Notice Nos. QA-07-000096 and QA-07-000097, assessing St. Luke’s Medical Center, Inc. (SLMC) deficiency income tax under Section 27(B) of the 1997 National Internal Revenue Code (NIRC) for taxable years 2005 (P78,617,434.54) and 2006 (P57,119,867.33).
On January 14, 2008, SLMC filed an administrative protest invoking its status as a non-stock, non-profit charitable and social-welfare organization exempt under Sections 30(E) and 30(G) of the NIRC.

On April 25, 2008, the Commissioner of Internal Revenue (CIR) issued a Final Decision increasing the deficiency for 2005 to P82,419,522.21 and for 2006 to P60,259,885.94, inclusive of surcharge, interest, and penalties.
SLMC elevated the matter to the Court of Tax Appeals (CTA) by Petition for Review (CTA Case No. 7789).

On August 26, 2010, the CTA Division granted SLMC’s petition, cancelling the assessments.
The Division denied the CIR’s motion for reconsideration on December 28, 2010.
On May 9, 2012, the CTA En Banc affirmed cancellation; it denied the CIR’s motion for reconsideration on September 17, 2012.

The CIR filed a Petition for Review under Rule 45 before the Supreme Court.
On September 26, 2012, in G.R. Nos. 195909 & 195960 (Commissioner v. SLMC), the Court held that SLMC’s revenues from paying patients are subject to the preferential 10% rate under Section 27(B) and that SLMC is not liable for surcharge and interest under Sections 248 and 249.
On April 30, 2013, SLMC paid the basic taxes due for taxable years 1998, 2000–2002, and 2004–2007; it submitted BIR certifications (dated May 27 and November 26, 2013) confirming payment and case closure.
The CIR opposed SLMC’s motion to dismiss as moot; both parties filed memoranda thereafter.

Whether SLMC’s revenues from paying patients are exempt under Sections 30(E) and 30(G) of the NIRC or taxable at 10% under Section 27(B).
Whether SLMC is liable for compromise penalty under Section 248(A) of the NIRC for alleged failure to file quarterly income tax returns.
Whether the petition is rendered moot by SLMC’s payment of the basic taxes for 2005 and 2006.