Case Digest (G.R. No. 222548)
Facts:
Fritz Bryn Anthony M. Delos Santos v. Commissioner of Internal Revenue, G.R. No. 222548, June 22, 2022, Supreme Court Second Division, Leonen, SAJ., writing for the Court.Petitioner Fritz Bryn Anthony M. Delos Santos became a Makati resident on April 29, 2013 and lived in his father’s condominium unit in Unit 12H, Classica Tower 2; he paid association dues to Classica Tower Condominium Association, Inc. On October 31, 2012 the Commissioner of Internal Revenue issued Revenue Memorandum Circular No. 65‑2012 (the Circular), which declared that association dues, membership fees, and other assessments/charges collected by condominium corporations constitute gross income and are subject to income tax, VAT and applicable withholding taxes. On November 26, 2015 Classica notified unit owners that it would no longer shoulder the VAT on association dues effective January 3, 2016. On January 4, 2016 Classica billed Delos Santos including VAT; he paid the dues on January 21, 2016 and thereafter filed the present petition.
Delos Santos filed a Petition for Certiorari under Rule 65 directly with the Court, alleging standing from his payment of VAT, substantive‑due‑process defects in the Circular, and that the Circular unlawfully expanded the tax code; he also invoked the TRAIN amendment exempting such dues. The Office of the Solicitor General filed a Manifestation and Motion urging that although Rule 65 may be procedurally improper, the Circular should be revisited and joined the petition in asking that the Circular be declared void. The Commissioner of Internal Revenue subsequently filed a Comment (November 8, 2017) asserting that the petition was procedurally improper because the Circular was a quasi‑legislative issuance and that review should have been sought by declaratory relief in the RTC or first to the Secretary of Finance; the Commissioner defended the Circular as a clarification of taxing provisions. Petitioner filed a Reply; the Court required further compliance and filings.
While this petition was pending, the Court’s First Division, in Bureau of Internal Revenue v. First E‑Bank Tower Condominium Corp., G.R. Nos. 215801 and 218924 (January 15, 2020, per Lazaro‑Javier, J.), adjudicated the same question and held that the Commissioner gravely abused authority in issuing a Revised Memorandum Circular No. 65 and declared the Circular invalid. Relying on that decision and controllin...(Pro-only)
Issues:
- Is this Petition for Certiorari under Rule 65 justiciable, or is it moot and academic in view of intervening judicial developments?
- If not moot, did the Commissioner of Internal Revenue gravely abuse his discretion in issuing Revenue Memorandum Circular No. 65‑2012 by declaring condominium association dues subject to income tax,...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)