G.R. No. 200868 - Ledda vs. Bank of the Philippine Islands

On 22 July 2013, Commissioner Kim S. Jacinto-Henares of the BIR issued RMO No. 20-2013, “Prescribing the Policies and Guidelines in the Issuance of Tax Exemption Rulings to Qualified Non-Stock, Non-Profit Corporations and Associations under Section 30 of the National Internal Revenue Code of 1997, as Amended.”
RMO No. 20-2013 required non-stock, non-profit educational institutions to apply for a three-year Tax Exemption Ruling (TER), subject to renewal, and provided that failure to file annual information returns would automatically revoke their tax-exempt status.

On 29 November 2013, St. Paul College of Makati (SPCM) filed a civil action in RTC Makati, Branch 143, seeking to declare RMO No. 20-2013 unconstitutional and praying for a temporary restraining order (TRO) and writ of preliminary injunction.
RTC issued a TRO on 27 December 2013 and, on 22 January 2014, granted a writ of preliminary injunction, finding that RMO No. 20-2013 divested institutions of their constitutional tax-exemption privilege. The CIR’s motion for reconsideration was denied.
On 25 July 2014, the RTC rendered a Decision declaring RMO No. 20-2013 unconstitutional under Article XIV, Section 4(3) of the Constitution and made the injunction permanent.
On 18 September 2014, the CIR issued RMO No. 34-2014 to clarify certain provisions of RMO No. 20-2013 (as amended by RMO No. 28-2013). On 29 October 2014, the RTC denied reconsideration in a Joint Resolution.

The CIR filed a petition for review under Rule 45 of the Rules of Civil Procedure (G.R. No. 215383), assailing the RTC’s Decision and Joint Resolution.

Whether the RTC correctly concluded that RMO No. 20-2013 imposes a new prerequisite before a non-stock, non-profit educational institution may avail of the tax exemption under Article XIV, Section 4(3) of the Constitution.

Whether the RTC correctly held that RMO No. 20-2013 adds requirements beyond those prescribed under Department of Finance Order No. 137-87.