Facts:

The case involves Rev. Fr. Casimiro Lladoc as the petitioner against the Commissioner of Internal Revenue and the Court of Tax Appeals as respondents. The events leading to the case began in 1957 when M.B. Estate, Inc., located in Bacolod City, donated P10,000.00 in cash to Rev. Fr. Crispin Ruiz, the then parish priest of Victorias, Negros Occidental, for the construction of a new Catholic Church. The entire amount was utilized for its intended purpose. On March 3, 1958, M.B. Estate, Inc. filed a donor's gift tax return. However, on April 29, 1960, the Commissioner of Internal Revenue issued an assessment for donee's gift tax against the Catholic Parish of Victorias, where Rev. Fr. Lladoc was the priest at the time. The assessed tax amounted to P1,370.00, which included surcharges and interest from May 15, 1958, to June 15, 1960, along with a compromise for the late filing of the return. Petitioner protested the assessment, arguing that he was not the parish priest at...

Facts:

1. Donation and Purpose: In 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to Rev. Fr. Crispin Ruiz, then parish priest of Victorias, Negros Occidental, for the construction of a new Catholic Church. The funds were fully utilized for the intended purpose.
2. Tax Assessment: On March 3, 1958, the donor filed a gift tax return. On April 29, 1960, the Commissioner of Internal Revenue assessed a donee's gift tax of P1,370.00 (including surcharges, interest, and a compromise penalty) against the Catholic Parish of Victorias, Negros Occidental, where Rev. Fr. Casimiro Lladoc was the current parish priest.
3. Protest and Appeal: Rev. Fr. Lladoc protested the assessment, arguing that he was not the parish priest at the time of the donation and that there was no legal entity known as the "Catholic Parish Priest of Victorias." His protest and motion for reconsideration were denied, prompting an appeal to the Court of Tax Appeals (CTA).
4. Constitutional Argument: Rev. Fr. Lladoc contended that imposing a gift tax on the Roman Catholic Church violated the constitutional provision exempting religious properties from taxation.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Constitutional Exemption: The phrase "exempt from taxation" in the Constitution does not mean exemption from all kinds of taxes. It specifically refers to property taxes on religious properties, not excise taxes like the donee's gift tax.
2. Nature of Gift Tax: A gift tax is an excise tax imposed on the transfer of property by way of gift, not a tax on the property itself. Thus, it falls outside the scope of the constitutional exemption.
3. Liability of the Diocese: The Head of the Diocese, as the administrator of church properties, is the proper party to be held liable for the gift tax, not the individual parish priest who was not in office at the time of the donation.
4. Strict Construction of Tax Exemptions: Tax exemptions are highly disfavored and must be justified by a clear, positive, or express grant of privilege by law. No such grant exists for excise taxes like the donee's gift tax.