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COMMISSIONER OF INTERNAL REVENUE v. YMCA G.R. No. 124043 October 14, 1998 Panganiban, J.

Facts: Private Respondent YMCA is a non-stock, non-profit institution, which conducts various programs and activities that are beneficial to the public, especially the young people, pursuant to its religious, educational and charitable objectives. YMCA earned income from leasing out a portion of its premises to small shop owners, like restaurants and canteen operators, and from parking fees collected from nonmembers. Petitioner issued an assessment to private respondent for deficiency taxes. Private respondent formally protested the assessment. In reply, the CIR denied the claims of YMCA. Issue: Whether or not the income derived from rentals of real property owned by YMCA subject to income tax Held: Yes. Income of whatever kind and character of non-stock non-profit organizations from any of their properties, real or personal, or from any of their activities conducted for profit, regardless of the disposition made of such income, shall be subject to the tax imposed under the NIRC. Rental income derived by a tax-exempt organization from the lease of its properties, real or personal, is not exempt from income taxation, even if such income is exclusively used for the accomplishment of its objectives. Because taxes are the lifeblood of the nation, the Court has always applied the doctrine of strict in interpretation in construing tax exemptions (Commissioner of Internal Revenue v. Court of Appeals, 271 SCRA 605, 613, April 18, 1997). Furthermore, a claim of statutory exemption from taxation should be manifest and unmistakable from the language of the law on which it is based. Thus, the claimed exemption must expressly be granted in a statute stated in a language too clear to be mistaken (Davao Gulf Lumber Corporation v. Commissioner of Internal Revenue and Court of Appeals, G.R. No. 117359, p. 15 July 23, 1998). Verba legis non est recedendum. The law does not make a distinction. The rental income is taxable regardless of whence such income is derived and how it is used or disposed of. Where the law does not distinguish, neither should we. Private respondent also invokes Article XIV, Section 4, par. 3 of the Constitution, claiming that it is a non-stock, non-profit educational institution whose revenues and assets are used actually, directly and exclusively for educational purposes so it is exempt from taxes on its properties and income. This is without merit since the exemption provided lies on the payment of property tax, and not on the income tax on the rentals of its property. The bare allegation alone that one is a non-stock, non-profit educational institution is insufficient to justify its exemption from the payment of income tax. For the YMCA to be granted the exemption it claims under the above provision, it must prove with substantial evidence that (1) it falls under the classification non-stock, nonprofit educational institution; and (2) the income it seeks to be exempted from taxation is used actually, directly, and exclusively for educational purposes. Unfortunately for respondent, the Court noted that not a scintilla of evidence was submitted to prove that it met the said requisites. The Court appreciates the nobility of respondents cause. However, the Courts power and function are limited merely to applying the law fairly and objectively. It cannot change the law or bend it to suit its sympathies and appreciations. Otherwise, it would be overspilling its role and invading the realm of legislation. The Court regrets that, given its limited constitutional authority, it cannot rule on the wisdom or propriety of legislation. That prerogative belongs to the political departments of government.

Meralco vs. Vera GR L-29987, 22 October 1975 First Division, Munoz Palma (J): 4 concur, 1 took no part Facts: Meralco is the holder of a franchise to construct, maintain, and operate an electric light, heat , and power system in the City of Manila and its suburbs. In 1962 and 1963, Meralco imported and received from abroad copper wires, transformers, and insulators for use in the operation of its business. The Collector of Customs, as deputy of the Commissioner of Internal Revenue, levied and collected a compensating tax. Meralco claimed for refund for the said yeares, but such claims were either not acted upon or denied by the Commissioner. Issue: Whether Meralco is exempt from payment of a compensating tax on poles, wires, transformers and insulators imported by it for use in the operation of its electric light, heat, and power system. Held: Meralco is not exempt from paying the compensationg tax provided for in Section 190 of the Tax Code, the prupose of which is to place casual importers, who are not merchants on equal forring with established merchants who pay sales tax on articles imported by them. Meralcos claim for exemption from payment of the compensating tax is not clear or expressed, contrary to the rule that exemptions from taxation are highly disfavored in law, and he who claims exemption must be able to justify his claim by the clearest grant of organic or statute law. Tax exemptiion are strictly construed against the taxpayer, they being highly disfavored and may almost be said to be odious to the law. When exemption is claimed, it must be shown indubitably to exist, for every presumption is against it, and a well-founded doubt is fatal to the claim.

Procter and Gamble vs. Jagna GR L-24265, 28 December 1979 First Division, Melencio Herrera (J): 8 concur Facts: Procter and Gamble Philippines Manufacturing Corp. is a consolidated corporation of Procter and Gamble Trading Company. It is engaged in the manufacture of soap, edible oil, margarine and otehr similar products; and maintains a bodega in the municipality of Jagna, where it stores copra purchased in the municipality and therefrom ships the same for its manufacturing and other operations. In 1954, the Municipal Council enacted Ordinance 4, imposing storage fees of all exportable copra deposite in the bodega within the jurisdiction of the municipality of Jagna, Bohol. From 1958 to 1963, the company paid the municipality, allegedly under protest, storage fees. In 1964, it filed suit, wherein it prayed that the Ordinance be declared inapplicable to it, and if not, that it be declared ultra vires and void. Issue: Whether the Ordinance i s void, as it amounts to double taxation. Held: The validity of the Ordinance must be upheld pursuant to the broad authority conferred upon municipalites by Commonwealth Act 472 (promulgated 1939), which was the prevailing law when the Ordinance is actually a municipal license tax or fee on persons, firms and corporations exercising the privilege of storing copra within the municipalitys territorial jurisdiction. Such fees imposed do not amount to double taxation. For double taxation to exist, the same property must be taxed twice, when it should be taxed but once. A tax on the companys producs is different from the