G.R. No. 144104, June 29, 2004 [Constitutional Law - Article VI: Legislative Department; Taxation ]
FACTS:
Petitioner is a non-stock, non-profit entity established by virtue of PD No. 1823, seeks exemption from real property taxes when the City Assessor issued Tax Declarations for the land and the hospital building. Petitioner predicted on its claim that it is a charitable institution. The request was denied, and a petition hereafter filed before the Local Board of Assessment Appeals of Quezon City (QC-LBAA) for reversal of the resolution of the City Assessor. Petitioner alleged that as a charitable institution, is exempted from real property taxes under Sec 28(3) Art VI of the Constitution. QC-LBAA dismissed the petition and the decision was likewise affirmed on appeal by the Central Board of Assessment Appeals of Quezon City. The Court of Appeals affirmed the judgment of the CBAA.
ISSUE:
1. Whether or not petitioner is a charitable institution within the context of PD 1823 and the 1973 and 1987 Constitution and Section 234(b) of RA 7160.
2. Whether or not petitioner is exempted from real property taxes.
RULING:
1. Yes. The Court hold that the petitioner is a charitable institution within the context of the 1973 and 1987 Constitution. Under PD 1823, the petitioner is a non-profit and non-stock corporation which, subject to the provisions of the decree, is to be administered by the Office of the President with the Ministry of Health and the Ministry of Human Settlements. The purpose for which it was created was to render medical services to the public in general including those who are poor and also the rich, and become a subject of charity. Under PD 1823, petitioner is entitled to receive donations, even if the gift or donation is in the form of subsidies granted by the government.
2. Partly No. Under PD 1823, the lung center does not enjoy any property tax exemption privileges for its real properties as well as the building constructed thereon.
The property tax exemption under Sec. 28(3), Art. VI of the Constitution of the property taxes only. This provision was implanted by Sec.243 (b) of RA 7160.which provides that in order to be entitled to the exemption, the lung center must be able to prove that: it is a charitable institution and; its real properties are actually, directly and exclusively used for charitable purpose. Accordingly, the portions occupied by the hospital used for its patients are exempt from real property taxes while those leased to private entities are not exempt from such taxes.
