BIR Ruling

February 11, 1972 Commissioner Eliseo C. Alinsug Court of Agrarian Relations 13th Regional District Branch I, Cebu City S i r : This refers to your request for exemption from the payment of income tax on your salary as Commissioner of the Court of Agrarian Relations. In reply thereto, I have the honor to inform you that Sections 143 and 158 of Republic Act No. 3844 otherwise known as the Agricultural Land Reform Code creating the Court of Agrarian Relations provide as follows: "Section 143. Judges of Agrarian Relations . The judicial function of the Courts of Agrarian Relations shall be vested in an Executive Judge and the Regional District Judges, who shall be appointed from time to time, depending on the need for their services, by the President of the Philippines with the consent of the Commission on Appointments . . .". "Section 158. Personnel of the Courts of Agrarian Relations . (1) Court Commissioners; Qualifications and Compensation. There shall be twenty-four Court Commissioners who shall receive an annual compensation of nine thousand pesos each and shall be appointed by the President with the consent of the Commission on Appointments. . . . A Court Commissioner may be assigned by the Executive Judge to assist in the hearing and investigation of cases. Subject to the latter's direction and supervision he may hear evidence for the court on any disputed point or issue in any given case or cases and shall after said hearing submit a report of all the cases heard by him together with the records thereof within the period prescribed by the Court. During the hearing, he may rule upon questions of pleading and procedure but not on the merits of the case." In this connection, the constitutional prohibition against diminution of salaries of judicial officers is provided in Section 9, Article VIII of the Constitution. The exemption from income tax emanated solely from this constitutional prohibition. Thus, the Supreme Court, in the cases of Endencia and Jugo v. David, G.R. Nos. L-6386, August 31, 1953, rules as follows: "As already stated construing and applying the above constitution provisions, we held in the Perfecto case that judicial officers are exempt from the payment of income tax on their salaries , because the collection thereof by the Government was a decrease or diminution of their salaries during their continuance in office, a thing which is expressly prohibited by the Constitution . . . . "So we have this situation. The Supreme Court in a decision interpreting the Constitution, particularly section 9, Article VIII, has held that judicial officers are exempt from payment of income tax on their salaries, because the collection thereof was a diminution of such salaries specifically prohibited by the Constitution ." (Emphasis ours) It will be noted also that according to the said Section 9, Article VIII of the Constitution, the prohibition applies only to Justices of the Supreme Court and all judges of inferior courts. In your case, it appears from the abovequoted provision of the Agricultural Land Reform Code that you are a part of the personnel of the Court of Agrarian Relations. The Judges of the Court of Agrarian Relations upon whom judicial function of said court is vested, are not included among the personnel of the court. The constitutional prohibition against diminution of salaries which is the basis of the exemption from income tax applies only to the said Judge of the Court of Agrarian Relations and not to the Commissioners of said Court. In view thereof, this Office is of the opinion and so holds that your compensation as Commissioner of the Court of Agrarian Relations is subject to income tax. cdta Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue