Request for Reconsideration of BIR Ruling No. 121-91 dated June 25, 1992 insofar as it revoked BIR Ruling No. 569-88 dated November 29, 1988

April 2, 1992 BIR RULING NO. 115-92 26 121-91 569-88 115-92 Manila Bethel Temple, Inc. P.O. Box 4530, Manila 2800 Attention: Mr . Dennis C . de Leon Deacon Gentlemen : This refers to your letter dated March 19, 1992 requesting reconsideration of BIR Ruling No. 121-91 dated June 25, 1992 insofar as it revoked BIR Ruling No. 569-88 dated November 29, 1988 issued to that religious organization. It appears that you are a religious organization owning lands, originally acquired in 1950 and 1980 as well as the buildings and improvements thereon being used exclusively for religious purposes; that since said properties can no longer accommodate your present membership, you intend to sell said properties, the proceeds of which will be used exclusively in the purchase of a new church site and the construction thereon of a new church building or a new church site and building thereon to be converted into a church or place or worship. In reply, please be informed that, after a re-study of the aforesaid BIR Ruling No. 569-88, this Office believes, and so holds, that the same is the correct ruling. This is so because said ruling is based on Opinion No. 45 dated March 10, 1959 of the Secretary of Justice which involves facts identical to the abovementioned facts involved in your case. Said opinion concerns the Union Church of Manila which is organized and operated exclusively for religious purposes; that Union Church of Manila owns and holds properties exclusively for religious purposes; that it sold and parted the same solely for religious purposes, i.e. transfer of the church to a new site; and, therefore, the income derived did not result from the productive use of real properties but from a single transaction which is merely incidental to the religious purpose. Hence, the opinion concluded that said income is not within the contemplation of the pertinent portions of then Section 27(e) which is now the last paragraph of Section 26 of the Tax Code. The aforesaid opinion of the Secretary of Justice has been sustained and adopted by final decisions of the Court of Tax Appeals in CTA Case No. 293 dated August 31, 1959 (Manila Polo Club); CTA Case No. 1682 dated October 8, 1969 (Xavier School, Inc.); and CTA Case No. 1468 dated October 14, 1968 (Congregacion de la Mission de San Vicente de Paul). These judicial decisions also involving identical facts now form part of the legal system of the Philippines (Art. 8, Civil Code); hence, should be applied in deciding cases of similar nature. Accordingly, in line with these opinion and judicial decisions, your case does not fall within the contemplation of the last paragraph of Section 26 of the Tax Code, the law invoked in BIR Ruling No. 121-91. In view thereof, your request is hereby granted and, therefore, BIR Ruling No. 569-88 is maintained. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner