Armed Forces and Police Savings and Loan Association, Inc. v. City Assessor of Butuan City

[CBAA CASE NO. M-19. July 1, 2004.] ARMED FORCES AND POLICE SAVINGS AND LOAN ASSOCIATION, INC. , petitioner-appellant , vs. LOCAL BOARD OF ASSESSMENT APPEALS OF THE CITY OF BUTUAN , appellee , CITY ASSESSOR OF BUTUAN CITY , respondent-appellee . RESOLUTION Before us is a motion filed by Petitioner-Appellant herein seeking a reconsideration of this Board's Decision dated March 18, 2004 in the above-entitled case. The envelope containing the said motion was post-marked as registered mail on May 24, 2004 by the Camp Aguinaldo Post Office in Quezon City, Metro Manila. Alleging that it received a copy of said Decision on May 7, 2004, Petitioner-Appellant raised the following issues, to wit: WHETHER OR NOT THE HONORABLE BOARD ERRED IN HOLDING THAT THE PETITIONER-APPELLANT IS LIABLE FOR REALTY TAX AS THE BENEFICIAL USER OF THE BUILDING. WHETHER OR NOT THE HONORABLE BOARD COMMITTED A GRAVE ABUSE OF DISCRETION IN DISMISSING THE INSTANT APPEAL FOR LACK OF MERIT. Petitioner-Appellant Armed Forces and Police Savings and Loan Association, Inc. (AFPSLAI) argues that, "even assuming arguenda that the law applicable on this matter is par. (a) of Section 234 of Republic Act No. 7160 . . . still, we submit that since AFPSLAI is NOT a taxable person, it follows that it is nonetheless exempted from paying realty tax for the building although the beneficial use of the same was granted to it." Petitioner-Appellant arrived at this conclusion because, as Petitioner-Appellant says, Section 234 (a) of R.A. 7160 does "not make any distinction as to who or what is a taxable person and as to what kind of taxes is he liable to be covered by the exemption. What is clear however is that the beneficial user or grantee is a taxable person to be liable for realty tax. Thus, what the law does not distinguish we must not also distinguish." Petitioner-Appellant is so obstinate that it still insists that, since it is exempt from the payment of income tax under the Revised Non-Stock Savings and Loan Association Act (R.A. 8367), it falls under the category of NON-TAXABLE persons with respect to any and all taxes including, but not limited to, real property tax. Petitioner is virtually saying that, since R.A. 8367 does not say that savings and loan associations are liable to the real property tax, ergo, Petitioner, being a savings and loan association, should not be so liable. The "issues" raised by Petitioner-Appellant in this motion for reconsideration are not new. They were thoroughly discussed, examined and dissected in this Board's decision of March 18, 2004. As stated in our Decision of March 18, 2004, Petitioner-Appellant admitted the following: (a) The subject building was constructed on a lot owned and leased by the Philippine Army to Petitioner; and (b) The Philippine Army shall own the subject building at the expiration or termination of the contract of lease over the lot. It was, therefore, established that, while the contract of lease over the lot is in force, Petitioner-Appellant is the owner of the subject building, subject to the real property tax. We even stated that, if we assumed the position of Petitioner that the subject building were owned by the Philippine Army even before the expiration of the lease contract over the lot, to which position we certainly do not subscribe, Petitioner would still be subject to the real property tax for being the beneficial user of said building. In fact, we stated that Petitioner was the beneficial user of the lot on which the subject building is built but we refrained from issuing an order to that effect for the sample reason that the matter of the lot was not at issue before us. Petitioner-Appellant seems to be having difficulty in trying to grasp the meaning of the phrase "taxable person." A "person" may be either natural or juridical. A "natural person" is an individual, a human being. On the other hand, a "juridical person," such as the Petitioner-Appellant, is an entity or person created by fiction of law with certain legal rights and obligations. Webster's New World Dictionary defines a "tax" as "a compulsory payment of a percentage of income, property value, etc. for the support of a government." The word "taxable" literally means "subject to a tax." When used in a tax statute, the phrase "taxable person" means a person subject to the payment of the tax created by that statute, in the same way that the phrase "taxable person" found at the end of Section 234 (a) of R.A. 7160 means a person subject to the real property tax, or one not exempt or not exempted from the payment of the real property tax. In relation to a certain kind of tax, a person is either taxable or exempt. Take the case at bar for example. If the owner and/or user of the subject building were the Philippine National Police (PNP) or, for that matter, any political subdivision of the Republic, instead of Petitioner, there would be no realty tax to talk about since the owner and/or beneficial user, being a part of the government, would have been exempt from the payment of the real property tax. Exemptions from taxation are highly disfavored, so much so that they almost could be said to be odious to the law. He who claims an exemption must be able to point to some positive provision of the law creating the right ( Asiatic Petroleum Co. vs. Llanes , 49 Phil. 466, 472 [1926]). When exemption is claimed, it must be shown indubitably to exist. At the outset, every presumption is against it ( Farrington vs. Tennessee and County of Shelby , 95 U.S., 679, 686). Petitioner-Appellant's claim of exemption is based on the provisions of the Revised Non-Stock Savings and Loan Association Act (R.A. 8367), under which law Petitioner-Appellant is supposed to be exempt from the payment of income tax, Republic Act No. 8367 has nothing to do whatsoever with the real property tax. WHEREFORE, premises considered, the instant Petition for Reconsideration is hereby DENIED for lack of merit. SO ORDERED. Manila, Philippines, July 1, 2004. (SGD.) CESAR S. GUTIERREZ Chairman (SGD.) ANGEL P. PALOMARES Member (SGD.) RAFAEL O. CORTES Member