Rules and Regulations Implementing Republic Act No. 8762

EN BANC [C.T.A. EB CASE NO. 622 . March 29, 2011.] (C.T.A. Case No. 7303) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . DE LA SALLE UNIVERSITY, INC. , respondent . RESOLUTION CASTAEDA, JR. , J p : For resolution are petitioner's Motion for Reconsideration filed by registered mail on January 4, 2011 assailing this Court's Decision dated December 10, 2010 and respondent's Comment filed on February 28, 2011. ECcTaH Petitioner's Motion for Reconsideration also seeks that the Court En Banc partially reverse the Decision dated January 5, 2010 and the Amended Decision dated July 29, 2010 both issued by the Court in Division and that judgment be rendered ordering the respondent pay the amount of P12,203,177.16, P3,349,144.50 and P1,750,679.45 representing income, VAT and DST deficiencies, respectively for fiscal years 2001, 2002 and 2003 plus 25% surcharge and 20% annual interest and 20% per annum delinquency interest on the delinquency taxes, surcharge and deficiency interest for late payment from September 30, 2004 until fully paid. 1 Petitioner's Motion for Reconsideration interposes the following grounds: THE HONORABLE COURT ERRED IN RULING THAT REVENUES, HOWSOEVER GENERATED ARE COVERED BY THE CONSTITUTIONAL EXEMPTION PROVIDED THAT THEY WILL BE USED OR HELD IN RESERVE FOR EDUCATIONAL PURPOSES; THE HONORABLE COURT ERRED IN RULING THAT RESPONDENT WAS ABLE TO PROVE THE FACT OF PAYMENT OF DST; and THE HONORABLE COURT ERRED IN RULING THAT RESPONDENT'S ADDITIONAL EVIDENCE IS ADMISSIBLE. 2 In its Comment, respondent asserts the following arguments: I. The Constitution, the Supreme Court, the Constitutional Deliberations, and even Expert's Views confirm that revenue, howsoever generated, is exempt from tax for as long as (a) the taxpayer must be a non-stock, non-profit educational institution, and (b) the income it seeks to be exempted therefrom is actually, directly, and exclusively used for educational purposes. Petitioner CIR cannot qualify the tax exemption by her reliance and unilateral reading of an administrative interpretation. II. Petitioner's CIR's rules providing that machine imprinting is proof of documentary stamps tax payment has been fully complied with. Petitioner CIR should be the first to observe her own rules. She cannot now arbitrarily and unilaterally disregard her own rules as such is tantamount to abuse of power. AaDSTH III. Supreme Court jurisprudence allows introduction of additional evidence. Besides, Petitioner CIR never objected to Respondent DLSU's additional evidence at the time it was offered. Thus, the evidence became a property of the case rightfully considered by the Honorable Court. 3 The grounds raised by the petitioner were extensively discussed in the assailed Decision. By way of reiteration, the Court restates the following key points: First, income tax exemption covers non-stock and non-profit educational institutions for as long as their income is actually, directly and exclusively used for educational purposes. 4 Thus, it is imperative for the taxpayer as a non-stock and non-profit educational institution to establish how it utilizes income sought to be exempted. Second, pursuant to Section 200 of the 1997 NIRC and Section 2 of Revenue Regulations ("R.R.") 15-2001, actual payment and remittance of DST are generally made by affixing to the taxable document/facility evidencing the transaction the duplicate copy or certified true copy of the DST return or proof of payment of DST, or also known as "constructive stamping of DST on the taxable document/facility evidencing the transaction" or the "receipt system". 5 Another mode of payment and remittance may be undertaken through the purchase or affixture of loose documentary stamps tax or by imprinting of stamps through a documentary stamp tax metering machine. Third, the questioned documentary pieces of evidence in this case were eventually formally offered and are admissible even if the same were proffered through a Motion for Reconsideration. 6 Considering that no new matters were raised in the Motion, the Court finds no cogent reason to modify, much less reverse the assailed Decision. WHEREFORE , premises considered, Petitioner's Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED . cCESTA (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Ernesto D. Acosta, P.J., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., concur. Footnotes 1. Rollo , p. 188. 2. Rollo , p. 182. 3. Rollo , p. 204. 4. Commissioner of Internal Revenue v. Court of Appeals, et al. , G.R. No. 124043, October 14, 1998, 298 SCRA 83, 97. 5. Hector S. De Leon and Hector M. De Leon, Jr., The National Internal Revenue Code Annotated, Volume 2, 2003 Edition, p. 329. 6. See BPI-Family Savings Bank, Inc. v. Court of Appeals , G.R. No. 122480, April 12, 2000, 330 SCRA 507; Commissioner of Internal Revenue v. PERF Realty Corporation , G.R. No. 163345, July 4, 2008, 557 SCRA 165 citing Filinvest Development Corporation v. Commissioner of Internal Revenue, G.R. No. 146941, August 9, 2007, 529 SCRA 605 and Calamba Steel Center, Inc. (formerly JS Steel Corporation) v. Commissioner of Internal Revenue, G.R. No. 151857, April 28, 2005, 457 SCRA 482.