FACTS: ISSUE & RULING:
Petitioner, a non-stock and
non-profit entity, is the
registered owner of a lot
located in Quezon City.
Erected in the middle of the
aforesaid lot is a hospital.
and a big space at the ground
floor is being leased to private
parties, for canteen and small
store spaces and private
clinics. Almost one-half of the
entire area on the left side of the
building is vacant and idle, while a
big portion on the right side, is being
leased for commercial purposes to a
private enterprise, the Elliptical Orchids and
Garden Center. Petitioner accepts paying and
non-paying patients. Aside from its income from
paying patients, the petitioner receives annual
subsidies from the government.
Thereafter, both the land and the hospital
building of the petitioner were assessed for
real property taxes by the City Assessor of
Quezon City. Petitioner filed a Claim for
LUNG CENTER OF Exemption from real property taxes with the
City Assessor, predicated on its claim that it is
THE PHILIPPINES a charitable institution. The petitioner’s
request was denied, and a petition was,
VS. thereafter, filed before the Local Board of
Assessment Appeals of Quezon City for the
QUEZON CITY reversal but the same was dismissed. Both
the Central Board of Assessment Appeals of
GROUP 3 - ABELARDO, ILACAD,
Quezon City and Court of Appeals affirmed
MANUEL, RAMAJO, REAL
the assailed decision. Hence, this petition.
IS LUNG CENTER A
CHARITABLE INSTITUTION?
YES. A charitable institution
does NOT lose its character
as such and its exemption
from taxes simply because it
derives income from paying
patients or receives subsidies
from the government, so long
as the money received is
devoted or used altogether to
the charitable object which it
is intended to achieve; and no
money inures to the private
benefit of the persons
managing or operating the
institution.
IS LUNG CENTER
EXEMPT FROM REAL
PROPERTY TAXES?
The portion of its real property
LEASED to private entities are
NOT EXEMPT from real property
taxes. What is meant by actual,
direct and exclusive use of the
property for charitable purposes
is the direct and immediate and
actual application of the property
itself to the purposes for which
the charitable institution is
organized. It is not the use of the
income from the real property that
is determinative of whether the
property is used for tax-exempt
purposes.
 FACTS:
Petitioner, a non-stock and
non-profit entity, is the
registered owner of a lot
located in Quezon City.
Erected in the middle of the
aforesaid lot is a hospital. as such and its exemption
and a big space at the ground f r o m t a x e s s i m p l y b e c a u s e i t
floor is being leased to private
parties, for canteen and small f r o m t h e g o v e r n m e n t , s o l o n g
store spaces and private
clinics. Almost one-half of the d e v o t e d o r u s e d a l t o g e t h e r t o
entire area on the left side of the
building is vacant and idle, while a
big portion on the right side, is being
leased for commercial purposes to a
private enterprise, the Elliptical Orchids and
Garden Center. Petitioner accepts paying and
non-paying patients. Aside from its income from
paying patients, the petitioner receives annual
subsidies from the government.
Thereafter, both the land and the hospital
building of the petitioner were assessed for
real property taxes by the City Assessor of
LUNG CENTER OF Quezon City. Petitioner filed a Claim for
Exemption from real property taxes with the
THE PHILIPPINES City Assessor, predicated on its claim that it is
a charitable institution. The petitioner’s
VS. request was denied, and a petition was,
thereafter, filed before the Local Board of
QUEZON CITY Assessment Appeals of Quezon City for the
reversal but the same was dismissed. Both
the Central Board of Assessment Appeals of
GROUP 3 - ABELARDO, ILACAD,
Quezon City and Court of Appeals affirmed
MANUEL, RAMAJO, REAL
the assailed decision. Hence, this petition.
ISSUE & RULING:
IS LUNG CENTER A
CHARITABLE INSTITUTION?
YES. A charitable institution
does NOT lose its character
derives income from paying
patients or receives subsidies
as the money received is
the charitable object which it
is intended to achieve; and no
money inures to the private
benefit of the persons
managing or operating the
institution.
IS LUNG CENTER
EXEMPT FROM REAL
PROPERTY TAXES?
The portion of its real property
LEASED to private entities are
NOT EXEMPT from real property
taxes. What is meant by actual,
direct and exclusive use of the
property for charitable purposes
is the direct and immediate and
actual application of the property
itself to the purposes for which
the charitable institution is
organized. It is not the use of the
income from the real property that
is determinative of whether the
property is used for tax-exempt
purposes.